2024 (8) TMI 100 - HC - Money Laundering

Seeking grant of Regular Bail - Money Laundering - scheduled offence - Proceeds of Crime - right to personal liberty - applicability of the proviso to Section 45 of PMLA - HELD THAT - There is no gainsaying that Article 21 of the Constitution of India guarantees right to personal liberty to every individual and that bail is the rule and jail is an exception. This Court is also conscious of the fact that in the present case charge sheet has been filed against the applicant albeit as stated in the status report considering the nature of offence, multi-layered transactions and the nation-wide nexus, further investigation is on-going. In PRASANTA KUMAR SARKAR VERSUS ASHIS CHATTERJEE AND ORS. 2010 (10) TMI 1199 - SUPREME COURT the Supreme Court elucidated the factors to be considered while deciding a bail application, where it was held that ' It is trite that this Court does not, normally, interfere with an order passed by the High Court granting or rejecting bail to the accused. However, it is equally incumbent upon the High Court to exercise its discretion judiciously, cautiously and strictly in compliance with the basic principles laid down in a plethora of decisions of this Court on the point.' From a conspectus of the judgements in Satyendar Kumar Jain 2024 (3) TMI 862 - SUPREME COURT and Vijay Madanlal 2022 (7) TMI 1316 - SUPREME COURT , it is clear that the present bail application will have to be considered on the touchstone and anvil of the twin conditions under Section 45 of PMLA and Court will have to arrive at a prima facie satisfaction that the applicant crosses the threshold. Based on the evidence disclosed in the predicate offence, present ECIR was registered against the applicant. Conscious of the settled legal position that at the stage of considering a bail application this Court is not to enter into a meticulous examination of the statements of the witnesses or hold a mini-trial, the case set up by the ED and the defence set up by the applicant examined only to satisfy whether there are reasonable grounds for believing that the applicant is not guilty of the alleged offence under the PMLA and that he is not likely to commit any offence while on bail as required by Section 45 of PMLA. There is prima facie sufficient material to show the involvement of the applicant in the alleged offence of money laundering and/or connecting the monies involved in the various transactions to the predicate offence as proceeds of crime , under Section 3 of PMLA. This Court is prima facie unable to agree with the applicant at this stage that the monies generated from cattle smuggling and concealed through various transactions, purchases and shell companies formed only for accommodation entries were not from criminal activities relating to scheduled offence. As held in Tarun Kumar 2023 (11) TMI 904 - SUPREME COURT , as per the statutory presumption permitted under Section 24 of PMLA, the Court or the Authority is entitled to presume, unless the contrary is proved, that in any proceedings relating to PoC under PMLA, in the case of a person charged with the offence of money laundering under Section 3 of PMLA, such PoC are involved in money laundering. In view of the above, more particularly, the role ascribed to the applicant, he has failed to meet and satisfy the test of twin conditions under Section 45 (1) of PMLA for this Court to come to a prima facie conclusion that there are reasonable grounds for believing that the applicant is not guilty of the alleged offence. The Bombay High Court in Mahendra Manilal Shah v. Rashmikant Mansukhlal Shah, 2009 (6) TMI 1022 - BOMBAY HIGH COURT , held that the nature of the sickness needs to be seen as to whether the accused can be treated in the government hospitals and custody. In the bail application, applicant has not set out a case that the medical ailments, from which he allegedly suffers, are such that they are not being treated or cannot be treated either in the Jail hospital or the referral hospitals and therefore, benefit of Proviso to Section 45 of PMLA cannot accrue to the applicant on this ground. The bail application is dismissed.

Summary

Issues Involved:
1. Bail application under Section 439 Cr.P.C.
2. Allegations of money laundering under PMLA.
3. Connection between the applicant and the proceeds of crime (PoC).
4. Admissibility of evidence, including diary entries and statements under Section 50 of PMLA.
5. Applicant's medical condition and its impact on bail consideration.

Issue-Wise Detailed Analysis:

1. Bail Application under Section 439 Cr.P.C.:
The applicant sought regular bail in connection with a case registered by the Directorate of Enforcement (ED) under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The application was filed through his brother and pairokar Abdul Hannan.

2. Allegations of Money Laundering under PMLA:
The prosecution alleged that the applicant, along with others, was involved in illegal activities related to cattle smuggling, which generated and acquired PoC. The applicant allegedly deposited around Rs. 12.8 Crores in the joint bank account of Badal Krishna Sanyal and Tania Sanyal through his employee Manoj Sana as a bribe to Satish Kumar, a Commandant in BSF, for providing protection in cattle smuggling. Additionally, Rs. 6.1 Crores were allegedly paid to Vinay Mishra and his brother Vikas Mishra through Manoj Sana in cash on different occasions.

3. Connection between the Applicant and the Proceeds of Crime (PoC):
The ED's case was based on the diary entries of Manoj Sana, which were corroborated by cash deposit slips. The investigation revealed that these funds were PoC generated from cattle smuggling and laundered through various transactions and shell companies. The applicant's companies, such as HMPL and HIPL, showed exponential growth in turnover, which was allegedly due to the illegal proceeds from cattle smuggling. The funds were used to purchase properties, including a property in CR Park, New Delhi.

4. Admissibility of Evidence:
The applicant contested the admissibility of the diary entries and statements under Section 50 of PMLA. The court noted that the diary was maintained by Manoj Sana in the ordinary course of business and was recovered from his possession, thus presuming its authenticity under Section 22 of PMLA. The statements under Section 50 of PMLA were considered admissible and could form a formidable case against the applicant.

5. Applicant's Medical Condition:
The applicant claimed to suffer from various medical ailments and sought bail under the Proviso to Section 45 of PMLA, which provides exceptions for sick or infirm individuals. However, the court found that the medical issues raised could be treated in the jail hospital or referral hospitals and did not warrant the benefit of the proviso.

Analysis and Findings:
The court emphasized the importance of Article 21 of the Constitution, guaranteeing the right to personal liberty, but also noted the need to balance this with the larger interest of society. The court referred to various judgments highlighting the gravity of economic offences and the stringent conditions under Section 45 of PMLA for granting bail. The court found prima facie sufficient material to show the applicant's involvement in the alleged offence of money laundering and the connection of the monies involved to the predicate offence as PoC. The court also noted that the applicant had failed to satisfy the twin conditions under Section 45 (1) of PMLA, which require showing that the applicant is not guilty of the alleged offence and is not likely to commit any offence while on bail.

Conclusion:
The bail application was dismissed, and the court found that the applicant had not met the threshold of the twin conditions under Section 45 of PMLA. The court also rejected the argument that the applicant's medical conditions warranted bail, as these could be treated within the jail facilities.