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2024 (9) TMI 1550 - HC - Money LaunderingMoney Laundering - scheduled offence - proceeds of crime - gravamen of the prosecution allegation against the petitioner is that he influenced the Bank and got loans sanctioned to Kiran.P.P, out of which the petitioner took Rs.14/- Crore - HELD THAT - Section 45 of PMLA starts with a non- obstante clause, which has an overriding effect on the general provisions of the Code of Criminal Procedure (Cr. P.C). There is a specific embargo to grant of bail to a person accused of an offence under the Act, which are (i) that the Public Prosecutor must be given an opportunity to oppose the application for bail, and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not likely to commit any offence while he is on bail. Section 65 of the Act mandates that the provisions of the Cr. P.C shall apply in so far as they are not inconsistent with the provisions of the Act. Also, Section 71 of the Act states that the provisions of the Act shall have an overriding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, the conditions enumerated in Section 45 of the Act have to be complied with even in respect of an application for bail made under Section 439 of Cr. P.C. Consequently, the power to grant bail to a person accused of having committed an offence under the Act is not only subject to the limitations imposed under Section 439 of Cr. P.C., but also subject to the rigour imposed by the twin conditions under sub-section (1) of Section 45 of Act. In Gautam Kundu v. Directorate of Enforcement 2015 (12) TMI 1133 - SUPREME COURT , the Hon ble Supreme Court has held that the compliance of Section 45 of the Act is mandatory to grant bail to an accused person. In Directorate of Enforcement Versus Aditya Tripathi 2023 (5) TMI 527 - SUPREME COURT the Honourable Supreme Court has held that merely because the chargesheet is filed, it cannot be a ground to release the accused on bail in connection with the scheduled offences under the Act. Investigation for the predicate offences and the investigation by the Enforcement Directorate for the scheduled offence under the PML Act are different and distinct. The petitioner has raised a specific ground that the written grounds of arrest were not served on him. On an appreciation of the materials on record, it is found that in the arrest order dated 04.09.2023, the Authorised Officer has specifically recorded that he has reason to believe that the petitioner is guilty of an offence under the Act. The grounds of arrest were duly prepared, served, read over and understood by the petitioner at the time of his arrest. Hence, it is concluded that the said contention is untenable. Whether this Court is convinced that there are reasonable grounds for believing that the petitioner is not guilty of the offence alleged against him and he is not likely to commit any offence while he is on bail? - HELD THAT - The essence of the accusation is that, out of Rs.24.56/- Crore obtained by Kiran P.P as loan from the Bank, Rs.14/- Crore was paid to the petitioner both through bank transfer and in cash. In the statement recorded on 04-09- 2023, the petitioner has stated that he had received only Rs.2,15,50,000/- from the Bank through Kiran P.P. Conversely, Kiran.P.P has asserted that he handed over Rs.1.25/- Crore to the petitioner in cash in 2014, and an additional Rs.3/-Crore in 2016. Kiran P.P has further stated that cash loans of Rs.14/- Crore were given to the petitioner and to other persons as instructed by the petitioner on multiple occasions. Jijor has corroborated these cash transactions in his statement. Furthermore, the petitioner s Chartered Accountant had noticed an additional capital of Rs.4,08,65,254/- in the financial statement of the petitioner s proprietary concern, which was not reflected in his income tax returns. Although the petitioner submitted a letter of Jayarajan P, claiming that he had invested Rs.4/- Crore in cash in the petitioner s business, Jayarajan. P has denied making such a payment. This prima facie shows that Rs. 4/- Crore is unaccounted money. Additionally, a total of Rs.44.50/- lakh was deposited and Rs.15.50 lakh was withdrawn in the petitioner s Bank account No.103100010035463 at the Varadliam Service Co-operative Bank Ltd. The petitioner was maintaining forty-four accounts in various Banks. The cash credits in the petitioner s ten bank accounts for the financial years 2014-15 to 2016-17 is Rs.1,35,87,612/-, Rs.1,52,92,407/- and Rs.87,93,532/-, respectively. These materials, particularly the above cash credits, prima facie lends support to the prosecution allegation against the petitioner regarding layering of the proceeds of the crime. Collectively, these factors prima facie appear to substantiate the prosecution case. In Manish Sisodia s case 2024 (8) TMI 614 - SUPREME COURT , the Honourable Supreme Court granted bail to the appellant in that case, considering the prolonged period of incarceration, the trial in the case had not commenced despite the assurance given by the respondents in the earlier round of litigations and the Trial Court had not followed the directions in paragraphs 28 and 29 of its first order regarding the right of the appellant to speedy trial - In the case on hand, the principles laid down in Manish Sisodia s case are not applicable. Therefore, the petitioner cannot draw analogy or parallels to the precedent set forth in the said case. On a careful analysis of the facts and circumstances of the case, the materials placed on record, the rival submission made across the Bar, and on considering the parameters under Section 45 of the Act, there are no reasonable grounds for believing that the petitioner is not guilty of the offences alleged and that he is not likely to commit the offences if he is enlarged on bail. In the light of the serious nature, gravity and severity of the accusations levelled against the petitioner, without expressing anything on the merits of the case, the petitioner is not entitled to be released on bail at this stage - the bail application is dismissed.
