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2019 (10) TMI 962 - HC - Money LaunderingBail application - Compoundable offences - grant of sanction to prosecute for offences punishable u/s 276C(1) and 277 of the Income Tax Act and section 120B of I.P.C - scheduled offences - HELD THAT - It is not in dispute that the petitioner was discharged by the Special Court, Bengaluru in 3 out of 4 complaints vide order dated 28.02.2019. however, the application seeking discharge in the 4th complaint was dismissed by the Special Court, Bengaluru, vide order dated 25.06.2019 - The petitioner had challenged the said order in Revision Petition No. 955/2019 filed before the High Court of Karnataka which granted stay of further proceedings vide order dated 20.08.2019 in the said 4th complaint case pending before the Special Court, Bengaluru. It is also not in dispute that the offences under Section 276C, 277 of the Income Tax Act alleged against the petitioner are compoundable offences and the only Scheduled Offence invoked against the petitioner is Section 120 B IPC. Bail application - entitlement for grant of bail - HELD THAT - While dealing with the bail application, it is not in dispute that three factors have to be seen viz. i) flight risk, ii) tampering evidence iii) influencing witnesses - Regarding the flight risk, neither argued by learned Additional Solicitor General nor placed any material on record, therefore, flight risk of the petition is ruled out - Regarding tampering with the evidence, it is not in dispute that the documents relating to the present case is in the custody of the prosecuting agency, Government of India and the Court. Moreover, presently, the petitioner is not in power except he is a Member of Legislative Assembly. Therefore, in my considered view, there is no chance of the petitioner to tamper with the evidence - On the issue of influencing the prosecution witnesses, the respondent has not placed any record to establish that either the petitioner or his family members or associates ever tried to contact any of the witnesses not to disclose any information regarding money earned by him for self and family members or associates. Moreover, petitioner has been examined extensively. All the 14 witnesses have already been examined - He was arrested on 3rd September, 2019 and remained 15 days in the custody of respondent and thereafter in judicial custody. He is no more required for investigation or interrogation by the prosecution. The petitioner is entitled for bail on merits and medical grounds as well - the petitioner shall be released on bail with conditions imposed - bail application allowed.
Issues Involved:
1. Maintainability of the bail application under Section 439 Cr.P.C. read with Section 65 PMLA, 2002. 2. Allegations and charges against the petitioner under the Income Tax Act and IPC. 3. The role of Section 120B IPC as a predicate offence under the PMLA. 4. Health conditions of the petitioner and their impact on the bail decision. 5. Risk factors associated with granting bail: flight risk, tampering with evidence, and influencing witnesses. 6. Arguments presented by the petitioner’s counsel and the respondent’s counsel. 7. Previous judicial decisions and their relevance to the current case. Detailed Analysis: 1. Maintainability of the Bail Application: The bail application was filed under Section 439 Cr.P.C. read with Section 65 of the PMLA, 2002. Section 65 of the PMLA states that the provisions of the Cr.P.C. apply to proceedings under the PMLA as long as they are not inconsistent with the PMLA. The court affirmed the maintainability of the bail application under these provisions. 2. Allegations and Charges Against the Petitioner: The petitioner was arrested following a search under Section 132(1) of the Income Tax Act, which led to the recovery of ?41,03,600/- in cash. The Income Tax Department filed multiple complaints against the petitioner, alleging offences under Sections 276C(1) and 277 of the Income Tax Act and Section 120B of the IPC. The Enforcement Directorate registered an ECIR based on these allegations and issued summons under Section 50 of the PMLA. 3. Role of Section 120B IPC as a Predicate Offence: The petitioner’s counsel argued that the offences under the Income Tax Act and Section 120B IPC do not constitute predicate offences under the PMLA. They contended that Section 120B IPC alone cannot be a standalone predicate offence for money laundering without the existence of another scheduled offence. The court noted that the High Court of Karnataka had left the question of Section 120B IPC open regarding its role as a predicate offence under the PMLA. 4. Health Conditions of the Petitioner: The petitioner had been hospitalized multiple times since his arrest, suffering from chest pain, high blood pressure, and other ailments. He was diagnosed with unstable angina and had undergone angiography. The court considered these health conditions as a significant factor in the bail decision, noting that the proviso to Section 45 of the PMLA provides for bail in case of a sick person. 5. Risk Factors Associated with Granting Bail: The court assessed the risk factors of granting bail, including flight risk, tampering with evidence, and influencing witnesses. The court found no material evidence suggesting that the petitioner was a flight risk or that he would tamper with evidence. The court also noted that all relevant documents were in the custody of the prosecuting agency and the court, and there was no indication that the petitioner or his associates had attempted to influence witnesses. 6. Arguments Presented by the Petitioner’s Counsel: The petitioner’s counsel argued that the twin conditions for bail under Section 45 of the PMLA had been struck down as unconstitutional by the Supreme Court in the case of Nikesh Tarachand Shah vs. Union of India. They also cited the petitioner’s deep roots in society, lack of criminal antecedents, and the compoundable nature of the alleged offences under the Income Tax Act. The counsel emphasized that the offences were not serious and that the petitioner was not a flight risk. 7. Arguments Presented by the Respondent’s Counsel: The respondent’s counsel argued that the petitioner was involved in a grave economic offence of laundering proceeds of crime through a series of transactions. They presented evidence of unaccounted cash transactions and alleged that the petitioner had generated at least ?143 crores through illicit means. They contended that the petitioner’s position and influence could potentially frustrate the investigation and intimidate witnesses. Judgment: The court, after considering the arguments and evidence, granted bail to the petitioner on both merits and medical grounds. The petitioner was ordered to furnish a personal bond of ?25 lacs with two sureties of the like amount, not leave the country without court permission, make himself available for investigation if required, and not influence prosecution witnesses. The court also noted that the petitioner had been extensively examined and was no longer required for investigation or interrogation. The bail application was allowed, and related applications were rendered infructuous. Conclusion: The court’s decision to grant bail was based on a thorough consideration of the maintainability of the bail application, the nature of the allegations, the role of Section 120B IPC, the petitioner’s health conditions, and the risk factors associated with granting bail. The petitioner’s deep roots in society, lack of criminal antecedents, and the compoundable nature of the alleged offences were significant factors in the court’s decision.
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