2024 (7) TMI 1517 - HC - Indian Laws

Grant of bail - admissibility of statements - Evidence against the present applicant - statements of approvers and witnesses should be disregarded at the stage of bail or not - benefit of the proviso to Section 45 of PMLA being a woman. Material Collected by Central Bureau of Investigation Against the Applicant Ms. K. Kavitha - HELD THAT - Evidence in the form of chats retrieved from the mobile phone of Sh. Buchi babu have revealed that Ms. K. Kavitha s partnership in M/s Indo Spirits, through her proxy Sh. Arun R. Pillai, as well as her assistance to Sh. Raghav Magunta, the approver, in obtaining an NOC for his firm i.e. M/s Pixie Enterprises for Airport retail zone. Furthermore, the photographs retrieved from Sh. Manoj Rai s phone revealed the details of a meeting that had taken place on 20.09.2021, organized by M/s Pernod Ricard India Pvt. Ltd., to appoint M/s Indo Spirits as a wholesaler, in which Sh. Sharath Chandra Reddy of M/s Aurbindo Group, Sh. Buchibabu, Sh. Sameer Mahendru, Sh. Arun R. Pillai, Sh. Abhishek Boinpally, etc. were present. In view of the material collected by the investigating agency, this Court is of the opinion that Smt. K. Kavitha was prima facie one of the main conspirators in the criminal conspiracy hatched in relation to formulation and implementation of Delhi Excise Policy 2021-22. Material Collected by Directorate of Enforcement Against the Applicant Smt. K. Kavitha - HELD THAT - This Court is of the opinion that Smt. K. Kavitha was prima facie involved in payment of kickbacks, establishing M/s Indo Spirit for recoupment of kickbacks, and in various other processes and activities relating to proceeds of crime, and thus, in commission of offence of money laundering as defined under Section 3 of PMLA, for the purpose of appreciating as to whether the twin condition under Section 45 PMLA are met or not and to arrive at a decision as to whether there was material collected by the investigating agencies against the present applicant. Whether the statements of approvers and witnesses should be disregarded at the stage of bail? - HELD THAT - Recording of statements of witnesses, complainant, and in many cases an accused turning approver and his statement being recorded by a judicial magistrate, as well as collection of digital or forensic evidence in various forms results in incriminating material being in possession of the investigating agency, which is placed before the Trial Court for the purpose of its satisfaction regarding grant of remand or bail. Similarly, at the stage of grant of bail before a higher Court, it will be the abovesaid initial material which will be placed before it for the purpose of reaching a conclusion regarding grant of bail or not. It is to be noted that at this stage when the chargesheet has not been filed, the conclusion of investigation and the entire material which will be part of a chargesheet will not be before a Court of law - As per the existing law, the Courts have to rely upon the statements of the witnesses etc. as mentioned above for the purpose of making out a prima facie view regarding involvement of an accused and the extent thereof for the purpose of exercising discretion to grant or deny bail. This Court is of the opinion that the present bail applications have to be decided on the basis of facts and material collected by the investigating agencies and the contentions regarding grant of bail raised by the learned defence counsels in light of the law and the judicial precedents. Whether the applicant is entitled to grant of bail at this stage? - HELD THAT - Having gone through the material placed on record by the Directorate of Enforcement, including the statements of witnesses recorded under Section 50 of PMLA, statements of approvers recorded under Section 164 of Cr.P.C., other documentary evidence collected by the investigating agencies including the recovery of chats, etc., which have been discussed in the preceding paragraphs in detail, this Court is of the view that a prima facie case of commission of money laundering under Section 3 of PMLA against the applicant Smt. K. Kavitha is made out for the purpose of deciding his bail application, since it prima facie appears from such material collected by the Directorate of Enforcement that she was involved in various processes and activities relating to proceeds of crime, and this Court, even considering the broad probabilities of the case, cannot reach a conclusion that the applicant is not guilty of the offence of money laundering, at this stage for the purpose of deciding the bail application. To conclude, the twin conditions under Section 45 of PMLA are not fulfilled in the present case, so as to entitle the applicant to grant of bail in case registered by Directorate of Enforcement. Whether the Applicant Fulfils the Triple Test for Grant of Bail? - HELD THAT - As far as triple test for grant of bail is concerned, this Court notes that during the course of investigation, the applicant had presented nine mobile phones for examination on 21.03.2023 before the Directorate of Enforcement, which were found to be formatted with no data. She had denied formatting the devices and had informed the investigating agency that the said phones belonging to her were given by her to her household staff and other staff and that she had got them back for the purpose of handing over to the investigating agency - this Court is also of the opinion that many of the crucial witnesses in this case are either close associates or employees of the present applicant, and since it is the case of applicant herself that she is a well-accomplished woman and holds position of eminence in the field of politics, the possibility of influencing witnesses cannot also be ruled out at this stage. Thus, this Court is of the opinion that the applicant herein does not fulfill the triple test for grant of bail. Whether the applicant is entitled to the benefit of the proviso to Section 45 of PMLA being a woman? - HELD THAT - The Hon ble Supreme Court in the case of Saumya Chaurasia v. Directorate of Enforcement 2023 (12) TMI 685 - SUPREME COURT has observed that though the Courts should be sensitive and sympathetic to the vulnerable groups such as women, it must also recognize that educated and well-placed women may engage themselves in illegal activities. Therefore, courts are required to exercise their discretion judiciously, considering factors such as the extent of involvement and evidence against the accused when applying this proviso. Smt. K. Kavitha cannot be equated to a vulnerable woman who may have been misused to commit an offence, which is the class of women for whom the proviso to Section 45 of PMLA has been incorporated, as held by the Hon ble Apex Court in case of Saumya Chaurasia. Accordingly, this Court is of the considered opinion that Smt. K. Kavitha is not entitled to the benefit of proviso to Section 45 of PMLA. Tthis Court is of the view that no case for grant of regular bail is made out at this stage - the present bail applications are dismissed.

