2023 (9) TMI 1258 - HC - Money Laundering

Legality of Bail granted - Money Laundering - offence of siphoning of money to Foreign Country - failure to co-operate with investigation and withholding the trail of proceeds of crime - adjudication not completed even after expiry of five years - detailed order not made ready and there is only a docket order - reasons for satisfaction of the twin condition imposed under Section 45 of PMLA Act not present - HELD THAT - After examining the earlier order of this Court, the order of the Hon'ble Supreme Court on appeal and trial Court orders passed subsequently, this Court is constrained to interfere in the bail order for the following reasons - (i) The trial Court patently erred in passing a docket order on 16.08.2023 and thereafter, the detailed order which was made ready to the parties only on 21.08.2023. (ii) On 17.08.2023, the learned Special Public Prosecutor moved this Court for stay of the bail order and reported certain irregularities. This submission prompted the Court to issue oral direction to the Registrar (Vigilance) of the High Court to bring records from the trial Court (which is hardly two km away from the High Court Campus). The case bundle secured and produced to the shock of this Court did not contain the detail order, neither the docket order indicated that a detailed order passed separately. The enquiry made in the trial Court by the Registrar (Vigilance) revealed that the learned Judge had not made ready the detailed order. While so, the grant of bail in haste without making the detail order throw suspicion over the conduct of the trial Court. (iii) However, this Court is not dwelling upon that aspect since this matter is for the High Court administrative side to take note and proceed. Except to reinforce the view of the Hon'ble Supreme Court in THE REGISTRAR GENERAL, HIGH COURT OF KARNATAKA ANR. VERSUS SRI M. NARASIMHA PRASAD 2023 (4) TMI 1251 - SUPREME COURT , which had observed that a judicial officer cannot pronounce the concluding portion of its judgement in open Court without the entire text of the judgement being prepared which dictated. In this case, the material collected immediately on the next day of pronouncing the order of granting bail, there was no prepared text of detailed order. (iv) The detail order made available on 21.08.2023 though runs to several pages, it does not contain the reasons for satisfaction of the twin condition imposed under Section 45 of PMLA Act. (v) The gravity of offence, the length and breath of crime committed has forced the Enforcement Directorate to request the trial Court to issue letter of rogatory and the trial Court had issued letter of request on 03.10.2022 to two countries. The responses from those countries are awaited. While so, it is incorrect to say that the Enforcement Directorate has not taken any steps to proceed with its investigation in respect of offshore entities. (vi) The delay in completing the investigation by the CBI, Delhi cannot be a ground to presume that accused is not guilty of money laundering offence. Closure of investigation in a similar case also cannot be a reason to presume that the present case will also end in closure report. Ifs and buts cannot be an adequate reason to hold this petitioner, not prima facie guilty of the alleged offence. (vii) This Court is conscious of the dictum that, it is not the expectation of law that Court must arrive at a positive finding that applicant for bail has not committed an offence under PMLA Act and if such is the expectation, it will be impossible for an applicant to establish that he has not committed the offence. However, in this case, records reveal that about 169 consignments with inflated price being encashed fraudulently by this petitioner through his Company and the money has gone out of the country. The provisional attachment of the property by efflux of time had lost its enforceability and therefore if the petitioner is enlarged on bail, apart from repeating similar crime by floating new Company, the danger of he fleeing from the hands of justice also cannot be ruled out. This Criminal Original Petition filed by the Enforcement Directorate is allowed.

Summary

Issues Involved:
1. Legality of the bail granted to the respondent.
2. Compliance with Section 45 of the Prevention of Money Laundering Act (PMLA).
3. Conduct and procedural propriety of the trial court.

Summary:

1. Legality of the Bail Granted to the Respondent:
The respondent was arrested under Sections 3 & 4 of the PMLA Act. The trial court granted bail on 16.08.2023, imposing conditions such as surrendering the passport, appearing before the court daily, and not leaving Chennai. The Enforcement Directorate (ED) challenged the bail, arguing that the trial court issued a non-speaking order without detailed reasoning, which was later confirmed by the High Court upon record examination.

2. Compliance with Section 45 of the PMLA:
Section 45(1) of the PMLA imposes twin conditions for granting bail in cases involving proceeds of crime exceeding one crore rupees. The High Court noted that the trial court's detailed order, made available on 21.08.2023, failed to address these conditions adequately. The High Court emphasized that the respondent's involvement in laundering over Rs. 564 crores through inflated coal prices indicated a prima facie case of guilt, thus not meeting the criteria for bail under Section 45.

3. Conduct and Procedural Propriety of the Trial Court:
The High Court found procedural irregularities in the trial court's handling of the bail order. The detailed order was not prepared at the time of granting bail, raising suspicions about the trial court's conduct. The High Court referenced the Supreme Court's dictum in Registrar General, High Court of Karnataka vs. Narasimma Prasad, stressing that a judicial officer must have the entire text of the judgment prepared before pronouncing the concluding portion in open court.

Conclusion:
The High Court allowed the Criminal Original Petition filed by the ED, setting aside the trial court's order granting bail to the respondent. The High Court underscored the gravity of the offence, the ongoing investigation, and the potential risk of the respondent absconding, thus justifying the cancellation of bail.