'Prosecution Story Reminds One Of A Crime Thriller': Jharkhand High Court Denies Bail To CM's Alleged Aide In Illegal Mining Case

Denying bail to an alleged aide of Jharkhand's sitting Chief Minister Hemant Soren in connection with an illegal mining case, the High Court recently said that the story of the prosecution (ED) "reminds one of a crime thriller, where the state withers and the crime cartels with political connection, clash for natural resources of the state".

The bench of Justice Gautam Kumar Choudhary observed thus while denying bail to Prem Prakash who was arrested by ED in August last year on account of his alleged involvement in activities related to Money Laundering linked with illegal mining and its transportation activities.

Significantly, the Court, in its order, also observed that the offence of money laundering is an independent offence and it is not necessary that the accused charged with the offence of money laundering are the same who are made accused in predicate offence.

The case against the accused

As per the ED's case, in its investigation into illegal mining case, it came to light that co-accused Pankaj Mishra, who is also claimed to be a close associate of Jharkhand CM, had been carrying out illegal mining extensively at several sites in the state through his accomplices.

It has been further alleged that Mishra enjoyed political clout and a further investigation into the bank accounts of the accused Mishra revealed the acquisition of proceeds of crime running into Crores of Rupees which came out of the illegal mining and the same was generated in cash and was also being transferred to the petitioner before the Court, Prem Prakash(Accused No.3).

In essence, the Case of the ED is that the petitioner Prem Prakash was hand in glove with Pankaj Mishra (Accused No.1) and others who were involved in illegal mining and its transportation activities as well as in activities related to Money Laundering.

ED has also alleged that Prem Prakash acquired proceeds of crime and had laundered the funds of his associates and also used them for personal gains. In fact, he has also been exerting his political proximity and his clouts for illegal activities and extraneous purposes and has been influencing the administration too.

To substantiate its case, the Court ED also relied upon the statement of one Ravi Kumar Kejriwal, who was earlier Treasurer of JMM, which was recorded in July 2022, under Section 50 of PMLA wherein he said that in his presence the CM had directed Pankaj Mishra (accused No.1) to directly hand over the funds coming from Santhal Parganas stone mining to the petitioner.

On the other hand, the counsel for the petitioner argued that Money Laundering Act is not a standalone offence and it is incumbent on the part of the prosecution to establish the link between the predicate offence and proceeds of crime generated by the said offence.

It was further argued that mere possession of a huge amount in the account of a person, cannot be sufficient to cast the burden of proof on the petitioner/accused to establish innocence with respect to the offence under PMLA.

It was also argued that ED had connected him to some companies involved in the illegal mining business despite the fact that he was not even an accused in the predicate offence registered in the matter by Jharkhand police in 2020. It was also submitted that illegal mining is not a scheduled offence for which PMLA can be invoked.

Court's observations

At the outset, rejecting the argument of the counsel for the petitioner that the offence of money laundering is not an independent offence, the High Court said that in the present case, the role of this petitioner had come up in the statement of Ravi Kejriwal and Anil Jha and huge cash transactions have been shown in the account of the company in the name of this petitioner, regarding which no plausible explanation has been offered.

Importantly, the Court further stressed that the Offence of Money Laundering is not like conventional crime and the modus operandi involves three stages: (a) Placement: which is to move the funds from the direct association of the crime. (b) Layering: which is disguising the trail to foil pursuit. (c) Integration: which is making the money available to the criminal from what seem to be legitimate sources.

"The investigation revealed that the cash receipts amounting to Rs.5,65,17,000/- in Punjab National Bank Account No.21881132000179 of M/s Herbal Green Solutions Pvt. Ltd, and subsequent payments worth Rs.5,31,18,000/- to one company M/s Aurora Studio Pvt. Ltd., a company of Amit Agarwal, required to be satisfactorily answered by the petitioner, but he failed to do so," the Court further observed.

Consequently, finding that the case is still at its nascent stage and it will not be in the interest of justice to enlarge the petitioner on bail, the Court rejected the bail plea.

Case title - Prem Prakash vs. Union of India [B.A. No. 12350 of 2022]

Case Citation: 2023 LiveLaw (Jha) 3

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