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2023 (7) TMI 957 - HC - Money LaunderingSeeking grant of bail - Money Laundering - aiding in fraudulent increase of inventory/stock in the account books of M/s Shakti Bhog Foods Limited SBFL which helped in increasing the borrowings - twin requirements of section 45 of PMLA complied with or not - reliaibility of statements u/s 50 of PMLA - HELD THAT - In order to grant bail, this Court, in view of the twin conditions has to record a finding that there are reasonable grounds for believing that the applicant/accused is not guilty of the offence of money laundering. It is a settled proposition that reasonable grounds is something more than prima facie . Although the email dt. 22.11.2013 does not bear the signatures of the Applicant and that the invoices are signed by Vijay Kumar Malhotra, CFO, the statements of witnesses as well as co-accused persons, recorded under Section 50 of PMLA, point out to the Applicant s active participation in procuring fake invoices from shell companies. It also reveals that the Applicant assisted in transferring proceeds of crime to shell companies without any genuine business transactions - The Applicant cannot feign ignorance to these transactions as these transactions relate to purchase of material for SBFL and the Applicant admittedly was VP (Purchases). Apart from fake invoices, fake transport invoices for these LCs were arranged under the applicant and others. Investigations revealed that total payment of Rs 342.05 crores (Rs. 111.26 crores in the form of L/C and Rs. 229.79 crores in the form of direct payments made from bank accounts) were made to 05 vendors of SBFL. On verification of (TAN and PAN) numbers of these vendors and their transporters, 02 of these vendors were found having invalid TAN and PAN of the non-existent transporters - the emails show the involvement of the applicant in the running of the affairs and business dealings of SBFL as he was either the originator or primary recipient. In view of such clear emails, at this stage a finding cannot be given that there are reasonable grounds for believing that the accused/applicant is not guilty of offence of money laundering. The emails categorially lead one to infer that the applicant was directly involved in process/activity connected to the proceeds of crime. As per the statements given by AH Ansari, Sandeep Mishra, Vijay Kumar Malhotra, Ewin Ahuja, the Applicant was not merely an employee of the company who was bound by the decisions taken by Sh. Kewal Krishna Kumar. The defence of the Applicant that the applicant had no such knowledge of any illegal transactions by Sh. Kewal Krishna Kumar and his family members does not seem probable - The statements prima facie also lend credence to the fact that the applicant was not merely the paper director but was a director who was actively involved in the working of the SBFL. In Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT , the Hon ble Supreme Court has also held The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are reasonable grounds for believing which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. The fact that the applicant is a 12th passed individual does not mean that he was not mentally adept to commit the alleged offense. The court at this stage is not required to delve deep into the evidence collected by the investigating agency or to make any findings about its authenticity or relevance to the applicant. It is also not required to make a finding of guilt, conduct a mini-trial, or meticulously examine the evidence. It only needs to be determined whether the applicant has successfully made out a case for me to state that there are reasonable grounds for believing that applicant is not guilty of the offence of money laundering - that there is sufficient incriminating evidence about the involvement of the accused/applicant in the offence of money laundering. It is not only the statements u/s 50 PMLA which show the involvement of the applicant but other material such as emails as well as documents containing the signatures of the applicant which are also indicative of involvement of the applicant in the offence of money laundering. The statements have not been retracted. The applicant is not guilty of the offence of money laundering - the application for bail of Mr. Tarun Kumar is dismissed.
Issues Involved:
1. Involvement in Money Laundering 2. Role and Capacity of the Applicant in the Company 3. Reliability of Evidence and Statements 4. Application of Section 45 of PMLA for Bail Summary: 1. Involvement in Money Laundering: The applicant was charged under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988, and Section 120B read with Sections 420, 465, 467, 468, and 471 of IPC, 1860, for alleged involvement in money laundering. The allegations included aiding in the fraudulent increase of inventory/stock in the account books of M/s Shakti Bhog Foods Limited (SBFL) to increase borrowings, resulting in a loss of INR 3269.42 Crore to a consortium of banks. 2. Role and Capacity of the Applicant in the Company: The applicant claimed to be a mere shareholder and director without active involvement in SBFL's management or decision-making. He argued that his role was limited to making purchases of raw materials, particularly wheat, and was made a director only to meet quorum requirements under the Companies Act. The applicant contended that he never drew any salary or remuneration as a director. However, the investigation revealed that the applicant was the Vice President (Purchases) from 2009-2017 and was actively involved in procuring fake invoices and transferring proceeds of crime to shell companies. 3. Reliability of Evidence and Statements: The applicant challenged the reliability of statements under Section 50 of PMLA, claiming they were cut, copy, paste. The court found these statements, along with emails and documents containing the applicant's signatures, to be credible evidence of his involvement in money laundering. Statements from employees and co-accused pointed to the applicant's active participation in fraudulent activities, including handling fake invoices and coordinating with entry operators. 4. Application of Section 45 of PMLA for Bail: Section 45 of PMLA requires the court to be satisfied that there are reasonable grounds for believing that the applicant is not guilty of the offence of money laundering and is not likely to commit any offence while on bail. The court referred to the Supreme Court's interpretation of "reasonable grounds" as something more than prima facie grounds, requiring substantial probable causes. Based on the evidence, the court could not find reasonable grounds to believe the applicant was not guilty. The court emphasized that it was not required to delve deep into the evidence but only to determine the probability of the applicant's involvement. Conclusion: The court concluded that there was sufficient incriminating evidence about the applicant's involvement in money laundering. The application for bail was dismissed, with the court noting that its observations were made only for the purpose of deciding the bail application and should not be taken as an expression of opinion on the merits of the case.
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