2023 (12) TMI 957 - HC - Money Laundering

Money Laundering - illegal transfer of funds out of India as import payments using forged Bill of Entries, Invoices, etc. - Disallowance of prayer of the applicant for an order under Section 267 of the Code of Criminal Procedure, 1973 for the production of respondent No. 1/original accused in a case being investigated by the applicant - HELD THAT - It is apparent that the Division Bench of this Court granted bail to the respondent/accused in Criminal Writ Petition No. 1153 of 2023 on 5.12.2023. However, the bail bond has not been executed to date. According to Sections 441 to 444 CrPC, the accused cannot be released on bail unless a valid bond of the accused and surety are obtained in terms of the bail order. When the impugned order was passed, the bail order in favour of the respondent/accused did not exist. However, the Division Bench of this Court has now granted bail to the respondent/accused. In these circumstances, the trial Court shall determine the consequences of bail order, including the effect of non-execution of bail bond. The criminal application stands disposed off.

Summary

Issues:
The judgment involves a challenge to a decision disallowing a request for production of the accused under Section 267 of the Code of Criminal Procedure, 1973.

Details of the Judgment:

Issue 1: Economic Fraud Investigation
A case was registered by the CBI against directors and proprietors of a company and others for economic fraud involving forged import documents and illegal transfer of funds to Hong Kong. Accused individuals created fake entities, opened bank accounts, and sent Forex remittances illegally, causing a significant loss to India's Foreign Exchange Reserve.

Issue 2: Money Laundering
Accused persons induced individuals to share their KYCs, used them to create fake firms, and collected a large sum of cash for illegal money laundering activities. They imported low-value goods, filed forged documents, and sent remittances to Hong Kong, causing a loss of USD equivalent to Rs. 2252 Crores.

Issue 3: Criminal Conspiracy
The accused were involved in a criminal conspiracy to send illegal remittances to Hong Kong by preparing forged documents, including Bills of Entry and Invoices. They used the funds to send remittances based on inflated values in the forged documents, causing a significant loss to the economy.

Issue 4: Kingpin of Money Laundering
One of the accused was identified as the main kingpin of trade-based money laundering in Mumbai, along with his brothers and accomplices. They opened multiple bank accounts, sent large remittances, and made fraudulent imports, resulting in substantial financial losses.

Issue 5: Threats and Intimidation
The accused continuously threatened witnesses and officials involved in the case, arranged false complaints against them, and interfered with the investigation by various authorities. The accused also acquired properties in different locations, indicating his influence and involvement in illegal activities.

Separate Judgment:
A separate judgment by the Division Bench of the Court granted bail to the accused, but the bail bond had not been executed. The Court clarified that the accused cannot be released on bail without fulfilling the necessary procedural requirements, and the trial Court was directed to determine the consequences of the bail order.

Overall, the judgment addressed the complexities of an economic fraud case involving money laundering, criminal conspiracy, and threats to witnesses, while also highlighting the importance of following proper legal procedures, especially regarding bail conditions.