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TMI Blog2025 (2) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held, that trial in the case under PMLA cannot be finally decided unless a trial of scheduled offence concludes. In the present case, as pointed out by the learned counsel for the applicant, in the scheduled offence wherein the charge-sheet has also been filed, the trial has not yet commenced and the charges have not been framed so far. The role of the present applicant as per the case of the prosecution was for providing entries in order to assist the main accused in laundering the proceeds of crime. The said allegation is sought to be proved by the prosecution on basis of statements made by the other co-accused persons as well as the present applicant. The statements made under Section 50 of the PMLA, no doubt is admissible in evidence, however, the veracity and sanctity of the same has to be tested during the course of the trial - The trial has not even commenced. The present applicant who is accused in a case of money-laundering cannot be considered to be a threat to the society without any material to demonstrate the same. The continued incarceration of the applicant with no possibility of trial being completed in near future, cannot be ignored and in case of conflict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2021, Aditi Singh was summoned and her statement was recorded u/s 50 of PMLA in ECIR/DLZO-II/05/2019 and during her statement she tendered her Iphone X, which was sent to DFS, Gandhinagar for forensic analysis on 18. 06.2021. On analysis of call data records (CDR), it was revealed that CDR contained multiple calls from various numbers belonging to Union Government offices and Ministries of the Government of India. It was intriguing to see that multiple calls were received from landlines of various Government offices, which on verification revealed that these calls were not made from the said landlines. 5.3 That investigation revealed that the said calls were spoofed calls which meant that the calls had been made through an' App' which enables the caller to hide its real number and choose the number that the caller intends to reflect on the screen of the recipient of the call. The Respondent in order to identify the caller who had masked himself with the use of technology, decided to use technology get the IP address of the caller and eventually, the Respondent Directorate caught the IP address of the caller. 5.4 To further investigate the issue, the location of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought into formal financial channels by getting the cash deposited through accommodation entry providers and also routing it through his personal and company accounts to accord legitimacy and lent his name to assets created and for various transactions. ii. He had ensured that the proceeds of crime received in cash were transferred to the accounts of Nail Artistry through getting credit cards swiped for a lesser commission as compared to B. Mohanraj which resulted in inflated sales credited into the accounts of Nail Artistry. He has himself admitted that he was sent to Dubai to avoid being present in case any law enforcement agency land at Chennai to search/ any action so that details of transactions are not divulged which itself show how crucial is he in these money laundering activities. Further, he has lent his name as business partner of Leena Paulose and has received and given cash which is proceed of crime. iii. Therefore, Arun Muthu knowingly assisted Sukash Chandrasekhar and Leena Paulose in acquisition and laundering of proceeds of crime generated through criminal activity and, thereby Arun Muthu has committed the offence of money laundering under section 3 of PMLA, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the form of confessional statements by the other co-accused persons which cannot be relied upon with respect to the prosecution of the present applicant. It is further submitted that the accused did not receive any money from co-accused Sukash Chandrasekhar or Leena Paulose. It was submitted that the applicant is a young person in his twenties and had directed a web-series along with the co-accused Leena Paulose and out of the earning from the said series a major chunk was remitted to co-accused Leena Paulose and the present applicant had retained his commission. 6. Learned counsel vehemently argued that the applicant has been in custody since 21.10.2021 and 4 supplementary complaints have been filed, the trial has not commenced as charges have still not been framed. The maximum sentence provided for the offence under Section 4 of the PMLA is 7 years, with a minimum sentence of 3 years. A total of 300 prosecution witnesses have been cited by the prosecution and trial is not likely to conclude in the near future. It is further submitted that certain co-accused persons have already been granted bail by this Court or by the learned Trial Court. Co-accused persons namely, Avatar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court surveyed the entire law right from the judgment of this Court in the cases of Gudikanti Narasimhulu v. Public Prosecutor, High Court of Andhra Pradesh, Shri Gurbaksh Singh Sibbia v. State of Punjab, Hussainara Khatoon (I) v. Home Secretary, State of Bihar, Union of India v. K.A. Najeeb and Satender Kumar Antil v. Central Bureau of Investigation. The Court observed thus: "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." 