2024 (5) TMI 724 - HC - Money Laundering

Seeking grant of bail - Money Laundering - proceeds of crime - scheduled offence - partners of M/s Vikas Construction had encroached on public property by falsification of records - Whether the applicant had any direct or indirect involvement in M/s. Vikas Construction, which allegedly generated proceeds of crime - HELD THAT - There is nothing to indicate that the applicant knowingly committed any offence as provided in Section 3 of the PMLA nor the applicant was in any way involved in the commissioning of the predicate offence and in case if the predicate offence is not made out against the applicant then proceeding under the PMLA will also fall. In the instant case, from the perusal of the complaint which has been brought on record as annexure no.2 including the supplementary complaint which has been brought on record as annexure no.9, prima faice , it reflects the involvement of the present applicant. Even though this Court is conscious of the fact that at this stage a mini trial is not be held nor the court is required to enter into the merits or the depth of the evidence to return a finding of guilt but what is required is to prima facie , consider the material available on record for the Court to satisfy itself and to enable it to reasonably form an opinion, to believe, that the applicant is not guilty of the offence and that he is not likely to commit any offence on bail as enshrined in Section 45 of the PMLA. Considering the material available on record including the flow charts which clearly demonstrates the origin of funds and it also explains how it finds its way into the accounts of the applicant and its use by the applicant, and there is material against the applicant to link him with the movement and trail of funds to and from the two firms M/s. Vikas Construction and M/s. Aaghaaz. Considering the family antecedents of the applicant including the statement which is contained in the ECIR that the applicant initially was not co-operative rather evaded the summons and only when the lookout notice was issued and in furtherance thereof the applicant was apprehended and during custody he gave his statements but nevertheless many of the transactions could not be explained by him by taking a plea that he did not know from where the fund was coming rather whenever he wanted the funds he asked his mother and maternal uncle and grand father who would arrange the funds. This Court is unable to persuade itself to form a, prima facie , satisfaction in terms of Section 45 of the PMLA, at this stage, that the applicant is not guilty or that he may not commit an offence on bail. Thus, for all the aforesaid reasons, the bail application is rejected.

Summary

Issues Involved:
1. Validity of the proceedings initiated under the Prevention of Money Laundering Act (PMLA).
2. Applicant's involvement in the predicate offences.
3. Applicant's connection to the proceeds of crime.
4. Conditions for granting bail under Section 45 of the PMLA.

Summary:

1. Validity of the Proceedings Initiated Under PMLA:
The applicant, a sitting MLA, was arraigned as an accused in ECIR/ALSZO/27/2021 for offences punishable u/s 3 read with Section 4 of the PMLA. The proceedings were based on investigations from three FIRs relating to predicate offences, primarily FIR No.129 of 2020, which alleged encroachment on public property by M/s Vikas Construction.

2. Applicant's Involvement in the Predicate Offences:
The applicant was not named or chargesheeted in FIR No.185 of 2021. However, FIR No.236 of 2020 implicated him along with his family members in usurping government land. The investigating agency did not allege that any proceeds of crime were generated from the predicate offence in FIR No.236 of 2020.

3. Applicant's Connection to the Proceeds of Crime:
The investigating agency alleged that proceeds of crime were generated from FIR No.129 of 2020. The agency claimed that M/s Vikas Construction, controlled by the applicant's family, generated proceeds of crime through illegal activities. The applicant allegedly received money from family members, which was used for personal expenses, including importing firearms. The applicant could not satisfactorily explain the source of funds in his account.

4. Conditions for Granting Bail Under Section 45 of the PMLA:
The court considered whether the conditions for bail u/s 45 of the PMLA were satisfied. The prosecution opposed the bail, and the court had to determine if there were reasonable grounds to believe the applicant was not guilty and would not commit any offence if granted bail. The court found that the applicant's explanations lacked credibility and there was material linking him to the proceeds of crime. The court could not form a prima facie satisfaction that the applicant was not guilty or would not commit an offence on bail.

Conclusion:
The court rejected the bail application, noting the gravity of the offence, the applicant's inability to explain the transactions, and the potential influence the applicant could exert on witnesses. The trial court was directed to expedite the trial process.