2023 (10) TMI 1219 - HC - Money Laundering

Seeking grant of bail - Money Laundering - ramifications involved in the Teachers Recruitment Scam - economic offences - applicability of principles as under Section 439 of the Cr.P.C. - factum of the complicity of the present petitioner so far as the proceeds of crime - HELD THAT - At the initial stage when the argument commenced and the Enforcement Directorate prayed for filing their affidavit, this Court directed to clarify whether any policy has been adopted by the Investigating Agency so far as the exercise of the powers under Section 19 of the PMLA is concerned - There were no cogent reasons assigned by the Investigating Agency which in the background of the present case satisfies the conscience of the Court regarding the exercise of such powers. Towards the end of the hearing, it was pointed out by the Enforcement Directorate that the Teachers Recruitment Scam involves wide magnitude and there are materials which have recently surfaced leading to money trail where the involvement of the petitioner is glaring. Having considered the tentative time limit set by the Hon ble Division Bench to the Investigating Agency to conclude the investigation and further materials having surfaced for which the Investigating Agency at this stage sought for time to examine two more witnesses apart from the witnesses who have already been examined particularly with regard to the amount which has transpired relating to the donations in the account of the school, having regard to the ramifications involved in the Teachers Recruitment Scam, the Investigating Agency at this stage must be granted an opportunity to exhaust their powers relating to investigation. Accordingly, at this stage, the petitioner cannot be released on bail. Bail application dismissed.

Summary

Issues Involved:
1. Allegations of money laundering under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Petitioner's involvement in the Teachers' Recruitment Scam.
3. Bail application and its rejection by the learned Special Court.

Summary:

Allegations of Money Laundering:
The petitioner is implicated in connection with M.L. case no. 13 of 2022 arising out of ECIR No. KLZOII/19/2022 for alleged commission of offences under Sections 3 and 70 of the PMLA, 2002 and punishable under Section 4 of the same Act. The accusations involve the petitioner's active involvement in assisting his father, the president of the West Bengal Board of Primary Education, in laundering proceeds of crime acquired through corrupt activities. This included extorting money from self-financed D.El.Ed Colleges and students during the COVID-19 pandemic, using proprietary concerns M/s Acuere Consultancy Services and M/s Educlasses Online to launder the extorted funds.

Petitioner's Involvement in the Teachers' Recruitment Scam:
The petitioner, along with his father, formed proprietary concerns to launder the extorted money. Investigations revealed that no actual services were provided by these firms, and the funds were not returned. The petitioner also opened joint bank accounts with family members to further conceal the proceeds of crime. The Enforcement Directorate (E.D.) highlighted the petitioner's complicity in the money trail and his role as the final beneficiary of the laundered funds.

Bail Application and Its Rejection:
The petitioner appeared before the Special Court and prayed for bail, but the E.D. opposed this, citing the petitioner's complicity and the ongoing investigation. The Special Court rejected the bail application on 22nd February 2023. A revisional application challenging this order was filed but subsequently not pressed by the petitioner. Another application under Section 88 of the Cr.P.C. was also rejected by the Special Court on 22nd March 2023.

The petitioner's counsel argued for bail based on the period of detention, the petitioner's cooperation with the investigation, and the fact that he was never arrested under Section 19 of the PMLA. However, the E.D. emphasized the petitioner's involvement in economic offences and the necessity of continued investigation. The High Court noted the ongoing investigation and the recent surfacing of new materials, leading to the decision to deny bail at this stage.

Conclusion:
The High Court dismissed the bail application, emphasizing the need for the E.D. to complete its investigation, especially given the wide ramifications of the Teachers' Recruitment Scam. The court directed all parties to act on the server copy of the judgment and allowed for urgent certified copies to be supplied upon compliance with formalities.