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2023 (9) TMI 1473 - HC - Money LaunderingSeeking grant of regular bail - Money Laundering - cheating depositors by collecting fixed deposits without authority - predicate offence - HELD THAT - While considering the prayer for regular bail this Court bears in mind the views of the Supreme Court in P. Chidambaram v. Directorate of Enforcement 2019 (12) TMI 186 - SUPREME COURT that one of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed and that in Vijay Madanlal Choudhary s case 2022 (7) TMI 1316 - SUPREME COURT that The punishment provided for the offence is certainly one of the principles in deciding the gravity of the offence however it cannot be said that it is the sole factor in deciding the severity of the offence as contended by the petitioners. Money laundering is one of the heinous crimes which not only affects the social and economic fabric of the nation but also tends to promote other heinous offences such as terrorism offences related to NDPS Act etc. Both decisions were rendered by coordinate Benches and state that one of the principles to decide the gravity of the offence can be the sentence. The predicate offences charged against the petitioner are under sections 420 120B 421 and 471 IPC. Though FIR has been registered against the petitioner for the offences under the BUDS Act and under the Kerala Protection of Interests of Depositors in Financial Establishments Act 2013 as well those offences are not scheduled offences under the PML Act and cannot hence be termed as predicate offences. There is nothing to indicate how the offence under section 471 IPC applies to the petitioner s case. Therefore the main predicate offences charged against the petitioner are under sections 420 and 421 IPC. In the absence of any presumption of guilt for the predicate offences this Court has to consider whether there are reasonable grounds to believe that petitioner is not guilty of the offence of money laundering as alleged. The burden of proving the predicate offence of section 420 IPC thus stands entirely on the prosecution. The offence under section 420 IPC has to be independently established. When the investigation into the predicate offence has been continuing for the last more than three and a half years and a final report has not been able to be filed till date it goes without saying that it cannot be assumed that the accused can be said to be guilty of the offence under section 420 IPC. There is nothing to indicate at present that there was any dishonest or fraudulent removal concealment or delivery of any property without adequate consideration to prevent the distribution of property to creditors. This Court is of the considered view that the twin conditions stipulated under section 45 of the PML Act are satisfied entitling the petitioner to be released on regular bail. It is clarified that the findings entered into in this order are purely for the purpose of this bail application and shall not affect the validity of any other proceedings under the PML Act or the investigation into the predicate offences. The petitioner is entitled to be released on bail subject to fulfilment of conditions imposed - bail application allowed.
Issues Involved:
1. Whether the petitioner should be released on regular bail. 2. Whether the petitioner is entitled to statutory bail u/s 167 Cr.P.C. 3. Whether the petitioner is guilty of the predicate offences under sections 420, 421 IPC, and the PML Act. Summary: Issue 1: Regular Bail The petitioner sought regular bail u/s 45 of the PML Act. The prosecution alleged that the petitioner collected deposits without authority, failed to repay, and used the money to acquire property, thus committing money laundering u/s 3 of the PML Act. The petitioner was initially arrested on 29.08.2020 and continued in custody till 11-03-2021. The investigation was transferred to the CBI, which registered a crime alleging offences under the Banning of Unregulated Deposit Schemes Act, 2019, and sections 406 and 420 IPC. The ED arrested the petitioner on 09.08.2021, and a complaint was filed on 07.10.2021. The petitioner argued that his continued detention was unauthorized and that he had been conducting business without complaints since 1965. He claimed the failure to pay interest was due to the COVID-19 lockdown, not fraudulent intent. The Court considered the arguments, including the petitioner's age, the period of detention, and the lack of a final report on the predicate offences. The Court found that the twin conditions u/s 45 of the PML Act were satisfied and granted bail, noting that punishment before conviction is the antithesis of the rule of law. Issue 2: Statutory Bail u/s 167 Cr.P.C The petitioner filed for default bail u/s 167(2)(i)(a) Cr.P.C, which was dismissed by the Sessions Court. The Court observed that the Supreme Court in Ritu Chhabria v. Union of India stated that incomplete final reports or supplementary charge sheets cannot be used to scuttle the right of default bail. However, considering the period of custody already undergone by the petitioner, the issue became academic and was not further addressed. Issue 3: Guilt of Predicate Offences The predicate offences under sections 420, 406, 409, 421, 465, and 471 IPC were considered. The Court noted that the offences under sections 406, 409, and 465 IPC are not predicate offences. The main predicate offences were under sections 420 and 421 IPC. The Court emphasized that to attract section 420 IPC, dishonest or fraudulent intention from the beginning is essential. The investigation into the predicate offences had been ongoing for over three and a half years without a final report. The Court found no presumption of guilt for the predicate offences and concluded that the petitioner could not be assumed guilty of section 420 IPC at this stage. The Court also noted that the failure to repay deposits due to the COVID-19 pandemic did not prima facie attract the offence of cheating u/s 420 IPC. The Court held that the petitioner was not guilty of the offence of money laundering as alleged and granted bail with conditions to ensure cooperation with the investigation and prevent tampering with evidence. Conclusion The Court granted bail to the petitioner on executing a bond for Rs. 2,00,000/- with two solvent sureties, cooperation with the investigation, non-tampering with evidence, and restrictions on leaving Kerala or the country without permission.
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