2024 (4) TMI 718 - HC - Money Laundering

Seeking grant of pre-arrest bail - Money Laundering - predicate offence - proceeds of crime - illegal gratification - section 45 of PMLA - HELD THAT - In the case of ROHIT TANDON VERSUS THE ENFORCEMENT DIRECTORATE 2017 (11) TMI 779 - SUPREME COURT three-judge bench of the Hon ble Apex Court has held that such statements are admissible in nature and can make out a formidable case about involvement of accused in the offence of money laundering. Furthermore the challenge to Section 50 of PMLA was rejected by the Hon ble Apex Court in case of Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT wherein it was held that the statements recorded under Section 50 of PMLA cannot be compared to statements under Section 67 of NDPS Act and that such statements were not in violation of Article 20(3) of the Constitution of India - thus at the stage of adjudicating an anticipatory bail application the statements recorded under Section 50 of PMLA will be relevant to be considered and appreciated alongwith other evidence collected by the investigating agency for the purpose of ascertaining whether the offence of money-laundering is prima facie made out against an accused or not. There is no doubt that a person is entitled to all remedies reliefs and fundamental rights available to him under the Constitution and law such as to seek anticipatory bail when apprehending arrest by the investigating agency or to file a petition challenging validity of summons issued to him. However to hold that filing of a petition or an application which is not diligently pursued would amount to a justification for not joining investigation despite repeated summons and notices being received from the law enforcement agency will be a dangerous proposition. The Courts of law cannot allow a legal strategy commonly used by a person to obstruct investigation or join investigation as that would amount to stripping the investigating agency of their valuable right to summon a person under the law to give information about a suspected crime especially under the law which has been upheld by the Hon ble Apex Court as constitutional and not illegal. The investigating agencies are involved in investigating offences as per law and rather it is the boundened duty of every citizen to join investigation when called for. Needless to say this Court should not be laying down that a citizen will not have a right to seek anticipatory bail however to make that a ground for not appearing before the investigating agency cannot be permitted by Courts. Whether non-co-operation with the investigation agency will come in way of grant or refusal of anticipatory bail? - HELD THAT - The State has a right to summon a person through the investigating agencies to ensure rule of law and bring those who are in conflict with law and in violation of law within the confines of law. The power of Directorate of Enforcement to summon a person is circumscribed under Section 50 of PMLA and as held by Hon ble Apex Court in case of Vijay Madanlal Choudhary and Directorate of Enforcement v. State of Tamil Nadu 2024 (4) TMI 667 - SC ORDER a person so summoned under Section 50 is bound to respect the same - Not responding to or attending to the notices or summons of an investigating agency would amount to non-cooperation with investigation. As a public servant i.e. a person who is in service of public especially the one who professes that his whole life is for public service he should have cooperated with the investigation. Moreso since the allegations are also of misuse of public funds to his own use by purchasing properties through his associates as well as other irregularities committed by him as Chairman of the Delhi Waqf Board it becomes crucial that he joins and cooperates with investigation. When this Court analyzes the material available on record and the investigation conducted so far it appears that the basic purpose for calling or summoning the applicant herein in the present ECIR is that the evidence collected so far be it the diaries seized during investigation or the statements recorded under Section 50 of PMLA have revealed that the properties in questions were purchased from money including cash amount of about Rs. 27 crores which is the proceeds of crime generated by the applicant - Non-joining of investigation on this ground therefore cannot be held in the favour of the applicant/accused since the assessment of evidence gathered by the investigating agency will ultimately be put before the Court of law. Balancing the right of accused and right of investigating agency - HELD THAT - Right to life liberty and security of a person is paramount under the Constitution of India and in the criminal law in India. However at the same time the powers of the investigating agency to investigate an offence wherein the joining and providing information by a person is required sending of summons cannot amount to infringing one s right to freedom and personal liberty on the pretext that the person concerned has apprehension of being arrested. For that he has a separate remedy to take recourse too in the form of anticipatory bail as well as regular bail before the Court of law or quashing of summons on whatever ground he deems appropriate - Thus a person in India has a fundamental right to liberty and life and the shield of law remains available even to an accused against whom an offence is alleged and his liberty can be curtailed only as per law. His right against arbitrary detention or arrest to be informed of specific offence he is accused of at appropriate stage of investigation protection against self incrimination presumption of innocence till held guilty bail not jail being a rule etc. remain available to an individual who is suspected accused. Undoubtedly every such person as any other citizen of India is entitled to the protection of law however the law will also equally apply to him subject to any privilege if at all in a case applicable to him. Needless to say the protection as per law which is available to all citizens is also available to such members and public figures. Their standing in lives or being an elected representative of the people does not create a class or elite class entitling them to different treatment being extended under the same law - an MLA or a public figure is not above the law of the land. In the realm of governance and public service the role of an elected official carries significant weight and responsibility. As an MLA the applicant stands as a figure of authority and influence entrusted with representing the interests and aspirations of their constituents. It is crucial to acknowledge that the actions of such public figures are observed closely by those they serve often looking up to them for guidance and leadership. Thus the applicant s failure to cooperate with the investigating agency sets a perilous precedent. The seizure of diary by the investigating agency which reveals that the properties in question were purchased for about Rs. 36 crore out of which Rs. 27 crores were paid in cash and out of the total amount of Rs. 36 crores an amount of Rs. 8.33 crores was paid by the present applicant - Recovery of one Sale Agreement which shows the sale consideration as Rs. 36 crore as against one alleged false and fabricated agreement which shows the sale consideration as Rs. 13.40 crore which has been allegedly prepared at the behest of present applicant to conceal the proceeds of crime and misguide the investigating agency. The material evidences so gathered during the course of investigation under PMLA revealed that the applicant Amanatullah Khan has acquired huge cash amounts being the proceeds of crime out of criminal activities relating to his corrupt and illegal activities relating to illegal recruitment of the persons in Delhi Waqf Board leasing out the properties of Delhi Waqf Board in unfair illegal manner misappropriation of Delhi Waqf Board funds including others while being the public servant i.e. Chairman of Delhi Waqf Board and MLA from Okhla Legislative Assembly of Delhi during the period from 2015 onwards. In order to launder the same he had hatched a criminal conspiracy along with his close associates and others and in pursuant thereupon he had invested his ill-gotten money i.e. proceeds of crime in the immovable properties through his associates namely Zeeshan Haider Daud Nasir and others. The material brought before this Court at this stage is sufficient to attract bar under Section 45 of PMLA and it prima facie shows the offence of money laundering being committed by the present accused/applicant - this Court does not find it a fit case for grant of pre-arrest bail to the present applicant Amanatullah Khan. The present bail application stands dismissed.

