2024 (9) TMI 1686 - HC - Money Laundering

Application for pre-trial bail - money laundering - proceeds of crime - scheduled offences - applicant is entitled to bail under Section 45 of the PML Act or not - HELD THAT - An attempt has been made to indicate that the amount as shown by the prosecution as received by the applicant as proceeds of crime is nothing but hard earned money of the applicant. The said amount is said to be her saving from her part of salary which she invested as well as money she earned from the sale and purchase of agricultural and commercial land and also part of her income she derived from sale and purchase of cow milk and other dairy products and from agricultural income apart from the monetary help extended to her by her husband and children. The record would further indicate that large number of documents were recovered from the premises/house of the applicant. The details of which have been mentioned in ECIR, Clause 3.4. The nature of the documents so recovered are certain FIRs lodged against the applicant relating to the year 2016. Documents indicating investments made in PIP Plan of Shine City Infra Project relating to Ajay Pal, Kuldeep Singh, Ram Awadh Yadav and the applicant herself. It could not be explained by the applicant as to why there large number of original sale deeds belonging to third parties were present at the residence of the applicant. Thus, in absence of any plausible reason, either the properties have been parked in names of third parties to cerate a smokescreen to evade it being traced to the applicant or the applicant has deep rooted connections to hold on to said documents for third parties for some ulterior gains. Merely to suggest that a sum of Rs. 16,00,000/- and odd has been shown as proceeds of crime and the applicant being a school teacher and later promoted to the post of Headmaster between the year 2009 to 2020 had the means to garner such amount which was in her account and it cannot be treated as an alarming figure. The applicant could have easily indicated her source of income from agricultural activities if she could give details of the extent of her landholding but it has not been done. No details were given to show how much live stock she had from where she could substantially earn by the sale of milk and dairy products - In absence of such material or explanation to justify the documents, data and amount found with the applicant such as third party sale deeds, plot buyer agreements, e-payment receipts which if seen in juxtaposition to the language of Section 3 of The PML Act of 2002 which provides that any act of a person engaged directly or indirectly being connected or associated with proceeds of crime or even being involved in concealing, possessing, acquisition or use or projecting as untainted property, all such acts falls within Section 3 of The PML Act of 2002. Conclusion - This Court is unable to persuade itself to form a, prima facie, satisfaction in terms of Section 45 of The PML Act of 2002, at this stage, that the applicant is not guilty or that she may not commit an offence on bail. Bail application is rejected.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

• Whether the applicant is guilty of money laundering under the Prevention of Money Laundering Act, 2002 (PML Act).
• Whether the applicant is entitled to bail under Section 45 of the PML Act, given the allegations and evidence presented.
• The interpretation and application of the legal framework concerning money laundering, including the definitions of "proceeds of crime" and the conditions for granting bail.
• Consideration of the applicant's argument that she was a victim rather than a perpetrator of the alleged fraud.
• The applicability of legal precedents and principles regarding bail in cases involving economic offenses.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Guilt under the PML Act

• Legal Framework: The PML Act defines money laundering as any process or activity connected with the proceeds of crime, including concealment, possession, acquisition, or use of such proceeds, projecting them as untainted property.
• Court's Interpretation: The court emphasized the wide scope of the PML Act, which includes any person directly or indirectly involved in the process or activity connected with proceeds of crime.
• Key Evidence and Findings: The applicant was allegedly a confidant of the main director of Shine City Group and involved in activities such as creating a social media group to facilitate illegal possession of land and handling proceeds of crime.
• Application of Law to Facts: The court found that the applicant's actions, including her financial transactions and communication with key figures in the Shine City Group, indicated involvement in money laundering.
• Treatment of Competing Arguments: The applicant argued that she was a victim of the fraud, having invested in the company herself, but the court found insufficient evidence to support this claim.
• Conclusions: The court concluded that there was a prima facie case against the applicant for money laundering.

Issue 2: Entitlement to Bail

• Legal Framework: Section 45 of the PML Act imposes stringent conditions for granting bail, requiring the court to be satisfied that the accused is not guilty and unlikely to commit any offense while on bail.
• Court's Interpretation: The court noted that the conditions under Section 45 are mandatory and require careful consideration of the evidence and circumstances.
• Key Evidence and Findings: The court highlighted the applicant's financial transactions and possession of documents related to the Shine City Group, which suggested involvement in money laundering.
• Application of Law to Facts: The court found that the applicant failed to provide a satisfactory explanation for her financial activities and connections to the Shine City Group.
• Treatment of Competing Arguments: The applicant's argument for bail based on her gender and prolonged detention was considered but found insufficient given the gravity of the offense.
• Conclusions: The court denied bail, citing the seriousness of the allegations and the applicant's failure to meet the conditions under Section 45.

3. SIGNIFICANT HOLDINGS

• Verbatim Quotes: "The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities."
• Core Principles Established: The court reaffirmed the stringent conditions for bail under the PML Act and the broad interpretation of involvement in money laundering.
• Final Determinations: The applicant's bail application was rejected due to the prima facie evidence of her involvement in money laundering and failure to meet the bail conditions under Section 45 of the PML Act.

The court emphasized that its observations should not be taken as an expression of opinion on the merits of the case, and directed the trial court to expedite the trial process.