2024 (12) TMI 611 - HC - Money Laundering

Seeking grant of bail - Money Laundering - proceeds of crime - siphoning off of the loans availed by indulging in criminal conspiracy and generation of Proceeds of Crime within the meaning of Section 2(1) (u) of PMLA - HELD THAT - The applicant is in custody in connection with an offence under Prevention of Money Laundering Act. In the predicate offence he has been granted bail. The said order stands final till date - No charge sheet has been submitted in the predicate offence with regards to the present issue being committed relating to Punjab National Bank till date. The law with regards to trial is clear and well settled - The case under PMLA and the predicate offence has to be tried together by the same court which is not possible in the present case as of now since predicate offence is yet to see its charge sheet, if any. The principle of bail is a rule and jail is an exception is being consistently followed and repeatedly being reiterated and reminded by the Apex Court and other Courts - The applicant is in jail since 07.02.2024 - There are no chances of his absconding - Looking to the facts and circumstances of the case, it is a fit case for grant of bail. Let the applicant Padam Singhee, be released on bail in the aforesaid case crime number on furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned with the fulfilment of conditions which are being imposed in the interest of justice - bail application allowed.

Issues Involved:
1. Bail application under Section 439 of the Code of Criminal Procedure, 1973.
2. Allegations under the Prevention of Money Laundering Act, 2002.
3. Competency of an advocate to interact directly with the investigating agency.

Issue-wise Detailed Analysis:

1. Bail Application under Section 439 of the Code of Criminal Procedure, 1973:
The applicant sought bail under Section 439, CrPC, in connection with an Enforcement Case Information Report under the Prevention of Money Laundering Act, 2002. The applicant argued that the loan taken by the company was not repaid, leading to its account being declared as a Non-Performing Asset (NPA) retrospectively. The applicant has been granted bail in the predicate offence by a Special Judicial Magistrate, and the claim of the bank to declare the company as a "Wilful Defaulter" or its account as "Fraud" was struck down by the Delhi High Court. The applicant contended that no charge sheet has been submitted in the predicate offence, and the trial cannot proceed without it. The applicant relied on various Supreme Court judgments highlighting that bail is a rule and jail is an exception, arguing that prolonged detention without trial violates Article 21 of the Constitution.

2. Allegations under the Prevention of Money Laundering Act, 2002:
The allegations involve the siphoning off of loans availed by M/s SVOGL Oil Gas & Energy Limited, constituting proceeds of crime as defined under Section 2(1)(u) of the PMLA. The Enforcement Directorate opposed the bail, citing the transfer of money to shell companies and the applicability of twin conditions under Section 45 of the PMLA, which restricts the grant of bail. The Enforcement Directorate argued that the complaint clearly shows the involvement of the applicant in the alleged activities. However, the court noted that the applicant has been in custody since 07.02.2024, and no charge sheet has been filed in the predicate offence, making it a fit case for granting bail. The court emphasized the principle that bail is a rule and jail is an exception, and noted that custodial interrogation is not needed, and there are no chances of the applicant absconding.

3. Competency of an Advocate to Interact Directly with the Investigating Agency:
The Enforcement Directorate raised an objection regarding the competency of the applicant's counsel to interact directly with the investigating agency. The counsel for the applicant had sent emails to the investigating officer, requesting the filing of a reply to the bail application. The court held that such communication is not within the realm of the duties of a counsel, as the agency was duly represented by its counsel. The court referred to the "Standards of Professional Conduct and Etiquette to be Observed by Advocates," which prohibits communication with a party represented by an advocate except through that advocate. The court did not appreciate the counsel's conduct of sending emails directly to the investigating officer, considering the objection valid.

Conclusion:
The court allowed the bail application, directing the release of the applicant on bail with specific conditions to ensure compliance and prevent tampering with evidence. The court also addressed the issue of direct communication by the applicant's counsel with the investigating agency, emphasizing adherence to professional conduct standards. Pending applications were disposed of.

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