2022 (3) TMI 987 - HC - Money Laundering

Grant of anticipatory bail - possession of huge cash and jewelleries - Creation of shell companies - constitutional validity of Section 45 of PMLA Act 2002 - HELD THAT - It is well settled that law framed by legislature is having presumption of its constitutionality, unless and until Constitutional Courts declared such law to be unconstitutional, it will have its force and therefore in the opinion of this Court, as twin conditions are still there in the Statute book after amendment in Section 45 of the Act of 2002, underlined principle and rigor of Section 45 of the Act of 2002 may get triggered once prayer for anticipatory bail is made in connection with offence under the Act of 2002. Merely because case is registered on complaint and cognizance of complaint is taken by Court after about two years, will in itself is not a ground considering entitlement of anticipatory bail but it is to be considered on merits of each case. In case at hand, there is allegation of involvement of applicants for committing offence under the Act of 2002 and amount involved is more than ₹ 39 Crores. Considering the entire facts and circumstances of case, nature of allegations levelled against applicants; rulings relied upon by learned counsel for both sides, this is not found to be a fit case where applicants can be enlarged on anticipatory bail - bail application is rejected.

Issues Involved:
1. Grant of anticipatory bail under Section 438 of CrPC.
2. Applicability of Section 45 of the Prevention of Money Laundering Act, 2002.
3. Involvement of the applicants in the alleged money laundering activities.
4. Interpretation of Supreme Court judgments related to anticipatory bail and money laundering.

Issue-wise Detailed Analysis:

1. Grant of Anticipatory Bail under Section 438 of CrPC:
The applicants sought anticipatory bail under Section 438 of CrPC, fearing arrest in connection with Complaint Case No.1/2021 under Section 45 of the Prevention of Money Laundering Act, 2002. The prosecution's case was based on information from the Income Tax Department, leading to an FIR against Babulal Agrawal (IAS) and subsequent investigation revealing the involvement of Sunil Agrawal, a Chartered Accountant, in creating shell companies and opening numerous bank accounts. The applicants argued that they had cooperated with the investigation, provided necessary documents, and did not require custodial interrogation. They cited several Supreme Court judgments to support their plea for anticipatory bail.

2. Applicability of Section 45 of the Prevention of Money Laundering Act, 2002:
The applicants contended that Section 45 of the Act, which imposes twin conditions for granting bail, had been struck down by the Supreme Court in Nikesh Tarachand Shah vs. Union of India. However, the non-applicant's counsel argued that the section had been amended in 2018, and its constitutionality was still under challenge before the Supreme Court. The court noted that the amended Section 45 still imposed twin conditions for bail and that these conditions were applicable unless declared unconstitutional by the Supreme Court.

3. Involvement of the Applicants in the Alleged Money Laundering Activities:
The prosecution's case detailed the involvement of the applicants in laundering approximately ?39,61,93,598 through 13 shell companies and M/s Prime Ispat Pvt. Ltd., where the applicants were directors. The court noted that the investigation revealed the applicants' involvement in opening 446 benami bank accounts and transferring funds to shell companies and then to M/s Prime Ispat Pvt. Ltd. The court found prima facie evidence of the applicants' involvement in organized economic crime as defined under Section 3 of the Act.

4. Interpretation of Supreme Court Judgments Related to Anticipatory Bail and Money Laundering:
The applicants relied on several Supreme Court judgments, including Gurbaksh Singh Sibbia vs. State of Punjab, Sushila Aggarwal vs. State (NCT of Delhi), and others, to argue for anticipatory bail. The non-applicant's counsel countered that the applicants' case was different from those of other co-accused who had been granted bail. The court acknowledged the Supreme Court's rulings but emphasized that the amended Section 45 of the Act still imposed twin conditions for bail, which were applicable in this case.

Conclusion:
The court, after considering the entire facts and circumstances, the nature of allegations, and the relevant legal provisions and judgments, concluded that the applicants were not entitled to anticipatory bail. The bail application was rejected, emphasizing the organized and serious nature of the alleged economic crime involving a substantial amount of money.

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