2024 (6) TMI 470 - HC - Money Laundering

Seeking enlargement on bail - money laundering - proceeds of crime - absence of material which would justify the belief that the applicant may be guilty of an offence under the PMLA - Justification for Arrest u/s 19 of PMLA - Alleged inchoate nature of predicate offences - Justification for Arrest u/s 19 of PMLA - HELD THAT - Firstly the Court cannot loose sight of the fact that CBI FIR was registered pursuant to the directions given by the Division Bench in PIL. Secondly it is necessary to note there is material in the form of the interception and seizure of betel nuts by DRI search and seizure operation at the premises of the applicant and Ikram Haji Haroon Jada (A4). Thirdly the statements of witnesses especially that of Manoj Kothari the transporter revealed that the applicant was the actual consignee of the alleged smuggled betel nuts and not M/s. Kheboto Traders the purported consignee. In his statement recorded under Section 50 of the PMLA the applicant has allegedly stated that he had placed orders and procured betel nuts from F.M. Food. Fourthly there is further material to show that the applicant had credited the amounts to the accounts of M/s. Kheboto Traders and K.S. Enterprises which were eventually transferred to the account of F.M. Food - In these circumstances prima facie it cannot be said that the Investigating Officer had no justification to arrest the applicant. Alleged inchoate nature of predicate offences - HELD THAT - The second submission on behalf of the applicant based on alleged inchoate nature of predicate offences deserves consideration. The fact that the CBI has registered FIR pursuant to the directions of the Division Bench in Public Interest Litigation is rather incontestable. It is not the requirement in law that the person who is accused of offence under the PMLA must also be arraigned as an accused in the predicate offence. The submission that since there has not been any effective investigation in the FIR registered by CBI and till the CBI concludes its investigation it cannot be said that the applicant has any role in the allegations levelled in the said FIR also does not merit countenance. For the reason that the CBI has not filed the charge-sheet it cannot be said that the predicate offence has effaced. It is true the allegations that the applicant attempted to bribe the contractual employee to obtain the copies of his statement are of serious nature. Yet the context of the matter is required to be kept in view and in the totality of the circumstances where the principal accused is at liberty in the peculiar facts of the case it is required to exercise discretion in favour of the applicant. The applicant is allowed to be released on bail subject to conditions imposed - bail application allowed.

Summary

Issues Involved:
1. Justification for arrest u/s 19 of the PMLA.
2. Role of the applicant in the alleged smuggling and money laundering.
3. Parity in treatment with co-accused Abdul Hannan Ali (A2).

Summary:

1. Justification for Arrest u/s 19 of the PMLA:
The applicant, arraigned in PMLA Special Case No. 1281 of 2023, sought bail for the offence of money laundering u/s 3 and punishable u/s 4 of the PMLA. The applicant argued that the threshold for arrest u/s 19 of the PMLA was not met, emphasizing that he had cooperated with the investigation by appearing before the agency on seven occasions. The applicant contended that there was no necessity for his arrest and referenced Supreme Court decisions in Vijay Madanlal Choudhary and Satender Kumar Antil to support his claim. However, the court noted that the applicant should have challenged the remand order in appropriate proceedings, as per the Supreme Court's ruling in V. Senthil Balaji.

2. Role of the Applicant in the Alleged Smuggling and Money Laundering:
The applicant was alleged to be the real consignee of smuggled betel nuts, generating proceeds of crime worth Rs. 11.70 Crores. The Directorate of Enforcement (ED) found that the applicant procured smuggled betel nuts from Abdul Hannan Ali (A2) and transferred the proceeds through fictitious entities. Despite the applicant's claim of ignorance regarding the smuggled nature of the goods, the court found prima facie evidence suggesting the applicant's involvement in the process or activity connected with the proceeds of crime. The court highlighted the material evidence, including the interception and seizure of betel nuts, search and seizure operations, and statements from witnesses.

3. Parity in Treatment with Co-Accused Abdul Hannan Ali (A2):
The court emphasized the principle of parity, noting that Abdul Hannan Ali (A2), the principal accused and mastermind behind the smuggling operations, was not arrested and was released on executing bonds. The court found it incongruent that the principal offender, against whom more severe allegations were made, was at liberty, while the applicant, who allegedly received a portion of the smuggled betel nuts, was detained. Given the circumstances, the court decided to extend the same dispensation to the applicant as was provided to Abdul Hannan Ali (A2).

Order:
The application for bail was allowed with conditions, including furnishing a PR bond, marking presence before the ED monthly, not tampering with evidence, surrendering the passport, and attending court proceedings regularly. The court clarified that the observations made were confined to the determination of bail entitlement and should not influence the trial court's judgment on the applicant's guilt. The request for a stay on the bail order was rejected.