2024 (8) TMI 21 - HC - Money Laundering

Second bail application for grant of regular bail - online betting in Live Ludo Football Casino games and marks through Mahadav Book - applicability of Section 45 of the PMLA - HELD THAT - As per provisions of Section 45 of the PMLA apart from providing Public Prosecutor opportunity to oppose bail application filed by the applicant two conditions are required to be fulfilled i.e. firstly the court is satisfied that there are reasonable grounds for believing that applicant is not guilty of such offence and secondly he is not likely to commit any offence while on bail. In the case of Sanjay Jain Vs. Enforcement Directorate 2024 (3) TMI 598 - DELHI HIGH COURT the Delhi High Court vide order dated 7-3-2024 considering various observations of Hon ble Supreme Court made in the case of Vijay Madanlal Choudhary Vs. Union of India 2022 (7) TMI 1316 - SUPREME COURT has held that A finding is also required to be recorded as to the possibility of the bail applicant committing a crime after grant of bail. This aspect has to be considered having regard to the antecedents of the accused his propensities and the nature and manner in which he is alleged to have committed the offence. In the instant case as per case of Enforcement Directorate itself applicant has not played any role in the predicate offence of online betting but applicant himself has admitted in his statement recorded under Section 50 of the PMLA 2002 that he and his brother Anil Dammani work as Havala operator. Promoter of Mahadev Book App namely Sourabh Chandrakar frequently purchased gift items from his jewellery shop namely Abhushan Jewelers since 2019 till 2021 - Applicant has also admitted that he knows Rahul Wakte (associate of ASI Chandra Bhushan Verma) who had come many times in their shop for Havala transaction worth Rs. 3-4 crorers. These facts have also been supported by chandra Bhushan Verma in his statement under Section 50 of the PMLA 2002. The evidence available on the complaint shows that the applicant is not only involved in Hawala transactions rather he is also aware about the persons to/from whom he delivered/received the amount of Hawala. Since the party was organized by promoters of Mahadev Book App and other connected persons therefore contentions raised by learned counsel for the applicant that he was not aware about the fact that said amount of Hawala transaction was proceed of crime of Mahadev Book App does not appear to be correct - Transaction of amount through Hawala made by the applicant also comes in purview of proceeds of crime as has been defined in Section 2 (1) (u) of PMLA 2002. Since applicant is engaged in the business of jewellery but his connection in Hawala transaction that too in respect of money pertaining to Mahadev Book App shows his involvement in such economic offence. The applicant used to receive Havala money in his shop namely Abhushan Jewelers and persons who brought money of Havala and persons who collected the same are found to be associates of money transaction of proceeds of crime of Mahadev Book App. Even promoters of Mahadev Book App namely Ravi Uppal and Sourabh Chandrakar had organized a party in the farm house of applicant and his brother in which Ravi Uppal Sourabh Chandrakar applicant and his brother Ashish Rathore Deepan Josef and he himself were present - Considering such significant role of applicant in ensuing money laundering case of proceeds of crime of Mahadev Book App it is found that there is sufficient evidence collected by the respondent-Enforcement Directorate to prima facie come to the conclusion that the applicant was involved in the offence of money laundering as defined in Section 3 of the PMLA. Having regard to the provisions of Section 45 of the PMLA bail cannot be granted to applicant - instant bail application is rejected.

Summary

Issues Involved:
1. Second Bail Application under Section 439 of Cr. P.C. and Sections 45 and 65 of PMLA, 2002.
2. Predicate Offence and Money Laundering Allegations.
3. Evidence and Mens Rea.
4. Proceeds of Crime.
5. Legal Precedents and Judicial Considerations.

Issue-wise Detailed Analysis:

1. Second Bail Application under Section 439 of Cr. P.C. and Sections 45 and 65 of PMLA, 2002:
The applicant filed a second bail application after the first was dismissed. The application was made under Section 439 of the Cr. P.C. and Sections 45 and 65 of the PMLA, 2002. The applicant was arrested on 23-8-2023 for offences under Sections 3 and 4 of the PMLA, 2002.

2. Predicate Offence and Money Laundering Allegations:
The case involves an ECIR registered against Mahadev Online Book and others for online betting and money laundering. Various FIRs across the country, including one from Andhra Pradesh, were cited, implicating the applicant and others in illegal online betting and money laundering activities. The applicant and his brother were accused of facilitating large-scale Havala transactions for bribing officials to protect the Mahadev Book App.

3. Evidence and Mens Rea:
The applicant's counsel argued that the prosecution's complaint did not reveal the applicant's involvement in any predicate offence. The applicant was implicated based on statements from co-accused and others under Section 50 of the PMLA, 2002. The counsel contended that these statements could not be used as evidence under Section 3 of the Indian Evidence Act and Article 20(3) of the Constitution. The applicant allegedly lacked mens rea as there was no evidence he knew the Havala money was proceeds of crime from illegal betting.

4. Proceeds of Crime:
The Enforcement Directorate (ED) argued that the applicant and his brother facilitated large-scale Havala transactions, knowing they were proceeds of crime. The applicant admitted to receiving commissions for these transactions. Properties worth Rs. 4.19 crores, allegedly bought with proceeds of crime, were attached. Statements from various witnesses under Section 50 of the PMLA, 2002, supported these allegations.

5. Legal Precedents and Judicial Considerations:
The court referred to several legal precedents, including the Delhi High Court's observations in Sanjay Jain Vs. Enforcement Directorate and the Supreme Court's rulings in Vijay Madanlal Chaudhary and Y.S. Jagan Mohan Reddy Vs. CBI. The court emphasized that at the bail stage, it need not delve deep into the merits but should consider if there is a prima facie case. The court noted that economic offences require a different approach due to their grave nature and potential impact on the economy.

Conclusion:
The court concluded that there was sufficient evidence to believe the applicant was involved in money laundering. The applicant's role in facilitating Havala transactions and his connections with key figures in the Mahadev Book App were significant. The court found that the applicant's contentions lacked merit, and the evidence suggested he was aware the funds were proceeds of crime. Therefore, the bail application was rejected, considering the provisions of Section 45 of the PMLA.