2022 (6) TMI 46 - HC - Money Laundering

Money Laundering - proceeds of crime - scheduled offence - alleged money scam - twin conditions of Section 45(1) of the PMLA satisfied or not - HELD THAT - The law in regard to grant or refusal of bail is well-settled. The considerations which normally weigh with the court in granting bail in non-bailable offences are - the nature and seriousness of the offence; the character of the evidence; circumstances which are peculiar to the accused; a reasonable possibility of the presence of the accused not being secured at the trial; reasonable apprehension of witnesses being tampered with; the larger interest of the public or the State and other similar factors which may be relevant in the facts and circumstances of the case. Although bail is the rule and jail is an exception is well established in our criminal jurisprudence, the gravity of the offence is an important aspect which is required to be kept in view by the Court before releasing a person on bail. It is well settled that the socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The jurisdiction of the Court to grant bail to a person accused of an offence under PMLA is circumscribed by the provisions of Section 45 as amended in 2018. The bail can be granted in a case where there are reasonable grounds for believing that the accused is not guilty of such an offence and that he is not likely to commit any offence while on bail. The twin conditions under sub-section (1) of Section 45 of PMLA as it originally stood were made applicable only to the offences punishable for a term of imprisonment of more than three years under Part A of the Schedule II of the Act. There are reasonable grounds for believing that the petitioner is not guilty of the offences alleged. The reasonable ground mentioned in Section 45(1)(ii) of PMLA connotes substantial probable causes for believing that the accused is not guilty of the offence charged. The investigation is going on and the same is at a crucial stage. Undoubtedly, the investigating agency may require further time to collect all the materials, particularly, the alleged nexus of the petitioner with the crime. The accused No. 1 is absconding. It is made clear that it is for the limited purpose of considering this bail application, that too at this stage, these findings have been arrived at. Indeed, different yardsticks might be required at different stages of the investigation. The petitioner cannot be released on bail at this stage - Bail application dismissed.

Issues Involved:
1. Application for regular bail under Section 439 of Cr.P.C.
2. Alleged offences under Sections 3 and 4 of the PMLA.
3. Allegations of cheating under Sections 406, 420, and 506 r/w 34 of IPC.
4. Application of Section 45 of the PMLA and its amendments.
5. Admissibility of statements under Section 50 of the PMLA.

Issue-wise Detailed Analysis:

1. Application for regular bail under Section 439 of Cr.P.C.:
The petitioner, accused No.12 in ECIR No. KZSZO/07/2021, sought regular bail under Section 439 of Cr.P.C. The petitioner was arrested on 24/3/2022 and remanded to judicial custody. The bail application was initially dismissed by the Special Court on 01/04/2022, leading to the present application before the High Court.

2. Alleged offences under Sections 3 and 4 of the PMLA:
The petitioner is accused of committing offences under Sections 3 and 4 of the PMLA, which involve money laundering activities. The investigation revealed that the accused, including the petitioner, generated a significant amount of proceeds of crime through fraudulent investment schemes.

3. Allegations of cheating under Sections 406, 420, and 506 r/w 34 of IPC:
Multiple FIRs were registered against the main accused, Sri. Nishad, and others for cheating several investors through fraudulent investment schemes. The accused promised high returns and commissions but failed to deliver, defrauding investors of approximately Rs.1200 crore.

4. Application of Section 45 of the PMLA and its amendments:
The court discussed the applicability of Section 45 of the PMLA, especially after its amendment in 2018. The amendment introduced the words "under this Act," which revived the twin conditions for bail. The court held that the twin conditions must be satisfied for granting bail under the PMLA, notwithstanding the Supreme Court's decision in Nikesh Shah, which had declared the original conditions unconstitutional.

5. Admissibility of statements under Section 50 of the PMLA:
The court considered the statements made by the petitioner under Section 50 of the PMLA, which are admissible in evidence. The petitioner admitted to investing in the scheme and being appointed as a pin stockist, facilitating transactions worth Rs.40 crores. The court referred to precedents where statements under similar provisions in other Acts were deemed admissible.

Conclusion:
The court concluded that the petitioner could not be released on bail at this stage. The investigation was ongoing, and the materials on record indicated the petitioner's involvement in the alleged offences. The court emphasized the gravity of socio-economic offences and the need for a different approach in granting bail for such crimes. The bail application was dismissed, with the court noting that different yardsticks might apply at different stages of the investigation.

← Previous Next →