2021 (10) TMI 1177 - HC - Money Laundering

Seeking grant of regular bail - Money Laundering - secret banking - acts of cheating and forgery in Netherlands by transferring of money of other persons through Hawala operations and earned commissions in the shape of cash - Section 45 of PMLA Act - HELD THAT - Section 45 (1) (ii) is akin to Section 37 of the NDPS Act, wherein the Court, while granting bail, has to form an opinion. In a case under the NDPS Act, it is easy for an accused who has been released on bail to repeat such offence, however, in a case under the PMLA like the present case, it is not easy for an accused to commit the offence again while on bail while staying in India - there was no request on behalf of the Netherlands authorities to register a case under Section 44/45 or 65 of the PMLA as at the first instance, a mutual legal assistance was called in 2017 and it is not the case of the ED that by way of any further correspondence, it was communicated to corresponding authorities in Netherlands that the petitioner, who is a Dutch National, is being prosecuted in India, for which he has already been convicted by the Courts at Netherlands. It is well settled principles of law that when the investigation is complete and charge sheet is filed in the Court, conclusion of trial is likely to take a long time, a person/accused like the present petitioner, who is aged about 63 years old, can be released on bail, subject to his furnishing bail/surety bonds and with a condition that his passport shall remain deposited with the Court/Prosecuting Agency and he will not leave the country without seeking prior permission of the Court. It is held that the petitioner qualifies the test under Section 45 of the Act and therefore, the present petition is allowed.

Summary

Issues Involved:
1. Grant of regular bail under Section 439 Cr.P.C.
2. Allegations of money laundering under Sections 3 and 4 of the PMLA.
3. Double jeopardy due to prior conviction in the Netherlands.
4. Compliance with Section 45 of the PMLA for granting bail.
5. Validity of the Lookout Circular (LOC) and procedural fairness.

Issue-wise Detailed Analysis:

1. Grant of Regular Bail under Section 439 Cr.P.C.:
The petitioner sought regular bail in connection with ECIR No. HQ-STF/15/2020, registered by the Enforcement Directorate (ED) for offences under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, a Dutch national, was involved in secret banking and had assets in Dubai and India. The ED's investigation revealed that the petitioner engaged in Hawala operations, earning commissions in cash, and transferring money through illegal channels.

2. Allegations of Money Laundering under Sections 3 and 4 of the PMLA:
The ED found that the petitioner, in conspiracy with Mukesh Sharma, created a facade of legitimate business operations under SM Fashion BV in the Netherlands to evade taxes and launder money. The petitioner transferred proceeds of crime to India through Hong Kong and Dubai, investing in various properties and businesses in Punjab. The investigation concluded that the petitioner committed offences with cross-border implications, as defined under Section 2(1)(ra) of the PMLA, corresponding to Sections 420 and 467 of the IPC.

3. Double Jeopardy Due to Prior Conviction in the Netherlands:
The petitioner argued that he was already convicted in the Netherlands for similar charges and sentenced to 44 months, which was under appeal. The petitioner claimed that prosecuting him in India would amount to double jeopardy. The court noted that the matter of double jeopardy would be determined during the trial, considering the mutual legal assistance sought by the Netherlands in 2017.

4. Compliance with Section 45 of the PMLA for Granting Bail:
The court examined the conditions under Section 45 of the PMLA, which require that the public prosecutor be given an opportunity to oppose bail, and that the court must be satisfied that the accused is not guilty and unlikely to commit an offence while on bail. The court found that the petitioner met these conditions, noting that it is not easy for an accused to commit the same offence again under the PMLA while staying in India. The court also emphasized that the petitioner had cooperated with the investigation and appeared before the ED on multiple occasions.

5. Validity of the Lookout Circular (LOC) and Procedural Fairness:
The petitioner was apprehended at New Delhi Airport based on an LOC issued by the Bureau of Immigration. The court observed that the LOC was not communicated to the petitioner or the writ court during the pendency of his civil writ petition. The court found that the arrest without informing the petitioner of the LOC or the grounds of arrest was procedurally unfair. The court also noted that the petitioner was not fleeing from the process of law but was attempting to attend legal proceedings in the Netherlands.

Conclusion:
The court allowed the petition for regular bail, considering the completion of the investigation, the petitioner's age, and the likelihood of a prolonged trial. The court imposed conditions for bail, including furnishing sureties, surrendering the passport, and appearing before the investigating agency and trial court as required. The court held that the petitioner qualified the test under Section 45 of the PMLA and granted bail with specific conditions to ensure compliance and prevent flight risk.