Summary

Issues Involved:
1. Evidence against the present applicant.
2. Whether the statements of approvers and witnesses should be disregarded at the stage of bail.
3. Whether the applicant is entitled to grant of bail at this stage.
4. Whether the applicant is entitled to the benefit of the proviso to Section 45 of PMLA being a woman.
5. The decision.

Detailed Analysis:

I. Evidence Against the Present Applicant
Material Collected by Central Bureau of Investigation Against the Applicant:
The CBI's investigation revealed that the applicant, Ms. K. Kavitha, was allegedly involved in a criminal conspiracy related to the formulation of Delhi's Excise Policy for 2021-22. The policy was purportedly designed to create loopholes for exploitation, resulting in substantial kickbacks to public servants. Statements from witnesses and approvers, including Sh. Magunta S. Reddy and Sh. Dinesh Arora, indicated that Ms. Kavitha was a key conspirator who facilitated payments of Rs. 90-100 crores from the South Group to Aam Aadmi Party officials. Chats and documents recovered from co-accused further implicated Ms. Kavitha in the conspiracy, showing her partnership in M/s Indo Spirits and involvement in laundering money through sham land deals and other transactions.

Material Collected by Directorate of Enforcement Against the Applicant:
The Directorate of Enforcement relied on statements under Section 50 of PMLA and other evidence to allege that Ms. Kavitha was involved in paying kickbacks and laundering money through M/s Indo Spirits. Statements from multiple individuals, including Sh. Sarath Reddy and Sh. Arun Pillai, indicated that Ms. Kavitha was a key player in the conspiracy, controlling shares in M/s Indo Spirits and facilitating the laundering of proceeds from the liquor business. The Directorate of Enforcement also found that Ms. Kavitha's associates were involved in transferring large sums of money for political campaigns through hawala channels.

II. Whether the Statements of Approvers & Witnesses Should Be Disregarded at the Stage of Bail
The court held that statements of approvers recorded under Section 164 of Cr.P.C. and statements under Section 50 of PMLA are admissible and can be relied upon at the stage of bail. The court cited precedents from the Supreme Court, including Rohit Tandon v. Directorate of Enforcement, which affirmed the evidentiary value of such statements. The court noted that at the stage of bail, the material collected during the investigation, including statements and documentary evidence, is sufficient to form a prima facie view of the accused's involvement.

III. Whether the Applicant is Entitled to Grant of Bail at This Stage
Principles Governing Grant of Bail:
The court considered general principles for bail, including the nature and gravity of the accusation, the likelihood of tampering with evidence, and the risk of the accused absconding. The court also applied the triple test for bail, which assesses flight risk, potential tampering with evidence, and influence over witnesses.

Section 45 of PMLA: The Twin Test:
The court referred to the mandatory twin conditions under Section 45 of PMLA, which require the court to be satisfied that there are reasonable grounds for believing the accused is not guilty and is not likely to commit any offense while on bail. The court cited Vijay Madanlal Choudhary v. Union of India, emphasizing the gravity of money laundering offenses and the stringent measures required to combat them.

Whether the Applicant Fulfils Twin Test under Section 45 of PMLA:
The court concluded that a prima facie case of money laundering against Ms. Kavitha was made out based on the material collected by the Directorate of Enforcement. The court could not conclude that the applicant was not guilty, thus failing the twin conditions under Section 45 of PMLA.

Whether the Applicant Fulfils the Triple Test for Grant of Bail:
The court noted that the applicant had presented formatted mobile phones, indicating potential tampering with evidence. Given her political influence and the ongoing investigation, the court could not rule out the possibility of her tampering with evidence or influencing witnesses. Therefore, the applicant did not fulfill the triple test for grant of bail.

IV. Whether the Applicant is Entitled to Benefit of Proviso to Section 45 of PMLA Being a Woman
The court examined the proviso to Section 45 of PMLA, which allows for bail to women under certain conditions. However, the court referred to the Supreme Court's judgment in Saumya Chaurasia v. Directorate of Enforcement, which held that the proviso is discretionary and not obligatory. The court noted that Ms. Kavitha, being an educated and well-accomplished woman, did not fall within the vulnerable category intended to benefit from the proviso. Therefore, she was not entitled to the benefit of the proviso to Section 45 of PMLA.

V. The Decision
The court concluded that no case for grant of regular bail was made out at this stage for both cases registered by the CBI and the Directorate of Enforcement. The bail applications were dismissed, with the clarification that the judgment does not express an opinion on the merits of the case.