2021 (10) TMI 1165 - HC - Money Laundering

Seeking concession of 'pre-arrest bail' - Hawala/underground banking and laundering of direct or indirect proceeds of crime - offences punishable under the provisions of Sections 467/471/120-B/108-A of the IPC - HELD THAT - This court finds it rather surprising that no offence pertaining to the provisions of Sections 420 specifically, of the IPC, has been even alleged to have been committed in the FIR, even though 'Hawala' transactions/ underground banking are alleged to have been transacted as per the FIR itself, which prime facie (at least for the purpose of this petition seeking the extra-ordinary relief of pre-arrest bail), would seem to amount to cheating. In the face of the allegations made in the FIR and the contents of the affidavit filed on behalf of the respondent-State, impossible to accept that no offence of cheating is even alleged to have been committed - Whether or not any such 'Hawala' transactions amounting to cheating eventually are proved, naturally would be a matter of evidence gathered and eventually submitted to the trial court if it comes to that stage; yet, to repeat, as regards this petition filed under the provisions of Section 438 of the Cr.P.C., there are no ground to admit the petitioner to 'anticipatory bail' with the aforesaid allegations made in the FIR itself, as also in the reply filed on behalf of the respondent-State. As regards all evidence being available by way of documents in the form of a power of attorney, the deed of assets and liabilities, and the loan transactions, though this court was swayed by that contention at first blush yet, with the learned Senior Deputy Advocate General, Punjab, having pointed out that 'Hawala'/ underground banking transactions have been time and again alleged to have been committed by Shivlal Pabbi in collusion with the petitioner, and the 'modus operandi' of such transactions needs to be disclosed by the petitioner, which may only be possible by way of custodial interrogation and not under the protection of even an interim bail in his favour. Petition dismissed.

Summary

Issues Involved:
1. Pre-arrest bail petition.
2. Allegations of forgery, cheating, and money laundering.
3. Validity of documents (Power of Attorney, Loan Agreement, Deed of Sale).
4. Alleged Hawala/underground banking transactions.
5. Jurisdiction and maintainability of the FIR.
6. Custodial interrogation necessity.

Detailed Analysis:

1. Pre-arrest Bail Petition:
The petitioner sought pre-arrest bail under FIR No. 161, alleging offenses under Sections 467, 471, 120B, and 108A of the IPC. The court denied the petition, citing serious allegations of forgery, cheating, and money laundering.

2. Allegations of Forgery, Cheating, and Money Laundering:
The FIR, based on a complaint by the Directorate of Enforcement, alleged that the petitioner assisted Shivlal Pabbi in laundering proceeds of crime through underground banking and Hawala transactions. The petitioner was accused of aiding Pabbi in evading taxes and laundering money to India through Dubai, which was invested in real estate and resorts.

3. Validity of Documents:
The petitioner argued that the documents in question (Power of Attorney dated 09.05.2005, Loan Agreement, and Deed of Sale of Assets and Liabilities dated 31.12.2007) were genuine. However, the FIR stated that these documents were used to facilitate illegal activities and were part of a sham transaction for bookkeeping purposes. The court found that these documents were central to the alleged offenses and required further investigation.

4. Alleged Hawala/Underground Banking Transactions:
The FIR and the respondent's affidavit detailed how Pabbi used the petitioner’s name and documents to conduct underground banking operations, earning commissions in cash and transferring them to India through Dubai. The court noted that these allegations were serious and indicative of cheating, making the petitioner’s custodial interrogation necessary to uncover the modus operandi of these transactions.

5. Jurisdiction and Maintainability of the FIR:
The petitioner contended that the FIR was not maintainable as similar proceedings were already pending under the Prevention of Money Laundering Act (PMLA). The court rejected this argument, stating that the Directorate had limited jurisdiction under the PMLA and was correct in referring the matter to the police for offenses under the IPC. The court also noted that no petition for quashing the FIR had been filed.

6. Custodial Interrogation Necessity:
The court emphasized the need for custodial interrogation, given the complexity of the alleged Hawala transactions and the petitioner’s role in facilitating them. The court found that documentary evidence alone was insufficient and that the petitioner’s interrogation was necessary to uncover the full extent of the criminal conspiracy.

Conclusion:
The court dismissed the pre-arrest bail petition, finding no merit in the petitioner’s arguments. It held that serious allegations of forgery, cheating, and money laundering warranted custodial interrogation. The court clarified that its observations were limited to the context of the bail petition and did not reflect on the merits of the case, which would be determined based on evidence gathered during the investigation and any subsequent trial.