2024 (9) TMI 704 - HC - Money Laundering

Seeking grant of Regular bail - money laundering - involvement in conspiracy - proceeds of crime - benefit of Proviso to Section 45 of the PMLA sought on the ground of being sick and infirm - HELD THAT - There is ample evidence to link the Accused to the commission of the offence of Money Laundering, and his release on Bail would adversely affect further investigation to trace remaining proceeds of crime especially in light of the nature of the case, severity of allegations and voluminous evidence on record. Certain facts are in the personal knowledge of the Applicant which the Investigation Agency is yet to unearth and there exists all likelihood of the accused tampering the evidence of the case, if released on Bail. There is also a likelihood of him evading the process of law, the possibilities of which cannot be ruled out. While personal liberty is of paramount importance, the same is not absolute but subject to reasonable restrictions, including the interest of the State and public. Reference has been made to Vijay Madanlal Choudharv Ors 2022 (7) TMI 1316 - SUPREME COURT wherein while considering the twin conditions under Section 45 of the PMLA, the Apex Court observed that the twin conditions are valid being reasonable on having correct nexus with the purposes and objects sought to be achieved by the 2002 Act to combat the menace of money-laundering having transnational consequences including impacting the financial systems and sovereignty and integrity of the country. It is asserted that the investigations against the Applicant are complete and the prosecution Complaint has also been filed. The IO and the ED have taken all steps to expedite the trial and has been proactive in complying with the directions of the Court. The Directorate of Enforcement as per the established law, is not required to give the list of un-relied documents to the accused persons before the stage of trial and thus, had challenged the Order of the Trial Court dated 05.01.2023 wherein it was directed to only provide the list of un-relied documents. In regard to the medical ground for Bail, it is stated that it is only on the exceptional sickness that Bail can be exercised and that too in sparing and cautious manner; any and every nature of sickness does not entitle an accused to be released on Bail. in a recent decision pertaining to interim medical bail in a PMLA case, this Court has accepted the principle that if the condition of the accused is not so serious or life threatening, he cannot be enlarged on medical bail. The basic argument on behalf of the applicant is that there is no prima facie case against him. There is no role of the applicant in framing or implementing the Excise Policy. The applicant has detailed that various meetings were held between the South Group and the AAP from March to July, 2021 at various locations in Delhi and Hyderabad and to none of those was he a party - The applicant also had given his comments only because he had been in this business for long and had huge experience. He merely gave his comments as a stakeholder and had not been in any way influenced the Policy. He has also sought to explain that the claim that he was getting kickbacks from the profits to be earned, is also not tenable as his profit margin was only 1 percent as has been explained in detail. The applicant has further explained that though there are allegations made against him of destruction of evidence, but it is in regard to three mobile phones which he had to change because these mobile phones were seized by the CBI during the raids making it imperative for him to switch to the new mobiles. Taking a prima facie view of the roll as defined of the applicant in the case, it can be observed that the twin test of guilt for the offence of money laundering or likely to commit any offence are weak. It may also be observed that the antecedents of the Applicant, who has no previous involvement, it cannot be said that he is of flight risk or is likely to tamper with the evidence or influence the witnesses since most of the evidence is essentially documentary in nature. The applicant is directed to be released forthwith on bail in connection with the ECIR No. HIU-II/14/2022 dated 22.08.2022, registered by the Directorate of Enforcement subject to furnishing a bail bond in the sum of Rs.10,00,000/-with two sureties of the like amount, to the satisfaction of the learned Trial Court - the Bail Application is allowed and Sameer Mahandru is admitted to bail subject to fulfilment of conditions imposed. Bail application allowed.

Summary

Issues Involved:
1. Legality of arrest and custody of the applicant.
2. Allegations of money laundering and involvement in the conspiracy.
3. Applicant's involvement in the formulation of the Delhi Excise Policy.
4. Applicant's role in facilitating kickbacks and cartel formation.
5. Medical grounds for bail.
6. Procedural compliance by the Enforcement Directorate (ED).
7. Repeated bail applications and their maintainability.
8. Triple test for bail and presumption of innocence.
9. Delay in trial and its impact on the right to liberty.

Issue-wise Detailed Analysis:

1. Legality of Arrest and Custody:
The applicant contended that he was arrested on 28.09.2022 and remanded to custody without adherence to Section 19 PMLA, violating Article 22(1) of the Constitution. The applicant argued that the arrest was made without informing him of the grounds, thus violating his constitutional rights.

2. Allegations of Money Laundering and Involvement in Conspiracy:
The applicant was accused under Sections 3 and 4 of the PMLA for laundering proceeds of crime. The applicant argued that the core ingredient of "proceeds of crime" was not met, as there was no evidence of illegal gain from criminal activity. The ED's allegations were based on assumptions without concrete evidence.

3. Involvement in Formulation of Delhi Excise Policy:
The applicant claimed no role in drafting or influencing the Delhi Excise Policy 2021-22. He argued that his involvement was limited to providing suggestions as a stakeholder in the liquor industry. The ED's allegations of conspiracy were unfounded as the applicant was not part of the meetings or discussions that led to the policy's formulation.

4. Role in Facilitating Kickbacks and Cartel Formation:
The applicant denied any role in facilitating Rs. 100 crores kickbacks or forming a cartel. He argued that the allegations of giving a 65% stake to the South Group and issuing credit notes were baseless. The applicant explained that business transactions with the South Group were legitimate and part of normal trade practices.

5. Medical Grounds for Bail:
The applicant sought bail on medical grounds, citing multiple surgeries and ongoing medical conditions. He also highlighted his wife's medical condition, arguing that his presence was necessary to attend to her. The applicant claimed that his health issues warranted bail under the proviso to Section 45 of the PMLA.

6. Procedural Compliance by ED:
The applicant argued that the ED filed incomplete complaints in a piecemeal manner to deny him default bail. He claimed that the ED's investigations were ongoing and incomplete, violating his right to a fair trial. The ED's reliance on statements from co-accused and approvers was also contested as unreliable and uncorroborated.

7. Repeated Bail Applications and Maintainability:
The ED opposed the successive bail applications, arguing that there were no new circumstances to warrant a different decision. The applicant countered that significant time had elapsed since the first bail application, and changes in circumstances justified a fresh application.

8. Triple Test for Bail and Presumption of Innocence:
The applicant argued that he satisfied the triple test for bail: he was not a flight risk, would not tamper with evidence, and had a permanent abode. He emphasized the presumption of innocence and argued that pre-trial incarceration was unwarranted. The ED contended that the applicant's release posed a risk of tampering with evidence and influencing witnesses.

9. Delay in Trial and Right to Liberty:
The applicant highlighted the inordinate delay in trial due to voluminous evidence and numerous witnesses. He argued that prolonged incarceration violated his right to liberty under Article 21 of the Constitution. The court acknowledged the delay and the complexity of the case, emphasizing the need to balance the right to liberty with the nature of the allegations.

Conclusion:
The court granted bail to the applicant, considering the prolonged incarceration, the right to liberty under Article 21, and the lack of a prima facie case against him. The bail was granted on specific terms and conditions to ensure the applicant's presence during the trial and prevent tampering with evidence. The court emphasized that the applicant's conduct did not indicate a flight risk or potential to influence witnesses. The petition was disposed of with detailed conditions for the applicant's release on bail.