2023 (6) TMI 650 - HC - Money Laundering

Money Laundering - proceeds of crime - predicate offences - diversion of funds from home-buyers from the accounts of Unitech Limited or its associate company - existence of mens rea - triple test - Flight Risk - Influencing Witnesses and Tampering with Evidence - whether the Proviso to Section 45(1) of the PMLA will be applicable to the applicant being a woman? - HELD THAT - PMLA does not define a woman . It is neither the intention of the Constitution of India nor the intention of PMLA to classify women on the basis of their education and occupation social standing exposure to society etc. - It is also settled principle of interpretation that while interpreting a statute and/or a Section the Courts are not to substitute or add or subtract words from the Section. The same would be amounting to supplanting the intention of the Legislature. Once the word woman has been used in the Proviso to Section 45(1) of PMLA the Court is not to further sub-classify women into different categories and apply the twin condition of Section 45 to some category of women and to exclude some category of women from the twin condition of Section 45. Doing the same would be not only be violative of Article 14 of the Constitution but also be a great injustice to the intention of the Legislature - In Devki Nandan 2022 (9) TMI 1216 - DELHI HIGH COURT this Court has already held that the proviso to section 45(1) PMLA is an exception and once a person comes within the exception the twin condition of Section 45 PMLA will not be applicable to such person. This court has observed in Kewal Krishan Kumar 2023 (3) TMI 746 - DELHI HIGH COURT that the legislature has carved out the proviso to section 45(1) as a lenient provision for persons below sixteen years of age women or persons who are sick or infirm. Once an accused is a woman the Proviso to Section 45(1) kicks in and the applicant would fall within the proviso - However this does not mean that the applicant will not be required to satisfy the triple test for grant of bail. In order to prove mens rea the respondent/prosecuting agency is required to show something more than merely an allegation. In the present case though the prosecuting agency has tried to substantiate the allegations by showing transfer of POC as well as section 50 PMLA statements but what persuades me is that the Applicant has provided a prima facie reasonable satisfactory explanation for each of the allegations. Whether the prima facie satisfactory explanation crystallises into substantial defence leading to an acquittal or is merely an eye-wash or a sham can only be determined after evidence - The explanations furnished by the Applicant seem reasonable to me to believe that prima facie the Applicant is not guilty of the offence of money laundering. A coordinate bench of this court in Chandra Prakash Khandelwal 2023 (2) TMI 993 - DELHI HIGH COURT has held that weightage given to section 50 statement is to be analysed at the final stage and not at the stage of grant of bail. Hence prima facie not much reliance can be placed on section 50 statements in view of inconsistency in the statements of Indrajit Zaveri Anuj Malik and Pranav Kumar. Triple Test Flight Risk Once the Hon ble Supreme Court has granted liberty to the applicant to move appropriate bail application before the appropriate Court the appropriate Court has to adjudicate the application on its own merits and the reliance of the respondent on an earlier order prior to the order of 10.08.2022 passed by the Hon ble Supreme Court may not be of much relevance. In addition the respondents have interrogated the Applicant on numerous occasions and lastly on 15.09.2022. Thereafter the respondents have not felt the need to interrogate the Applicant for a period of more than 7-8 months - Regarding the applicant being a citizen of another country i.e. Dominican Republic which does not have an extradition treaty with India the learned senior counsel for the Applicant states that the Applicant is willing to renounce the citizenship of Dominican Republic as a bail condition and is already in the process of taking Indian citizenship. Triple Test Influencing Witnesses and Tampering with Evidence A perusal of the chats show that the messages are with regard to settling of a counter affidavit exchanging greetings details of bank accounts asked for by the court filling of bail bonds and so on and so forth - It cannot be lost sight that the applicant is the wife of Mr. Sanjay Chandra who is in Police custody. The applicant is allowed meetings and regular jail visits. All these messages could very well have been put by her to Mr. Sanjay Chandra during these jail visits. There is nothing incriminating in the messages except the fact that Mr. Sanjay Chandra should not and could not have a telephone while in jail for which an FIR has already been registered. There are no messages which have been brought to my notice which show handling of money monetary transactions business decisions siphoning off funds etc. Furthermore as regarding tampering with evidence is concerned it is already stated that all the documents are in the custody of the ED and therefore the allegation of the Applicant tampering with the evidence or influencing the witnesses is not made out. The twin conditions of Section 45 of the PMLA will not be applicable to the applicant. The applicant has to satisfy the triple test which can be taken care of by imposing stringent conditions. The applicant has already been investigated for more than 13 occasions and has been in custody for more than 20 months. The application is allowed and the applicant is granted bail subject to the terms and conditions imposed.

