2023 (12) TMI 1347 - HC - Money Laundering

Money Laundering - illegal mining and transportation of stones from Sahebganj and illegal activities were carried out under political and administrative patronage - HELD THAT - It is difficult to be persuaded by the argument on behalf of petitioner that the mandate of directions given in Pankaj Bansal 2023 (10) TMI 175 - SUPREME COURT was intended to have retrospective operation. The plain reading of para 35 of the said order and the use of word henceforth , can only mean that that direction of the Hon ble Supreme Court was prospective and not retrospective in nature. Furthermore, if the suggested interpretation of the expression henceforth is accepted, it will amount to review all the arrest so far made under Section 19(1) of PMLA. Be that as it may, there are factors from which an inference can be drawn that rigors of Section 45 PMLA Act will not apply in the present case. The petitioner was not named in the earlier two prosecution complaints submitted by E.D. and his name has transpired in the 3rd supplementary prosecution complaint. The F.I.R. which has been lodged under Sections 279 and 304A, read with Section 120B of the IPC, will have no bearing on the present case. The above named petitioner is directed to be released on bail on furnishing bail bond of Rs. 1,00,000/-(One Lakh) with two sureties of the like amount each to the satisfaction of the Court below, subject to the condition that one of the bailor shall be an income tax payee - Petition allowed.

Summary

Issues:
1. Custody of the petitioner under the Prevention of Money Laundering Act, 2002.
2. Allegations of illegal mining and money laundering.
3. Compliance with the mandate of Section 19(1) of the PMLA.
4. Interpretation of recent judgments regarding scheduled offences and money laundering.

Analysis:
1. The petitioner, in custody under the PMLA, was implicated in illegal mining activities beyond the lease hold area, leading to the accidental death of two laborers. The prosecution alleged that the petitioner laundered substantial amounts through various bank accounts, including transferring funds to the main accused, Pankaj Mishra, involved in illegal mining operations. The ED froze significant amounts linked to the petitioner, indicating possession of crime proceeds.

2. The defense argued that the petitioner was not directly named in the FIR or ECIR, and the offenses registered were not scheduled offenses under the PMLA. They contended that the dropping of Section 120B of the IPC from the chargesheet indicated a lack of predicate offense for money laundering. Citing recent judgments, the defense claimed that the petitioner's actions did not constitute money laundering under the PMLA.

3. The ED countered by asserting that the laundering of proceeds from illegal mining activities was evident in the channeling of funds through the petitioner's accounts. They highlighted the independent nature of money laundering offenses under the PMLA, emphasizing the connection to proceeds of crime rather than the predicate offense. The ED also defended the arrest procedure, stating that the petitioner was informed of the grounds during remand proceedings, ensuring compliance with Section 19(1) of the PMLA.

4. The court considered the arguments from both sides and examined recent judgments to determine the applicability of the PMLA in the case. While acknowledging the retrospective interpretation debate, the court ultimately granted bail to the petitioner, noting the lack of direct involvement in earlier complaints and the nature of the offenses in the present case. The court directed the petitioner's release on bail with specific conditions.

This detailed analysis covers the issues of custody under the PMLA, allegations of illegal mining and money laundering, compliance with legal mandates, and the interpretation of recent judgments in the context of the case.