2023 (8) TMI 479 - SCH - Money Laundering

Rejection of Bail - appellant remanded to District Jail - appellant not accused in individual capacity - HELD THAT - Having regard to the fact that the appellant Sachin Bhati is not an accused in his individual capacity, the trial court was not right either directing the appellant Sachin Bhati to appear as the authorized representative of the three companies, or in sending him to judicial custody. The aforesaid three companies are being prosecuted and can be represented by any person in accordance with law and as per Section 309 of the Code of Criminal Procedure, 1973. In STANDARD CHARTERED BANK VERSUS DIRECTORATE OF ENFORCEMENT 2005 (5) TMI 327 - SUPREME COURT , the majority opinion held that a corporation or a company though the juristic person can be prosecuted for offence punishable under law, but being a juristic person custodial sentence cannot be imposed. Thus, the direction given to send/remand the appellant Sachin Bhati to judicial custody is unsustainable in law and, therefore, set aside - appeal allowed.

Summary

Issues involved:
The judgment involves the issue of the legality of directing an individual to represent companies in a criminal trial and the validity of remanding the individual to judicial custody when he is not named as an accused in the case.

Representation of Companies:
The judgment pertains to a case where three companies were summoned to stand trial under the Prevention of Money Laundering Act, 2002, but the appellant, Sachin Bhati, was not named as an accused. Despite this, the trial court directed Bhati to represent the companies, resulting in his remand to judicial custody. The Supreme Court held that a juristic person like a company can be prosecuted, but custodial sentence cannot be imposed on them. Therefore, the direction to send Bhati to judicial custody was deemed unsustainable and set aside.

Release of the Appellant:
As Sachin Bhati was not an accused in his individual capacity in the case, the Supreme Court allowed the appeal and directed his release from custody. The impugned orders directing his representation and remand to custody were set aside. The Court clarified that this order does not hinder further investigation by the Directorate of Enforcement or make any comments on the case's merits.

Conclusion:
The judgment emphasizes that a person who is not an accused in a case cannot be compelled to represent companies in a trial or be sent to judicial custody. It upholds the principle that custodial sentences cannot be imposed on juristic persons like companies. The decision ensures the individual's rights are protected and clarifies that it does not interfere with ongoing investigations or prejudge the case's merits.