2019 (8) TMI 1032 - HC - Money Laundering

Offence under PMLA - pre-arrest bail seeked - HELD THAT - In the instant case, in view of the enormous material placed on record in respect of distinguished entities, various transactions etc, this Court unhesitatingly opines that bail plea of petitioner is not acceptable. Recently, Supreme Court in Rohit Tandon Vs. Directorate of Enforcement 2017 (11) TMI 779 - SUPREME COURT while dealing with the bail plea in a money laundering case, has again reiterated that white collar crimes/ economic offenders have deep rooted conspiracies involving huge amount of public funds and this should be viewed seriously and such offences ought to be considered as grave offences. Pertinently, the bail plea in the case of Rohit Tandon (Supra) was repelled by the Supreme Court while observing that duty of the Court at the bail stage is not to weigh the evidence meticulously but to arrive at a finding on the broad probabilities of the case. This is a classic case of money laundering. The twin factors which have weighed to deny pre-arrest bail to petitioner are (i) Gravity of offence and (ii) evasive replies given by petitioner to the questions put to him while he was under protective cover extended to him by this Court. The parameters governing pre-arrest bail and regular bail are altogether different. I have pondered over this matter for long and after weighing the pros and cons, as of considered view that the gravity of the offence committed in the instant case amply justifies denial of pre-arrest bail to petitioner. Grant of pre-arrest bail in a serious matter like instant one to an accused simply on the ground that investigation is complete and charge sheet has been filed, would defeat the ends of justice. In bail matters, gravity of the offence is of utmost consideration which weighs with the Court in granting or refusing pre-arrest bail or regular bail. The facts of this case persuades me to decline pre-arrest bail to petitioner while refraining to comment on the merits of the case. Upon considering the case set up against petitioner in its entirety, this Court is of prima facie opinion that it is not a fit case for grant of pre-arrest bail to petitioner.

Issues Involved:
1. Pre-arrest bail under IPC and PC Act.
2. Pre-arrest bail under PMLA.
3. Allegations of money laundering and corruption.
4. Jurisdiction of ED and applicability of PMLA.
5. Custodial interrogation necessity.
6. Comparison with co-accused.
7. Political motivation and vendetta claims.
8. Gravity of economic offences.

Issue-wise Detailed Analysis:

1. Pre-arrest Bail under IPC and PC Act:
The petitioner sought pre-arrest bail in FIR No. RC220-2017-E-0011 under Section 120B read with Section 420 of IPC and Sections 8 and 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988. The petitioner argued that there were no allegations against him in the FIR and that the investigation was politically motivated. The court noted that the petitioner was not named in the FIR but found that he was the key conspirator, thus justifying the denial of pre-arrest bail.

2. Pre-arrest Bail under PMLA:
The petitioner also sought pre-arrest bail in ECIR/07/HIU/2017 under the PMLA. The petitioner's counsel argued that the offences under IPC and PC Act were not scheduled offences under PMLA at the relevant time, and thus, the petitioner could not be prosecuted under PMLA. The court, however, found that the magnitude of the money laundering involved justified the application of PMLA, and the petitioner’s involvement was evident from the material collected.

3. Allegations of Money Laundering and Corruption:
The court examined the allegations that the petitioner’s son received illegal gratification from INX Media Pvt. Ltd. and that the petitioner, as Finance Minister, facilitated FDI approvals in exchange for bribes. The investigation revealed that significant amounts of money were transferred to entities controlled by the petitioner’s son, which were used for personal expenses and investments. The court found these allegations to be substantiated by the material on record, including bank statements and statements from associates.

4. Jurisdiction of ED and Applicability of PMLA:
The petitioner contended that the ED's investigation was baseless and politically motivated. The court noted that the ED had the authority to arrest the petitioner based on the material collected, which indicated money laundering activities. The court also dismissed the argument that the offences were not scheduled under PMLA, stating that the gravity of the offence and the amount involved justified the application of PMLA.

5. Custodial Interrogation Necessity:
The respondents argued that the petitioner’s custodial interrogation was necessary to trace further proceeds of the crime and that the petitioner was giving evasive replies under the protection of interim orders. The court agreed, citing the need for effective interrogation to uncover the full extent of the money laundering activities. The court referenced the Supreme Court's decision in CBI Vs. Anil Sharma, emphasizing the importance of custodial interrogation in such cases.

6. Comparison with Co-accused:
The petitioner sought parity with co-accused who were granted bail. The court rejected this argument, noting that the petitioner, as the Finance Minister, played a central role in the conspiracy. The court emphasized that the petitioner’s status as a high-profile individual did not entitle him to pre-arrest bail.

7. Political Motivation and Vendetta Claims:
The petitioner claimed that the investigation was an act of political vendetta. The court found no merit in this argument, stating that the material collected provided a prima facie case against the petitioner. The court emphasized that the investigation’s findings were based on substantial evidence and not political bias.

8. Gravity of Economic Offences:
The court highlighted the serious nature of economic offences, which involve deep-rooted conspiracies and significant public funds. The court referenced Supreme Court decisions, noting that economic offences should be viewed seriously and that granting bail in such cases would send the wrong message to society. The court stressed that the gravity of the offence justified the denial of pre-arrest bail.

Conclusion:
The court concluded that the petitioner’s involvement in the money laundering and corruption activities was evident from the material on record. The gravity of the offence, the need for custodial interrogation, and the substantial evidence against the petitioner justified the denial of pre-arrest bail. The court disposed of both bail applications, emphasizing that the decision should not influence the trial's merits.

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