2020 (10) TMI 200 - HC - Money Laundering

Money Laundering- proceeds of crime - It has been alleged that Sri Manoj Singh had acquired proceeds of crime and placed the said proceeds of crime in the form of fixed deposit and other deposits - HELD THAT - In course of investigation by the Vigilance Bureau, it was detected that so far as the valuation of gold and diamonds are concerned, the jewellery was not physically taken to the Valuer, but instead the Valuer had given a back dated valuation report and in lieu thereof, he was given an amount of ₹ 1,26,042/-. Sri Ramesh Kumar Soni, the Valuer in his statement under Section 15 of the Prevention of Money Laundering Act has specifically stated about the valuation being made after the gold and diamonds were brought before him by the accused which is contrary to what has been stated by him before the Vigilance Bureau. In course of investigation, it has also come that the petitioner Manoj Kumar had submitted some invoices in support of his claim regarding sale of diamonds worth ₹ 8,17,21,664/- to one M/s. Star Traders, Mumbai/Surat which was a proprietorship firm of Raj Kumar Patodia. However, the income tax return does not indicate regarding the claim of Sri Manoj Kumar about the sale of diamonds as stated above. It has also come during course of investigation that the address of M/s. Star Traders has been given in the invoices submitted by Sri Manoj Kumar which is apparently false as there is no firm in existence in the name of M/s. Star Traders at Surat. In fact the son of Raj Kumar Patodia had denied being aware of any purchase of diamond or of the residential address of his father which had been provided by the petitioner Manoj Kumar. In fact, with respect to the agricultural income for which reliance has been placed on various documents by the learned counsel for the petitioner, but in course of investigation, the statements of several persons who were said to have purchased the agricultural produce have stated otherwise which also contradicts the claim of the petitioner Manoj Kumar Singh regarding his explanation with respect to the income from agricultural produce. An economic offence is a grave offence and considering the role played by the petitioner in which he had misused his position of being the Private Secretary of the then Speaker as well as the then Minister while amassing a huge wealth which is disproportionate to his known source of income and having miserably failed to submit any appropriate explanation for such income from the proceeds of crime, bail cannot be granted - The prayer for bail of the petitioner is hereby rejected - the petitioners in B. A. No. 2806 of 2020 above named are directed to be released on bail on furnishing bail bond of ₹ 10,000/- with two sureties of the like amount each. Petition allowed in part.

Summary

Issues Involved:
1. Allegations of disproportionate assets and money laundering.
2. Valuation of gold and diamonds without physical verification.
3. False claims regarding sale of diamonds and agricultural income.
4. Bail considerations for the accused.

Detailed Analysis:

1. Allegations of Disproportionate Assets and Money Laundering:
The petitioners are accused in connection with ECIR/02/PAT/11/AD. It has been alleged that the petitioner, while working as a Private Secretary to high-ranking officials, acquired assets worth ?12,95,47,971/- disproportionate to his known sources of income. The assets were allegedly acquired in the name of Sri Manoj Singh (HUF) and included proceeds of crime placed in fixed deposits and other deposits. The complaint was lodged, and cognizance was taken for offences under Sections 3 and 4 of the Prevention of Money Laundering Act.

2. Valuation of Gold and Diamonds Without Physical Verification:
During the investigation by the Vigilance Bureau, it was detected that the valuation of gold and diamonds was not physically verified. The Valuer, Sri Ramesh Kumar Soni, prepared a back-dated valuation report for pecuniary gain. In his statement under Section 15 of the Prevention of Money Laundering Act, he contradicted his earlier statement by claiming the valuation was done after physical verification.

3. False Claims Regarding Sale of Diamonds and Agricultural Income:
The petitioner submitted invoices supporting the sale of diamonds worth ?8,17,21,664/- to M/s. Star Traders, which was found to be a non-existent firm. The income tax return did not indicate the sale of diamonds. Furthermore, the agricultural income claimed by the petitioner was contradicted by statements from supposed buyers during the investigation.

4. Bail Considerations for the Accused:
The counsel for the petitioners argued that the petitioner had cooperated with the investigation and provided explanations for his income. The petitioner cited precedents from "Shri P. Chidambaram Vs. Central Bureau of Investigation" and "Sanjay Chandra vs. Central Bureau of Investigation" to support the bail plea. The Directorate of Enforcement opposed the bail, highlighting the falsified valuation report and the false claims regarding income sources. The court noted that the Prevention of Corruption Act and the Prevention of Money Laundering Act operate in different fields concerning bail considerations.

Judgment:
The court recognized the gravity of the economic offence committed by the petitioner in B. A. No. 2134 of 2020, who misused his position to amass wealth disproportionate to his known income sources. The court rejected the bail application for this petitioner. However, for the petitioners in B. A. No. 2806 of 2020, who were implicated due to their relation to the main accused and had no specific allegations against them, the court granted bail. They were directed to be released on bail on furnishing a bond of ?10,000/- with two sureties of the same amount.

Conclusion:
The judgment highlights the court's careful consideration of the severity of the allegations, the evidence presented, and the individual circumstances of each petitioner. The main accused's bail was denied due to the serious nature of the economic offences, while the co-accused were granted bail due to the lack of specific allegations against them.