2024 (9) TMI 1176 - HC - Money Laundering

Seeking grant of regular Bail - oney Laundering - large-scale malpractice and corruption in the framing and implementation of the Excise Policy for the Year 2021-22 - HELD THAT - It is pertinent to observe that the prosecution Complaint has already been filed against the Applicant in which he has been summoned. The investigations qua the Applicant are complete in the present matter. The Applicant is a highly-educated 50-year-old citizen of India who is holding B. Com. (Hons.) from Hindu College, University of Delhi with early training in the U.K. Graduate Honours and certifications from Harvard Business School, Masters of International Management and Stanford School of Business, Enterprise Program for Growing Companies (EPGC). The Applicant along with his family run M/s Brindco Sales Pvt. Ltd. ( M/s Brindco hereinafter), that is engaged in the business of sale and distribution of alcoholic beverages for the last 55 years with strong relationship with leading Indian alcohol manufacturing Companies. The Applicant has deep roots in the society and is not a flight risk and has business and professions which are based in India and he is not likely to abscond from the country - Also, the evidence so collected in the ED case is documentary in nature and there is no likelihood of his tampering with the witnesses or influencing the witnesses. Regardless, conditions can be imposed to ensure the Applicant s attendance to face the trial. In the case of Manish Sisodia v. Directorate of Enforcement 2024 (8) TMI 614 - SUPREME COURT the Hon ble Supreme Court observed that prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. It was further observed that fundamental right of liberty provided under Article 21 of the Constitution is superior to statutory restrictions and reiterated the principle that bail is the rule and refusal is an exception . Insofar as the role of the Applicant in the present case is concerned, he stands on a better footing that the other co-accused, who have been recently granted bail - Insofar as the role of the Applicant in the present case is concerned, he stands on a better footing that the other co-accused, who have been recently granted bail. The Applicant is directed to be released subject to fulfilment of conditions imposed - bail application allowed.

Summary

Issues Involved:
1. Legality of the Applicant's arrest and detention.
2. Applicant's involvement in the formulation of the Delhi Excise Policy 2021-22.
3. Allegations of kickbacks and money laundering.
4. Admissibility and reliability of evidence under Section 50 PMLA, 2002.
5. Applicant's entitlement to bail under Section 45 of PMLA, 2002.

Detailed Analysis:

1. Legality of the Applicant's Arrest and Detention:
The Applicant, a highly-educated individual with significant business interests, was arrested on 01.03.2023 by the Enforcement Directorate (ED) and produced before the Special Judge, Rouse Avenue Courts, New Delhi. Despite multiple supplementary prosecution complaints (SPCs), the Applicant was not initially made an accused. The Applicant argued that his detention was illegal and prolonged, violating his Fundamental Right to Life and liberty under Article 21 of the Constitution. The court noted that the Applicant had joined investigations multiple times and had been in custody for nearly seventeen months without substantial evidence implicating him directly in the alleged offenses.

2. Applicant's Involvement in the Formulation of the Delhi Excise Policy 2021-22:
The Applicant was accused of being actively involved in the conspiracy to draft the Delhi Excise Policy 2021-22 and facilitating kickbacks. The Applicant argued that he had no role in the policy formulation and that mere meetings were not sufficient to prove a conspiracy. The court observed that the evidence against the Applicant was primarily based on statements under Section 50 PMLA, 2002, which were contradictory and lacked substantive corroboration. The court also noted that the Applicant was not the sole recipient of the draft policy, which was already in the public domain.

3. Allegations of Kickbacks and Money Laundering:
The ED alleged that the Applicant was involved in a scheme where kickbacks were disguised through credit notes and other financial transactions. The Applicant countered these allegations by providing detailed explanations and documentary evidence, including the fact that profits from foreign liquor sales were not subject to the alleged 12% margin. The court found that the allegations were circumstantial and lacked direct evidence implicating the Applicant. The court also noted that other co-accused individuals had been granted bail in similar circumstances.

4. Admissibility and Reliability of Evidence under Section 50 PMLA, 2002:
The Applicant argued that statements under Section 50 PMLA, 2002, were inadmissible without corroboration and could not be relied upon as substantive evidence. The court observed that while such statements could be considered, they were not ipso facto reliable and their veracity was a matter for trial. The court cited various judgments supporting the view that uncorroborated statements of co-accused could not be the sole basis for denying bail.

5. Applicant's Entitlement to Bail under Section 45 of PMLA, 2002:
The Applicant contended that he met the twin conditions under Section 45 of PMLA, 2002, and satisfied the triple test for bail. The court noted that the Applicant had deep roots in society, was not a flight risk, and there was no likelihood of him tampering with evidence or influencing witnesses. The court also considered the prolonged incarceration and the fundamental right to liberty under Article 21. The court granted bail to the Applicant, imposing stringent conditions to ensure his attendance at trial and prevent any interference with the investigation.

Conclusion:
The court admitted the Applicant to bail, subject to several conditions, including furnishing a bail bond, surrendering his passport, and reporting to the Investigating Officer regularly. The court emphasized that the observations made were without prejudice to the trial and disposed of the petition, directing communication of the order to the concerned authorities.