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TMI Blog2024 (11) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused. In Senthil [ 2024 (9) TMI 1497 - SUPREME COURT] , the Supreme Court while reiterating the ratio enunciated in Union of India v. K.A. Najeeb (Three Judge bench) [ 2021 (2) TMI 1212 - SUPREME COURT] , also held that if the Constitutional Court comes to the conclusion that the trial would not be able to be completed in a reasonable time, the power of granting bail could be exercised on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions present in special legislations - The applicant has been in custody since 10.10.2023 and the trial is at the stage supply of documents under Section 207 Cr.P.C. and charges are yet to be framed. Out of the 7 accused persons who were arrested, arrest of 3 persons was declared illegal by the Trial Court vide order dated 30.12.2023 and the other three, as noted above, have already been released on bail. The fact that the twin conditions under Section 45 of PMLA stand satisfied, the fact that the all the other accused persons who were arrested are out on bail, the period of custody undergone, the trial is at nascent stage of supply of documents under Section 207 Cr.P.C., keeping in mind the import of the catena of decisions of Supreme Court discussed herein above, it is directed that the applicant be released on regular bail subject to him furnishing 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/Trial Court/Duty J.M./link J.M. and subject to fulfilment of further conditions imposed - The bail application is disposed of. - HON'BLE MR. JUSTICE MANOJ KUMAR OHRI For the Appellant : Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Identification Number by Chinese nationals. Illegalities in visa obtainment by various entities have also been alleged. 3. The present applicant is the Managing Director of M/s Lava International Ltd., (hereinafter, referred to as Lava ) engaged in the business of manufacture and sale of mobile phones under the brand Lava and a competitor of Vivo. He has been arrayed as accused No. 20 in the prosecution complaint. It has been alleged that the applicant had invited Chinese Nationals from Vivo China in 2013-2014 with the intent of enabling them to set up a web of companies in India by concealing true ownership. He is also alleged to have provided them logistical and ground support and helped them get a foothold in India by circumventing FDI norms. He is also alleged to have transferred around Rs. 3.17 Crores in total, including Rs 2.62 Crores from Lava and Rs 55 lacs from his personal account to one Labquest Engineering Pvt. Ltd.(hereinafter, referred to as Labquest ) to help Vivo China set up a number of companies without disclosing that it is the controller of those entities. 4. Mr. Vikas Pahwa, learned Senior Counsel appearing on behalf the applicant submits that the applicant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lothe the applicant with mens rea, regarding the subsequent occurrence of a scheduled offence. 6. With respect to the alleged remittance of Rs. 3.17 Crores, it is submitted that the same was given to Labquest by way of a loan from January 2014 to December 2014. The same is stated to have been repaid to Lava by March 2015 with interest, much prior to the commission of the alleged scheduled offence. It is further contended that there is not an iota of evidence to show that the applicant ever received money from Vivo in an overseas entity. The entire allegation is based on surmises and conjectures with respect to an email dated 23.07.2014. It is contended that the email merely records options suggested by Vivo and the reply to the email would show that Labquest arranged its own funds and further, no transaction has been brought on record to show that money was transferred to the overseas entity of the applicant by Vivo. It is contended that by the time this email was sent, the applicant had already remitted at least 5 tranches of loan to Labquest from January 2014 to July 2014. In light of the same, the email was inconsequential and has been blown out of proportions by the respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f PMLA 2002 and the same had been added in the FIR No. 190/2021. One instance of such violation is that the applicant s company had issued invitation letters to Zhengshen Ou and Zhang Jie, both Directors and Shareholders of M/s GPICPL. Both of them were found to be in possession of forged driving licenses and utilised these forged driving licenses to acquire valuable security i.e. Director Identification Number issued by MCA in June 2015 and opening of Bank Accounts with HDFC Bank. In total, 4 people in relation to 3 SDC s had given forged licenses. 