2025 (6) TMI 21 - HC - Money Laundering

Money Laundering - seeking modification of order dated passed by this Court in the captioned bail - condition requiring the surrender of passport - condition of furnishing a surety bond. Condition requiring the surrender of passport - grievance of the applicant herein is essentially that since bail has been granted to him subject to him depositing his passport with the learned Trial Court he cannot be released as he is not in a position to deposit his passport - HELD THAT - Having considered the orders passed by the learned Trial Court and the fact that it would take some time for a fresh passport being issued to the applicant by the HMPO/British High Commission the bail condition imposed by this Court in order dated 04.03.2025 stands modified to the extent that applicant may be released on regular bail without him depositing his passport immediately; however the FRRO shall ensure that the applicant does not leave the country and the British High Commission (or the concerned authority issuing the applicant s passport) shall ensure that the applicant s fresh passport whenever the same is ready is not handed over to the applicant but directly deposited with the learned Trial Court under intimation to this Court. Condition of furnishing a surety bond - whether this Court can dispense with the requirement that the applicant who is an accused in the present ECIR must furnish a surety bond alongwith his personal bond? - HELD THAT - It shall be apposite to take note of the decision of the Coordinate Bench of this Court in OBI Ogochukwa Stephen v. State (NCT of Delhi) 2024 (10) TMI 1663 - DELHI HIGH COURT wherein a similar issue was decided. The Coordinate Bench was adjudicating two applications seeking modification of bail conditions pertaining to furnishing of surety bond filed by the petitioners therein who were foreign nationals (nationals of Nigeria) and had been granted regular bail in a case registered under the NDPS Act 1985. The Coordinate Bench has held that while the requirement of furnishing a surety bond by a third person is the norm the same may be waived or substituted with a cash deposit in exceptional cases particularly where the accused or convict is able to demonstrate a genuine and verifiable inability to furnish surety. However such waiver or substitution must not be granted mechanically or for mere convenience but only after careful scrutiny of the facts and circumstances of each case including verification where necessary. Importantly the Court emphasized that the substitution of surety with a cash deposit does not by itself satisfy the underlying purpose of ensuring the accused s continued presence during trial unless accompanied by additional conditions that effectively mitigate the flight risk and uphold the integrity of the judicial process. In the present case the applicant has remained in custody in India for a period of about 6 years and 5 months. As already noted by this Court while granting bail even if the applicant was to be convicted for the alleged offence the maximum punishment prescribed is seven years of imprisonment. Thus the applicant has already undergone a substantial portion of the maximum sentence that could be imposed without the trial having even commenced - The principle that bail conditions must not be excessive or punitive in nature applies with greater force in cases where the undertrial has already spent a period in custody nearly equivalent to the potential maximum sentence. In these circumstances the imposition of rigid conditions without due regard to the applicant s peculiar situation would amount to an unjust deprivation of liberty. In the present case the applicant is a British national. It is his case that he has no friends or relatives in India who can stand as a surety for him. To appreciate this submission it is necessary to take note of some crucial facts. It is not in dispute that the applicant was apprehended in Dubai UAE where he remained in custody for approximately 130 days. Thereafter he was extradited to India on 04.12.2018 and following 14 days of custodial interrogation was arrested by the DoE in the present case on 22.12.2018. Since then the applicant has remained continuously incarcerated and has not stepped out of prison even for a single day. It is the DoE s own case that the applicant had not visited India at all after February 2013 and that he has no roots in the country. In such circumstances the applicant s assertion that he has no friend or relative in India who could stand as a surety appears to be logical and acceptable. Considering the overall facts and circumstances of the case including the applicant s prolonged incarceration his status as a foreign national with no roots in India and his inability to arrange for a surety locally this Court is inclined to modify the bail condition imposed earlier. Instead of the requirement to furnish a personal bond and surety bond of Rs. 5, 00, 000/- each the applicant shall now furnish a personal bond of Rs. 5, 00, 000/- along with a cash surety in the enhanced sum of Rs. 10, 00, 000/-. Conclusion - i) Modification of bail condition to dispense with third-party surety bond and substitute it with a cash surety of Rs. 10, 00, 000 along with a personal bond of Rs. 5, 00, 000. ii) Modification of passport surrender condition to allow release without immediate deposit of expired passport with the condition that the renewed passport be deposited directly with the Trial Court and the FRRO monitor the applicant s movement. iii) Affirmation that the applicant must comply with all other bail conditions imposed by the Trial Court including attendance address verification prohibition on tampering with evidence and restrictions on leaving India without permission. Application disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

