2024 (9) TMI 936 - HC - Money Laundering

Seeking grant of regular bail - Money Laundering - predicate offence - lack of evidence against petitioner - HELD THAT - In the case of Vijay Madanlal Choudhary and Ors. v. Union of India and Ors. 2022 (7) TMI 1316 - SUPREME COURT it has been held that the Authority under the 2002 Act is to prosecute a person for offence of money laundering only if it has reason to believe which is required to be recorded in writing that the person is in possession of proceeds of crime . Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government such process initiated would be a standalone process. Veerendra Kumar Ram used to give cash to Mukesh Mittal who with the help of entry providers including the present petitioner used to make entries in the bank accounts of his employees and relatives and then such fund was transferred by Mukesh Mittal into the bank accounts of Rajkumari (wife of Veerendra Kumar Ram) and Genda Ram (father of Veerendra Kumar Ram). The investigation further disclosed that Mukesh Mittal contacted Ram Prakash Bhatia who is engaged in the illegal business of providing entries in lieu of commission for taking the entries into the bank account of Genda Ram. Subsequently Ram Prakash Bhatia provided those entries with the help of his associate and present petitioner - The petitioner is the mastermind behind using the bank accounts for the purpose of laundering/routing of funds which makes it established that the petitioner is a key person of the nexus which provides entries in lieu of commission and hence he was involved in the offence of money laundering of proceeds of crime of Veerendra Kumar Ram. When a serious offence of such a magnitude mere fact that accused was in jail for long time inconsequential besides such casual approach would undermine trust of public in integrity of Investigating Agency. Further bail is the rule and jail is an exception but competing forces need to be carefully measured before enlarging the accused on bail. Socio economic offences constituted a class apart and need to be visited with different approach in the matter of bail since socio economic offences have deep-rooted conspiracies affecting moral fibre of society and causing irreparable harm. Moreover investigating agency was in process of expediting the trial. Considering that there is direct allegation against the petitioner and he is involved in proceeds of crime as such the Court is not inclined to release the petitioner on bail - bail application dismissed.

Issues Involved:
1. False implication and lack of evidence against the petitioner.
2. Jurisdiction and connection to the predicate offence.
3. Compliance with procedural requirements during arrest.
4. Role and involvement of the petitioner in the alleged money laundering activities.
5. Comparative analysis of bail granted to co-accused and other related cases.
6. Principles for granting bail in economic offences.
7. Public interest and seriousness of the offence.

Issue-wise Detailed Analysis:

1. False Implication and Lack of Evidence Against the Petitioner:
The petitioner argued that he was falsely implicated without cogent and reliable evidence. He highlighted that he was not initially named in the main complaint and was only included in the supplementary complaint. He emphasized that the main complaint was against other individuals, and he had no connection to the predicate offence registered under FIR No. 13/2019 by ACB, Jamshedpur. The petitioner also mentioned his cooperation with the investigation and the completion of the investigation against him, arguing that there was no likelihood of concluding the trial shortly.

2. Jurisdiction and Connection to the Predicate Offence:
The petitioner contended that the Enforcement Directorate (ED) exceeded its jurisdiction by arraigning him as an accused, as he could not be remotely linked to the predicate offence. He pointed out that the FIR was against Suresh Prasad Verma, with whom he had no connection. The petitioner argued that the prosecution complaint did not establish a prima facie case under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), 2002.

3. Compliance with Procedural Requirements During Arrest:
The petitioner argued that the grounds of arrest were not informed to him in writing, violating the mandate of the Supreme Court judgment in Pankaj Bansal v. Union of India and others. He highlighted that this procedural lapse further weakened the case against him.

4. Role and Involvement of the Petitioner in the Alleged Money Laundering Activities:
The ED's counsel presented evidence showing the petitioner's involvement in money laundering activities. Statements from witnesses, including Tara Chand and Ram Prakash Bhatia, indicated that the petitioner managed transactions and facilitated the transfer of funds through various bank accounts. The petitioner was found to be involved in the illegal business of money transfer and providing bogus entries in lieu of commission. The investigation revealed that the petitioner was a key person in the nexus, managing the laundering of proceeds of crime.

5. Comparative Analysis of Bail Granted to Co-accused and Other Related Cases:
The petitioner cited several cases where co-accused were granted bail, including Harish Yadav, Rajkumari, Genda Ram, Mukesh Mittal, Prem Prakash, and Manish Sisodia. However, the court distinguished these cases based on the specific facts and roles of the individuals involved. The court noted that the petitioner's case was different due to his direct involvement and the gravity of the allegations.

6. Principles for Granting Bail in Economic Offences:
The court referred to the Supreme Court's judgment in P. Chidambaram v. Central Bureau Investigation, which outlined the principles for granting bail in economic offences. The court emphasized the need to consider the nature of the accusation, severity of the punishment, reasonable apprehension of tampering with witnesses, and the larger interest of the public or the State. The court also cited the judgment in Central Bureau of Investigation Vs Santosh Krnani and Another, which highlighted the seriousness of corruption and the need to deal with it with iron hands.

7. Public Interest and Seriousness of the Offence:
The court considered the seriousness of the offence and the public interest involved. It noted that socio-economic offences have deep-rooted conspiracies affecting the moral fibre of society and causing irreparable harm. The court emphasized that such offences require a different approach in the matter of bail, as highlighted in the judgment of State of Bihar v. Amit Kumar.

Conclusion:
The court, after considering the submissions and the material on record, found that the petitioner was directly involved in the money laundering activities and was the mastermind behind the transactions. The court emphasized the seriousness of the offence and the need to uphold the integrity of the investigation. Consequently, the court dismissed the bail application, stating that the petitioner was involved in the proceeds of crime and should not be released on bail.

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