2024 (4) TMI 375 - HC - Money Laundering

Seeking grant of bail - Money Laundering - scheduled offence - proceeds of crime - delay in proceedings or not - HELD THAT - The benefit of Section 436-A of the Code cannot be denied merely on the basis that allegations are serious. If the conditions are fulfilled the Court is bound to give the benefit. Only the factors like the allegations time required to be taken for conduct of the trial need to be considered. It is but natural for the Prosecution to take sometime for conduct of trial. At the same time it is but natural that the Accused still remain in jail for a longer period. Ultimately the Court has to balance in between the rights of both the contesting parties. The word joint trial is not defined anywhere in the Code of Criminal Procedure. In ordinary parlance it is construed as a joint trial of several Accused. It may be for the purpose of framing of charge. Such issue may also arise when there are counter cases against each other. Both these cases also need to be tried separately even though it may be by the same Judge. By inserting this provision the Legislatures want to suggest that the trial of scheduled offences and trial of PMLA offences will have to be conducted independently though by the same Judge. As per Section 3 of the PML Act anyone involved in the process of proceeds of crime it is an offence. The scheduled offences are the offences laid down as per the schedules. The scheme of the Act does not suggest that there can be an investigation for PMLA offences only when there is a conviction in a trial involving the scheduled offences . A person accused of PMLA offence may contend that unless it is proved that the proceeds alleged by the Enforcement Directorate were derived from the criminal activity is proved they cannot be convicted. When the trial of PMLA offences in this case will be started? - HELD THAT - A draft charge is already filed on behalf of the E.D. It is true that yet the Special Court has not proceeded further after framing of charge that is to say hearing the Prosecution and hearing the respective Accused persons. If there are discharge Applications the Special Court is required to decide them. There are in all 38 Accused persons. One does not know when this pre-charge formalities will be completed. It is true that all these complaints consist of thousands of pages and there will be number of witnesses. So the trial will be going to take its own time. The issue is whether the Applicants can be detained in jail just because the allegations are serious in nature ? The answer is No . Because it is not certain when the trial will start and it will be over. Furthermore even if trial of both the cases will start simultaneously still the judgement in PMLA case will not be pronounced till the time the judgement in trial involving scheduled offence will be pronounced. It is true that in entire administration of Criminal Law various stake holders are involved. The responsibility on investigating agency and on the Courts is onerous. Firstly it is the duty of investigating agency to investigate properly and to collect materials and to submit it in the Court. The responsibility of the Court starts later on. It is true that there is time limit fixed for completion of investigation. Even if the charge-sheet/complaint is filed still depending upon the magnitude of the offence the trial continues. There are two sides. One is prosecution and another is defence. Court has to hear both of them. And it is bound to take time - It is but natural that it will take long time for completion of the cases considering the procedure required to be followed. One cannot deny the fact that considering the statistics received by me it is uncertain when the trial will start. Hence in such a situation a person cannot be deprived of his personal liberty. It is no doubt true that E.D. has filed draft charge . Same time it is also true that framing a charge is not an empty formality. The Special Judge has to satisfy himself that ingredients of an offence are prima facie satisfied. Both the parties need to be heard - In this exercise there is also onerous responsibility on the prosecuting Agency by remaining vigilant. If their case is not progressed (due to pendency) they are not remedy-less. They can request the head of that establishment (i.e. Principal Judge) to assign the case to another Court. Ultimately running of a system is collective responsibility. The defense Counsels have also a role to play. On one hand they have got every right to protect the interest of their clients and at the same time they have to come forward for early disposal of the case. Because they are also part and parcel of the system. And the system must work. Defence Counsels are also part of the same Society for betterment of which system is created. Bail application allowed.

Summary

Issues Involved:
1. Allegations under the Prevention of Money-Laundering Act, 2002 (PML Act).
2. Grounds for bail under Section 436-A of the Code of Criminal Procedure, 1973 (Cr. P.C.).
3. Delay in the conduct of the trial.
4. Seriousness of allegations and severity of punishment.
5. Status of the case before the Special Court.
6. Nature of other orders and their impact on the case.

Summary:

Allegations:
The Enforcement Directorate (E.D.) lodged an Enforcement Case Information Report (ECI Report) on 3rd October 2019 against 38 persons, including the two Applicants, under the PML Act. The allegations involve availing loans worth Rs. 6117.93 Crores from PMC Bank by the Applicants, who are promoters of HDIL, which are claimed to be proceeds of crime derived after committing a scheduled offence.

Grounds for Bail:
The Applicants argued for bail under Section 436-A of the Cr. P.C., stating they have already undergone half of the maximum punishment prescribed u/s 4 of the PML Act. They contended that filing bail applications does not amount to delaying the trial and there is no death penalty prescribed for their offence.

Opposition to Bail:
The E.D. opposed the bail, arguing that Section 436-A of Cr. P.C. does not provide an absolute right to bail. They emphasized the seriousness of the allegations, severity of punishment, and the difference between 'right to default bail' under Section 167 and Section 436-A of the Code. The trial court had noted various circumstances resulting in the delay of the trial.

Punishment Prescribed:
The punishment under Section 4 of the PML Act includes a minimum sentence of 3 years, a maximum of 7 years, and a fine extending to five lakh rupees. There is no death penalty prescribed, satisfying the first requirement for bail under Section 436-A.

Period Under Detention:
The Applicants have been in detention for more than three and a half years, satisfying the second requirement for bail under Section 436-A.

Delay in Conduct of Trial:
The trial court observed that the Applicants have filed numerous applications, which delayed the trial. The court noted that the trial for the scheduled offence and PMLA offences should be conducted independently, though by the same Judge.

Status of the Case:
The trial court has not yet framed charges, and the trial is expected to take a long time due to the complexity and volume of the case.

Findings:
The court acknowledged the Applicants' right to file applications and take steps to protect their liberty but emphasized that these actions should not be seen as delaying tactics unless mala fide is shown. The court also noted the seriousness of the allegations but concluded that the Applicants cannot be detained indefinitely without a clear timeline for the trial's completion.

Conclusion:
The court granted bail to the Applicants on furnishing a personal bond and surety bond of Rs. 5,00,000/- each. The Applicants are directed not to leave Maharashtra without prior permission, not to threaten prosecution witnesses, to attend the trial court punctually, and to surrender their passports to the EOW/ED. The court also directed the Registrar General to address administrative issues faced by the trial court.

Order:
The Bail Applications were allowed, and the Applicants were released on bail with specific conditions to ensure their presence during the trial. The request for cash bail was rejected.