Summary

Issues Involved:
1. Grant of pre-arrest bail under PMLA.
2. Allegations of misuse of official position and illegal appointments.
3. Allegations of money laundering and accumulation of proceeds of crime.
4. Non-cooperation with the investigation by the applicant.
5. Applicability of Section 45 of PMLA in anticipatory bail applications.

Summary:

1. Grant of Pre-Arrest Bail under PMLA:
The applicant sought pre-arrest bail u/s 438 Cr.P.C. read with Sections 45 and 65 of PMLA for offenses under Sections 44 and 45 of PMLA. The prosecution alleged the applicant, an MLA and Chairman of DWB, accumulated proceeds of crime through illegal activities and laundered the money by purchasing properties through associates.

2. Allegations of Misuse of Official Position and Illegal Appointments:
The prosecution's case included multiple FIRs, alleging illegal appointments and misuse of funds by the applicant. Specific allegations included the illegal appointment of Mr. Mahboob Alam as CEO of DWB, unauthorized appointments of 41 persons, and misappropriation of funds meant for widows and social workers.

3. Allegations of Money Laundering and Accumulation of Proceeds of Crime:
The Directorate of Enforcement's investigation revealed transactions involving Rs. 36 crores for properties in Jamia Nagar, Delhi, with Rs. 27 crores paid in cash, allegedly the proceeds of crime. Statements under Section 50 of PMLA from co-accused corroborated these transactions. The applicant was accused of using associates as benamidars to conceal the proceeds of crime.

4. Non-Cooperation with the Investigation by the Applicant:
The applicant did not join the investigation despite six summonses. He cited reasons such as being busy with official work and pending anticipatory bail applications. The court noted this non-cooperation as a significant factor against granting pre-arrest bail.

5. Applicability of Section 45 of PMLA in Anticipatory Bail Applications:
The court emphasized that the twin conditions of Section 45 of PMLA apply to anticipatory bail applications. The applicant failed to demonstrate that he was not guilty of the offense or that he would not commit any offense while on bail.

Conclusion:
The court found sufficient material to attract the bar under Section 45 of PMLA and prima facie evidence of money laundering by the applicant. The applicant's non-cooperation with the investigation further weighed against granting pre-arrest bail. The bail application was dismissed.