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2024 (10) TMI 506 - HC - Money Laundering


Issues Involved:
1. Legality of the FIR and ECIR.
2. Premature investigation by the Enforcement Directorate (ED) under PMLA.
3. Validity of the arrest and remand process.
4. Reliance on statements recorded under Section 50 of the PMLA.
5. Incarceration period and delay in trial commencement.

Issue-wise Detailed Analysis:

1. Legality of the FIR and ECIR:
The applicant challenged the FIR's validity, claiming it was unsigned and thus fundamentally defective, rendering the ECIR illegal. The FIR, registered by the ACB, Mumbai, alleged that the applicant amassed assets disproportionate to his known sources of income. The applicant argued that since the FIR was unsigned, the subsequent ECIR was vitiated, making the arrest illegal. The court acknowledged the applicant's contention but focused on the investigation's status and the absence of a chargesheet.

2. Premature Investigation by the ED under PMLA:
The applicant contended that the ED prematurely registered the ECIR without a chargesheet in the predicate offence, arguing that the ED encroached upon the CBI's domain. The applicant cited judgments emphasizing that the ED should not presume the commission of a predicate offence without a chargesheet. The court agreed, noting that the investigation into the predicate offence was incomplete, and the ED's presumption that all assets were proceeds of crime was unsustainable. The court highlighted that the CBI's investigation could reveal satisfactory explanations for the assets, affecting the determination of proceeds of crime.

3. Validity of the Arrest and Remand Process:
The applicant argued that the arrest was vitiated as the remand application lacked material to justify the arrest, and statements under Section 50 of the PMLA were recorded post-arrest. The court found merit in this argument, noting that the arrest was based on suspicion rather than credible information. The court emphasized that the ED should not proceed with a preconceived notion of guilt and that the arrest violated the principles laid down by the Supreme Court regarding Section 19 of the PMLA.

4. Reliance on Statements Recorded under Section 50 of the PMLA:
The applicant contended that statements recorded under Section 50 of the PMLA post-arrest were inadmissible, as they were obtained when the applicant was in custody, violating Section 25 of the Evidence Act. The court agreed, citing the Supreme Court's ruling that such statements could not be considered incriminating. The court ruled that the ED's reliance on these statements to oppose bail was misplaced.

5. Incarceration Period and Delay in Trial Commencement:
The applicant argued that the prolonged incarceration without trial commencement warranted bail. The court acknowledged that the trial was unlikely to commence soon, given the incomplete investigation and lack of a chargesheet. The court noted the Supreme Court's emphasis on granting bail in cases of extended incarceration and remote trial prospects, finding the applicant's continued detention unjustifiable.

Conclusion:
The court allowed the bail application, finding that the applicant satisfied the twin test under Section 45 of the PMLA. The court ordered the applicant's release on bail with specific conditions, emphasizing cooperation with the investigation and non-interference with evidence. The court clarified that its observations were limited to the bail application and would not influence the designated court's proceedings.

 

 

 

 

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