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2025 (2) TMI 562 - HC - Money LaunderingMoney Laundering - seeking grant of bail - signing and approving fabricated invoices - Section 439 of the Code of Criminal Procedure 1973 - applicability of twin conditions under Section 45 of the PMLA - HELD THAT - The statutory legal position as applicable is required to be considered and stated. Chapter III of the Constitution of India enumerates the fundamental rights which have been time and again construed to be inherent and any law which abrogates and abridges such fundamental rights would be violative of the basic structure doctrine including right of protection imposed against arrest and detention in certain cases contemplated under Article 22 of the Constitution of India. In the present case it is seen that on 19.07.2023 Applicant was summoned by ED in connection with the investigation however ED exercised its power under Section 19 (1) of the PMLA arrested Applicant on the same day. It is seen that no grounds of arrest as mandated under Section 50 of Cr.P.C were provided save and expect an arrest memo. It is prima facie seen that Applicant before me has fully co-operated with the investigation and made all disclosures which is evident from the prosecution complaint appended at page No. 54 of the Application. Prosecution Compliant is filed on 15.09.2023. The sole allegation against the Applicant is that he signed and approved fabricated invoices based on falsified attendance sheets of staff records thereby facilitating alleged fraudulent activities and generation of proceeds of crime. The Applicant held his position for only five months and verified 15 bills / invoices one of the bill / invoice is appended at page Nos. 494 and 495 of the Application. There is no impediment or provision in EOI guidelines that mandated Dean of Jumbo Covid Centres to physically verify deployment of staff their attendance or doctor to patient ratio which has been brought to my notice prima facie since that is one of the allegation in the prosecution complainant. Instead designated staff members performed this duty and reported to the Dean - If at all it is prosecution case that Applicant aided fraudulent activities of M/s. Lifeline Hospital Management Services prima facie there is no material on record to substantiate this allegation. The chargesheet encloses statements of co-accused which is the sole basis of allegation so as to come to conclusion that illegal proceeds of crime under the contract were routed to the Applicant via his driver once again will be a matter of trial. However no recovery has been made till date. When the investigation is completed can twin conditions under Section 45 of PMLA be applied mechanically despite in absence of prima facie evidence warranting further incarceration of the Applicant or otherwise? - HELD THAT - It is seen that Applicant is not made an accused in predicate offence or in the ECIR. Chargesheet has been filed in predicate offence however charges are yet to be framed. Trial is not likely to commence hence trial in PMLA offence cannot commence. Applicant is incarcerated for 1 year 6 months 25 days after duly co-operating with the investigation. The existence of proceeds of crime at the time of trial of the offence under Section 3 of the PMLA can be proved only if the Scheduled Offence is established in prosecution of the Scheduled Offence. This clearly envisages that even if trial of the case under the PMLA proceeds it cannot be officially tested unless the trial of the Scheduled Offence concludes. In the present case before me in the Scheduled Offence Chargesheet has been filed but trial is not likely to start in the near foreseeable future. Therefore prima facie I see no possibility of both trials concluding in the foreseeable future. Applicant before me is in judicial custody pending trial for more than one year. The Supreme Court in the case of Gudikanti Narasimhulu Ors. Vs. Public Prosecutor High Court of Andhra Pradesh 1977 (12) TMI 143 - SUPREME COURT has reiterated the same principle. Keeping the aforesaid principle in mind and the facts of the present case it is prima facie seen that the present case would largely depend upon documentary evidence which is already seized by the prosecution and is made part of the Chargesheet. As such there is no possibility of tampering with the evidence. The present case in hand is restricted to grant of bail on account of incarceration of the under trial accused / Applicant having fully co-operated in the investigation and made all disclosures it is refrained to comment on any of the merits of the matter. Any comment made above on the merits is cursory and only to the extent of considering the Applicant s case for grant of bail and is not an opinion expressed by the Court so as to influence the trial which may be noted. Conclusion - Given the incarceration of Applicant and the absence of any foreseeable conclusion of the trial continued detention would violate the Applicant s fundamental right under Article 21 of the Constitution which guarantees a speedy trial and personal liberty. The primary allegation relates to the Applicant s temporary position which no longer persists mitigating concerns of tampering with the evidence. Any such apprehension can be addressed through appropriate conditions. Continued incarceration of the Applicant would be unwarranted and would amount to punitive detention prior to the establishment of guilt. Applicant is granted bail subject to the fulfilment of conditions imposed - bail application allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Entitlement to Bail under Section 439 Cr.P.C. and Section 45 PMLA: The Applicant sought bail under Section 439 of the Cr.P.C., read with Section 45 of the PMLA. The legal framework requires the Public Prosecutor to be given an opportunity to oppose bail, and the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty and is unlikely to commit any offense while on bail. The Court considered the Applicant's prolonged detention, cooperation with the investigation, and the absence of direct evidence linking him to the proceeds of crime. 2. Applicant's Alleged Involvement in Fraudulent Activities: The prosecution alleged that the Applicant, as Dean of the Dahisar Jumbo Covid Center, approved fabricated invoices based on falsified attendance sheets. However, the Court noted that the Applicant's role was limited to verifying 15 out of 82 invoices, and the preparation and verification of attendance sheets were primarily the responsibility of other staff members. The Court found no prima facie evidence of the Applicant's direct involvement in the preparation of fraudulent invoices or receipt of proceeds of crime. 3. Applicability of Twin Conditions under Section 45 PMLA: The Court addressed whether the twin conditions under Section 45 of the PMLA should be applied mechanically, given the Applicant's prolonged detention and the lack of prima facie evidence. The Court referred to Supreme Court judgments emphasizing that prolonged incarceration without trial could violate Article 21 of the Constitution. The Court concluded that the stringent conditions for bail under Section 45 should not be used to incarcerate the accused for an unreasonably long time without trial. 4. Fundamental Rights under Article 21: The Court considered the Applicant's right to a speedy trial and personal liberty under Article 21 of the Constitution. Given the Applicant's cooperation with the investigation, lack of evidence of tampering, and the unlikelihood of trial conclusion in the near future, the Court found that continued detention would violate the Applicant's fundamental rights. SIGNIFICANT HOLDINGS The Court held that:
Core Principles Established:
Final Determinations on Each Issue:
The judgment underscores the importance of safeguarding individual liberty and ensuring that statutory provisions align with constitutional mandates, particularly in cases of prolonged pre-trial detention.
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