2024 (12) TMI 613 - HC - Money Laundering

Seeking release on bail - petitioner sought bail on the limited ground of his medical condition - Money Laundering - E.D. has failed to establish the link between the generation of proceeds of crime and the bank accounts of the petitioner - HELD THAT - In the judgment in Prem Prakash v/s. Union of India through Directorate of Enforcement 2024 (8) TMI 1412 - SUPREME COURT the Hon ble Supreme Court has held that once these foundational facts are established by the prosecution the onus shifts on the person facing charge of offence of money laundering to rebut the legal presumption that the proceeds of crime are not involved in money laundering, by production of evidence which is within his personal knowledge. Admittedly, the petitioner was not named in the FIR, charge sheet or supplementary charge sheet submitted by the CBI in the predicate offence. It is trite law that prosecution cannot commence with the statement of a co-accused under section 50 of the PMLA. The Hon ble Supreme Court has held in a catena of judgments with the statement of the coaccused cannot be considered against the petitioner and is not substantive piece of evidence. Its evidentiary value has to be tested at the time of trial and not at the stage of granting bail. The statement cannot be taken as gospel truth and only broad probabilities have to be seen. In the authority in A. Tajudeen v/s. Union of India 2014 (10) TMI 367 - SUPREME COURT the Hon ble Court has held that statement of the accused can under no circumstances constitute the sole basis for recording the finding of guilt against him. The E.D. has placed reliance on a voice recording of the petitioner. Whether the said recording is relevant to the present proceeding shall be decided at the appropriate stage of trial - True, the conditions laid down in section 45 of the PMLA are the guiding factors for grant of bail to an accused under the Act and the accused has to satisfy the said condition for earning an order of bail in his favour. The petitioner is in custody for considerable period of time. It is not in dispute that he was lastly interrogated by the E.D. before about eleven months. Therefore it is evident that his further custodial interrogation is not required. The E.D. intends to rely upon voluminous evidence including 180 witnesses, and 438 documents. Charges are yet to be framed. Chance of conclusion of trial in near future is bleak. The delay in trial is not wholly attributable to the petitioner - Since the case primarily depends on documentary evidence which is in custody of the E.D, there is no scope for the petitioner to tamper with the same. With regard to the apprehension that the petitioner shall influence witnesses or may abscond if released on bail, stringent conditions may be imposed upon him to address the concern. Upon consideration of the facts and circumstances of the case, submission made on behalf of the parties as well as material on record, this Court is inclined to release the petitioner on bail subject to stringent conditions keeping in mind his right to speedy trial under section 21 of the Constitution as well as his prolonged incarceration without trial - the application for bail is allowed.

Summary

Issues Involved:

1. Petitioner's involvement in the predicate offence.
2. Validity of evidence against the petitioner.
3. Petitioner's custodial status and right to bail.
4. Applicability of Article 21 of the Constitution and Section 45 of the PMLA.
5. Conditions for granting bail.

Detailed Analysis:

1. Petitioner's Involvement in the Predicate Offence:

The petitioner was not named in the FIR, charge sheet, or supplementary charge sheet submitted by the CBI concerning the predicate offence. The Enforcement Directorate (E.D.) initiated proceedings under the Prevention of Money Laundering Act (PMLA) based on the alleged illegalities in the selection process for assistant teachers, but the petitioner was only named in the fourth supplementary prosecution complaint. The petitioner's alleged involvement surfaced from statements by co-accused Tapas Kumar Mondal and Kuntal Ghosh, which are not considered substantive evidence at this stage. The E.D. has not established a direct link between the petitioner and the proceeds of crime.

2. Validity of Evidence Against the Petitioner:

The E.D. relied on statements recorded under Section 50 of the PMLA, voice recordings, and alleged financial transactions to implicate the petitioner. However, the court noted that the statements of co-accused cannot be the sole basis for prosecution. The truth and veracity of these statements need to be weighed during trial. The E.D. also seized documents and electronic devices from the petitioner's premises, but whether these constitute an unbroken money trail leading to the petitioner is a matter for trial.

3. Petitioner's Custodial Status and Right to Bail:

The petitioner has been in custody for approximately one year and six months, with no custodial interrogation for the last eleven months. The court acknowledged that prolonged incarceration without trial should not be permitted to become punishment. The delay in trial is not wholly attributable to the petitioner, and the E.D. intends to rely on voluminous evidence, indicating that the trial's conclusion is not imminent.

4. Applicability of Article 21 of the Constitution and Section 45 of the PMLA:

The court emphasized that Article 21, which guarantees the right to life and personal liberty, should be read into the conditions for granting bail under Section 45 of the PMLA. The Supreme Court has held that bail is a rule, and refusal is an exception, especially when prolonged incarceration occurs without conviction. The court found that the petitioner's further detention was not justified, given the lack of recent interrogation and the nature of the evidence.

5. Conditions for Granting Bail:

The court granted bail to the petitioner, subject to stringent conditions, including surrendering his passport, not leaving the trial court's jurisdiction without permission, appearing at all court hearings, not tampering with evidence, and not engaging in criminal activity. The court clarified that these observations are limited to the bail application and should not influence the trial's merits.

In conclusion, the court allowed the petitioner's application for bail, considering the prolonged incarceration, lack of substantive evidence at this stage, and the petitioner's right to a speedy trial under Article 21 of the Constitution.