2024 (3) TMI 1356 - HC - Money Laundering

Seeking grant of bail - Money Laundering - proceeds of crime - submission of forged papers - predicate crime - principles of parity - twin conditions under Section 45 of PMLA - HELD THAT - The Hon'ble Apex Court in the case MANUBHAI RATILAL PATEL TR. USHABEN VERSUS STATE OF GUJARAT ORS. 2012 (9) TMI 1080 - SUPREME COURT has categorically observed that while exercising this judicial act, it is obligatory on the part of the Magistrate to satisfy himself whether the materials placed before him justify such a remand or, to put it differently, whether there exist reasonable grounds to commit the accused to custody and extend his remand. It is evident from the aforesaid judgment that the power conferred to the Court to remand a person in the judicial custody if there is imputation of prima facie case said to be committed under cognizable offence. The word remand bifurcates that whether the same is for one allegation or more than one allegation, rather irrespective of number of allegations even if a person has committed one offence and when said person is produced before the concerned court seeking remand then the court is to accept the remand by assigning the reason of remand. It is, thus, evident that Section 19 of the PML Act, 2002 confers power upon the competent authority to arrest a person if he has got reason to believe of commission of offence. The phrase reason to believe is having bearing and this Court is to consider on the basis of imputation as to whether the arrest is based upon any reason to having been said to be believed by the Director in order to come to the conclusion with respect to fact as to whether the remand/arrest is legal or not. This Court, in order to reach to the conclusion as to whether the material has been available before the learned Special Judge for passing the order of remand, has perused the order of remand, based upon the incriminating material claimed by the ED as per reference to that effect made in paragraph 7 to 17 of the application for custody. It has been found by learned Special Judge that huge amount of proceeds of crime is involved with larger conspiracy to illegally sell the land by manipulation of official records and later acquiring the said land on meager price. Accordingly, the petitioner was remanded in the case. The present Deputy Commissioner was aware with all the facts regarding the fabrication of the document from its rightful owner in the name of Pradeep Bagchi and as such direction was given by him to the Circle Officer and based upon said forged document, the documents pertaining to the said land was prepared in the name of Pradeep Bagchi who has subsequently sold out the land in favour of one firm, M/s Jagatbandhu Tea Estate Pvt. Ltd, the land situated at Cheshire Home, which was owned by Amit Kumar Agarwal, the accused no. 3 - this Court is of the view that the order of remand cannot be said to suffer from error, as the learned Court based upon the material available before it has passed the order of remand. The authority under the Act, 2002 is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of proceeds of crime . Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process - It is thus evident from the imputation of allegation leveled against the petitioner that it is incorrect on the part of the petitioner to take the ground that there was no reason to believe to the competent authority for making arrest. Irrespective of the fact that subsequently the other allegations have been added. It is evident that the penal offence under Section 3 will be attracted if a person is directly or indirectly even attempting to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime, meaning thereby that it is not that it is direct involvement rather it is indirectly also even in taking attempts or by assisting in any process or activity connected with the proceeds of crime - the question of commission of crime as per imputation, as per the argument advanced on behalf of learned counsel for the petitioner even accepting to be correct the same will not come under the fold of proceeds of crime and hence Section 3 will not be attracted but this Court is dealing with the issue of bail and not analyzing the veracity of the imputation which is only to be done at appropriate stage and at this stage which requires consideration is parameters of Section 45 (ii) of the PML Act, 2002 as per which the twin condition is to be fulfilled. After perusal of the record of the instant case it appears that the holding number was issued to show that the possession of the said land is in the name of Pradeep Bagchi and based upon which title of the said land was established with the help of present petitioner by relying upon the report which is based upon a forged deed planted in the Registrar Kolkata Assurance Office and petitioner used his official position to give legal colour to the transaction when he himself was aware that the title to the said land is in dispute and possession belongs to Defence and from the various paragraph of prosecution complaint it is evident that in the said act proceeds of crime is generated wherein forged deed is relied upon and transaction was entered into a miniscule rate wherein no actual amount of payment was done - From record it also appears that the petitioner has involvement in facilitating brokers and private entities to acquire the properties which had been in possession of the Defence before independence. The deliberate act of the petitioner is not only restricted in extending benefits to the private entities but it also amounts to cheating and forgery and the petitioner who had a responsibility of ensuring fairness and securing government properties himself misused his official position and influenced his subordinate officials. Ground of parity - HELD THAT - Law is well settled that the principle of parity is to be applied if the case of one or the other is exactly to be similar then only the principle of parity is to be applied but if there is difference in between the facts then the principle of parity is not to be applied - Ground of parity though has been raised but in the aforesaid context it may be noted that parity is not the law, rather the principle of parity is based on the guarantee of positive equality before law enshrined under Article 14 of the Constitution of India and while applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration. This Court is of the view that the applicant has failed to make out a case for exercise of power to grant bail and considering the facts and parameters, necessary to be considered for adjudication of bail, without commenting on the merits of the case, this Court does not find any exceptional ground to exercise its discretionary jurisdiction under Section 439 of the Code of Criminal Procedure to grant bail. Therefore, this Court is of the view that the bail application is liable to be rejected - the instant application stands dismissed.

