2023 (3) TMI 1016 - HC - Money Laundering

Seeking for grant of bail - It is alleged that certain incriminating documents were found in respect of misuse of unaccounted and illegal cash money, which was generated by the main accused Suryakant Tiwari, being brought into the mainstream public money through the Applicant - further case is that Applicant was in connivance with the main accused Suryakant Tiwari in the layering of the proceeds of crime illegally collected by Suryakant Tiwari - HELD THAT - As regards the incriminating materials that have been collected during the course of investigation, what prima facie reflects is the purchase of two Coal Washeries by the Applicant from the group of Companies owned by Suryakant Tiwari and his associates. What is also reflected from the materials available on record is the fact that the purchase made by Suryakant Tiwari of the two Coal Washeries at the first instance was for an amount of roughly Rs.90 Crores, of which cheque payments were made only for an amount of around Rs.34-35 Crores and the rest was cash dealing that was made. These two Coal Washeries, worth more than Rs.90 Crores, have subsequently been sold by the main accused Suryakant Tiwari to the Applicant for just around the same value of cheque transaction made by Suryakant Tiwari at the time of purchase of two Coal Washeries at the first instance. This by itself shows that the Applicant has got two Coal Washeries at a very cheap price. The manner of transaction made between the Applicant and the Firms belonging to Suryakant Tiwari, the timing of the transaction, the sale consideration made by the Applicant in the process of purchase of the Coal Washeries from the Firms belonging to Suryakant Tiwari, all establishes the nexus between the Applicant and Suryakant Tiwari and their involvement in the predicate offence. Further, going into the entire materials available in the case records, there seems to be a serious nature of racket involving huge generation of hard cash illegally being collected. Taking into consideration the fact that the offence is one under the Prevention of Money Laundering Act, in the opinion of this Court, it would not be justified at this juncture to grant bail to the Applicant - Bail application rejected.

Summary

Issues involved:
The judgment involves a bail application under Section 439 of CrPC seeking bail for the Applicant arrested by the Enforcement Directorate in connection with an investigation under the Prevention of Money Laundering Act, 2002. The primary issue revolves around the alleged involvement of the Applicant in illegal activities related to money laundering and his eligibility for bail.

Summary:
1. The Applicant was arrested in connection with an investigation under the Prevention of Money Laundering Act, 2002, for alleged involvement in converting illegal cash money into white money. The Enforcement Directorate conducted a search at the Applicant's premises and found incriminating documents related to the misuse of unaccounted cash money generated by the main accused.

2. The Applicant's defense argued that there was no direct or indirect relationship between the Applicant and the main accused in the commission of the alleged offense. They highlighted the business relations between the Applicant and the main accused, emphasizing that the transactions, including the purchase of Coal Washeries, were legal and reflected in the Applicant's accounts.

3. The Enforcement Directorate contended that the Applicant, as the Managing Director of a group of companies, conspired with the main accused to assist in laundering ill-gotten wealth. They raised suspicions regarding the purchase of Coal Washeries by the Applicant at a significantly lower price compared to the amount paid by the main accused, suggesting foul play in layering the proceeds of crime.

4. The court noted irregularities and illegalities in the transactions by the main accused, including extorting money from coal transporters. It was found that the Applicant was involved in clandestine business deals with the main accused, indicating a nexus between them in the layering of illegally collected proceeds of crime.

5. Considering the serious nature of the alleged offense under the Prevention of Money Laundering Act, the court denied bail to the Applicant, citing the established nexus between the Applicant and the main accused in illegal activities. The rejection of the bail application was based on the gravity of the offense and the evidence presented during the investigation.

Separate Judgement:
No separate judgment was delivered in this case.