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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 ..... nies in India without revealing their true beneficial ownership and carried out mis-declarations before government bodies. It is alleged that Vivo Mobile India Private Limited (hereinafter, referred to as "Vivo India") and its State Distribution Companies (SDCs) concealed their Chinese ownership. While it was projected that Vivo India is a subsidiary of a Hong Kong based company viz. Multi Accord Limited, however investigation has established that it was under the ultimate control of Vivo China. It is also alleged that Vivo India had remitted funds outside India to the tune of Rs 70,837 Crores out of the total funds i.e. Rs. 71,625 Crores accumulated by them from sale of goods in the period from January 2015 to March 2021. Thus, Vivo China, through Vivo India has created an elaborate network of companies under a corporate veil. All the SDCs are controlled by Vivo India which in turn is controlled by Vivo China. By creating the said meshed and Pan-India structure, Vivo India has acquired Proceeds of Crime to the tune of Rs. 2,02,41,17,72,292.89/-. The proceeds so acquired were then siphoned off by Vivo India to Overseas trading companies many of which are in control of Vivo China. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been put forth by the respondent to show that the applicant had knowledge of the alleged offences committed by Vivo, or that he ever received or otherwise dealt in any Proceeds of Crime. With respect to the issuance of invitation letters to 19 Chinese nationals, it is submitted that the same were issued between December 2013 and April 2014 to explore the possibilities of a joint venture between Vivo and Lava, which eventually did not lead to fruition. It is submitted that none of these invitations were extended to persons who are alleged to have committed the scheduled offence as the invitation letters were issued prior to the period of offence stated in the FIR which is from 03.12.2014 to 13.12.2021. Moreover, the allegation of violation of Foreigners Act is with respect to 30 out of 193 Visas granted to Chinese nationals. It is submitted that none of these 193 Visas were granted on invitations extended by the applicant/Lava. It is further submitted that even as per the Prosecution Complaint, the Visa invitations for Zhang Jie and Zhengshen Ou who are alleged to have committed the scheduled offence by submitting false documents to MCA, were from M/s GPICPL for a subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the trial is still at the stage supply of documents under Section 207 Cr.P.C. As the charges are yet to be framed, the trial is likely to take a long time. On parity, it is submitted that out of the 7 accused persons who were arrested, the arrest of 3 persons has been declared illegal vide order dated 30.12.2023. Co-accused Nitin Garg has been granted bail vide order dated 29.01.2024, Rajan Malik and Guangwen Kuang @ Andrew (Employee of Vivo) have granted bail by the ASJ vide orders dated 09.10.2024 and 11.11.2024 respectively. Lastly, it is submitted that the applicant satisfies the triple test as there is no material brought on record by the respondent to show that applicant has tried influencing witnesses or tampering with evidence. 8. Per contra, Mr. Zoheb Hossain, learned special counsel on behalf of the respondent has vehemently opposed the bail application and submits that the applicant is involved not only in the offence of money laundering by actively assisting in the generation of proceeds of crime, but is also involved in destruction of evidences, setting up of companies based on forged documents, giving invitation letters to persons who gave forged driving licens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent on email communications dated 23.07.2014 between Rajesh Sethi, CFO of Lava and Alice Cheng, CFO of Vivo China wherein they were discussing ways of arranging funds for incorporation of Vivo India and other entities through Labquest. One of the ways which was discussed was that Lava would give money to Labquest, while its overseas entities would receive funds in USD. It is contended that this shows that the transactions between Lava International Limited and Labquest were not genuine business transactions. 10. Next, It is contended that the role of applicant is not only limited to helping Vivo in statutory compliance but he has continued to provide guidance as to the ongoing criminal investigation, as is evident from email communication dated 30.06.2023 between him and Jerome Chen and Luis, of Vivo India. Moreover, in the WhatsApp chats between Jerome Chen (CEO, Vivo India) and the applicant on 28.07.2023, Jerome had asked the applicant if he could help resolve immigration issues of employees of Vivo India and the applicant had agreed to help in fighting their legal battles. It is submitted these are proof as to the attendant circumstances that the applicant is giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derations, it would have to be seen whether the twin conditions stipulated in Section 45 of the PMLA are met. A plain reading of Section 45 of the PMLA shows that the public prosecutor must be given an opportunity to oppose the application and the Court should have reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. The twin conditions though restricts the right of accused to be released on bail but do not impose absolute restraint and the discretion vests in the Court. Vijay Madanlal Choudhary v. Union of India, reported as 2022 SCC OnLine SC 929 15. The first allegation levelled against the applicant is that he had extended invitations to Chinese nationals and during their stay in India, they committed the predicate offence by using forged licenses to open bank accounts and obtain DINs. There are also allegations of illegalities being committed in the Visa obtainment process by some of the Chinese nationals. Pertinently, none of the 30 Visas qua which the violation of Foreigners Act is alleged, were granted on invitation issued by applicant/Lava in 2013- 2014. The Prosecution Complaint in Table 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er any undue gain was received by the applicant in the aforesaid transaction. 