2018 (2) TMI 239 - HC - Money Laundering

Bail application - offence under PMLA - Held that - The involvement of the Applicant accused with regard to the alleged offence under the PML Act and there may be further scrutiny of the material by the Respondent agency, the fact remains that most of the material has been seized and collected and the severity of the punishment, which has been emphasized by learned Senior Counsel Shri S.V.Raju, clearly suggest that it is punishable up to 7 years, meaning thereby, it is not punishable with life imprisonment or death. The consideration of the present application for bail even in light of the submissions and the prima facie case suggesting the involvement of the Applicant accused for the alleged offence would not dis-entitle the Applicant accused from bail having regard to the broad guidelines regarding grant of bail. However, in order to protect the interest of the Respondent or the public interest, suitable stringent conditions can be imposed particularly when learned Assistant Solicitor General Shri Devang Vyas has voiced an apprehension that even though the Applicant accused is in jail, there is no cooperation by his family members for the investigation and further details. Therefore the present application deserves to be allowed and accordingly stands allowed. The Applicant JIGNESH KISHOREBHAI BHAJIAWALA is ordered to be released on bail in connection with ECIR/01/STSZO/2016 registered with Directorate of Enforcement, Surat converted into PMLA Case No.5 of 2017 pending before the Hon ble Designated Special Court under PMLA, 2002 on his executing a bond of ₹ 50,000/- (Rupees Fifty Thousand Only), with one solvent surety of the like amount to the satisfaction of the lower Court

Summary

Issues Involved:
1. Application for regular bail under Section 439 of the Code of Criminal Procedure read with the Prevention of Money Laundering Act, 2002.
2. Constitutional validity of Section 45 of the PML Act.
3. Jurisdiction of the High Court to consider the bail application after remittance by the Apex Court.
4. Applicability of Sections 23 and 24 of the PML Act regarding presumption and burden of proof.
5. Consideration of bail under Section 439 of Cr.PC in light of the removal of twin conditions under Section 45 of the PML Act.

Issue-wise Detailed Analysis:

1. Application for Regular Bail:
The Applicant, the original accused, filed an application for regular bail under Section 439 of the Code of Criminal Procedure read with the Prevention of Money Laundering Act, 2002. The application was initially dismissed by the Sessions Court and later by the High Court on 12.1.2018, referring to the provisions of the PML Act.

2. Constitutional Validity of Section 45 of the PML Act:
A significant development occurred when the Hon'ble Apex Court, in Writ Petition (Criminal) No. 67/2007, declared Section 45(1) of the PML Act, which imposed two further conditions for release on bail, to be unconstitutional as it violated Articles 14 and 21 of the Constitution of India. Consequently, all matters where bail had been denied due to the twin conditions were remanded to the respective courts for fresh consideration without applying these conditions.

3. Jurisdiction of the High Court:
The Apex Court remitted the matter back for fresh consideration, leading to a debate on whether the High Court or the trial court should hear the bail application. The Applicant’s counsel argued that the matter should be heard by the High Court, as it was remitted back by the Apex Court. The Respondent’s counsel contended that the trial court should consider the application first. The High Court decided to hear the application itself, interpreting the Apex Court's order to mean that the High Court was the "concerned court."

4. Applicability of Sections 23 and 24 of the PML Act:
The Respondent’s counsel emphasized the provisions of Sections 23 and 24 of the PML Act, which deal with the presumption of interconnected transactions and the burden of proof. The court noted that these provisions require the court to presume that the proceeds of crime are involved in money laundering unless the contrary is proved. However, the court also recognized that these aspects would be more relevant at the trial stage rather than at the bail stage.

5. Consideration of Bail under Section 439 of Cr.PC:
With the removal of the twin conditions under Section 45 of the PML Act, the court considered the bail application under Section 439 of Cr.PC. The court referred to various judgments of the Hon'ble Apex Court, emphasizing the balance between personal liberty and the interests of the investigating agency. The court acknowledged that the severity of the punishment (up to 7 years) and the fact that the investigation was practically over were relevant factors favoring the grant of bail. The court also imposed stringent conditions to ensure the Applicant’s cooperation with the investigation and to prevent tampering with evidence or influencing witnesses.

Conclusion:
The High Court granted bail to the Applicant, subject to several conditions, including the execution of a bond, regular reporting to the police station, cooperation with the investigation, and surrendering of the passport. The court emphasized that the bail could be canceled if the conditions were breached or if the Applicant failed to cooperate with the investigating agency.