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2025 (4) TMI 13 - HC - Money LaunderingSeeking grant of bail - Money Laundering - predicate offence - proceeds of crime - preparation of fake deeds falsification of government records and tampering with revenue registers to acquire and dispose of landed properties as a member of syndicate - applicability of principles of parity - HELD THAT - In the judgment rendered by the Hon ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. 2022 (7) TMI 1316 - SUPREME COURT (LB) it has been held that the Authority under the 2002 Act is to prosecute a person for offence of money-laundering only if it has reason to believe which is required to be recorded in writing that the person is in possession of proceeds of crime . Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime action under the Act can be taken to forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government such process initiated would be a standalone process. So far as the issue of grant of bail under Section 45 of the Act 2002 is concerned at paragraph-412 of the judgment rendered in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. it has been held therein by making observation that whatever form the relief is couched including the nature of proceedings be it under Section 438 of the 1973 Code or for that matter by invoking the jurisdiction of the Constitutional Court the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering. It has come during investigation that the petitioner along with other accused persons was involved in preparation of fake deed as admitted by co-accused Afsar Ali mentioned at para 9.20 of the prosecution complaint. Further as per para 9.35 9.38 of the prosecution complaint where CDR has been reproduced the petitioner was acquainted with other co-accused and also as per paras 9.45 9.46 9.48 of the prosecution complaint substantial amount was transferred in the account of this petitioner. The offence of money laundering as contemplated in Section 3 of the PMLA has been elaborately dealt with by the three Judge Bench in Vijay Madanlal Choudhary in which it has been observed that Section 3 has a wider reach. The offence as defined captures every process and activity in dealing with the proceeds of crime directly or indirectly and is not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money laundering. Of course the authority of the Authorised Officer under the Act to prosecute any person for the offence of money laundering gets triggered only if there exist proceeds of crime within the meaning of Section 2 (1) (u) of the Act and further it is involved in any process or activity. The three Judge Bench the Hon ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement 2017 (11) TMI 779 - SUPREME COURT has held that the statements of witnesses recorded by Prosecution ED are admissible in evidence in view of Section 50. Such statements may make out a formidable case about the involvement of the accused in the commission of the offence of money laundering - In the instant case it has been found that during the course of investigation from the statements of witnesses recorded under Section 50 that the petitioner had indulged knowingly as the party and is actually involved in all the activities connected with the offence of money laundering. It is pertinent to mention here that the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus the involvement of the person in any of the criminal activities like concealment possession acquisition use of proceeds of crime as much as projecting it as untainted property or claiming it to be so would constitute the offence of money laundering under Section 3 of the Act. The power of the Court to grant bail is further conditioned upon the satisfaction of the twin conditions prescribed under Section 45(1) (i) and (ii) PMLA. While undertaking this exercise the Court is required to take a prima facie view on the basis of materials collected during investigation. The expression used in Section 45 of PMLA are reasonable grounds for believing which means that the Court has to find from a prima facie view of the materials collected during investigation that there are reasonable grounds to believe that the accused has not committed the offence and that there is no likelihood of him committing an offence while on bail. This Court while considering the prayer for regular bail has taken into consideration that though the Court is not sitting in appeal on the order passed by learned court since this Court is exercising the power of Section 439 Cr.P.C but only for the purpose of considering the view which has been taken by learned court while rejecting the prayer for bail this Court is also in agreement with the said view based upon the material surfaced in course of investigation. Grounds of parity - HELD THAT - The Hon ble Apex Court in Tarun Kumar Vs. Assistant Director Directorate of Enforcement 2023 (11) TMI 904 - SUPREME COURT it has been held that parity is not the law and while applying the principle of parity the Court is required to focus upon the role attached to the accused whose application is under consideration. The allegation against the present petitioner is entirely different and as per the prosecution complaint it is evident that the present petitioner has been found in