52. The Court also reproduced the observations made in Gudikanti Narasimhulu (supra), which read thus: "10. In the aforesaid context, we may remind the trial courts and the High Courts of what came to be observed by this Court in Gudikanti Narasimhulu v. Public Prosecutor, High Court reported in (1978) 1 SCC 240. We quote: "What is often forgotten, and therefore warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant. .............................................." (emphasis added) 24. There are a few penal statutes that make a departure from the provisions of Sections 437, 438, and 439 of the Code of Criminal Procedure, 1973. A higher threshold is provided in these statutes for the grant of bail. By way of illustration, we may refer to Section 45 (1) (ii) of PMLA, proviso to Section 43D (5) of the Unlawful Activities (Prevention) Act, 1967 and Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (for short, 'NDPS Act'). The provisions regarding bail in some of such statutes start with a non obstante clause for overriding the provisions of Sections 437 to 439 of the CrPC. The legislature has done so to secure the object of making the penal provisions in such en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under 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 declin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the power under Section 436A of the CRPC has to be exercised by the Court of first instance. 5. In the facts of the case, we find that there is no prospect of even the trial commencing, as the charge has not been framed. In these facts, we find that the appellant will be entitled to be enlarged on bail under section 436A of the CRPC on 27th May, 2024. Hence, there is no need to have multiplicity of proceedings. 6. Hence, we allow these appeals and direct that the appellant shall be enlarged on bail under Section 436A of the CRPC on 27th May, 2024." iii. Veerendra Kumar Ram v. Union of India Vide order dated 18.11.2024 in Criminal Appeal No. 4615/2024 (Para 1). "1. The appellant was arrested on 23rd February, 2023. He is in custody for a period of approximately 01 year and 09 months. Charge has not been framed. There is no possibility of the trial even commencing in near future. Therefore, in the facts of this case, following the principles laid down by this Court in paragraphs 26 to 28 of V. Senthil Balaji vs. The Deputy Director, Directorate of Enforcement, the appellant is entitled to be enlarged on bail, pending the trial." 8. It is further submitted that in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement before arrest dated 17.08.2021 which shows his direct connection with co-accused Sukash Chandrasekhar and Leena Paulose. Applicant's statement before the arrest dated 27.08.2021, shows that he assisted accused Sukash Chandrasekhar by collecting and depositing cash in his account and making payment for purchase of car. ii) Statement dated 27.08.2021 and 28.08.2021 by Leena Paulose (Co- accused) showing that the applicant was in direct contact with Sukash Chandrasekhar and assisted him in his transactions. However, after a raid by the CBI, they avoided direct contact and Leena Paulose facilitated their communication by putting call on speaker. iii) Statement dated 16.10.2021 of Sukash Chandrasekhar showing that the applicant had done various transactions at his behest. iv) Statement dated 20.10.2021 of Siva Subramaniam to show that he received Rs. 4 crores approximately in cash from the applicant over the period of 7 to 8 months. It is case of the prosecution that aforesaid Siva Subramaniam provided entries to the bank account which was in turn provided by the applicant from his account as well as the account of his companies. v) Statement dated 22.09.2021 by one M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OnLine Del 642. vi. Sajjan Kumar vs. Directorate of Enforcement 2022 SCC OnLine Del 1769. vii. Tarun Kumar v. Enforcement Directorate (2023) SCC OnLine SC 1486. viii. Gautam Kundu v. Directorate of Enforcement (2015) 16 SCC 1. ix. Serious Fraud Investigation Office vs. Rahul Modi (2019) 5 SCC 266. x. Pavana Dibbur v. Enforcement Directorate (2023) 15 SCC 91. xi. M/s Jagati Publications Ltd. vs. Directorate of Enforcement 2021 SCC Online TS 3293. xii. Radha Mohan Lakhotia v. Deputy Director 2010 SCC OnLine Bom 1116. xiii. Manharibhai Muljibhai Kakadi & Anr v. Shaileshbhai Mohanbhai Pata & Ors (2012)10 SCC 517, xiv. Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46. xv. Satish Jaggi v. State of Chhattisgarh (2007) 11 SCC 195. xvi. Anirudh Kamal Shukla vs. Union of India Through Assistant Director, Directorate of Enforcement 2022 SCC OnLine All 176. xvii. Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439. xviii. Anil Kumar Yadav v. State (NCT of Delhi) (2018) 12 SCC 129. xix. Sunil Dahiya v. State (Govt. of NCT of Delhi) 2016 SCC Online Del 5566. xx. Pramod Kumar Saxena v. Union of India (2008) 9 SCC 685, xxi. Religare Finvest Ltd. v. State (NCT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the trial is not likely to be completed in a reasonable time, the power of granting bail could be exercised on the ground of violation of Part III of the Constitution of India. Such power, it was held, can be exercised even in case of stringent statutory provisions with regard to bail like Section 45 of PMLA. 16. The Hon'ble Supreme Court in Prem Prakash v. Enforcement Directorate (2024) 9 SCC 787 held as under: "11. In Vijay Madanlal Choudhary v. Union of India [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1], this Court categorically held that while Section 45 PMLA restricts the right of the accused to grant of bail, it could not be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. Para 302 is extracted hereinbelow: (SCC p. 259) "302. