2022 (11) TMI 401 - HC - Money Laundering

Seeking grant of regular bail - siphoning off of funds - twin conditions for grant of bail satisfied or not - Section 4 read with Section 70 of the Prevention of Money Laundering Act, 2002 - HELD THAT - Section 45(1) of PMLA 2002 imposes twin conditions before bail could be granted to a person accused of having committed an offence punishable under the PMLA. As per section 45(1) PMLA, the Public Prosecutor was required to be given an opportunity to oppose the plea for bail and that where the Public Prosecutor opposed such plea, the Court could grant bail only after recording satisfaction that there were reasonable grounds to believe that the person to be released was not guilty of the offence he was accused of and that while on bail he was not likely to commit any offence. The constitutional validity of provisions of section 45 PMLA 2002, imposing the twin conditions for grant of bail, which were also there before amendment of section 45 PMLA in 2018, was questioned before Hon'ble the Supreme Court in Nikesh Tarachand Shah vs. Union of India 2017 (11) TMI 1336 - SUPREME COURT and the Supreme Court, after holding that the prescribed twin conditions for release on bail were violative of Articles 14 and 21 of the Constitution of India, declared Section 45(1) of the PMLA, to that extent, to be unconstitutional - Thus it is apparent that despite the Supreme Court having declared that the twin conditions for release on bail as prescribed by un-amended provisions of Section 45(1) of the PMLA,were violative of Articles 14 and 21 of the Constitution of India and thus unconstitutional. Obesity, as in the case of the petitioner, who weighs 153 kilograms is not just a symptom but is itself a disease which becomes root-cause of several other diseases. With such co-morbodities, the response, the resistance, the resilience and the capacity of the body to fight ailments and recuperate efficaciously, decreases substantially. The jail doctor or for that matter, a civil hospital may not be fully equiped to handle a patient having multiple aiments who apart from medical treatmet may require a certain level of monitoring, care and attention which ordinarily is not available in jail - Considering the co-morbodities of the petitioner, it can safely be said that he falls in the exception of being sick as carved out in Section 45 of the Act, so as to be entitled to be released on bail. The petitioner is ordered to be released on regular bail on his furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned - petition allowed.

Summary

Issues Involved:
1. Grant of regular bail under Section 4 read with Section 70 of the PMLA.
2. Petitioner's involvement and arrest.
3. Petitioner's role and received benefits.
4. Health condition of the petitioner.
5. Applicability of Section 45 of the PMLA and its exceptions.

Issue-wise Detailed Analysis:

1. Grant of Regular Bail under Section 4 read with Section 70 of the PMLA:
The petitioner sought regular bail concerning a complaint under Section 4 read with Section 70 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner was initially cited as a witness but was later arrested and accused of being a beneficiary of crores of rupees through the fraudulent activities of the company he was associated with.

2. Petitioner's Involvement and Arrest:
The sequence of events leading to the petitioner's involvement included multiple FIRs registered in Haryana and Hyderabad against the directors of M/s FMLC and others. The petitioner, initially a witness, was later found to have direct involvement and was arrested on 10.03.2022. A supplementary complaint filed on 07.05.2022 specifically alleged the petitioner's involvement in the scam, benefiting to the extent of about Rs.53 crores.

3. Petitioner's Role and Received Benefits:
The petitioner's counsel argued that he was merely an employee handling software for the company and received payments as professional remuneration. However, evidence indicated that the petitioner played a pivotal role in managing software used to siphon off about Rs.3000 crores. Investigation revealed substantial amounts transferred to the petitioner's and his relatives' accounts, which could not be justified. The court found that the petitioner could not feign ignorance of the company's illegal activities.

4. Health Condition of the Petitioner:
The petitioner claimed deteriorating health due to severe comorbidities, including obesity, hypertension, diabetes, and coronary artery disease. A medical report confirmed his precarious health condition, stating that his health was deteriorating considerably. The court acknowledged that jail facilities might not be adequately equipped to handle his multiple ailments, making him fall under the "sick" exception in Section 45 of the PMLA.

5. Applicability of Section 45 of the PMLA and its Exceptions:
Section 45 of the PMLA imposes stringent conditions for granting bail, requiring the court to be satisfied that the accused is not guilty and not likely to commit any offense while on bail. Despite the Supreme Court's previous ruling in Nikesh Tarachand Shah's case declaring the twin conditions unconstitutional, the amended provisions of Section 45 were upheld in Vijay Madanlal Choudhry's case. The court found that the petitioner's complicity was evident from the evidence, and there was a likelihood of him fleeing from justice. However, considering the petitioner's severe health condition, the court deemed he fell under the "sick" exception, justifying his release on bail.

Conclusion:
The court ordered the petitioner's release on regular bail due to his deteriorating health condition, while clarifying that the observations made were not an expression on the merits of the main case. The petitioner was to furnish bail bonds/surety bonds to the satisfaction of the trial court.