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2021 (6) TMI 558 - HC - Money LaunderingSeeking grant of Regular Bail - Money Laundering - Scheduled Offences - Constitutional validity of Section 45 of the Prevention of Money Laundering Act, 2002 - requirment for fulfilment of two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule to the Act - HELD THAT - The declaration by the Supreme Court in Nikesh Tarachand Shah's case 2017 (11) TMI 1336 - SUPREME COURT would render the twin conditions prescribed in Section 45(1) of the PMLA for release of an accused on bail to be void in toto; such conditions have to be disregarded of any legal force from its inception; they cease to be law; the same are rendered inoperative and that they are to be regarded as if they had never been enacted. That being so, the twin conditions for grant of bail under Section 45(1) of the PMLA as are now sought to be pressed into service by the ED cannot be considered to have revived or resurrected only on the prospective substitution of the words punishable for a term of imprisonment of more than three years under Part A of the Schedule with the words under this Act especially without there being any amendment with regard to the twin conditions for grant of bail which had specifically been declared to be unconstitutional as also in the absence of any validating law in this regard with retrospective effect. The investigations in the case are complete since a report under Section 173 Cr.P.C. as also a supplementary report under Section 173(8) Cr.P.C. by the Haryana Police and a complaint under Sections 44/ 45 of the PMLA by the ED have already been filed; both the petitioners have been in custody since 16.02.2021; all the relevant documents on the basis of which the prosecution seeks to prosecute the petitioners already stand seized in the course of 16 raids conducted by the ED on different premises of the petitioners; the petitioner in CRM-M-12901-2021 has joined the investigation 11 times whereas the petitioner in CRM-M-12459-2021 has joined the investigation on 13 occasions; properties of both the petitioners, to the extent of the alleged money laundered by them, already stands attached - this Court is of the considered opinion that, subject to the satisfaction of the Trial Court/ Illaqa Magistrate/ Duty Magistrate, Gurugram which shall include deposit of the petitioners' Passports and furnishing of heavy local sureties, the petitioners be released on regular bail. Bail application allowed.
Issues Involved:
1. Grant of regular bail under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). 2. Applicability of Section 420 IPC in the context of the case. 3. Constitutional validity and applicability of the twin conditions for bail under Section 45(1) of the PMLA. Detailed Analysis: 1. Grant of Regular Bail under Sections 3 and 4 of the PMLA: The petitioners sought regular bail in connection with a case registered under Sections 3 and 4 of the PMLA, arising from FIR No.291 dated 13.12.2018 under Section 10 of the Haryana Development and Regulation of Urban Areas Act, 1975 (the 1975 Act) and Section 420 IPC. The prosecution alleged that Chintels India Limited (Chintels), QVC Realty Company Limited (QVC), and Sobha Limited (Sobha) conspired to commit fraud by not reserving and allotting the required number of 'No Profit No Loss' (NPNL) plots as per the terms of the license. Instead, they allotted these plots to Limited Liability Partnerships (LLPs) created by Sobha, thereby violating the terms of the license and committing fraud. The petitioners argued that they had been falsely implicated and had cooperated with the investigation. They contended that the case was based on documents already seized, and that they were not in a position to influence the investigation. They also highlighted their senior citizen status and health issues, particularly in the context of the COVID-19 pandemic, as additional grounds for bail. 2. Applicability of Section 420 IPC: The petitioners contended that Section 420 IPC was not applicable, as the allegations pertained to a breach of the terms of the agreement/license under Section 10 of the 1975 Act, which is a bailable offense. The prosecution, however, argued that the petitioners had acted dishonestly and fraudulently by not reserving NPNL plots for allocation, constructing villas on these plots, and selling them at higher rates, thereby causing wrongful loss and making wrongful gain, which attracts Section 420 IPC. The court noted that the supplementary charge sheet filed by the Haryana Police sought to prosecute the petitioners under both Section 420 IPC and Section 10 of the 1975 Act. The complaint by the Enforcement Directorate (ED) also contained specific allegations of fraud and dishonesty. The court decided that the applicability of Section 420 IPC should be considered by the trial court at the appropriate stage, rather than in a preliminary bail hearing. 3. Constitutional Validity and Applicability of Twin Conditions for Bail under Section 45(1) of the PMLA: The prosecution argued that the twin conditions for bail under Section 45(1) of the PMLA, which required the court to be satisfied that the accused was not guilty of the offense and was not likely to commit any offense while on bail, had been revived by an amendment through Act No.13 of 2018. This amendment substituted the words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" with "under this Act." The court, however, held that the twin conditions for bail under Section 45(1) of the PMLA, as declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah's case, could not be considered revived merely by the prospective substitution of words without a validating law with retrospective effect. The court referred to similar judgments by various High Courts, including the Bombay High Court and the Delhi High Court, which had held that the twin conditions for bail under Section 45(1) of the PMLA were no longer applicable. Conclusion: The court granted regular bail to the petitioners, considering that the investigations were complete, the petitioners had cooperated with the investigation, their properties had been attached, and they were senior citizens with health issues, especially in the context of the COVID-19 pandemic. The court emphasized that these observations were made only for the purpose of deciding the bail petitions and should not be construed as an opinion on the merits of the case.
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