2023 (11) TMI 63 - SC - Money Laundering

Seeking grant of bail - Money Laundering - proceeds of crime - scope and ambit of the constitutional protection under Articles 74 and 163 of the Constitution of India on the decisions taken by the Council of Ministers - interpretation of Section 3 of the PML Act - 'the act/process of generation or the attempt to generate the proceeds of crime falls within the ambit of the expressions assist , acquisition , possession or use under Section 3 of the PML Act or not - person can be prosecuted under the PML Act only when there is material to show that he has indulged or assisted in any activity/process of money laundering, albeit an activity/process different and separate from the scheduled offence? - Sections 45 and 50 of the PML Act should be read down in view of the constitutional scheme and mandate of Article 20 of the Constitution of India? HELD THAT - In Mohan Lal 2015 (4) TMI 688 - SUPREME COURT , the expression possession , it is held, consists of two elements. First, it refers to corpus of physical control and second it refers to the animus or intent which has reference to exercise of self-control. In the context of narcotics laws, a person is said to possess control over the substance when he knows the substance is immediately accessible and exercises dominion or control over the substance. The power and dominion over the substance is, therefore, fundamental. The stand of the DoE as to the constructive possession, will be satisfied only if the dominion and control criteria is satisfied. If the proceeds of crime are in dominion and control of a third person, and not in the dominion and control of the person charged under Section 3, the accused is not in possession of the proceeds of the crime. In the present case, the involvement of an accused may be direct or indirect. Prima facie, there is lack of clarity, as specific allegation on the involvement of the appellant Manish Sisodia, direct or indirect, in the transfer of Rs. 45,00,00,000 (rupees forty five crores only) to AAP for the Goa elections is missing. The offence of conspiracy and abetment, in terms of Sections 120/ 120B and Sections 107/108 of the IPC, are not applicable to offences under the PML Act. At the same time, Section 3 of the PML Act is wide and encompassing as it uses the words, directly or indirectly , with reference to the person involved, and knowingly assists, or knowingly is a party in an offence in relation to the concealment, possession, acquisition, use, projecting or claiming the proceeds of crime as untainted property. The appellant Manish Sisodia, it is claimed, had deliberately destroyed the two mobile phones so as to prevent any investigation. Further, he had changed his mobile phone on 22.07.2022, the date on which the media had covered the news of the complaint sent by the LG of NCT of Delhi to the CBI for investigation. The appellant Manish Sisodia states that people do change mobile phones frequently, and old phones need not be retained. Whether or not the allegation as to deliberate destruction of mobile phones is correct would be decided post recording of evidence, but this would not be a weighty factor for deciding the question of bail, given the period of detention undergone by the appellant Manish Sisodia. Prolonged period of incarceration suffered by the appellant Manish Sisodia - HELD THAT - In P. Chidambaram v. Directorate of Enforcement 2019 (12) TMI 186 - SUPREME COURT , the appellant therein was granted bail after being kept in custody for around 49 days In P. Chidambaram v. Central Bureau of Investigation, 2019 (10) TMI 879 - SUPREME COURT , the appellant therein was granted bail after being kept in custody for around 62 days, relying on the Constitution Bench in Shri Gurbaksh Singh Sibbia and Others v. State of Punjab 1980 (4) TMI 295 - SUPREME COURT , and Sanjay Chandra v. Central Bureau of Investigation 2011 (11) TMI 537 - SUPREME COURT , that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case. Ultimately, the consideration has to be made on a case to case basis, on the facts. The primary object is to secure the presence of the accused to stand trial. The argument that the appellant therein was a flight risk or that there was a possibility of tampering with the evidence or influencing the witnesses, was rejected by the Court. Detention or jail before being pronounced guilty of an offence should not become punishment without trial. If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious - The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Code and Section 45 of the PML Act. The reason is that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted, that he be ensured and given a speedy trial. When the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years. In view of the assurance given at the Bar on behalf of the prosecution that they shall conclude the trial by taking appropriate steps within next six to eight months, liberty given to the appellant Manish Sisodia to move a fresh application for bail in case of change in circumstances, or in case the trial is protracted and proceeds at a snail s pace in next three months. If any application for bail is filed in the above circumstances, the same would be considered by the trial court on merits without being influenced by the dismissal of the earlier bail application, including the present judgment. Appeal dismissed.

Note:- The case of Manish Sisodia versus CBI and DoE is not just a legal battle but also a matter of significant public interest.

Issues Involved:
1. Scope and ambit of constitutional protection under Articles 74 and 163 of the Constitution of India.
2. Interpretation of Section 3 of the PML Act regarding the act/process of generating proceeds of crime.
3. Prosecution under the PML Act without the prime accused being arrayed.
4. Reading down Sections 45 and 50 of the PML Act in view of Article 20 of the Constitution of India.
5. Entitlement to bail of the appellant - Manish Sisodia.

Detailed Analysis:

1. Scope and Ambit of Constitutional Protection under Articles 74 and 163 of the Constitution of India:
The judgment discusses the constitutional protection provided under Articles 74 and 163, which safeguard the decisions taken by the Council of Ministers. The court refrains from delving deeply into these constitutional protections but acknowledges their relevance in the context of the decisions made by the Council of Ministers in the case at hand.

2. Interpretation of Section 3 of the PML Act:
The court examines whether the act/process of generating proceeds of crime falls within the ambit of 'assist', 'acquisition', 'possession', or 'use' under Section 3 of the PML Act. The judgment references the case of Vijay Madanlal Choudhary, which clarifies that the PML Act deals with the process or activity connected to the proceeds of crime, not the crime itself. The court finds that the contention that generation amounts to possession is unclear and not free from doubt.

3. Prosecution under the PML Act without the Prime Accused:
The court discusses whether an accused can be prosecuted under the PML Act when the prime accused, a juristic person, is not arrayed as an accused. The DoE's assertion that AAP, a political party, used proceeds of crime for election funding in Goa is noted. The court highlights that AAP is not being prosecuted and that the appellant cannot be held vicariously liable under Section 70 of the PML Act without AAP being an accused.

4. Reading Down Sections 45 and 50 of the PML Act:
The judgment addresses whether Sections 45 and 50 should be read down in view of Article 20 of the Constitution. The court refers to the case of Vijay Madanlal Choudhary, which states that Section 45 does not require a positive finding of non-guilt for bail but a tentative finding based on broad probabilities. The court emphasizes the need for fairness and objectivity in applying these provisions.

5. Entitlement to Bail of the Appellant - Manish Sisodia:
The court considers the appellant's arguments for bail, including prolonged custody, the complexity of the case, and the large volume of evidence. The court acknowledges the prolonged incarceration but denies bail at this stage, citing the seriousness of the allegations and the need for a fair trial. The court allows the appellant to reapply for bail if the trial is unduly delayed or in case of a medical emergency.

Conclusion:
The appeals are dismissed, but the appellant is given the liberty to file a fresh application for bail in case of a change in circumstances or prolonged trial. The observations made are specific to the disposal of the present appeals and should not influence the trial court's decision on the merits of the case.

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