2024 (10) TMI 1351 - HC - Money Laundering

Seeking grant of Regular bail - creating fraudulent documents for availing LC facility from the banks - manipulating accounts to inflate stock-in-transit and create bogus debtors - Section 447 of Companies Act, 2013 and Sections 409, 467, 468, 471, 120B IPC - HELD THAT - It is noted that the investigation was initiated in the year 2019 and the prosecution has named 156 accused persons and cited 82 witnesses. There are 2.5 lac pages of documents which need to be analysed. Learned Special Judge took cognizance of the supplementary chargesheet vide order dated 26.07.2024. It is also observed that in the supplementary complaint dated 08.03.2024, permission was taken by the ED under Section 173 (8) Cr.P.C. for further investigation into the matter. As such, the Trial is yet to commence. When there are multiple accused persons, lacs of pages of evidence to assess, scores of witnesses to be examined, the trial is not expected to end anytime in the near future. Importantly, the delay being not attributable to accused, keeping the accused in custody by using Section 45 PMLA as a tool for incarceration is not permissible. Flow of liberty cannot be dammed by Section 45 without taking all other germane considerations into account. It is the duty of Constitutional Courts to champion the constitutional cause of Liberty and uphold the majesty of Article 21. Moreover, as repeatedly held, Constitutional Courts can always exercise their powers to grant bail on the grounds of violation of Part III of the Constitution of India and stringent provisions for the grant of bail such as those provided in Section 45 of the PMLA do not take away the power of Constitutional Courts to do so. The right of liberty and speedy trial guaranteed under Article 21 is a sacrosanct right which needs to be protected and duly enforced even in cases where stringent provisions have been made applicable by way of special legislation. The stringent provisions would have to be interpreted with due regard to Article 21 and in case of a conflict, the stringent provisions, such as section 45 of the PMLA in the instant case, would have to give way. In the present cases, both the applicants were arrested on 11.01.2024. They have been in custody since more than 9 months. Moreover, the trial in the predicate as well as the present complaint is yet to commence and would take some time to conclude. It is also pertinent to note that the main accused and other similarly placed co-accused persons have been enlarged on bail - No evidence has been led to show that the present applicants are a flight risk. In fact, records would show that both the applicants have joined investigation on multiple occasions. There is no incident alleged by the respondent wherein the applicants have tried to tamper with evidence or influence witnesses. Considering the totality of the facts and circumstances, the fact that the main accused are out on bail, the period of custody undergone and that the trial is yet to commence, it is directed that both the applicants be released on regular bail subject to them furnishing a personal bond in the sum of Rs. 1,00,000/- with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M. and subject to fulfilment of conditions imposed - bail application allowed.

Issues Involved:

1. Consideration of regular bail applications under the Prevention of Money Laundering Act (PMLA) for the applicants involved in alleged financial fraud and money laundering.
2. Examination of the twin conditions under Section 45 of the PMLA.
3. Evaluation of the right to a speedy trial and the impact of prolonged incarceration on the applicants' fundamental rights.
4. Assessment of the applicants' involvement in the alleged offenses and their potential flight risk.

Issue-wise Detailed Analysis:

1. Consideration of Regular Bail Applications:
The applicants sought regular bail in connection with a case involving serious allegations of financial fraud and money laundering. The case originated from an investigation by the Serious Fraud Investigation Office (SFIO), which led to the filing of a complaint under various sections of the Companies Act and the Indian Penal Code. The Enforcement Directorate (ED) subsequently filed a prosecution complaint under the PMLA, alleging that the ex-promoters of a company siphoned off funds using a complex web of companies and financial transactions. The applicants were alleged to have played roles in creating fraudulent documents and facilitating the diversion of funds.

2. Examination of the Twin Conditions under Section 45 of the PMLA:
The court examined the applicability of the twin conditions under Section 45 of the PMLA, which require the court to be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offense and that they are not likely to commit any offense while on bail. The court noted that these conditions, while restrictive, do not impose an absolute restraint on granting bail and that the discretion ultimately rests with the court. The court also emphasized that the right to bail should be read into the provisions of Section 45, especially when there is a delay in the trial and the accused has been incarcerated for a significant period.

3. Evaluation of the Right to a Speedy Trial:
The court highlighted the constitutional mandate of the right to a speedy trial as enshrined in Article 21 of the Constitution of India. It observed that the trial in the present case was yet to commence, and given the large number of accused persons, witnesses, and documents involved, the trial was unlikely to conclude in the near future. The court underscored that prolonged incarceration without trial infringes on the fundamental rights of the accused and that bail should be the norm, not the exception, particularly when the trial is delayed for reasons not attributable to the accused.

4. Assessment of Applicants' Involvement and Flight Risk:
The court considered the material cited against the applicants, primarily statements recorded under Section 50 of the PMLA. It noted that there was no direct evidence of money traveling to the applicants' accounts or them being beneficiaries of the alleged transactions. The court also took into account the applicants' personal circumstances, such as their deep roots in society, lack of criminal antecedents, and the fact that they had joined the investigation on multiple occasions. The court found no evidence to suggest that the applicants were a flight risk or that they had attempted to tamper with evidence or influence witnesses.

Conclusion:

The court concluded that the applicants were entitled to bail, considering the period of custody undergone, the delay in the trial, and the fact that similarly placed co-accused had been granted bail. The court directed the applicants to be released on regular bail subject to certain conditions, including surrendering their passports, not leaving the Delhi/NCR region without permission, and not contacting prosecution witnesses. The court emphasized that its observations were limited to the present bail applications and did not reflect on the merits of the case.

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