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2022 (3) TMI 808 - HC - Money LaunderingMoney Laundering - proceeds of crime - petitioner could not produce purchase/sale orders in respect of the transactions - effect of the amendment in question in sub-section (1) of Section 45 of the Act - twin conditions of section 45 of the PMLA Act satisfied or not - HELD THAT - The twin conditions of section 45 of the PMLA Act still remain in the Statute Book in that eventuality also the observations of the Supreme Court do not get obliterated. The Schedules attached to the PMLA Act still continue. The insertion of the words under this Act by deleting offence punishable for a term of imprisonment of more than three years under Part A of the Schedule only makes an ostensible change. The offence of money laundering as stipulated under Section 3 of the PMLA Act stems out of the offences prescribed in the Schedules. The defects which the Supreme Court in Nikesh Tarachand Shah (supra) 2017 (11) TMI 1336 - SUPREME COURT had pointed out while invalidating the existing law are not substantially removed by the amendment. The Supreme Court has asserted that the twin conditions prescribed in Section 45 of the PMLA Act would have no nexus whatsoever with a bail application which concerns itself with the offence of money laundering for if Section 45 of the PMLA Act is to apply the Court does not apply its mind to whether the person prosecuted is guilty of the offence of money laundering but instead applies its mind to whether such person is guilty of the scheduled or predicate offence. The Supreme Court has held that that merely reading down the two conditions would not get rid of the vice of manifest arbitrariness and discrimination . Such observations facilitate the Courts to realize and interpret the legal effect of the twin conditions attached to Section 45 of the PMLA Act - the Supreme Court has directed all the concerned courts to decide the matter on merits without application of the twin conditions contained in Section 45 of the PMLA Act as they are declared unconstitutional. The twin conditions still continue. Unquestionably the Amendment Act of 2018 which introduces the expression under this Act to Section 45 of the PMLA Act in no uncertain terms can obliterate or dilute the directions issued by the highest court of land. After going through the facts of the present case it is not in dispute that proceeds of crime amounting to 20, 00, 000/- (Rupees Twenty Lakh) originating from bank accounts held with Bank of India G.B. Road Gaya have merged in the bank account no.75105078737 of M/s Sanjog Steels Pvt. Ltd. Jaipur (petitioner s firm). During investigation it was also found that firms namely M/s Radha Trading Company Delhi M/s Shree Ram Overseas M/s Shree Ganesh Overseas M/s Sandeep Traders M/s Rajesh Trading Company M/s Sunil Trading Company and M/s Azad Singh and Manoj Kumar are fake and fictitious firms and have not been operating from the addresses as mentioned in their bank accounts or in the sales invoices. It also revealed that they do not exist at given address - the transactions through these firms are involved in money laundering in terms of Section 23 of the PMLA. The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the hit of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. The prayer for anticipatory bail of the petitioner is hereby rejected.
Issues Involved:
1. Applicability of Section 45(1) of the Prevention of Money Laundering Act (PMLA). 2. Allegations of money laundering against the petitioner. 3. Petitioner's defense and justification for anticipatory bail. 4. Prosecution's argument against granting anticipatory bail. 5. Judicial precedents and their relevance to the case. Detailed Analysis: 1. Applicability of Section 45(1) of the PMLA: The court examined whether the twin conditions under Section 45(1) of the PMLA apply to the petitioner's case. The petitioner argued that the amount alleged to be laundered is less than ?1 crore, making the twin conditions inapplicable. The court noted that the Supreme Court in Nikesh Tarachand Shah v. Union of India declared the twin conditions unconstitutional. Despite the amendment substituting "under this Act," the court found that the amendment did not substantially remove the defects pointed out by the Supreme Court. Hence, the twin conditions should not apply to bail applications concerning money laundering offenses. 2. Allegations of Money Laundering Against the Petitioner: The prosecution alleged that the petitioner was involved in money laundering by receiving proceeds of crime through fake and non-existent firms. Specifically, cash deposits were transferred to the petitioner's company, M/s Sanjog Steels Pvt. Ltd., Jaipur, from accounts held with Bank of India, G.B. Road Branch, Gaya. The prosecution highlighted that firms such as M/s Radha Trading Company, Delhi, were fake and used to layer the proceeds of crime. 3. Petitioner's Defense and Justification for Anticipatory Bail: The petitioner claimed innocence, arguing that his company, engaged in manufacturing MS TMT BAR and Billets, received orders through brokers without written purchase orders. The petitioner provided statutory and transport documents to support the legitimacy of transactions. The petitioner also argued that the Enforcement Directorate (ED) failed to establish any positive evidence of money laundering and that the twin conditions under Section 45(1) should not apply. 4. Prosecution's Argument Against Granting Anticipatory Bail: The prosecution contended that the petitioner was involved in a deliberate design to launder money through fake firms. The prosecution emphasized that economic offenses like money laundering affect the entire society and should be treated with a different approach. The prosecution also cited Supreme Court judgments to argue that anticipatory bail should not be granted in cases involving economic offenses. 5. Judicial Precedents and Their Relevance to the Case: The petitioner relied on several judgments, including Pasumarthi Venkata Satyanarayana Sarma v. The Assistant Director, ED, and Rajeev Sharma v. ED, where the courts granted bail despite allegations of laundering amounts greater than ?1 crore. However, the court found these judgments inapplicable to the present case, emphasizing the need to consider the specific facts and circumstances. Conclusion: The court concluded that the petitioner did not qualify for anticipatory bail due to the gravity of the allegations and the involvement of fake firms in money laundering. The court emphasized the importance of addressing economic offenses seriously to maintain public trust in the justice system. Consequently, the prayer for anticipatory bail was rejected.
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