Incriminating Evidence to Prove Commission of Money Laundering Offence under PMLA Act: Delhi HC Dismisses Bail Application [Read Order]

The Delhi High Court dismissed the bail application since there was incriminating evidence to prove the commission of a money laundering offence under the Prevention of Money Laundering Act, 2002 ( ‘PMLA’ ). The applicant/petitioner, Dalip Jindal sought the grant of regular bail in a case registered under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 ( ‘PMLA’ ). Bankey Behari Group of Companies were all engaged in the business of manufacturing and trading of pulses, wheat etc. and these business entities had availed working capital funds from several banks. The companies were declared as NPA due to default in repayment of loan amounts. Thereafter, the consortium of Banks resorted to forensic audit and based on Forensic Audit Reports, the Banks lodged complaints with the CBI, leading to the registration of seven FIRs/RCs against seven companies/firms of Bankey Behari Group of Companies. On the strength of seven FIRs/RCs of CBI, seven ECIRs were recorded under PMLA, which are the subject matter of the present complaint case. During the investigation, from the analysis of relevant documents obtained from the banks, it was revealed that these entities had availed credit facilities to the tune of Rs. 480 crore and the total amount defrauded was around Rs. 527.32 crore. As per the prosecution, this case involves default in payment of the Cash Credit Limit availed by Bankey Behari Group of Companies and the CC limit had been extended on hypothecation of inventory, trade receivables ( sundry debtors ) and other moveable assets. Since large transactions in terms of volume and value had taken place for the purchase of goods and sales of manufactured/traded goods, the analysis of the major debtors of Bankey Behari Group of Companies was crucial since the debtors were emanating from fake sales which had taken place under broker codes B00000, B00001, B00003 and B00033. The twin conditions of Section 45 of the PMLA that there are grounds for believing that he is not guilty of such offence; and that he is not likely to commit any offence while on bail do not exist in this case. The applicant has not been able to show that he is not involved in the offence of money laundering. The applicant has failed to show that the twin conditions of Section 45 of the PMLA Act do not apply to him. So, as far as the merits of the application are concerned, the accused prima facie appears to be involved in the offence of money laundering. On the other hand, the Special Counsel for the Directorate of Enforcement argued that the investigation, in this case, had revealed the role of the present applicant in the commission of the offence of money laundering, and based on the evidence and material in possession against the applicant, it can be safely concluded that he is involved in the offence of money laundering. It was contended that the material placed on record is sufficient to arrive at a finding that no satisfaction, as required under Section 45 of PMLA, can be reached, which provides that no person shall be released on bail unless the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. It was argued that there is a difference between an FIR and an ECIR, and a prosecution complaint under PMLA can be filed even without recording an ECIR therefore, the argument that seven ECIRs could not have been clubbed, is without any merit. It was further submitted that it is settled law that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail, and the classification of economic offences in a different class itself is a clear jurisprudential recognition of the gravity of the offence being recognised as an extremely relevant factor while considering matters regarding bail. A single bench of Justice Swarana Kanta Sharma observed that “twin conditions under Section 45 of PMLA are not satisfied since the material on record at this stage points out that the applicant herein was involved in the process of acquisition, possession, concealment of proceeds of crime obtained by way of cheating and forgery and projecting the same as untainted, thereby committing an offence of money-laundering under Section 3 of PMLA.” The Court dismissed the bail application. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Incriminating Evidence to Prove Commission of Money Laundering Offence under PMLA Act: Delhi HC Dismisses Bail Application [Read Order]

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