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

(a) Whether the bail condition requiring the applicant, a foreign national, to furnish a surety bond along with a personal bond can be modified or waived, given the applicant's inability to find a surety in India due to lack of family or social ties.

(b) Whether the condition requiring the applicant to surrender his passport before the learned Trial Court can be waived or modified, considering that the applicant's existing passport has expired and he must retain it for renewal purposes.

(c) The extent to which bail conditions imposed on a foreign national accused must balance the interests of ensuring the accused's presence for trial and the accused's fundamental rights under Article 21 of the Constitution.

(d) The applicability and interpretation of statutory provisions, particularly Section 441 of the Criminal Procedure Code (Cr.P.C.), and relevant judicial precedents concerning bail conditions, surety bonds, and passport surrender.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Modification or Waiver of Surety Bond Requirement for a Foreign National

Legal Framework and Precedents: The Court examined Section 441 of Cr.P.C., which mandates furnishing of a surety bond as a condition for bail. The judgment extensively relied on the Coordinate Bench decision in OBI Ogochukwa Stephen v. State (NCT of Delhi), which addressed the permissibility of dispensing with or substituting the surety bond requirement, especially for foreign nationals lacking local ties. The Coordinate Bench formulated a three-fold test for bail conditions: they must be necessary to ensure the accused's presence for trial, preserve judicial integrity, and be feasible for the accused to fulfill.

The Court also referenced the Supreme Court's judgment in Frank Vitus v. Narcotics Control Bureau, which held that bail conditions must not be "fanciful, arbitrary or freakish" but should facilitate the trial's efficient resolution without imposing impossible burdens on the accused.

Court's Interpretation and Reasoning: The Court recognized that while furnishing a surety bond is the norm and serves the critical function of ensuring the accused's presence during trial, exceptions may be made where the accused demonstrates a genuine, verifiable inability to furnish surety. The Court emphasized that waiver or substitution of surety must be cautiously granted, especially for foreign nationals who pose a heightened flight risk.

Key Evidence and Findings: The applicant is a British national who was extradited to India and has no family or friends in India to stand surety. He has been incarcerated in India for over six years, exceeding most of the maximum sentence prescribed for the alleged offence. The Directorate of Enforcement (DoE) confirmed the applicant's lack of roots in India and highlighted the risk of absconding if surety is waived.

Application of Law to Facts: Balancing the applicant's prolonged incarceration, lack of local ties, and inability to furnish surety against the State's interest in securing trial attendance, the Court found that strict enforcement of the surety condition would be unjust and punitive. However, the Court sought to mitigate flight risk by increasing the cash surety amount and imposing stringent conditions such as regular attendance before the investigating officer, address verification, and passport deposit.

Treatment of Competing Arguments: The DoE opposed waiver, citing Section 441 Cr.P.C. and the risk of absconding. The Court acknowledged these concerns but held that the applicant's unique circumstances justified modification rather than outright waiver. The Court rejected the notion that cash deposits alone suffice as surety without accompanying safeguards.

Conclusion: The Court modified the bail condition to require the applicant to furnish a personal bond of Rs. 5,00,000 and a cash surety of Rs. 10,00,000, dispensing with the need for a third-party surety. This modification balances the applicant's rights and the State's interest in trial integrity.

Issue (b): Modification of Passport Surrender Condition

Legal Framework and Precedents: The surrender of passport is a common bail condition aimed at preventing flight risk. The Court considered the practical difficulties faced by the applicant due to his expired passport and the procedural requirements of the British High Commission/HMPO for renewal, which can take 4-8 weeks.