9. It is the case of the prosecution that the applicant used Labquest as a front for establishing the network of Vivo companies in India. It is alleged that from May 2014 to December 2014, an amount of Rs. 2.62 Crores and Rs 55 Lacs respectively was transferred by Lava International and the applicant respectively to Labquest for the purpose of setting up of offices/residential accommodation for the Chinese nationals of M/s Vivo India and its SDCs and this amount was given without any agreement or collateral. It is contended that Labquest was also used to circumvent the government approval which was required for making 100% FDI investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laptop has revealed that the applicant was searching ways in which the email data can be deleted permanently on 01.09.2022. Emails of the period prior to July, 2015 were not found on the server of Lava International during the search operation. It is contended that the applicant had misused the liberty granted to him when he was released on interim bail and for which he was directed to surrender and an FIR No. 234/2024 was also registered by PS Hauz Khas on 17.05.2024 under Sections 419/420/464/468/471/120-B IPC. It is contended that the subsequent involvement of the accused will result in the application failing to meet the test in the second part of Section 45 PMLA, as it is evident that the applicant is likely to commit any offence when enlarged on bail. The orders passed in relation to other co-accused have been challenged and the same are pending consideration. Lastly, it is submitted that the period of incarceration is only around 10 months and there is no delay in the trial affecting the applicants right to life and liberty. 12. I have heard learned counsel for the parties and have gone through the record. 13. Pertinently, as noted above, the FIR No. 0807/2021 was registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visa process is GPICPL. Even though the Special Counsel for the respondent has time and again stressed on these allegations, no material proof has been brought to the attention of this Court to prove that the said two Chinese nationals had come to India on invitations sent by the applicant. Moreover, admittedly, the invitation letters were issued between December 2013 to April 2014. The period of offence as per the FIR No. 190/2021 is 03.12.2014 to 13.12.2021, i.e. subsequent to the issuance of invitation letters. Nothing has been shown to prove that the applicant was aware that an offence was going to be committed on account of him extending the said invitations. 16. Second allegation levelled against the applicant is that the applicant had cumulatively, through Lava and his personal account, given Rs. 3.17 Crores to Labquest which acted as a front of the applicant and was instrumental in helping Vivo China set up business in India. It is alleged that for this, the applicant was paid by Vivo in the accounts of his overseas entities. Reliance has been placed on an email dated 23.07.2014 between CFO of Lava International Limited and CFO of Vivo China. However, learned Special Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ah v. Union of India, reported as (2018) 11 SCC 1, while discussing the import of Kartar Singh v. State of Punjab, reported as (1994) 3 SCC 569, with regard to Section 20(8) of the TADA Act, which is pari materia to Section 45 PMLA, observed as follows:- 47...Also, the offence that is spoken of in Section 20(8) is an offence under TADA itself and not an offence under some other Act. For all these reasons, the judgment in Kartar Singh [Kartar Singh v. State of Punjab, (1994) 3 SCC 569 : 1994 SCC (Cri) 899] cannot apply to Section 45 of the present Act. Similarly, Maharashtra Control of Organised Crime Act, 1999 also contains similar twin conditions in Section 21(4). While upholding the validity of the same, the Supreme Court in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, reported as (2005) 5 SCC 294 held as follows:- 38. We are furthermore of the opinion that the restrictions on the power of the court to grant bail should not be pushed too far. If the court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the court as regards his likeliho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in trial is attributable to the accused. V. Senthil Balaji v. The Deputy Director, Directorate of Enforcement reported as 2024 INSC 739 22. In Senthil (Supra), the Supreme Court while reiterating the ratio enunciated in Union of India v. K.A. Najeeb (Three Judge bench) (2021) 3 SCC 713 , also held that if the Constitutional Court comes to the conclusion that the trial would not be able to be completed in a reasonable time, the power of granting bail could be exercised on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. It was held that:- 21. Hence, the existence of a scheduled offence is sine qua non for alleging the existence of proceeds of crime. A property derived or obtained, directly or indirectly, by a person as a result of the criminal activity relating to a scheduled offence constitutes proceeds of crime. The existence of proceeds of crime at the time of the trial of the offence under Section 3 of PMLA can be proved only if the scheduled offence is established in the prosecution of the scheduled offence. Therefore, even if the trial of the case under the PMLA proceeds, it cannot be finally decided unless the tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45(1)(ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the accused, there is every possibility of the accused becoming a real threat to society if enlarged on bail. The jurisdiction to issue prerogative writs is always discretionary. (emphasis added) 23. The issue of long incarceration and right of speedy trial also cropped up in Manish Sisodia v Directorat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty are sacrosanct rights. On denial of these rights, the trial court as well as the High Court ought to have given due weightage to this factor. 