2024 (10) TMI 1675 - HC - Indian Laws

Money Laundering - illegal money circulation business - misappropriation of over Rs.600 crores from innocent members of public - HELD THAT - In the present case petitioner is in custody for 15 months and a major part of the transaction by and between him and the PINCON Group of Companies have not been accounted for. Whether failure to account for the remainder is due to inadvertent errors in maintaining accounts and/or would constitute offences of money laundering may be assessed during trial. Keeping in mind the profile of the case and the period of detention suffered by the petitioner a reasonable guesstimation may be made that the trial would not conclude even if the petitioner is kept in detention for some months more to attain the benchmark under Section 479 of BNSS. It is also relevant to note that the principal accused Manoranjan Roy has been enlarged on bail and even if challenged the bail order has not been suspended by this Court. Given these situations we are of the considered view petitioner has made out a case for bail on the ground of protracted detention and dim possibility of conclusion of trial in the near future. The petitioner shall be released on bail upon furnishing a bond of Rs. 50, 000/- with five sureties of like amount each two of whom must be local to the satisfaction of the learned Judge-in-charge City Sessions Court. Prior to his release petitioner shall deposit his passport if in his possession before the trial court and shall not leave country without permission of the court and shall appear before the trial court on every date of hearing until further orders and shall not intimidate witnesses or tamper with evidence in any manner whatsoever. Application allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the petitioner, a journalist and editor accused of receiving proceeds of crime from the 'PINCON Group of Companies,' is entitled to bail despite allegations of money laundering under the Prevention of Money Laundering Act (PMLA).

- Whether the strict restrictions on bail under Section 45 of the PMLA apply in the context of delay in trial and prolonged detention.

- Whether the petitioner's prolonged detention without framing of charges and the dim prospect of trial conclusion justify grant of bail.

- The applicability and interpretation of recent Supreme Court precedents regarding bail in PMLA cases, particularly on grounds of delay in trial and fundamental rights under Article 21.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under PMLA Allegations

The petitioner was alleged to have received Rs. 4.2 crores from the 'PINCON Group of Companies,' which was engaged in an illegal money circulation scheme misappropriating over Rs. 600 crores. While the principal accused and directors were charged with predicate offences under IPC and WPPIDE Act and convicted, the petitioner was not charged with predicate offences but was implicated for receiving proceeds of crime under PMLA.

The petitioner contended that the monies received were legitimate payments for telecasting programmes and advertisements on his news channel. However, the Enforcement Directorate (ED) disputed this, pointing to discrepancies in ledger entries, invoices, and telecast certificates, noting Rs. 1.14 crores remained unaccounted for. The Court noted that while over Rs. 3 crores were accounted for, the unaccounted sum and ongoing investigation into other unaccounted funds warranted careful scrutiny during trial.

The Court emphasized that whether the unaccounted funds arose from inadvertent accounting errors or constituted money laundering offences would be determined during trial, underscoring the need for a full trial process to assess the merits of these allegations.

Issue 2: Applicability of Section 45 PMLA Restrictions on Bail in Context of Delay

The ED relied on Section 45 of the PMLA, which imposes stringent restrictions on grant of bail in money laundering cases, arguing that prima facie material existed against the petitioner to deny bail.

The Court acknowledged the strict statutory restrictions but clarified that these do not operate to deny bail where the ground is delay in trial and violation of the fundamental right to a speedy trial under Article 21 of the Constitution. The Court referred extensively to recent Supreme Court decisions that have clarified this position:

• In Prem Prakash vs. Union of India and Manish Sisodia vs. Directorate of Enforcement, the Supreme Court held that the right to bail on grounds of delay in trial is not fettered by Section 45 of the PMLA.
• In Vijay Madanlal Chowdhury vs. Union of India, the Apex Court held that bail on delay grounds under Section 436A CrPC may be considered in PMLA cases after the accused has undergone half of the maximum sentence.
• In Re: Inhuman Conditions in 1382 Prisons, the Apex Court clarified that under the amended Section 479 BNSS, a first-time offender is entitled to bail after serving one-third of the maximum sentence, instead of half as previously required.

The Court noted that in Manish Sisodia, bail was granted after 15 months of detention on grounds of delay, and in Prem Prakash, bail was granted after just over a year of detention in a PMLA case.

Issue 3: Prolonged Detention Without Charge Framing and Trial Delay

The petitioner had been in custody for over 15 months without framing of charges, while the prosecution proposed to examine numerous witnesses and produce voluminous documents, indicating a protracted trial process with no imminent conclusion.

The Court observed that the principal accused, Manoranjan Roy, who had undergone 10 months of detention, had been granted bail and that this bail order had not been stayed despite challenge. This fact was relevant in assessing parity and fairness in bail considerations.

The Court reasoned that given the petitioner's prolonged detention, the lack of charge framing, and the dim prospects for trial conclusion in the near future, continued incarceration would infringe the petitioner's fundamental right to a speedy trial. It was further noted that even if detention continued to reach the benchmark under Section 479 BNSS, the trial would likely not conclude within that time frame.

Issue 4: Conditions and Safeguards Imposed on Bail

While granting bail, the Court imposed stringent conditions to safeguard the trial process and public interest:

• Petitioner to furnish a bond of Rs. 50,000 with five sureties of like amount, two of whom must be local.
• Deposit of passport prior to release, with prohibition on leaving the country without court permission.
• Mandatory appearance before the trial court on all hearing dates.
• Prohibition on intimidating witnesses or tampering with evidence.
• Provision for cancellation of bail if the petitioner fails to appear without justifiable cause.
• Obligation to cooperate with Enforcement Directorate for further interrogation as necessary.

3. SIGNIFICANT HOLDINGS

"We are conscious of the strict restrictions to grant of bail on merits in PMLA cases. However, the said restrictions do not operate when bail prayer is made on the ground of delay in trial."

"The right to bail on the ground of infraction of fundamental right to speedy trial under Article 21 is not fettered by restrictions under Section 45 of PMLA Act."

"Given these situations we are of the considered view petitioner has made out a case for bail on the ground of protracted detention and dim possibility of conclusion of trial in the near future."

Core principles established include:

• The statutory restrictions on bail under PMLA do not override the constitutional right to a speedy trial and bail on grounds of trial delay.
• Prolonged detention without framing of charges and with no reasonable prospect of trial conclusion justifies bail even in serious economic offences involving money laundering.
• Grant of bail in PMLA cases must balance the interests of justice, the rights of the accused, and the public interest, with appropriate conditions to prevent interference with the trial process.

Final determinations:

• The petitioner's bail was allowed on the ground of prolonged detention and trial delay.
• Conditions were imposed to ensure the petitioner's presence at trial and prevent tampering with evidence.
• The Court recognized the ongoing investigation and trial but prioritized fundamental rights over procedural restrictions in bail law.