Court's Interpretation and Reasoning: The Court noted prior orders permitting the applicant to apply for a fresh passport online from jail, with assistance from counsel and jail authorities. The Court recognized that immediate surrender of the expired passport was impractical as it was required for renewal.

Key Evidence and Findings: The applicant had not been able to comply with the passport deposit condition as his passport was expired and needed for the renewal process. The Trial Court had already authorized steps to facilitate the passport application process.

Application of Law to Facts: The Court modified the bail condition to allow the applicant's release without immediate deposit of the passport. However, it directed that the FRRO ensure the applicant does not leave India and that the British High Commission or issuing authority deposit the renewed passport directly with the Trial Court upon issuance, preventing misuse.

Treatment of Competing Arguments: The DoE argued that the applicant should deposit his expired passport and that renewal could be managed without retaining the passport. The Court accepted the practical difficulties and the procedural safeguards in place, thereby modifying the condition.

Conclusion: The passport surrender condition was modified to accommodate the renewal process without compromising the State's interest in preventing absconding.

Issue (c): Balancing Bail Conditions with Fundamental Rights

Legal Framework and Precedents: Article 21 of the Constitution guarantees the right to life and personal liberty. The Court considered the principle that bail conditions must not be excessive or punitive, especially where the accused has already undergone substantial pre-trial incarceration.

Court's Interpretation and Reasoning: The Court observed that the applicant had spent over six years in custody, nearly the maximum sentence prescribed for the offence, without trial commencement. Imposing onerous bail conditions that the applicant cannot fulfill would amount to unjust deprivation of liberty.

Key Evidence and Findings: The applicant's prolonged incarceration and the delay in trial proceedings were undisputed. The Court noted that bail conditions must be proportionate, fair, and not defeat the purpose of bail.

Application of Law to Facts: The Court applied the principle that bail conditions should facilitate liberty without compromising judicial process integrity, leading to the modification of conditions to suit the applicant's circumstances.

Treatment of Competing Arguments: While the DoE emphasized the necessity of strict conditions to prevent flight risk, the Court balanced this against the applicant's fundamental rights and the realities of his situation.

Conclusion: Bail conditions were tailored to balance the applicant's right to liberty with the State's interest in ensuring trial attendance.

3. SIGNIFICANT HOLDINGS

The Court held that:

"It is permissible for a court to completely dispense with the requirement that an undertrial/convict must furnish a surety bond executed by a third person to avail bail or suspension of sentence."

However, such waiver or substitution must be "guarded, to ensure that at least the fundamental requirement that an undertrial/convict must remain available to face trial or to undergo the punishment awarded, is not jeopardised."

"The conditions imposed for grant of bail or suspension of sentence must pass muster on the anvil of the following criteria: First, the conditions must be necessary to ensure that the accused remains available for trial. Second, the conditions must be necessary to ensure that the integrity of the judicial process is preserved. Third, the conditions must not be impossible for the accused to fulfill."

Regarding passport surrender, the Court emphasized practical considerations and procedural safeguards, stating:

"The bail condition imposed by this Court, in order dated 04.03.2025, stands modified, to the extent that applicant may be released on regular bail, without him depositing his passport immediately; however, the FRRO shall ensure that the applicant does not leave the country, and the British High Commission (or the concerned authority issuing the applicant's passport) shall ensure that the applicant's fresh passport, whenever the same is ready, is not handed over to the applicant, but directly deposited with the learned Trial Court under intimation to this Court."

On balancing fundamental rights and State interests, the Court noted:

"The principle that bail conditions must not be excessive or punitive in nature applies with greater force in cases where the undertrial has already spent a period in custody nearly equivalent to the potential maximum sentence."

Final determinations include:

(i) Modification of bail condition to dispense with third-party surety bond and substitute it with a cash surety of Rs. 10,00,000 along with a personal bond of Rs. 5,00,000.

(ii) Modification of passport surrender condition to allow release without immediate deposit of expired passport, with the condition that the renewed passport be deposited directly with the Trial Court and the FRRO monitor the applicant's movement.

(iii) Affirmation that the applicant must comply with all other bail conditions imposed by the Trial Court, including attendance, address verification, prohibition on tampering with evidence, and restrictions on leaving India without permission.