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2024 (12) TMI 293 - HC - Money LaunderingSeeking grant of Regular Bail - money laundering - proceeds of crime - scheduled offences - violation of right to liberty - requirements of section 45 of PMLA fulfilled or not - Delay in trial and long incarceration. HELD THAT - PMLA legislation was brought in to prevent and control the issue of money laundering, to seize the proceeds of crime, and to punish the perpetrators. Now what exactly is money laundering, to put in simple words, an act of dealing with illegal money or assets i.e. money obtained or derived as result of criminal act relating to scheduled offence. The Hon ble Supreme Court in Vijay Madanlal Choudhary v. Union of India 2022 (7) TMI 1316 - SUPREME COURT has very categorically laid down the distinction with respect to proceeds of crime . The above paras hold that any property derived or obtained directly or indirectly as a result of criminal activity which is a scheduled offence under the PMLA is proceeds of crime. In other words, any property obtained following the commission of the scheduled offence or from the proceeds of the scheduled offence will be the proceeds of crime. In the present case, ED has alleged that all the petitioners are members/office bearers of the banned organisation i.e. PFI. The role of the petitioners are that they have collected funds for and on behalf of the organization from unknown sources, thereafter they provided fake receipts/showed the collections as legitimate donations to utilize those funds to commit terrorist activities (scheduled offences). Hence, the funds so collected by the petitioners are the proceeds of crime - On perusing the Complaint, there is no evidence to show that any scheduled offence has been committed, it is stated that the petitioners participated in the anti-CAA protests in Delhi which culminated in Delhi Riots. Learned counsels for the petitioners have rightly pointed out that in the present case i.e. collection of funds precedes the crime i.e. Delhi Riots. The proceeds of crime has to be generated as a result of criminal activity (scheduled offence). In the present case, the role of the petitioners is that they collected funds and deposited the same to the accountant or PFI s account. Hence, in this scenario, prima facie, the dominion and control over the generation of alleged proceeds of crime is not of the petitioners herein. In the present case, the twin conditions of section 45 have been met. The Special Counsel for ED has been given an opportunity to oppose the bail applications. Prima facie, the offence of money laundering is not made out against the petitioners herein. Delay in trial and long incarceration - HELD THAT - Special statutes have stringent conditions for grant of bail but they should not become means to detain the accused without there being any possibility of concluding the trial, expeditiously. Merely charging an accused person under the provisions of these special statutes should not become a punishment in itself which violates Article 21. A perusal of the aforesaid judgment also shows that Article 21 prevails over the stringent conditions of section 45 of PMLA and in case the accused has been incarcerated for a reasonably long period of time without there being any reasonable chance of concluding trial, Article 21 will take primacy. In the present case, it is stated that the matter is at the stage of 207/208 proceedings for supply of documents and thereafter charges are yet to be framed. As per the Complaint and Supplementary Complaints filed by the ED, it is stated by the learned counsels for the petitioners that there are total 185 prosecution witnesses which are proposed to be examined and the trial is to be conducted jointly with all co-accused persons, there are 456 relied upon documents and digital evidence running into lakhs of pages. The same factual position is not disputed by the learned counsel for the ED. Thus, it is evident that there is no hard and fast formula as to what is the minimum period which is to be considered as substantial period undergone but keeping in view the timelines of the Hon ble Supreme Court and the trial will take considerable time to conclude, the petitioners i.e. Parvez Ahmed, Mohd Ilyas and Abdul Muqeet are directed to be released on bail subject to the fulfilment of terms and conditions imposed - bail application allowed.
Issues Involved:
1. Whether an offence under the Prevention of Money Laundering Act, 2002 (PMLA) is made out against the petitioners. 2. Whether the petitioners' right to liberty has been violated due to long incarceration and delay in trial. 3. Whether the conditions for bail under Section 45 of the PMLA have been satisfied. Issue-wise Detailed Analysis: 1. Offence under PMLA: The petitioners sought bail under Section 439 read with Section 482 of the Code of Criminal Procedure, 1973, arguing that no offence under the PMLA was made out against them. The core ingredient for an offence under Section 3 of the PMLA is the "proceeds of crime," defined as any property derived or obtained as a result of criminal activity related to a scheduled offence. The court analyzed whether the funds collected by the petitioners, allegedly for the Popular Front of India (PFI), constituted proceeds of crime. The court noted that the funds were purportedly collected for committing a scheduled offence in the future, which does not fit the scheme of the PMLA. The funds must be generated as a result of a scheduled offence to qualify as proceeds of crime. The court concluded that the petitioners' actions did not constitute money laundering under the PMLA as the funds were not proceeds of crime generated from a completed scheduled offence. 2. Right to Liberty and Delay in Trial: The petitioners argued that their right to liberty under Article 21 of the Constitution was violated due to prolonged incarceration and the delay in trial proceedings. The court recognized the principle that bail is the rule and jail is the exception, emphasizing the importance of personal liberty and the presumption of innocence until proven guilty. The court cited several Supreme Court judgments, highlighting that long incarceration without trial completion could violate Article 21. Given that the petitioners had been in custody for over two years and the trial was unlikely to conclude soon, the court found that their continued detention was unjustified. 3. Conditions for Bail under Section 45 of PMLA: Section 45 of the PMLA imposes stringent conditions for granting bail, requiring the court to be satisfied that there are reasonable grounds for believing the accused is not guilty and is unlikely to commit any offence while on bail. The court noted that the Special Counsel for the Enforcement Directorate (ED) was given an opportunity to oppose the bail applications. However, the court found that the offence of money laundering was not prima facie made out against the petitioners. Additionally, the court considered the long period of incarceration and the unlikelihood of trial completion as factors justifying bail. The court concluded that the twin conditions of Section 45 were satisfied, warranting the grant of bail. Conclusion: The court directed the release of the petitioners on bail, subject to conditions ensuring they do not leave the country, maintain contact with investigating officers, and refrain from tampering with evidence or contacting prosecution witnesses. The court emphasized that the observations made were solely for deciding the bail applications and would not affect the merits of the case. The petitions were disposed of accordingly.
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