2023 (10) TMI 681 - HC - Money Laundering

Money Laundering - seeking release of petitioner - Use of forged identification documents and falsified addresses by Chinese shareholders of GPICPL, while projecting itself to be a subsidiary company of Vivo, China - it is argued by learned Senior Counsel that the said ingredient of Section 19 is missing in the present case since the investigating officer has not recorded any such satisfaction. HELD THAT - This Court has carefully considered the decision of Hon ble Apex Court in case of Pankaj Bansal 2023 (10) TMI 175 - SUPREME COURT and has perused the remand order impugned before this Court. This Court is of the opinion that the impugned order takes note of the allegations leveled against the accused persons in the FIR as well as the investigation conducted so far by Directorate of Enforcement. The learned Sessions Court had also perused the written grounds of arrest placed on record and had also taken note of the fact that the grounds of arrest in writing had been supplied to the accused persons in compliance of judgment of the Hon ble Apex Court in case of Pankaj Bansal. After perusing the records of the case, the learned Sessions Court has categorically recorded that prima facie there was no violation of Section 19 of PMLA since the investigating officer, from the material and investigation conducted so far, had formed an opinion that the accused persons were guilty of offence of money laundering and had affected their arrest accordingly. The impugned order also mentions that the custody of the accused persons was sought not only due to their non-cooperation and evasive replies, but also due to the deliberate attempts to evade/mislead investigation and to find out the deep rooted conspiracy for the commission of offence under PMLA. Only after considering the abovementioned facts, the remand order impugned before this Court was passed. This Court notes that the present remand order is clearly distinguishable from the remand order which was challenged before the Hon ble Apex Court in case of Pankaj Bansal in which the concerned Sessions Judge had failed to even record a finding that he had perused the grounds of arrest to ascertain as to whether Directorate of Enforcement had recorded reasons to believe that the accused persons therein were guilty of an offence under PMLA and the order had merely recorded that the custodial interrogation of the accused was required in view of the seriousness of the offences and the stage of investigation. Having also considered the judgment of Hon ble Apex Court in case of V. Senthil Balaji, this Court notes that the investigating agency i.e. Directorate of Enforcement had satisfied the learned Sessions Court with adequate material for the need of custody of the accused and the learned Sessions Court had arrived at a conclusion that Section 19 of the Act was duly complied with and it is only thereafter that the accused persons including petitioner had been remanded to the custody of Directorate of Enforcement. This Court does not find any infirmity in the order of remand dated 10.10.2023 challenged before this Court as the same takes into account the mandate of compliance of provisions of Section 19 of PMLA as well as Section 45 of PMLA. Petition dismissed.

Summary

Issues Involved:
1. Legality of the remand order dated 10.10.2023.
2. Compliance with Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA).
3. Allegations against the petitioner and the necessity of custodial interrogation.

Summary:

Issue 1: Legality of the Remand Order
The petitioner sought the setting aside of the remand order dated 10.10.2023 passed by the Sessions Court, which remanded him to the custody of the Directorate of Enforcement (ED) for three days. The High Court examined the impugned order and noted that the Sessions Court had considered the allegations, the investigation conducted so far, and the written grounds of arrest. The Sessions Court found no prima facie violation of Section 19 of PMLA and concluded that the remand was necessary to unearth the complete conspiracy. The High Court found no infirmity in the remand order and dismissed the petition.

Issue 2: Compliance with Section 19 of PMLA
The petitioner argued that his arrest was carried out in violation of Section 19 of PMLA, which requires the investigating officer to have a belief that the person being arrested is guilty of an offence. The High Court noted that the arrest order and the remand application clearly mentioned that the investigating officer had reason to believe that the petitioner was guilty of money laundering. The Sessions Court had recorded that the grounds of arrest were supplied to the petitioner, and there was no violation of Section 19 of PMLA. The High Court found that the Sessions Court had duly considered the compliance with Section 19 before remanding the petitioner to custody.

Issue 3: Allegations Against the Petitioner and Necessity of Custodial Interrogation
The petitioner was accused of being one of the main conspirators in creating a mesh of companies across India, which were used to control the supply chain of Vivo mobiles and siphon off proceeds of crime. The investigation revealed that the petitioner had coordinated the incorporation of these companies and was involved in their operations. The ED argued that custodial interrogation was necessary due to the petitioner's non-cooperation and evasive replies. The High Court found that the remand order was based on adequate material and the need for custodial interrogation was justified to unearth the conspiracy and the petitioner's involvement in money laundering.

Conclusion:
The High Court dismissed the petition, finding that the remand order dated 10.10.2023 was justified and complied with the provisions of Section 19 and Section 45 of PMLA. The Court clarified that nothing expressed in the judgment should be taken as an opinion on the merits of the case.