17. Next, reliance was placed by the learned Special Counsel on email communication dated 30.06.2023 between the applicant and Jerome Chen and Luis, of Vivo India and WhatsApp chats between Jerome Chen and applicant dated 28.07.2023 to contend that the role of applicant is not only limited to helping Vivo in statutory compliance but he has continued to provide guidance to the other accused as to the ongoing criminal investigation. Special Counsel has argued that the period of conspiracy under Section 10 of the Evidence Act has continued till the aforesaid dates. Notably, the aforesaid communications are much after the registration of ECIR and filing of Prosecution Complaint. Even otherwise after going through the said communications, the contention raised being preposterous and meritless, is rejected. 18. It was next contended that due to the involvement of the applicant in a subsequent FIR, being FIR No. 234/2024, he has failed to satisfy the second part of Section 45 PMLA, which states that the accused is not likely to commit any offence while on bail. Pertinently, the said FIR has been registered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is in negative, then should this circumstance inure to the benefit of the accused. This aspect is to be seen in light of the period of incarceration and the nature of allegations. 21. Bail is the rule and jail is the exception. This principle is nothing but a crystallisation of the constitutional mandate enshrined in Article 21, which says that that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty is the usual course of action and deprivation of it a detour. The deprivation of liberty must only by procedure established by law, which should be fair and reasonable. Right of the accused to speedy trial is an important aspect which the Court must keep in contemplation when deciding a bail application as the same are higher sacrosanct constitutional rights, which ought to take precedence. Section 45 of the PMLA while imposing 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 conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45(1)(ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K.A. Najeeb, can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the aforesaid discussion, the Court was not inclined to accept the prayer for grant of bail at that stage. However, certain paragraphs of the said order cannot be read in isolation from the other paragraphs. The order will have to be read in its entirety. In paragraph 28 of the said order, this Court observed that the right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 Cr.P.C. and Section 45 of the PMLA. The Court held 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. It further observed that when the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, would be guided to exercise the power to grant bail. The Court specifically observed that this would be true where the trial would take years. It could thus clearly be seen that this Court, in the first round of litigation between the parties, has specifically observed that in case of delay coupled with incarceration for a long period and dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of India and that prolonged incarceration before being pronounced guilty ought not to be permitted to become the punishment without trial. In fact, Manish Sisodia (II) (Supra) reiterated the holding in Manish Sisodia (I) v. Directorate of Enforcement (judgment dated 30.10.2023 in Criminal Appeal No. 3352 of 2023) where it was held as under:- "28. Detention or jail before being pronounced guilty of an offence should not become punishment without trial. If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring." 26. On similar lines, is the decision of Supreme Court, in Sunil Dammani v. Directorate of Enforcement Criminal Appeal No. 4108/2024 decided on 03.10.2024, where considering the one-year custody of the accused and the factum of investigation being complete, the bail was granted noting that the prosecution had cited 98 witnesses. 27. The right to speedy trial was also upheld and other special legislations where provisions akin to Section 45 PMLA exist. Notable ones being, the decision in the case of Javed Gulam Nabi Shaikh v. State of Maharashtra 2024 SCC OnLine SC 1693, wherein Supreme Court while granting bail to an accused under UAPA, observed as under:- "19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime." (Emphasis added) On similar lines is the case of Union of India v. K.A. Najeeb (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he restrictions under a statute as well as the powers exercisable under constitutional jurisdiction can be well harmonised. Whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence. Such an approach would safeguard against the possibility of provisions like Section 43-D(5) of the UAPA being used as the sole metric for denial of bail or for wholesale breach of constitutional right to speedy trial." (Emphasis added) Taking note of above decision, in the case of Sk. Javed Iqbal v. State of U.P., (2024) 8 SCC 293 the Supreme Court held that:- "42. This Court has, time and again, emphasised that right to life and personal liberty enshrined under Article 21 of the Constitution of India is overarching and sacrosanct. A constitutional court cannot be restrained from granting bail to an accused on account of restrictive statutory provisions in a penal statute if it finds that the right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept in a few exceptional cases, the maximum sentence can be of seven years. The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc. As held in the catena of judgements discussed herein above, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as a hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations. 30. 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. 31. Considering the totality of the facts and circumstances, the fact that the twin conditions under Section 45 of PMLA stand satisfi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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