2023 (3) TMI 541 - HC - Money Laundering

Seeking grant of bail - Money Laundering - scheduled offence - proceeds of crime - rebuttal of presumption - inviting deposits from general public promising to pay interest upto 90% per annum - effect of bar under Section 45(1)(ii) of PMLA - HELD THAT - Admittedly, the accused was apprehended on 15.11.2022. Three months have already lapsed from the date of arrest. The complaint in the form of ECIR is filed on 13.01.2023 which is registered in PCR No. 4 of 2023. Details of the assets acquired and the money invested by the accused along with the details of bank account are stated in the complaint. It is the specific contention of the prosecution that accused No. 2 being one of the partner of accused No. 1 is in charge of investing the proceeds of crime in various assets as he has purchased the lands out of the amount so received by accused No. 1 and used to develop the same. There are no justification for non producing any of the documents in support of the allegations made in the complaint. Apparently, the statements of the petitioner recorded by the Investigating Officer disclose that the accused invited deposits promising exorbitant rate of interest, not subjected such monetary transaction for audit, not returned the amount i.e., due to the investors on time and on the other hand, the amounts were being invested in the landed properties in the name of the accused. Apparently, the petitioner could not justify collection of crores of rupees from thousands of depositors, promising to pay return as high as upto 90%. Prima facie, the intention of the accused may attract Section 420 of IPC, for which a criminal complaint is already lodged way back in the year 2018. To constitute the proceeds of crime as defined under Section 2(u) of PMLA, the prosecution has to prove that the properties derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. As per Section 3 of PMLA, even concealment, possession, acquisition, use of proceeds or claiming the proceeds of crime as untainted property would amount to money laundering - to constitute the offence of money laundering, the prosecution has to establish that the petitioner had indulged in criminal activity relating to scheduled offence, the property referred to in the complaint have been derived or obtained as a result of such criminal activity and the petitioner is involved in any process or activity connected with the said property being the proceeds of crime. Unless these basic requirements are fulfilled, the presumption under Section 24 of PMLA, cannot be raised. It is the contention of the prosecution that further investigation is still in progress. But at present, no prima facie materials, except the assertion made in the complaint are available to form an opinion that the accused is guilty of the offence which is one of the requirement under Section 45(1)(ii) of PMLA to deny bail to the petitioner. Without such materials on record, the accused is not required to be detained in custody as the same would amount to infringement of his right to life and liberty. It is not the contention of the prosecution that the petitioner would abscond as his passport is already said to have been seized. The interest of the prosecution could be safeguarded by imposing suitable conditions. The petitioner is ordered to be enlarged on bail on obtaining the bond in a sum of Rs. 2,00,000/- with two sureties for the likesum to the satisfaction of the jurisdictional Court, subject to the conditions imposed - application allowed.

Issues Involved:
1. Grant of bail under Section 439 of Cr.P.C.
2. Alleged commission of offence under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA).
3. Alleged commission of offences under Section 420 of IPC and other related acts.
4. Validity of arrest and detention under Section 19 of PMLA.
5. Presumption under Section 24 of PMLA.
6. Conditions for granting bail.

Detailed Analysis:

1. Grant of Bail under Section 439 of Cr.P.C.:
The petitioner-accused No. 2 sought bail under Section 439 of Cr.P.C. in a case registered for offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA). The court had to determine whether the petitioner had made out any ground for release on bail. The court found in the affirmative, allowing the bail petition subject to certain conditions.

2. Alleged Commission of Offence under Sections 3 and 4 of PMLA:
The Directorate of Enforcement filed a complaint alleging money laundering under Section 3 read with Section 70, punishable under Section 4 of PMLA. The complaint stated that the petitioner, along with other accused, collected over Rs. 145.88 crores from investors under false promises and invested the proceeds in properties. The court noted that the prosecution must establish that the petitioner indulged in criminal activity relating to a scheduled offence and that the properties were derived from such activity to constitute money laundering.

3. Alleged Commission of Offences under Section 420 of IPC and Other Related Acts:
The initial complaint was registered in 2018 for offences under Section 420 of IPC, which is a scheduled offence under PMLA. The prosecution alleged that the petitioner and other accused cheated investors by promising high returns and instead invested the collected money in properties. The court observed that prima facie, the intention of the accused might attract Section 420 of IPC, but noted the absence of recorded statements from investors to constitute the offence of cheating.

4. Validity of Arrest and Detention under Section 19 of PMLA:
The petitioner's counsel argued that the arrest was invalid as the conditions under Section 19 of PMLA were not satisfied. The court noted that the grounds for arrest disclosed by the Investigating Officer indicated sufficient reasons to believe the petitioner was guilty of money laundering. However, the court found no prima facie materials, except assertions in the complaint, to form an opinion on the petitioner's guilt, thereby questioning the necessity of continued detention.

5. Presumption under Section 24 of PMLA:
The prosecution contended that there is a presumption in favor of the prosecution under Section 24 of PMLA, which the accused must rebut. The court highlighted that the presumption could only be raised if the prosecution established the basic requirements of money laundering, which were not sufficiently demonstrated with prima facie materials in this case.

6. Conditions for Granting Bail:
The court granted bail to the petitioner with conditions to ensure he does not commit similar offences, threaten or tamper with prosecution witnesses, and appears before the court as required. The court emphasized that the petitioner's continued detention without sufficient prima facie materials would infringe on his right to life and liberty.

Conclusion:
The High Court granted bail to the petitioner-accused No. 2, noting the lack of prima facie materials to justify continued detention and emphasizing the need to protect the petitioner's rights. The bail was granted with conditions to safeguard the prosecution's interests and ensure the petitioner's compliance with legal proceedings.

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