Issues Involved:
1. Allegations of money laundering and embezzlement. 2. Role of the petitioner in the alleged crimes. 3. Compliance with Section 45 of the Prevention of Money Laundering Act (PMLA). 4. Legality of the petitioner's arrest. 5. Petitioner's bail application and opposition by the prosecution. Detailed Analysis: 1. Allegations of Money Laundering and Embezzlement: The prosecution alleged that from 2014 to 2020, the accused, including the petitioner, sanctioned and disbursed multiple loans from the Karuvannur Service Co-operative Bank Ltd, violating loan limits and using forged documents. They misappropriated Rs.100 Crore from the Bank, projecting the proceeds as untainted money. The petitioner allegedly received Rs.14 Crore from these illegal loans, which he invested in his business, thus layering and integrating the proceeds of the crime. 2. Role of the Petitioner in the Alleged Crimes: The petitioner, the fourteenth accused, allegedly facilitated the illegal activities by influencing the Bank to grant loans to Kiran P.P., who then transferred a significant portion of the loan amount to the petitioner. The investigation revealed that the petitioner received Rs.2.15 Crore through bank transfers and cash. The petitioner's financial records showed unexplained cash deposits and withdrawals, indicating his involvement in money laundering. The petitioner's Chartered Accountant noticed a discrepancy in the capital account, which was not reflected in the income tax returns, suggesting the introduction of unaccounted money. 3. Compliance with Section 45 of the PMLA: Section 45 of the PMLA imposes stringent conditions for granting bail, including giving the Public Prosecutor an opportunity to oppose the application and the Court being satisfied that the accused is not guilty and unlikely to commit any offence while on bail. The Court noted that the petitioner's case did not meet these conditions, as the materials on record prima facie indicated his involvement in the crime. The Court emphasized that the petitioner's economic offences, involving a significant amount of public funds, necessitated a different approach to bail. 4. Legality of the Petitioner's Arrest: The petitioner contended that his arrest was illegal as he was not served with the grounds of arrest. However, the Court found that the arrest order dated 04.09.2023 recorded the reasons for the petitioner's arrest, and the grounds were duly served and understood by the petitioner at the time of his arrest. Thus, the contention regarding the illegality of the arrest was deemed untenable. 5. Petitioner's Bail Application and Opposition by the Prosecution: The petitioner argued that he was innocent, had cooperated with the investigation, and was a victim of fraudulent activities by other accused. He claimed that the allegations were masterminded by others and that he had not taken any illegal loans from the Bank. The prosecution opposed the bail, highlighting the gravity of the offence, the petitioner's influential status, and the potential for tampering with evidence and influencing witnesses. The Court, considering the serious nature of the accusations, the materials on record, and the parameters under Section 45 of the PMLA, concluded that there were no reasonable grounds to believe that the petitioner was not guilty or that he would not commit further offences if released on bail. Conclusion: The bail application was dismissed, with the Court determining that the petitioner was not entitled to be released on bail at this stage due to the serious nature, gravity, and severity of the accusations against him. The Court emphasized the need to maintain a balance between the rights of the accused and the interests of justice, particularly in cases involving significant economic offences.
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