Allahabad High Court Grants Bail To Accused In Money Laundering Case, Says Section 45 PMLA Not Applicable As Arrest Not Made Under Section 19

The Allahabad High Court on Monday granted bail to an accused in a case under the Prevention of Money Laundering Act (PMLA), observing that he was not arrested by the investigating agency under Section 19 of the PMLA and therefore rigours of Section 45 of the PMLA can't be made applicable. 

The regular bail application moved by the applicant was rejected by the trial court on the ground that the twin conditions of Section 45 of PMLA are not satisfied. 

Justice Rajesh Singh Chauhan while granting bail, observed that 

"In the present case, prima facie, there was no requirement to take the applicant into custody when he appeared before the learned trial court pursuant to the summons being issued inasmuch as he has never flouted the process of law, he cooperated in the investigation throughout, the Investigating Agency has never thought to arrest him under Section 19 of the PMLA despite he appeared before the E.D. to record his statement twice pursuant to the summons being issued under Section 50 of the PMLA and there was no request of the E.D. before the learned trial court to the effect that arrest of the present applicant is warranted. Therefore, it appears that the learned trial court has taken the custody of the present applicant without following the settled proposition of law of the Apex Court in re: Aman Preet Singh [v. CBI] and Satender Kumar Antil [v. Central Bureau of Investigation & Another]".

Background

The applicant joined Jagran Solutions as Senior Accounts Manager and is presently working as the business head of Jagran Solutions and as a part of his official duties, he undertook business development and client servicing for Jagran solutions.

Director General of Family Welfare in Uttar Pradesh published an advertisement seeking private bidders to operate MMUs in selected districts for a period of three years. Jagran Solutions submitted a proposal for providing MMUs in all 15 districts. The financial proposal of Jagran Solutions was approved and the firm entered into four different agreements with the Director General, Family Welfare. 

On the complaint of huge bungling, fraud and forgery in the issue relating to the NRHM, the matter was referred to CBI and the central agency registered an FIR after conducting a preliminary enquiry in 2011. The Enforcement Directorate also registered a case in 2012.

The applicant had been sent to judicial custody in July 2014 in relation to the CBI case due to his non-appearance in the court on the date fixed.

However, the High Court in 2015 granted him bail noting that he had throughout cooperated in the investigation, has not absconded and there is no likelihood of tampering with the evidence. The court had further directed the applicant to deposit a sum of Rs.4.89 Crores, the alleged misappropriated amount, before the trial court.

In the meantime, ED continued the investigation. However, since the applicant cooperated with the investigation, he was not arrested during the course of the investigation. 

After more than 10 years since the registration of the case, ED filed a prosecution complaint under Section 44 read with Section 45 of the PMLA making the applicant an accused in the case and summons was issued. No proper service of summons was effected on the applicant and only a constructive service was effected, the court was told.

When he came to know about the date, he appeared before the trial court on 10.01.2023 where he was taken into custody, the court was told.

Contentions Raised

According to the Senior Counsel appearing for the applicant, the summons did not contain a copy of the prosecution complaint filed by the ED, a copy of the statement or any relevant documents of the complaint which is a clear violation of Sections 204(3) and 208 CrPC.

The Senior Counsel submitted that while granting the bail to the present applicant in the predicate offence, the High Court had observed that the applicant has never flouted the process of law and has cooperated in the investigation properly. The amount ordered to be deposited has been deposited, the court was told. 

"Since then, the applicant is cooperating in the investigation being conducted by the Enforcement Directorate as he has been called twice to record his statement under Section 50 of the PMLA and the applicant has recorded his statement," it was submitted.

The counsel further submitted that the ED did not arrest him under Section 19 of the PMLA as the Investigating Agency did not find it appropriate to arrest the applicant during investigation as he was cooperating.

"After the filing of the prosecution complaint, the trial court took cognizance and issued a summons to the applicant without making compliance with the mandatory provisions of Section 204 (3) Cr.P.C. as neither copy of the complaint has been supplied to the applicant nor any relevant documents have been provided," the court was told

The senior counsel relied on the apex court decision in Aman Preet Singh v. CBI through Director, to substantiate his contentions in which it was held that if during the investigation the accused had cooperated in the investigation and had not been arrested, then merely because the charge sheet has been filed, he should not be arrested. 

However, the counsel appearing for ED submitted that a person accused of the offence of money laundering can only be released when the conditions stipulated under Section 45 of the PMLA are satisfied.

Findings

The court observed that the arrest of the applicant was not warranted during the investigation. 

"It is also clear from the records that after proper cooperation of the applicant in the investigation, the prosecution complaint was filed by the E.D.," the court said. 

The court also observed that "even his regular bail application has been rejected on the ground that the twin conditions of Section 45 of the PMLA are not being satisfied whereas in the present case, the applicant has not been arrested by the Investigating Agency under Section 19 of the PMLA and the counsel for the E.D. was properly heard by the trial court, therefore, rigours of Section 45 of the PMLA should not be made applicable in the present case."

It also noted that the statutory rights of the applicant defined under Section 204 (3) & 208 Cr.P.C. have been violated by the Investigating Agency as he has not been provided a copy of complaint, copy of statements and other relevant documents.

Thereby, the court allowed the bail application. 

Case Title: Govind Prakash Pandey v. Directorate of Enforcement, Govt of India 

For Applicant-: Aviral Raj Singh,Alok Kumar Singh,Dhruv Kumar Singh,Palash Banerjee,Ritwick Rai,Vaibhav Tiwari

For Respondents: Jaideep Narain Mathur, learned Senior Advocate, assisted by Sri Ritwick Rai, Sri Rajiv Shaker Bhatnagar, Sri Birendra Kumar Mishra, Sri Anshuman Mohit Chaturvedi, Sri Agni Sen, Sri Vaibhav Tiwari and Sri Aviral Rai, learned counsel for the applicant as well as Sri Rohit Tripathi

Click Here To Read/Download The Order