Summary

Issues Involved:
1. Legality of the remand order.
2. Compliance with Section 19(1) of the Prevention of Money Laundering Act, 2002 (PMLA).
3. Availability of legal evidence against the petitioner.
4. Whether the alleged acts constitute "proceeds of crime" under PMLA.
5. Application of the principle of parity in granting bail.
6. Consideration of twin conditions under Section 45 of PMLA for granting bail.

Detailed Analysis:

1. Legality of the Remand Order:
The petitioner argued that the remand order was invalid as it considered properties not mentioned at the time of arrest, violating Section 19(1) of PMLA. The court held that the remand order was based on prima facie evidence of a cognizable offense, which is sufficient for remand. The court emphasized that the remand court primarily needs to see the availability of allegations of a penal offense. Therefore, the remand order was deemed valid.

2. Compliance with Section 19(1) of PMLA:
The petitioner contended that the arrest was illegal as the grounds for arrest were not properly communicated. The court referred to the Supreme Court's interpretation in Vijay Madanlal Choudhary v. Union of India, which mandates that the reason for arrest must be recorded in writing and communicated as soon as possible. The court found that there was sufficient material at the time of arrest to justify the belief that the petitioner was involved in money laundering. Hence, the arrest complied with Section 19(1) of PMLA.

3. Availability of Legal Evidence:
The petitioner argued that there was no legal evidence against him. The court examined the prosecution's complaint, which detailed the petitioner's involvement in facilitating the fraudulent transfer of land using forged documents. The court found that there was ample material to substantiate the allegations, including statements from co-accused and officials. Therefore, the argument that there was no legal evidence was rejected.

4. Whether the Alleged Acts Constitute "Proceeds of Crime":
The petitioner claimed that the acts constituted mere forgery and did not fall under "proceeds of crime" as defined by PMLA. The court referred to the definition under Section 2(1)(u) of PMLA, which includes any property derived from criminal activity related to a scheduled offense. The court found that the fraudulent transfer of land, facilitated by the petitioner, fell within this definition. Therefore, the acts were deemed to constitute "proceeds of crime."

5. Application of the Principle of Parity in Granting Bail:
The petitioner sought bail on the ground of parity, citing bail granted to co-accused Dilip Kumar Ghosh. The court noted that parity is not an absolute principle and must consider the specific role and circumstances of each accused. The court found that the petitioner's role as a public servant and his direct involvement in the fraudulent activities distinguished his case from that of Dilip Kumar Ghosh. Therefore, the principle of parity was not applicable.

6. Consideration of Twin Conditions under Section 45 of PMLA:
The court emphasized that Section 45 of PMLA requires satisfaction of twin conditions: reasonable grounds to believe that the accused is not guilty and that he is not likely to commit any offense while on bail. The court found that the material on record did not support the belief that the petitioner was not guilty. Given the petitioner's role and the gravity of the allegations, the court concluded that the twin conditions were not met. Therefore, the bail application was rejected.

Conclusion:
The court dismissed the bail application, finding that the remand order was valid, the arrest complied with Section 19(1) of PMLA, there was sufficient legal evidence, the acts constituted "proceeds of crime," the principle of parity was not applicable, and the twin conditions under Section 45 of PMLA were not satisfied. The observations were made solely for the purpose of deciding the bail application and would not affect the trial's merits.