Summary

Issues Involved:
1. Applicability of Section 45 PMLA and its proviso for granting bail to a woman.
2. Merits of the case and the applicant's involvement in money laundering.
3. Satisfaction of the triple test for granting bail: flight risk, tampering with evidence, and influencing witnesses.

Summary:

Applicability of Section 45 PMLA:
1. Proviso to Section 45 PMLA: The court examined whether the proviso to Section 45(1) of the PMLA, which provides relaxation for women, minors, and infirm persons, applies to the applicant. It was noted that the proviso is based on Article 15(3) of the Constitution, allowing special provisions for women and children.
2. Interpretation of 'Woman': The court emphasized that the PMLA does not define 'woman' and that the intent of the Constitution and the PMLA is not to classify women based on education, occupation, or social standing. The court rejected the respondent's argument that the applicant's status as a well-educated businesswoman should exclude her from the proviso's benefits.
3. Precedents: The court referred to previous judgments, including Devki Nandan Garg v. Directorate of Enforcement and Komal Chadha v. SFIO, which supported the view that the proviso to Section 45(1) PMLA provides relaxation for women without further sub-classification.
4. Conclusion: The court concluded that the applicant, being a woman, falls within the proviso to Section 45(1) PMLA, exempting her from the twin conditions for bail under this section.

Merits of the Case:
1. Mens Rea: The court noted that mens rea (criminal intent) is crucial for the offense of money laundering under Section 3 PMLA. The court found that the applicant's knowledge of dealing with proceeds of crime could only be determined after evidence is led.
2. Role in Companies: The court found that the applicant's involvement in Prakausali and Mayfair was limited and that she was not involved in the day-to-day affairs or key managerial decisions. The court also noted that other family members who were directors in these companies were not named as accused.
3. Specific Allegations: The court addressed various allegations, including the transfer of Rs. 107.4 crores, Rs. 43.7 crores, Rs. 7 crores, and other amounts. The court found that the applicant provided prima facie reasonable explanations for these transactions, and her involvement in these transactions could only be ascertained after a full trial.
4. Trikar Group: The court noted that the Trikar Group was primarily managed by Sanjay Chandra and others, and the applicant's involvement was limited to being a nominee director from 2017 onwards. The court found inconsistencies in the statements of witnesses regarding the applicant's role in the Trikar Group.

Satisfaction of the Triple Test:
1. Flight Risk: The court considered the applicant's citizenship of the Dominican Republic and her travel history. The court noted that the applicant had traveled in and out of India multiple times and had not attempted to flee. The applicant's passport was already with the ED, and she expressed willingness to renounce her Dominican Republic citizenship as a bail condition.
2. Tampering with Evidence: The court found no evidence that the applicant tampered with evidence or influenced witnesses. All relevant documents were already in the custody of the ED.
3. Influencing Witnesses: The court found no incriminating evidence in the WhatsApp messages between the applicant and her husband, Sanjay Chandra. The court noted that the applicant was not involved in any criminal activity during her custody and that the trial was yet to commence.

Conclusion:
The court granted bail to the applicant, subject to several conditions, including furnishing a personal bond, surrendering her Dominican Republic passport, not leaving the country, and not tampering with evidence or influencing witnesses. The court emphasized that these observations were for the purpose of deciding the bail application and would not affect the merits of the case.