preparation of fake deeds falsification of government records and tampering with revenue registers to acquire and dispose of landed properties as a member of syndicate - Applying the principle of parity this Court is of the view as per the judgment rendered by the Hon ble Apex Court rendered in Tarun Kumar that the benefit of parity is to be given if the facts/involvement of the petitioner is identical to the persons with whom parity is being claimed. This Court on the basis of the discussion of the involvement of the petitioner vis- -vis the other co-accused person is of the view that the case of the petitioner is quite distinguishable to that of the case of the co-accused/petitioner of B.A no.4892 of 2024 therefore it is considered view of this Court that it is not a fit case for application of the issue of parity herein. This Court in view of the aforesaid material available against the petitioner is of the view that in such a grave nature of offence which is available on the face of the material applying the principle of grant of bail wherein the principle of having prima facie case is to be followed the nature of allegation since is grave and as such it is not a fit case of grant of bail - this Court is of the opinion that the petitioner has miserably failed to satisfy this Court that there are reasonable grounds for believing that he is not guilty of the alleged offences. On the contrary there is sufficient material collected by the respondent-ED to show that he is prima facie guilty of the alleged offences. Conclusion - i) The offence of money laundering is independent of the scheduled offence and the petitioner can be prosecuted under the PMLA without being accused of the predicate offence. ii) The principle of parity does not apply as the petitioner s involvement was distinct from the co-accused who was granted bail. iii) The conditions under Section 45 of the PMLA were not satisfied as the petitioner failed to demonstrate reasonable grounds for believing he was not guilty and was unlikely to reoffend. This Court is of the view that it is not a case where the prayer for bail is to be granted as such the instant application stands dismissed.
1. ISSUES PRESENTED and CONSIDERED
The primary issues considered by the Court were:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Grant of Bail under PMLA The legal framework under the PMLA, specifically Sections 3 and 4, was analyzed. The Court noted that the offence of money laundering is independent of the scheduled offence, meaning that a person can be charged under the PMLA without being accused of the predicate offence. The Court referred to the Supreme Court's decision in Pavana Dibbur vs. Directorate of Enforcement, which clarified that money laundering is an independent offence. The Court examined evidence, including statements recorded under Section 50 of the PMLA and financial transactions linked to the petitioner, indicating involvement in the alleged crime. The Court found that the petitioner had access to original records and assisted in the preparation of fake deeds, thereby participating in the process of money laundering. The Court concluded that the petitioner was prima facie involved in the alleged activities and that the burden of proof lay on the petitioner to demonstrate otherwise, as per Section 24 of the PMLA. Issue 2: Principle of Parity The principle of parity in granting bail was discussed, with reference to the Supreme Court's rulings in Tarun Kumar vs. Assistant Director Directorate of Enforcement and Ramesh Bhavan Rathod vs. Vishanbhai Hirabhai Makwana. The Court emphasized that parity requires a similar role and circumstances between co-accused individuals. The Court found that the petitioner's involvement was distinct from the co-accused who was granted bail, as the petitioner was directly involved in the preparation of fake deeds and falsification of records. Thus, the principle of parity did not apply in this case. Issue 3: Conditions under Section 45 of PMLA Section 45 of the PMLA imposes twin conditions for granting bail: the Court must be satisfied that the accused is not guilty of the offence and is unlikely to commit any offence while on bail. The Court referred to the Supreme Court's decision in Vijay Madanlal Choudhary and Ors. Vs. Union of India, which upheld the mandatory nature of these conditions. The Court found that the petitioner failed to demonstrate reasonable grounds for believing he was not guilty, and the nature of the allegations suggested a likelihood of reoffending. Therefore, the conditions under Section 45 were not satisfied. Issue 4: Nature of the Offence The Court considered the nature of the offence as an economic offence, which requires a different approach in bail matters, as established in Y. S Jagan Mohan Reddy v/s C. B. I. and Nimgadda Prasad Vs. C.B.I. The Court noted that economic offences have serious repercussions on the economy and should be viewed seriously. The Court concluded that given the grave nature of the offence and the evidence against the petitioner, it was not appropriate to grant bail. 3. SIGNIFICANT HOLDINGS The Court held that:
The Court dismissed the bail application, emphasizing the prima facie evidence of the petitioner's involvement in money laundering activities.
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