2025 (1) TMI 9 - HC - Money Laundering

Seeking grant of bail - Money Laundering - proceeds of the crime - unexplained source of income - prolonged incarceration of the petitioners without the commencement of trial - applicability of twin conditions under Section 45 of the PMLA, 2002 - HELD THAT - In the case on hand, the petitioners have been in judicial custody for the last 14 months; the investigation of the crime, so far as the petitioners are concerned, is complete, and the complaint has been filed. But the investigation into the predicate offence is not complete and the charge sheet has not been filed. Therefore, there is not even the remotest possibility of the trial in the crime commencing in the near future. So, keeping the petitioners in indefinite incarceration till the culmination of the trial will infringe on their right to life guaranteed under Article 21 of the Constitution of India. The petitioners have strong roots in the State. The apprehension of the prosecution that the petitioners may flee from justice, can be adequately safeguarded by imposing stringent conditions. The petitioners have volunteered to abide by any condition that may be imposed by this Court and they will cooperate with the investigation. On considering the prosecution allegations and the explanations put forward by the petitioners, which have been narrated above, this Court is satisfied that there are reasonable grounds to hold that the petitioners have not committed the above offences. As the petitioners have no criminal antecedents, going by the law laid down by the Honourable Supreme Court in Dheeraj Kumar Shukla v. State of Uttar Pradesh 2023 (1) TMI 1374 - SC ORDER , this Court has no hesitation to hold that the petitioners are not likely to commit an offence if they are enlarged on bail. This Court is convinced that the petitioners have satisfactorily diluted the twin conditions under Section 45 of the Act. Hence, the petitioners are entitled to be enlarged on bail. Conclusion - The prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. The applications are allowed, by directing the petitioners to be released on bail on them executing a bond for Rs. 2,00,000/- each, with two solvent sureties for the like sum, to the satisfaction of the jurisdictional court, which shall be subject to fulfilment of conditions imposed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the petitioners, accused under the Prevention of Money Laundering Act, 2002, are entitled to bail under Section 439 of the Code of Criminal Procedure, 1973, considering the twin conditions under Section 45 of the Act.
Whether the prolonged incarceration of the petitioners without the commencement of trial infringes their right to a speedy trial under Article 21 of the Constitution of India.
Whether the petitioners have satisfactorily diluted the twin conditions under Section 45 of the Act to be granted bail.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under Section 439 of Cr. P.C. and Section 45 of the Act

Relevant Legal Framework and Precedents: The petitioners sought bail under Section 439 of Cr. P.C., which is subject to the conditions under Section 45 of the Prevention of Money Laundering Act, 2002. Section 45 imposes twin conditions for granting bail: the Public Prosecutor's opposition and the court's satisfaction that the accused is not guilty and will not commit an offence while on bail. The Supreme Court's decisions in Gautam Kundu v. Directorate of Enforcement and Vijay Madhanlal Choudhary v. Union of India were considered.
Court's Interpretation and Reasoning: The court emphasized that Section 45's conditions are mandatory and must be satisfied for bail to be granted. The court also referred to the non-obstante clause in Section 45, which overrides the general provisions of Cr. P.C.
Key Evidence and Findings: The allegations against the 15th accused involved substantial cash deposits without a clear income source, while the 16th accused allegedly availed loans fraudulently. Both petitioners had been in custody for 14 months, and the investigation related to them was complete.
Application of Law to Facts: The court found that the petitioners had been in custody for an extended period without the trial commencing, which raised concerns about their right to a speedy trial. The court considered the petitioners' explanations and lack of criminal antecedents.
Treatment of Competing Arguments: The prosecution argued against bail, citing the seriousness of the offences and the petitioners' potential to influence the investigation. The petitioners argued that they had strong roots in the state and were willing to comply with stringent conditions.
Conclusions: The court concluded that the petitioners had diluted the twin conditions under Section 45 of the Act and were entitled to bail, considering the prolonged incarceration and lack of trial commencement.

Issue 2: Right to Speedy Trial under Article 21 of the Constitution

Relevant Legal Framework and Precedents: Article 21 of the Constitution guarantees the right to a speedy trial. The Supreme Court's decisions in Union of India v. K.A. Najeeb and Manish Sisodia v. Directorate of Enforcement were considered.
Court's Interpretation and Reasoning: The court recognized the petitioners' right to a speedy trial and noted that their prolonged incarceration without trial commencement was unjustified.
Key Evidence and Findings: The investigation into the predicate offence was incomplete, and the charge sheet was not filed, indicating no imminent trial commencement.
Application of Law to Facts: The court applied the principles from relevant Supreme Court judgments, emphasizing that prolonged pre-trial detention should not become a punishment without trial.
Treatment of Competing Arguments: The prosecution's concerns about the petitioners fleeing or tampering with evidence were addressed by imposing stringent bail conditions.
Conclusions: The court concluded that the petitioners' continued detention would infringe on their right to a speedy trial and ordered their release on bail.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The power of the Courts to grant bail to a person accused of an offence under the Act is circumscribed by Section 45 of the Act." "The prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial."
Core Principles Established: The judgment reinforces the principle that bail is a rule and jail is an exception, particularly when trial commencement is delayed. It highlights the importance of balancing statutory restrictions with constitutional rights.
Final Determinations on Each Issue: The court determined that the petitioners were entitled to bail, subject to stringent conditions, due to the lack of trial commencement and their prolonged detention, which infringed on their right to a speedy trial.

The court's decision underscores the need to protect the constitutional rights of accused individuals while ensuring compliance with statutory requirements. The judgment provides a detailed analysis of the legal framework and principles governing bail under the Prevention of Money Laundering Act, emphasizing the importance of a balanced approach in granting bail.

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