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2024 (10) TMI 1640 - HC - Money LaunderingMoney Laundering - proceeds of crime - prima facie evidence against the applicant indicating involvement in money laundering activities under Sections 3 and 4 of the PMLA - twin conditions u/s 45 of the Prevention of Money Laundering Act 2002 (PMLA) - HELD THAT - The Hon ble Supreme Court in the matter of Vijay Madanlal Chaudhary case 2022 (7) TMI 1316 - SUPREME COURT (LB) has observed that The Court will not weigh the evidence to find the guilt of the accused which is of course the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during the investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. In the case of Satish Jaggi Vs. State of Chhattisgarh 2007 (4) TMI 775 - SUPREME COURT the Hon ble Supreme Court has held that at the stage of granting of bail the Court can only go into the question of prima facie case established for granting bail it cannot go into the question of credibility and reliability of witnesses put up by the prosecution. The question of credibility and reliability of prosecution witnesses can only be tested during trial. The requirement of Section 19 of the PMLA 2002 is completely satisfied. In criminal activity of using the benami bank accounts and utilizing them for managing the proceeds of crime belonging to Mahadev Online Book is the proceeds of crime as defined under Section 2(1)(u) of the PMLA 2002. The material collected during the investigation and the statements recorded under Section 50 of the PMLA 2002 clearly establish the link of the present applicant with the alleged offence. From the material produced in the present case it is not acceptable that the present applicant did not know about the transactions that the amount utilized by him in purchasing the assets comes from Mahadev Online Book. Denial by the accused itself is not sufficient to consider prima facie that there is no mens rea of the applicant for the said offence under the PMLA 2002. Although the statement recorded under Section 50 of the PMLA 2002 is required to be tested at the time of trial for the purpose of consideration of bail application the statement recorded under Section 50 of the PMLA 2002 can be considered against the applicant. It cannot be said that there is no involvement of the applicant in the offence in question. Considering the role of the applicant in the ensuing money laundering case of proceeds of crime in the Mahadev Book App it is found that there is sufficient evidence collected by the ED/respondent to prima facie show the involvement of the applicant in the offence of money laundering as defined under Section 3 of the PMLA 2002. It is an organized crime having various facets of its complexion therefore further considering the provisions of Section 45 of the PMLA 2002 this Court is satisfied that there is reasonable ground for believing that the applicant is involved in the offence and he is likely to commit any other offence while on bail it is not inclined to release the applicant on bail. Conclusion - There is sufficient prima facie evidence against the applicant to justify denying bail. The court found that the applicant s arrest and remand were conducted in accordance with legal provisions and that the evidence presented by the ED supported the allegations of money laundering. The present bail application filed by the applicant is rejected.
ISSUES PRESENTED and CONSIDERED
The primary legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework primarily involves the PMLA, particularly Sections 3 and 4, which define and penalize money laundering. Section 45 of the PMLA sets stringent conditions for granting bail, requiring the court to be satisfied that there are reasonable grounds for believing the accused is not guilty and is unlikely to commit an offense while on bail. The court also referenced precedents such as Vijay Madanlal Chaudhary and Y.S. Jagan Mohan Reddy to guide its decision on bail applications in economic offenses. Court's Interpretation and Reasoning The court emphasized that at the bail stage, it is not required to delve deeply into the merits of the case but should consider the prima facie material against the accused. The court noted that the PMLA aims to combat money laundering, which is considered a serious offense affecting national and economic interests. The court highlighted the need for a stringent approach to economic offenses, as articulated in Y.S. Jagan Mohan Reddy. Key Evidence and Findings The evidence against the applicant includes statements from co-accused and associates, bank account analyses, and call records. The court noted the statements of Chaturbhuj Sharma, who admitted to facilitating financial transactions for the applicant using proceeds from the Mahadev Online Book. The court also considered the applicant's connections to individuals involved in the betting syndicate and the use of proceeds to purchase assets. Application of Law to Facts The court applied the provisions of the PMLA and relevant case law to the facts, finding that there was sufficient prima facie evidence to suggest the applicant's involvement in money laundering activities. The court considered the applicant's alleged role in layering and integrating proceeds of crime, as well as his connections to key figures in the Mahadev Online Book operation. Treatment of Competing Arguments The applicant's counsel argued that there was no sufficient evidence to support the charges and that the arrest and remand were arbitrary. The counsel emphasized the applicant's cooperation with the investigation and lack of criminal antecedents. However, the court found these arguments unpersuasive in light of the evidence presented by the Enforcement Directorate (ED), which demonstrated the applicant's active involvement in the alleged offenses. Conclusions The court concluded that there are reasonable grounds to believe the applicant is involved in money laundering activities and that releasing him on bail could lead to further offenses. The court emphasized the seriousness of the allegations and the need to prevent the applicant from potentially tampering with evidence or influencing witnesses. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning The court cited the Vijay Madanlal Chaudhary case, stating: "The Court is only required to place its view based on probability on the basis of reasonable material collected during the investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial." Core Principles Established The judgment reinforced the principle that economic offenses, particularly money laundering, require a stringent approach due to their potential impact on national interests. The court reiterated that bail in such cases should be granted only when there is a clear absence of prima facie evidence against the accused. Final Determinations on Each Issue The court determined that there is sufficient prima facie evidence against the applicant to justify denying bail. The court found that the applicant's arrest and remand were conducted in accordance with legal provisions and that the evidence presented by the ED supported the allegations of money laundering. Consequently, the court rejected the bail application, emphasizing the need to prevent further offenses and ensure the integrity of the investigation and trial process.
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