2017 (3) TMI 1269 - HC - Money Laundering

Offences punishable under Sections 3 and 4 of the PML Act alleging that the applicant has committed parity of scheduled offences i.e. under Sections 467, 471 read with Section 120-B of Indian Penal Code as well as for the offences punishable under Sections 7 and 13 of the Prevention of Corruption Act, 1988 - Held that - Considering there is no pronouncement by Hon ble the Supreme Court or of any High Courts that the provisions of Section 45 of the PML Act are ultravires or the inclusion of the offences of Part B into Part 1 of the Schedule of PML Act is declared ultra-vires to the provisions of the Constitution of India, the Court is required to read the provisions of law which are applicable on the day. When the Court is dealing with an application of an accused under Section 439 read with Section 45 of the PML Act, the provisions of the PML Act are required to be scrupulously followed. The applicant is facing charges for several offences punishable under the provisions of Indian Penal Code and also under the provisions of Prevention of Corruption Act, which are of Part A to the Schedule of PML Act and, therefore, rigor of Section 45 would be applicable. Therefore, the Court cannot presume that certain offences which were in part B in past shall be treated in the same Part even though they have been amended in the year 2013. Hence, hereby hold that the rigors of Section 45 would be applicable in the present case. If the definition of proceeds of crime is read and compared with the material collected by the Investigating Agency, it appears that Crores of rupees have been transferred in the bank accounts of the wife and children of the applicant in USA by different modes. The said aspect is supported by the information supplied by the United States of America, pursuant to the request made by the Special Judge under Section 57 of the PML Act. When the Investigating Agency could gather such material against the applicant, the burden to prove not guilty of having committed the schedule offence lie on accused as per Section 24 of the PML Act, which in my opinion, the applicant has failed to establish that. However, at this stage, I would not like to deal with the same in detail since the present case is being dealt with for the purpose of releasing a person on bail. It is also alleged that through Havala entries via Dubai (UAE), Crores of rupees have been credited in the account of his wife and his children in USA. The wife of the applicant who was made a Partner in a firm to the extent of 30% and that too, by investing only ₹ 1 Lac, and getting Crores of rupees from India as well as UAE, the Court cannot believe that the applicant is not guilty of offences for which he has been charged. The burden is upon the accused to prove that the amount which has been transferred in the account of his family member in foreign country is not proceeds of crime as per Section 24 of the PML Act. In the present case, except his own statements, the applicant is unable to prove himself that the amount received by his family members are not proceeds of crime. The statements recorded of the witnesses who would be governed under Section 50 of the PML Act and there are number of judgments of validity of such statements recorded under the provisions of Section 50. Have also gone through several statements of witnesses referred and relied upon by the Investigating Agency and have also gone through the material which prima facie suggests that huge amount has been credited in the account of the wife of the applicant and his children though they might have settled in USA. Therefore, the present application fails on both the grounds and hence, the same is accordingly dismissed.

Summary

Issues Involved:
1. Applicability of Section 45 of the Prevention of Money Laundering Act (PML Act) for bail.
2. Merits of the bail application under Section 439 of the Code of Criminal Procedure (CrPC) read with Section 45 of the PML Act.

Analysis of Judgment:

1. Applicability of Section 45 of the Prevention of Money Laundering Act (PML Act) for Bail:
The applicant contended that the rigors of Section 45 of the PML Act should not apply since the offenses charged were previously under Part B of the Schedule before the 2013 amendment. The applicant argued that the Punjab and Haryana High Court's decision in Gorav Kathuria v. Union of India, which held that the stringent conditions for bail under Section 45 should not apply to offenses shifted from Part B to Part A, should be considered. However, the court noted that the Supreme Court had not declared the provisions of Section 45 or the inclusion of Part B offenses into Part A as unconstitutional. The court emphasized that the provisions of the PML Act, as they stand, must be followed, and the rigors of Section 45 apply to the applicant's case.

2. Merits of the Bail Application under Section 439 of the CrPC read with Section 45 of the PML Act:
The prosecution alleged that the applicant, a retired IAS officer, used his position to grant government land to a company where his wife was a 30% partner and transferred crores of rupees to his family members' accounts in the USA. The court noted that substantial evidence, including bank transactions and witness statements, suggested that the applicant was involved in money laundering. The court highlighted that under Section 24 of the PML Act, the burden of proof lies on the accused to show that the proceeds of crime are untainted, which the applicant failed to do. Given the serious nature of the allegations and the substantial evidence against the applicant, the court found no reasonable grounds to believe that the applicant was not guilty of the offenses charged. Therefore, the bail application was dismissed.

Conclusion:
The court concluded that the stringent conditions for bail under Section 45 of the PML Act apply to the applicant's case. The applicant failed to prove that the funds transferred to his family members' accounts were not proceeds of crime. Consequently, the bail application was dismissed.