2024 (2) TMI 441 - HC - Money Laundering

Seeking grant of regular bail - Money Laundering - proceeds of crime - paper/bogus sale and purchase for projecting paper/bogus revenue and paper/bogus profit of Bankey Behari Group of Companies - HELD THAT - Having perused the prosecution complaint filed in the present case and statements of applicant recorded under Section 50 of PMLA as well as other material on record, it appears prima facie that the applicant herein, through his companies namely M/s Jindal Agro International, M/s Fagir Chand Dalip Kumar and M/s Jindal Green Crop International Pvt. Ltd., had indulged in paper/bogus sales and purchase of goods, even though there was no actual movement of goods. As per prosecution complaint, the applicant was asked during his examination to provide transportation bills, kanta parchi or any other supporting documents in order to prove the movement of goods from his entity to Bankey Behari Group of Companies or vice -versa. However, he had failed to provide any documents to prove his transactions with Bankey Behari Group of companies as genuine. Further, he had accepted in his statement that he had shown paper purchase and paper sales with Bankey Behari Group of Companies. It is prima facie reflected from the records that the applicant herein, through his entities, had sold goods of about Rs. 314.57 crore and purchased goods of Rs. 200.83 crore, between the period 2013- 14 to 2016-17. However, on account of such false sale and purchase, the applicant had settled these transactions by passing journal voucher entries to the tune of Rs. 201.32 crore between the period 2013-14 to 2016-17, and a sum of Rs. 113.25 crore had been diverted to the bank accounts of the applicant. Though the learned Senior Counsel for the applicant took this Court through the entries and other documents so as to point out as to how the same will not lead to conclusion of money laundering, however, while dealing with the present bail application, this Court is of the opinion that it cannot go through the entire list of entries of accounts for the purpose of appreciating their genuineness or authenticity. The cognizance of prosecution complaint has already been taken by the learned Trial Court vide order dated 24.02.2023. This Court is of the opinion that twin conditions under Section 45 of PMLA are not satisfied since the material on record at this stage points out that the applicant herein was involved in the process of acquisition, possession, concealment of proceeds of crime obtained by way of cheating and forgery and projecting the same as untainted, thereby committing an offence of money-laundering under Section 3 of PMLA. This Court is not inclined to grant bail to the present accused/applicant, at this stage - the present application stands dismissed.

Summary

Issues Involved:
1. Validity of clubbing multiple ECIRs into one complaint.
2. Justification for the applicant's arrest and denial of bail.
3. Satisfaction of twin conditions under Section 45 of PMLA for granting bail.

Summary:

1. Validity of Clubbing Multiple ECIRs into One Complaint:
The applicant contended that the Enforcement Directorate (ED) should not have filed one complaint for seven ECIRs while leaving out one ECIR to be filed separately. The court clarified that ECIR is an internal document of the ED and not similar to an FIR. There is no provision in PMLA requiring the registration of ECIR for the offence of money laundering. The Supreme Court in Vijay Madan Lal Choudhary stated that the ED could file a formal complaint without registering an ECIR. The court found no merit in the argument that seven ECIRs could not be clubbed for filing one complaint.

2. Justification for the Applicant's Arrest and Denial of Bail:
The applicant argued that his arrest was unjustified as the incriminating material against him was already available when the prosecution complaint was filed in another case where he was granted bail. The court noted that the applicant was actively involved in money laundering through his companies by indulging in paper/bogus sales and purchases without actual movement of goods. The applicant failed to provide any documents to prove genuine transactions. The court emphasized the gravity of economic offences and the need for a stringent approach in granting bail. The applicant did not satisfy the twin conditions under Section 45 of PMLA, which require reasonable grounds for believing that he is not guilty and that he is not likely to commit any offence while on bail.

3. Satisfaction of Twin Conditions under Section 45 of PMLA for Granting Bail:
The court referred to Section 45 of PMLA and the twin conditions required for bail: the court must be satisfied that the accused is not guilty of money laundering and is not likely to commit any offence while on bail. The court cited the Supreme Court's observations in Vijay Madanlal Choudhary and Tarun Kumar, emphasizing the stringent measures required for money laundering offences. The court found that the material on record indicated the applicant's involvement in money laundering activities, including the concealment and siphoning off of proceeds of crime. Therefore, the applicant did not meet the twin conditions for bail under Section 45 of PMLA.

Conclusion:
The court dismissed the bail application, stating that the applicant failed to meet the twin conditions under Section 45 of PMLA. The observations made were solely for deciding the bail application and not on the merits of the case.