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2021 (9) TMI 50 - HC - Money LaunderingSeeking grant of anticipatory bail - predicate offence - alleged irregularities in the utilization of funds of Government of India - pre-trial detention of the accused-applicant - Sections 120-B r/w Sections 420, 409 of IPC and Section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act against several persons - HELD THAT - The twin conditions as imposed by Section 45 of PMLA cannot be looked into while deciding the bail/anticipatory bail application as the same are violative of Articles 14 and 21 of Constitution of India. The Hon'ble Supreme Court in different decisions held that economic offences constitute a class apart, the Court need to visit the same with a different approach in the matter of bail/anticipatory bail and should be loathed while extending the benefit of bail/pre-arrest bail to a person accused of such offences. In the instant case, during the course of investigation under the PMLA, 2002, searches were conducted under Section 17 of PMLA, 2002 at the office, factory and residential premises of Naresh Grover, Director of M/s Surgicoin Medequip Pvt. Ltd. During these searches several incriminating documents were seized. These documents included letters written by Naresh Grover, who was in judicial custody at that time, to his son Pankaj Grover directing him to manipulate the accounts and records to defeat the allegation of supply of material under NRHM Scheme at astronomical rates of profit as well as of short supply of the said material - the fact that Naresh Grover had directed Pankaj Grover in writing not to submit the original invoices and the ledgers of the sundry creditors and debtors to the ED as well as to manipulate the records of the genuine creditors with other fictitious entries establishes that he was wilfully and knowingly trying to frustrate the proceedings under the Act and was also attempting to deflect the process of investigation In socio-economic offences proceed of crimes are larger and further, offenders are economically sound, therefore, in releasing them on bail/anticipatory bail probability of abscondance not within country but beyond country is more probable. Usually socio-economic offenders abscond to some other country and after that it becomes difficult to bring them back and complete the criminal proceeding against them. Further, their monetary sound condition particularly proceed of crime obtained not by honest working but by deceiving others causes more prone situation for influencing witnesses and other evidences. Furthermore, status and position of offender provides opportunity to influence investigation and prosecution - this Court finds no merit in the application under Section 438 Cr.P.C. filed by the applicant. The instant anticipatory bail application is rejected.
Issues Involved:
1. Application for anticipatory bail under Section 438 Cr.P.C. 2. Allegations under the Prevention of Money Laundering Act, 2002 (PMLA). 3. Applicability of Section 45 of PMLA post-amendment. 4. Necessity of custodial interrogation. 5. Legal precedents on anticipatory bail in economic offences. Issue-wise Detailed Analysis: 1. Application for Anticipatory Bail under Section 438 Cr.P.C.: The applicant sought anticipatory bail apprehending arrest in ECIR No.01/PMLA/LZO/2012 dated 14.04.2012 under Sections 3/4 of PMLA. The applicant argued that he was a sleeping Director of M/s Surgicoin Medequip Pvt. Ltd. and was not named in the predicate offence or the ECIR. The applicant contended that the accusations were made with ulterior motives and did not meet the essentials of Section 3 of PMLA, which mandates the existence of 'Proceeds of Crime'. 2. Allegations under the Prevention of Money Laundering Act, 2002 (PMLA): The Directorate of Enforcement lodged an ECIR against several persons, including the applicant. The investigation revealed that Naresh Grover, in connivance with his son Pankaj Grover (the applicant), manipulated records to conceal the "Proceeds of Crime" and sold off property clandestinely. The investigation established that proceeds of crime amounting to ?21,20,87,617/- were generated, with significant amounts paid as bribes and commissions. 3. Applicability of Section 45 of PMLA Post-Amendment: The respondent argued that the twin conditions prescribed in Section 45 of PMLA were revived by the Finance Act, 2018, and thus applicable. However, the court noted that the Supreme Court in Nikesh Tarachand Shah v. Union of India declared Section 45(1) unconstitutional. Subsequent amendments did not revive the twin conditions, as held in various judgments including Okram Ibobi Singh Vs. The Directorate Enforcement and Vinod Bhandari v. Assistant Director. 4. Necessity of Custodial Interrogation: The respondent emphasized the need for custodial interrogation to uncover the larger conspiracy and involvement in the economic offence. The court acknowledged the importance of custodial interrogation in economic offences, as highlighted in P. Chidambaram v. Directorate of Enforcement, where the Supreme Court noted that economic offences require a different approach due to their impact on society and the economy. 5. Legal Precedents on Anticipatory Bail in Economic Offences: The applicant cited several Supreme Court judgments, including Gurbaksh Singh Sibbia v. State of Punjab and Siddharam Satlingappa Mhetre v. State of Maharashtra, arguing that anticipatory bail should be granted unless the accused's presence during trial cannot be ensured. The respondent countered with precedents emphasizing the gravity of economic offences and the necessity of custodial interrogation, such as State of Gujarat v. Mohanlal Jitamalji Porwal and Y.S. Jagan Mohan Reddy v. CBI. Conclusion: The court concluded that the twin conditions of Section 45 of PMLA could not be applied while deciding the anticipatory bail application, as they were declared unconstitutional. However, considering the gravity of the economic offence and the necessity of custodial interrogation to uncover the larger conspiracy, the court found no merit in the anticipatory bail application and rejected it. The observations made were exclusively for deciding the anticipatory bail application and would not affect the trial.
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