2025 (7) TMI 706 - HC - Money Laundering

Seeking grant of interim bail - Money Laundering - Director of the Companies has to file Income Tax and GST returns - HELD THAT - Merely the fact that in the Companies at Serial No. 2 to 6 father of the applicant is also one of the directors is too short to decline the relief to the applicant as declining the relief would amount to violation of his fundamental rights as enshrined under Article 19 (1)(g) of the constitution of India and the prayer as made in para 2 A directly connected with his business. Even otherwise there is nothing in the reply to raise any suspicion with regard to the genuineness of the requests as made in para 2 B and C - Another fact which has also assumes significance in this regard is that earlier the applicant was also released on interim bail for looking after his matter under the provisions of SARFAESI Act with regard to the company M/s Walia Traders Limited. This Court is of the opinion that the prayer of the applicant for interim bail can be allowed - the applicant is ordered to be released on interim bail on and with effect from 10th July 2025 till 4th August 2025 in the case on his furnishing personal bail bond in the sum of Rs. 2, 00, 000/- with two sureties in the like amount to the satisfaction of learned trial Court and subject to fulfilment of conditions imposed. Bail application allowed.

Summary

ISSUES PRESENTED and CONSIDERED

1. Whether the applicant is entitled to interim bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in the case registered by the Enforcement Directorate (ED) involving allegations of fraud and financial irregularities.

2. Whether the applicant's claim of being the sole person knowledgeable about the accounts and financial affairs of multiple companies justifies the grant of interim bail for the purpose of filing Income Tax and GST returns.

3. Whether the applicant's need to secure a loan for his daughter's educational fees and to safeguard interests in a petrol pump allotment constitutes sufficient grounds for interim bail.

4. Whether the investigation is complete and the charge-sheet filed, and if so, how this affects the grant of interim bail.

5. Whether the applicant has misused previous interim bail granted and the implications of such conduct on the present application.

6. Whether the applicant's fundamental rights under Article 19(1)(g) of the Constitution are engaged in the context of the interim bail application.

7. Whether the strict parameters laid down by the Supreme Court for granting interim bail, especially in cases involving economic offences, have been satisfied.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Interim Bail under Section 483 of BNSS, 2023

The legal framework governing the applicant's bail application is Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The Court examined whether the applicant meets the criteria for interim bail considering the nature of the offence and stage of investigation. The ED opposed the bail, citing the applicant's involvement in a fraudulent scheme harming the government exchequer and vulnerable students.

The Court noted that the investigation was complete and the charge-sheet filed, implying that the applicant was no longer required for custodial interrogation. The Court also considered the applicant's prior conduct during earlier interim bail periods, which had not been misused.

Applying the law to facts, the Court found that the applicant's entitlement to interim bail could be considered, especially given the absence of any fresh grounds to deny bail and the applicant's compliance with previous bail conditions.

Issue 2: Applicant's Claim of Exclusive Knowledge of Accounts

The applicant claimed to be the sole person with knowledge of the accounts and financial affairs of several companies and societies, necessitating his release to file Income Tax and GST returns. The respondent contested this, submitting a detailed table showing multiple directors in these companies, including the applicant's father and others, thereby negating the claim of exclusive knowledge.

The Court analyzed the table and found that while the applicant was not a director in some companies, he was a director in others alongside his father and other directors. The Court held that the presence of multiple directors does not automatically disqualify the applicant's claim to manage taxation matters, as denying bail on this ground alone would infringe the applicant's fundamental rights under Article 19(1)(g) relating to the right to carry on business.

The Court emphasized that the applicant's assertion, though contested, was not wholly refuted at this stage, and thus, the claim warranted consideration in the bail context.

Issue 3: Grounds Relating to Daughter's Education and Petrol Pump Allotment

The applicant sought bail to secure a loan for his daughter's second-year fees at an American university in Dubai and to attend meetings concerning the allotment of a petrol pump by Bharat Petroleum Corporation Limited, which was under scrutiny.

The Court found no reason to doubt the genuineness of these claims. The respondent did not challenge these grounds substantively. The Court held these reasons as legitimate personal and business-related grounds that supported the grant of interim bail.

Issue 4: Completion of Investigation and Filing of Charge-sheet

The applicant contended that the investigation was complete and the charge-sheet had been filed, with his property attached, implying no further recovery or custodial interrogation was necessary.

The Court accepted this position, noting that once the investigation is complete and charge-sheet filed, the purpose of custodial detention diminishes, strengthening the applicant's case for interim bail.

Issue 5: Applicant's Conduct During Earlier Interim Bail Periods

The Court reviewed the applicant's history of interim bail, granted on multiple occasions between July and November 2024, and found no evidence of misuse of this liberty.

This favorable conduct weighed in the applicant's favor, indicating compliance with bail conditions and reducing the risk of absconding or tampering with evidence.

Issue 6: Fundamental Rights under Article 19(1)(g)

The Court considered the applicant's right to carry on business under Article 19(1)(g) of the Constitution. It held that denying interim bail solely on the basis that other directors were involved in the companies would amount to an infringement of this right, especially when the applicant's business interests were directly affected.

The Court balanced the interests of the State and the applicant's fundamental rights, concluding that the applicant's business-related grounds justified interim bail.

Issue 7: Compliance with Supreme Court Guidelines on Interim Bail in Economic Offences

The respondent relied on Supreme Court precedents, including judgments in Y.S. Jagan Mohan Reddy v. CBI, Serious Fraud Investigation Office v. Nittin Johari, and P. Chidambaram v. Directorate of Enforcement, which set stringent parameters for interim bail in economic offence cases.

The Court acknowledged these precedents and noted that the present application did not involve any medical emergency or violation of fundamental rights beyond business interests. However, the Court found that the applicant had provided undertakings and the relief sought was limited and specific, thus satisfying the strict parameters to some extent.

The Court also emphasized that the interim bail was subject to strict conditions to prevent misuse and ensure cooperation with the trial process.

SIGNIFICANT HOLDINGS

"Merely, the fact that in the Companies at Serial No. 2 to 6, father of the applicant is also one of the directors, is too short to decline the relief to the applicant, as declining the relief would amount to violation of his fundamental rights, as enshrined under Article 19 (1)(g) of the constitution of India and the prayer as made in para 2'A, directly connected with his business."

"There is nothing in the reply to raise any suspicion, with regard to the genuineness of the requests, as made in para 2'B and C."

"Considering the given facts and circumstances, of the case, this Court is of the opinion that the prayer of the applicant for interim bail can be allowed."

The Court established the principle that in cases where the investigation is complete and the charge-sheet filed, interim bail may be granted if the applicant's fundamental rights and legitimate business interests are engaged, provided the applicant complies with stringent conditions to prevent interference with the investigation or trial.

The Court's final determination was to allow the interim bail from 10th July 2025 to 4th August 2025, subject to furnishing personal bond and sureties, and compliance with conditions including non-tampering with evidence, appearance before the trial court, restrictions on travel, and limited movement to necessary places only.