24. Prem Prakash v. Union of India through the Directorate of Enforcement, Prem Prakash v. Union of India through the Directorate of Enforcement, reported as 2024 SCC OnLine SC 2270 is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account. The relevant extract of the said judgement is enacted below for convenience:- 11 .All that Section 45 of PMLA mentions is that certain conditions are to be satisfied. The principle that, bail is the rule and jail is the exception is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Code and Section 45 of the PML Act. The reason is that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted, that he be ensured and given a speedy trial. When the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years. It is in this background that Section 45 of PMLA needs to be understood and applied. Article 21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict. (emphasis added) 25. The view taken in the Manish Sisodia and Prem Prakash cases (Supra) was reiterated recently by the Supreme Court in the case of Vijay Nair v. Directorate of Enforcement, Vijay Nair v. Directorate of Enforcement, 6decided on 02.09.2024 in SLP (Crl) Diary No. 22137/2024 where it was held that liberty guaranteed under Article 21 of the Constitution does not get abrogated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Babba v. State of Maharashtra [Babba v. State of Maharashtra, (2005) 11 SCC 569 : (2006) 2 SCC (Cri) 118] and Umarmia v. State of Gujarat [Umarmia v. State of Gujarat, (2017) 2 SCC 731 : (2017) 2 SCC (Cri) 114] enlarged the accused on bail when they had been in jail for an extended period of time with little possibility of early completion of trial. The constitutionality of harsh conditions for bail in such special enactments, has thus been primarily justified on the touchstone of speedy trials to ensure the protection of innocent civilians. 15. This Court has clarified in numerous judgments that the liberty guaranteed by Part III of the Constitution would cover within its protective ambit not only due procedure and fairness but also access to justice and a speedy trial. In Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) v. Union of India [Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) v. Union of India, (1994) 6 SCC 731, para 15 : 1995 SCC (Cri) 39] , it was held that undertrials cannot indefinitely be detained pending trial. Ideally, no person ought to suffer adverse consequences of his acts unless the same is established before a ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant bail. But it would be very wrong to say that under a particular statute, bail cannot be granted. It would run counter to the very grain of our constitutional jurisprudence. In any view of the matter, K.A. Najeeb [Union of India v. K.A. Najeeb, (2021) 3 SCC 713] being rendered by a three-Judge Bench is binding on a Bench of two Judges like us. (Emphasis added) To the similar extent are the decisions in Mohd. Muslim alias Hussain v State (NCT of Delhi 2023 SCC OnLine SC 352 , Jitendra Jain v. Narcotics Control Bureau 2022 SCC OnLine SC 2021 , Rabi Prakash v. State of Odisha 2023 SCC OnLine SC 1109 and Man Mandal and Anr. v. State of West Bengal 2023 SCC OnLine SC 1868 , wherein while taking into account the prolonged custody and unlikelihood of completion of trial in immediate future, the accused was granted bail. 28. Examining the present case in the aforenoted backdrop, it is noted that the investigation was initiated in the year 2022 and the Prosecution Complaint has named 48 accused persons and cited 527 witnesses. There are 80,000 pages of documents which need to be analysed. A supplementary Prosecution Complaint dated 19.02.2024 has also been filed as per which the number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each to the satisfaction of the concerned Jail Superintendent/Trial Court/Duty J.M./link J.M. and subject to the following further conditions: - i) The applicant shall not leave Delhi/NCR without prior permission of the concerned Court and surrender his passport, if any, if not already done. ii) The applicant shall provide his mobile number to the Investigating Officer on which he will remain available during the pendency of the trial. iii) In case of change of residential address or contact details, the applicant shall promptly inform the same to the concerned Investigating Officer as well as to the concerned Court. iv) The applicant shall not directly/indirectly try to get in touch with the prosecution witnesses or tamper with the evidence. v) The applicant shall regularly appear before the concerned Court during the pendency of the proceedings. 32. The bail application is disposed of in the above terms alongwith the pending application. 33. Copy of the order be communicated to the concerned Jail Superintendent electronically for information. 34. Copy of the order be uploaded on the website forthwith. 35. Needless to state that this Court has not expressed any opinion on the meri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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