2023 (8) TMI 904 - SCH - Money Laundering

Seeking release on Bail - money laundering - predicate offence - withdrawal of SLP arising out of the rejection of his prayer for bail - wrong interpretation of Section 45 of the Prevention of Money Laundering Act, 2002 - flight risk - HELD THAT - It is true that the respondent moved this Court by way of a Special Leave Petition against the refusal of the High Court to grant bail in the predicate offence. But the withdrawal of the said Special Leave Petition need not stand in the way of this Court independently considering the correctness of the impugned judgment. It is true that the interpretation given by the High Court to Section 45 of the PMLA, 2002 is not in tune with the law laid down by this Court. But, it is made clear that the interpretation given by the High Court in the impugned judgment to Section 45 is not correct. The respondent is still in custody in connection with the predicate offence. Therefore, at least as on date, the question of the respondent being a flight risk does not arise. As to what happens to the bail application moved by him in the predicate offence, as and when it comes up for hearing, will at present be a matter of guesswork. In any case, by directing the respondent to surrender his passport, the said apprehension can also be taken care of. It is stated that the passport is already surrendered. The continued incarceration of the respondent, who has now completed nearly half of the penalty that can be imposed, may not be necessary. Therefore, the Special Leave Petition is dismissed.

Summary

Issues involved:
The judgment involves a challenge by the Directorate of Enforcement against the High Court of Delhi's decision to grant bail to the respondent in connection with an Enforcement Case Information Report (ECIR) related to offenses under the Indian Penal Code.

Details of the Judgment:

Issue 1: Arrest and Bail Grant
The respondent was arrested for offenses under Sections 409, 420, and 120B of the Indian Penal Code, and later for the ECIR. The High Court granted bail to the respondent, leading to the Special Leave Petition. The Supreme Court ordered notice and maintained status quo on the respondent's release pending further proceedings.

Issue 2: Justification for Continued Detention
The Enforcement Directorate argued against the continued detention of the respondent, highlighting that the maximum penalty upon conviction would be seven years, and the respondent had already served nearly half of that period in custody. The respondent's completion of a significant portion of the potential sentence raised questions about the necessity of further detention.

Issue 3: Objections raised by the Enforcement Department
The Enforcement Department raised objections, including the respondent's custody for the predicate offense, misinterpretation of Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), and the assertion that the respondent posed a flight risk. The Supreme Court addressed each objection, clarifying that withdrawal of a bail petition in the predicate offense did not prevent independent consideration, correcting the misinterpretation of Section 45 by the High Court, and noting that the flight risk concern could be mitigated by surrendering the passport.

Conclusion:
The Supreme Court dismissed the Special Leave Petition, emphasizing that the continued incarceration of the respondent, who had already served a significant portion of the potential sentence, was unnecessary. The Court ordered the respondent's release subject to conditions set by the Special Court, including surrendering the passport if not already done. The Court also clarified that the High Court's interpretation of Section 45 of the PMLA was not in line with established legal principles and should not be considered a precedent in other cases.