2025 (5) TMI 2000 - SCH - Money Laundering

Money Laundering - Release on bail by the High Court subject to certain terms and conditions - applicability of proviso to Section 45 of the Prevention of Money Laundering Act (PMLA) 2002 - HELD THAT - The applicant shall report once every two weeks to the Investigating Officer is concerned Mr. Venkatesh the learned counsel appearing for the Directorate of Enforcement submitted that this may be modified to the extent that as and when the Investigating Officer requires the presence of the applicant and if the applicant is informed accordingly she will have to remain present before the Investigating Officer. The condition no.4 (ii) of the main order is modified to the extent that the applicant/respondent may not report once every two weeks to the Investigating officer but as and when the Investigating Officer requiring her presence she must report to the Investigating Officer. Application disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter include:

• Whether the bail granted by the High Court to the accused/respondent should be cancelled or maintained.
• The scope and exercise of judicial discretion under the proviso to Section 45 of the Prevention of Money Laundering Act (PMLA) 2002, particularly in relation to a woman accused.
• The applicability and interpretation of Section 437 of the Code of Criminal Procedure 1973 in the context of bail for the accused/respondent.
• The appropriateness and reasonableness of the terms and conditions imposed on the accused/respondent's bail, including restrictions on travel, reporting requirements, and restrictions on property disposal.
• The procedural modifications to the bail conditions, specifically concerning the authority to grant permission for travel and the frequency of reporting to the Investigating Officer.
• The legal consequences and procedural requirements relating to the accused's renunciation of foreign citizenship and its bearing on bail conditions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Whether the bail granted by the High Court should be cancelled or maintained

Relevant legal framework and precedents: The Court relied on the proviso to Section 45 of the PMLA, which confers discretion on courts to grant bail to a woman accused. The interpretation of Section 437 of the CrPC was also pivotal, as established in the precedent case where it was held that the statutory provisions do not mandate automatic bail for persons specified in the proviso.

Court's interpretation and reasoning: The Court distinguished the considerations relevant for granting bail from those applicable to cancellation of bail. It noted that the accused/respondent had undergone over 620 days of custody, and the High Court, in the exercise of its discretion, had granted bail subject to several conditions. The Court found no sufficient grounds to interfere with the High Court's order under Article 136 of the Constitution.

Key evidence and findings: The prolonged custody period of the accused and the detailed conditions imposed by the High Court were significant factors. The Court also considered the Directorate of Enforcement's dissatisfaction but found it insufficient to overturn the bail.

Application of law to facts: Applying the discretion under PMLA and CrPC, the Court upheld the bail, emphasizing judicial restraint and the importance of conditions to safeguard the investigation and trial process.

Treatment of competing arguments: The Directorate of Enforcement's challenge was considered but ultimately rejected, with the Court emphasizing the High Court's discretion and the sufficiency of imposed conditions.

Conclusion: Bail was maintained, and the challenge was dismissed.

Issue 2: Interpretation and application of bail conditions, including travel restrictions, reporting, and property disposal

Relevant legal framework: The Court referred to the conditions imposed by the High Court and supplemented by its own order, including limitations on travel, regular reporting to the Investigating Officer, and restrictions on disposal of property without court permission.

Court's interpretation and reasoning: The Court initially imposed additional conditions beyond those of the High Court to ensure compliance and prevent interference with the investigation. These included restricting the accused's movement to the NCR region, mandatory reporting every two weeks, and prohibiting property disposal without the Special Court's permission.

Key evidence and findings: The Court considered the nature of the investigation, potential risks of absconding or tampering with evidence, and the accused's foreign citizenship status.

Application of law to facts: The Court tailored the conditions to balance the accused's liberty with the interests of justice and investigation integrity.

Treatment of competing arguments: Upon hearing submissions from both parties, the Court modified certain conditions:

• The travel restriction was relaxed to allow the accused to leave the NCR region with prior permission, which was further modified to require permission from the Investigating Officer rather than the trial Court.
• The reporting condition was altered from mandatory biweekly appearances to reporting only as and when required by the Investigating Officer.
• The restriction on property disposal was retained without modification, emphasizing the need for judicial oversight.

Conclusion: The Court refined bail conditions to ensure practicality and enforceability while safeguarding investigative interests.

Issue 3: Renunciation of foreign citizenship and its impact on bail

Relevant legal framework: The High Court's bail condition required the accused to relinquish her Dominican Republic citizenship within one week of release and submit documentary proof to the trial Court.

Court's interpretation and reasoning: The Court noted the accused's compliance by applying for renunciation and undertaking to relinquish citizenship forthwith. It accepted the undertaking and directed compliance reporting within a fortnight.

Key evidence and findings: The undertaking by the accused and the application for renunciation were critical to the Court's satisfaction.

Application of law to facts: The Court recognized the importance of the accused's citizenship status in the context of bail and potential flight risk, making renunciation a condition precedent to bail continuation.

Treatment of competing arguments: The Court accepted the respondent's counsel's submissions and made no adverse findings.

Conclusion: The condition was upheld and compliance directed, with the accused also permitted to apply for Indian citizenship in due course.

3. SIGNIFICANT HOLDINGS

"The proviso to Section 45 of the Prevention of Money Laundering Act 2002 confers a discretion on the Court to grant bail where the accused is a woman. Similar provisions of Section 437 of the Code of Criminal Procedure 1973 have been interpreted by this Court to mean that the statutory provision does not mean that person specified in the first proviso to sub-section (1) of Section 437 should necessarily be released on bail."

"Considerations which weigh in the grant of bail are distinct from those which are relevant to the adjudication of an application for cancellation of bail."

"Since in the exercise of its discretion, the High Court has come to the conclusion that the respondent should be released on bail, we are not interfering with the order under Article 136 of the Constitution."

"In addition to the terms and conditions which have been imposed by the High Court, we direct that: (i) The respondent shall not leave the limits of the NCR region; (ii) The respondent shall report once every two weeks to the Investigating Officer; and (iii) The respondent shall not dispose of any property without specific permission of the Special Court."

The Court's final determinations on each issue were:

• The bail granted by the High Court to the accused/respondent is upheld and not cancelled.
• The bail conditions imposed by the High Court are appropriate but subject to modification for practicality, including permission for travel to be obtained from the Investigating Officer and reporting to be as required rather than on a fixed schedule.
• The accused must renounce foreign citizenship and provide proof within a stipulated timeframe as a condition of bail.
• The accused is restrained from disposing of property without express permission of the Special Court.