Whether Becoming Approver In Predicate Offence Has Any Bearing On PMLA Proceedings? Delhi High Court Answers

The Delhi High Court has observed that the evidence sought to be given at the instance of an accused who becomes an approver and is granted pardon in the scheduled or predicate offence, cannot be used for the purposes of money laundering proceedings under the PMLA.

While granting bail to an accused namely Sanjay Kansal in the money laundering case, who had turned approver in the CBI FIR, Justice Amit Sharma said:

“In any case, since the present applicant has been granted pardon in the scheduled/predicate offences, the evidence sought to be given at his instance in those proceedings cannot be used for the purposes of present proceedings under the PMLA.”

The court observed that even in the scheduled or predicate offence, Kansal's status remained as a witness, subject to his full and complete disclosure in terms of Section 308 of the CrPC.

“This Court agrees with the judgment given by the learned Single-Judge of Allahabad High Court in Mohan Lal Rathi (supra), that the grant of pardon would bring an accused in the category of witness however, the same, as pointed out hereinabove, is subject to certain conditions enshrined under Sections 306 and 307 of the CrPC and cannot be considered as absolute absolvement in the predicate offence,” the court said.

The court allowed Kansal's plea seeking regular bail in the money laundering case. The Enforcement Directorate (ED) alleged that he was responsible for the laundering of money in furtherance of conspiracy with the co-accused persons to an amount of almost Rs. 50 crores.

After turning an approver in the scheduled offence, Kansal was cited as a witness in the chargesheet filed by the CBI.

Kansal's counsel submitted that once a person becomes an approver, he is given a pardon in the said case and becomes a witness to the prosecution, subject to conditions mentioned in the order granting him pardon.

The court observed that Kansal's case has to be dealt with while keeping in mind the provisions of Section 45 of PMLA. 

It noted that he was not key managerial personnel and was not holding any designation in M/s SBBEL, the accused company, which would indicate that he was responsible or in charge of running the day-to-day affairs of the company.

Justice Sharma said whether Kansal had the requisite knowledge that the transactions in which he was involved related to proceeds of crime cannot be presumed at the stage of bail.

The court observed that Kansal was able to make out a case for a grant of bail under Section 45 of the PMLA.

Noting that he was in judicial custody since August 25, 2022, and had undergone incarceration for approximately one year and nine months, the court said:

“It is also not disputed that the applicant has been granted bail in the predicate/scheduled offence apart from the fact that he has now become an approver. It is a matter of record that the applicant had joined investigation as and when directed by the Investigating Officer till he was arrested in the present ECIR.”

Counsel for Petitioner: Mr. Siddharth Agarwal, Sr. Adv. with Mr. Malak Bhatt, Ms. Neeha Nagpal, Ms. Arshia Ghose, Ms. Smridhi & Mr. Ayush Shrivastava, Advs

Counsel for Respondent: Mr. Zoheb Hossain, Spl. Counsel for ED with Mr. Vivek Gurnani & Mr. Kartik Sabharwal, Advocates

Title: SANJAY KANSAL v. ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT

Citation: 2024 LiveLaw (Del) 572

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