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the court, which is not arbitrary or irrational but judicial, guided by the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be proved against him."" (emphasis supplied) 17. Similarly, in the case of Vijay Nair vs Directorate of Enforcement (supra) it was held as under: "12. Here the accused is lodged in jail for a considerable period and there is little possibility of trial reaching finality in the near future. The liberty guaranteed under Article 21 of the Constitution does not get abrogated even for special statutes where the threshold twin bar is provided and such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception. The cardinal principle of bail being the rule and jail being the exception will be entirely defeated if the petitioner is kept in custody as an under-trial for such a long duration. This is particularly glaring since in the event of conviction, the maximum sentence prescribed is only 7 years for the offence of money laundering." 18. In Javed Gulam Nabi Shaikh vs. State of Maharashtra (2024) 9 SCC 813 the Hon'ble Supreme Court while dealing with a case under the stringent provisions of Unlawful Activities (Prevention) Act, 1967 observed as under: "18. We may hasten to add that the petitioner is still an accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onths. 21. The role of the present applicant as per the case of the prosecution was for providing entries in order to assist the main accused in laundering the proceeds of crime. The said allegation is sought to be proved by the prosecution on basis of statements made by the other co-accused persons as well as the present applicant. The statements made under Section 50 of the PMLA, no doubt is admissible in evidence, however, the veracity and sanctity of the same has to be tested during the course of the trial. 22. The trial, as pointed out hereinabove, has not even commenced. The present applicant who is accused in a case of money-laundering cannot be considered to be a threat to the society without any material to demonstrate the same. The continued incarceration of the applicant with no possibility of trial being completed in near future, cannot be ignored and in case of conflict with a restrictive statutory provision like Section 45 of PMLA, the latter would not come in way ensuring the right to liberty and speedy trial under Article 21 of the Constitution of India. 23. As pointed out hereinabove, five of the co-accused have been granted bail. The coordinate bench of this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 436A of the Code can apply to offences under the PML Act, as it effectuates the right to speedy trial, a facet of the right to life, except for a valid ground such as where the trial is delayed at the instance of the accused himself. In our opinion, Section 436A should not be construed as a mandate that an accused should not be granted bail under the PML Act till he has suffered incarceration for the specified period. This Court, in Arnab Manoranjan Goswami v. State of Maharashtra and Others, held that while ensuring proper enforcement of criminal law on one hand, the court must be conscious that liberty across human eras is as tenacious as tenacious can be." (emphasis supplied) "20. It is necessary to mention that even in the reply to the bail application filed by the ED and perusal of the statement recorded under Section 50 of PMLA, the evidence against the petitioner is of his dealing with Deepak Ramnani. Whether the petitioner was acting as an agent of the main accused or was in any way indulging or knowingly assisting or knowingly party in "any process or activity" connected with the proceeds of crime is to be proved during the trial. The factum of * knowledge regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been shown to demonstrate the same. The evidence in the present case is primarily documentary in nature which is already in possession of the prosecution. 26. In totality of the facts and circumstances of the case, the application is allowed. The applicant is directed to be released on bail upon his furnishing a personal bond in the sum of Rs. 1,00,000/- alongwith one surety of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to the following conditions: i. The memo of parties shows that the applicant is residing at H. No. 40, Seshachalam Streets, Sai Kripa Apartment, Flat No. B-1, Saidapet, Chennai, 600015. In case of any change of address, the applicant is directed to inform the same to the learned Trial Court and the Investigating Officer. ii. The applicant shall not leave the country without the prior permission of the learned Trial Court. iii. The applicant is directed to give all his mobile numbers to the Investigating Officer and keep them operational at all times. iv. The applicant shall not, directly or indirectly, tamper with evidence or try to influence the witnesses in any manner. v. The applicant shall join the investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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