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2024 (5) TMI 569 - HC - Money LaunderingSeeking grant of Regular bail - Money Laundering - proceeds of crime - predicate offences - scheduled offences - loan was declared as fraud on account of fudging of balance sheets - diversion of funds and related party transactions - bogus transactions relating to inventories and receivables - proceeds from the sale of inventory and realization of receivables were diverted - misappropriation of legitimate fund obtained for working capital from the bank - HELD THAT - The Hon ble Supreme in Pavana Dibbur 2023 (12) TMI 49 - SUPREME COURT was adjudicating upon an issue wherein the appellant had not been arrayed as accused in the chargesheet filed with respect to alleged scheduled offences, but was made an accused for offence punishable under Section 3 of the PMLA. The appellant therein relied upon the aforesaid paragraph of the Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT and it was submitted that the case of the appellant therein was on a better footing as she was not shown as accused in the scheduled/predicate office. In any case, since the present applicant has been granted pardon in the scheduled/predicate offences, the evidence sought to be given at his instance in those proceedings cannot be used for the purposes of present proceedings under the PMLA. Even in the scheduled/predicate offence the status of the present applicant remains as a witness subject to his full and complete disclosure in terms of the Section 308 of the CrPC - This Court agrees with the judgment given by the learned Single-Judge of Allahabad High Court in Mohan Lal Rathi 2023 (9) TMI 1069 - ALLAHABAD HIGH COURT , that the grant of pardon would bring an accused in the category of witness however, the same, as pointed out hereinabove, is subject to certain conditions enshrined under Sections 306 and 307 of the CrPC and cannot be considered as absolute absolvement in the predicate offence. The Hon ble Supreme Court in Vijay Madanlal Choudhary has held that the Court at the stage of grant of bail is expected to consider the issue as to whether the accused had requisite mens rea . It was further observed by the Hon ble Supreme Court that the Court is not required to record a positive finding that the accused has not committed an offence under the Act. In other words, the Court at the stage of bail can examine the case on the basis of broad probabilities and can give a finding on the basis of material on record for the purposes of bail. In the present case, admittedly the applicant was not a key managerial personnel and was not holding any designation in M/s SBBEL which would indicate that he was responsible or in-charge of running day-to-day affairs of the said company. The thrust of allegation in the prosecution complaint is that the present applicant was involved in creating paper companies by allegedly inducing indigent persons in order to show sham sale and purchase of goods thereby diverting the loan amount received by the said company. Whether the present applicant has the requisite mens rea demonstrating that he was having knowledge that the funds which are being routed through the paper companies were part of the loan amount extended to M/s SBBEL by the consortium of bank headed by SBI? - HELD THAT - As per the case of the prosecution, the applicant was not key managerial personnel or person responsible for running day-to-day affairs of the company. The applicant, like the other proprietors of the paper entities, have given the statement that all these transactions were being done on commission basis of 50 paise per quintal (out of Re. 1 per quintal) with some entities and on a fixed commission on monthly basis ranging between Rs. 7,000/- to Rs. 20,000/- with other entities. In the statements relied upon by prosecution, applicant has stated that all the actions taken by him were on the instructions of Shri Amar Chand Gupta and others and nowhere has it been stated that he was privy to the alleged objective behind the sham transactions. In other words, whether the applicant had the requisite knowledge that the transactions in which he is involved relates to proceeds of crime cannot be presumed at this stage. So far as the transactions from the applicant s sister concerns are concerned, the same are similar to that of other paper entities and their proprietors who are either being arrayed as co-accused without arrest or cited as witnesses. In the considered opinion of this Court, the applicant has been able to make out a case under Section 45 of the PMLA. Apart from the above, complaint in the present has been filed. The applicant has been in judicial custody since 25.08.2022 and has undergone incarceration for approximately one year and nine months. It is also not disputed that the applicant has been granted bail in the predicate/scheduled offence apart from the fact that he has now become an approver. It is a matter of record that the applicant had joined investigation as and when directed by the Investigating Officer till he was arrested in the present ECIR. The applicant is directed to be released on bail upon his furnishing a personal bond in the sum of Rs. 50,000/- alongwith two sureties of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to the conditions imposed - application allowed.
Issues Involved:
1. Regular bail under Section 439 of CrPC read with Section 45 of PMLA. 2. Role and involvement of the applicant in the alleged money laundering. 3. Impact of the applicant being an approver in the predicate offence on the PMLA proceedings. 4. Application of the twin conditions under Section 45 of PMLA for granting bail. Summary: Issue 1: Regular Bail u/s 439 CrPC read with Section 45 PMLA The applicant sought regular bail in Complaint Case No. 25/2022 arising out of ECIR/DLZO-I/06/2020 u/s 44 and 45 of PMLA. The ECIR was based on FIR No. RC2202020E0005 registered under Sections 120B read with Sections 420/468/471 IPC and Section 13(2) read with Section 13(1)(d) of PC Act. The applicant was arrested on 27.08.2022 and has been in judicial custody since then. Issue 2: Role and Involvement of the Applicant The applicant was alleged to have played an instrumental role in opening various firms on paper, inducing indigent people to open dummy firms for bogus transactions with M/s SBBEL, and laundering money amounting to almost Rs. 50 Crore. The applicant argued that he was merely an employee acting on instructions from the company's directors and was not a beneficiary nor a Key Managerial Person (KMP). Issue 3: Impact of Applicant Being an Approver The applicant's counsel argued that his status as an approver in the predicate offence should influence the bail decision under PMLA. However, the court noted that the grant of pardon in the predicate offence does not absolve the applicant in the PMLA case unless he seeks pardon in the PMLA case by making a full disclosure. The court referenced the judgment in *Pavana Dibbur v. Directorate of Enforcement* and *Mohan Lal Rathi v. Union of India* to support this view. Issue 4: Twin Conditions under Section 45 PMLA The court examined whether the applicant satisfied the twin conditions under Section 45 of PMLA, which require the court to believe that the accused is not guilty and will not commit any offence if released on bail. The court noted that the applicant was not a KMP and was acting on instructions from the company's directors. The statements under Section 50 of PMLA did not show that the applicant had the requisite knowledge that the funds were proceeds of crime. Similarly placed accused persons had not been arrested, indicating a selective approach by the ED. Conclusion: The court allowed the bail application, directing the applicant to be released on bail upon furnishing a personal bond of Rs. 50,000 with two sureties of like amount, subject to conditions including not leaving the country without permission, not tampering with evidence, and joining the investigation as required. The court emphasized that the observations made were only for the purpose of the bail application and not an opinion on the merits of the case.
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