2014 (12) TMI 1261 - HC - Money Laundering

Bail application - Offence of money laundering - Held that - After going into all the details furnished by the respondent/ Directorate of Enforcement in the form of reply without expressing any opinion on merits feel that at this stage the release of the petitioner would hamper further investigation as it may influence the witnesses. Though it is pointed out by learned senior counsel for the petitioner that the petitioner is in no way connected with this case however in my view the apprehension raised by the respondent cannot be ignored considering the fact that the petitioner is the beneficiary and the prime conspirator in the said money laundering transactions. It has also to be kept in mind that for the purpose of granting bail the legislature has used the words reasonable grounds for believing instead of the evidence which means the Court dealing with the grant of bail can only be satisfied as to whether there is a genuine case against the accused if the prosecution will be able to produce prima facie evidence in support of the charge. At this stage it is not expected to have the evidence establishing the guilt of the accused beyond reasonable doubt. Thus the petitioner cannot be released on bail at this stage.

Summary

Issues Involved:
1. Application for bail under Section 439 read with Section 482 of Cr.P.C.
2. Allegations of money laundering and corruption.
3. Applicability of PMLA and the burden of proof.
4. Judicial discretion in granting bail for economic offences.
5. Investigation and influence on witnesses.

Issue-wise Detailed Analysis:

1. Application for Bail under Section 439 read with Section 482 of Cr.P.C.:
The petitioner sought bail in ECIR No.DLZO/15/2014/AD(VM)/CBI/ACU-V/NEW DELHI under Section 120B read with Section 420 of IPC and Sections 7/8/9/12/13(2) read with Section 13(1)(d) of PC Act, 1988, and Sections 3 and 4 of PMLA. The application was dismissed by the Special Judge (PC Act) CBI-2, New Delhi, and subsequently, the petitioner filed the present application.

2. Allegations of Money Laundering and Corruption:
The case involves allegations that M/s. Agustawestland International Ltd. paid kickbacks to secure a contract with the Ministry of Defence, Government of India, for the supply of helicopters. The petitioner, as Legal Advisor of M/s. IDS Infotech, India, facilitated the transfer of kickbacks through complex financial transactions involving multiple entities, including IDS Tunisia and Aeromatrix Info Solutions Pvt. Ltd.

3. Applicability of PMLA and the Burden of Proof:
The petitioner argued that the provisions of Section 45 of PMLA apply only to offences under Part A of the Schedule and that the investigation should be conducted by the Directorate of Enforcement, not CBI. The court noted that under Section 24 of PMLA, the burden of proof that proceeds of crime are not involved in money laundering lies upon the accused. The court also referenced judgments such as 'Shivkant Tripathi vs. State of U.P. & Ors.' and 'Narender Mohan Singh vs. Directorate of Enforcement and Anr.' to highlight the legal principles regarding the burden of proof and the initiation of investigations under PMLA.

4. Judicial Discretion in Granting Bail for Economic Offences:
The court emphasized that economic offences constitute a class apart and need to be approached differently in matters of bail. The seriousness of the offence, the nature of evidence, the severity of punishment, and the potential influence on witnesses are critical considerations. The court cited the Supreme Court's observations in 'Union of India vs. Hassan Ali Khan & Anr.' and 'State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr.' to underscore the gravity of economic offences and the need for a judicious exercise of discretion in granting bail.

5. Investigation and Influence on Witnesses:
The court expressed concern that releasing the petitioner on bail could hamper further investigation and influence witnesses. Despite the petitioner's cooperation during the inquiry, the court found that the apprehension raised by the respondent (Directorate of Enforcement) could not be ignored, considering the petitioner's alleged role as a prime conspirator and beneficiary in the money laundering transactions.

Conclusion:
The court concluded that there were reasonable grounds to believe that the petitioner was involved in the offence of money laundering. Consequently, the application for bail was dismissed. The court directed the Directorate of Enforcement to complete the investigation expeditiously, allowing the petitioner to file a fresh bail application before the trial court, which would be considered independently on its merits.

Crl. M.B. No.10813/2014:
The application was dismissed as infructuous.