Delhi HC Grants Bail to Chartered Accountant on Money Laundering under PMLA based on Prima Facie view based on Material on Record [Read Order]

A Single Bench of Delhi High Court has granted bail to chartered accountant on money laundering under Prevention of Money Laundering Act (PMLA) 2002 based upon the prima facie view on material on record.

The petitioner Manish Kothari was aggrieved of the order dated 09.06.2023 whereby the bail application of the petitioner had been dismissed by the Special Judge primarily on the ground that the petitioner had failed to meet the threshold of Section 45 of PMLA. The trial court had inter alia held that the petitioner had actively assisted the co-accused to convert the tainted money into untainted money and connived in the laundering thereto.

The trial court had also inter alia held that the present case being a serious economic offence stood on a different footing and thus required to be seen with a different perspective and hence the applicant/accused was to be treated on a different footing in terms of the proviso clause appended to Section 45 of the PMLA.

The trial court was inter alia of the view that at this stage, the court could not segregate the share of individual person and it had to be seen in a wholesome manner and therefore, the role of applicant/accused touches at least a figure of 48 Crores or so which was the amount allegedly attributed to the co-accused persons.

Special judge also rejected the plea taken by the petitioner that the grounds of arrest were not supplied to him. Aggrieved of this, the petitioner had filed the present bail application.

Yogesh Jagai for the petitioner submitted that the petitioner was a law-abiding citizen with no criminal antecedents. It had been submitted that the petitioner was a qualified and practising chartered accountant since November, 1999 and had maintained a clean practice record. It had further been submitted that the petitioner had been rendering his services to various companies, firms, proprietorship and partnership and individuals and had also been appointed as statutory auditor under Section 139 of the Companies Act of approximately 19 companies.

He submitted that now the prosecution complaint had already been filed and therefore investigation qua the petitioner had come to an end and petitioner had duly fulfils the twin conditions under Section 45 of PMLA as he had not committed any scheduled offence under Section 2 (x) which was a condition precedent for invoking the provision under PMLA Act.

Anupam S. Sharrma, on behalf of the respondent submitted that that investigation conducted by the ED had revealed that the petitioner had been managing the finances of co-accused Anubrata Mondal and his family members with regards to proceeds of crime which were received by them as patronage for providing protection to the illegal business of cross-border cattle smuggling.

It was submitted that the said amount was projected and claimed as untainted property by the Petitioner who was their Chartered Accountant and purchased huge properties, created benami assets and companies for laundering of proceeds of crime, besides ensuring cash deposits in the companies and their personal accounts.

The offence alleged against the accused is money laundering under Section 3 of PMLA. It had been submitted that under Section 3 of the PMLA, it was attributed that if there was a direct or indirect attempt to indulge or knowingly assist or being knowingly a party or was actually involved in ‘any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.’

A Single Bench of Justice Dinesh Kumar Sharma observed that, “Generally speaking, the professional would act on the instructions of his client. However, whether he had gone beyond his professional duty is something which is required to be seen and examined during the trial. The plea of the petitioner that he had acted on the basis of information and record provided to him could not be rejected outrightly at this stage. This was required to be tested during the course of the trial.”

The Bench further noted that any further appreciation of the evidence at this stage may prejudice the case and therefore was not expected. It has repeatedly been held that stage of bail cannot convert into a mini trial. It was also pertinent to mention here that that the court had only to take a prima facie view on the basis of the material on record. The Bench granted the bail with certain conditions.

To Read the full text of the Order CLICK HERE

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