Home > Recent Judgements > “No Scheduled Violation In Chargesheet Or Complaint”: Bail Is Granted To Two Accused In A Money Laundering Case By The Supreme Court
Oct 05, 2024
BACKGROUND
In the case between Laxmikant Tiwari v. Directorate of Enforcement. The Appellant was taken into custody about an Enforcement Case Information Report “ECIR” prepared by the Enforcement Directorate ‘ED’ which was filed on September 29, 2022. It is worth mentioning that this investigation stems from a raid by the Income Tax Department at a hotel in Bengaluru on June 30, 2022. The Department of Coal Mines even conducted in camera raids against coal levy transportation. The ED claimed that Appellant managed assets worth Rs. 26 crores which were earned from crime and which helped in acquiring land and buildings. He was still further incriminated for keeping the illegal money in his custody and being engaged in the act of money laundering.
The Chhattisgarh High Court had earlier granted the appeal of the Appellant against the loyalists to the Chhattisgarh Board Administration of Crime and Court and denied bail, referencing the nature of the crime and the possibility of evidence tampering.
Deputy Director in Mining Department, was also arrested on January 25, 2023 while apprehending him in relation to tracing the Illegal collection of levies on coal transport. The ED alleged that Appellant 2 Clause 120 B committed crime in collusion with other people engaged in the business of coal delivery by taking bribes and thereby allowing the extortion business to prosper. The Chhattisgarh High Court also turned down the application for bail Deputy general in this respect who is being summoned on allegations of money laundering of the cash criminal proceeds and interference with witnesses.
ISSUES
- Whether the appellants can be granted bail under the Prevention of Money Laundering Act (PMLA), 2002, given that the scheduled offence was not in existence at the time the complaint under Section 44 of the Prevention of Money Laundering Act “PMLA” was filed?
- Whether the subsequent addition of Section 384 of the Indian Penal Code “IPC”, after the filing of the charge-sheet, qualifies as a scheduled offence under the PMLA?
- Whether the Special Court can grant bail to the appellants based on these peculiar facts and circumstances without affecting the merits of the case?
COURT OBSERVATION
“When the complaint was lodged under Section 44 of the PMLA Act, the scheduled offence was not in existence. Even in the charge sheet which is filled in the FIR which is stated to be a scheduled offence in the complaint, there was no spelling or allegations of any scheduled offence being committed. As we speak presently, the charge was been filed on the 19th day of July, 2024 for the commission of the offence which attracts Section 384 of the IPC in the state of Chhattisgarh. The Court replied: “Taking into account the duration of imprisonment and taking into account the extraordinary nature of those appeals, further deprivation of the appellants’ liberty will amount to infringement of their right under Article 21 of the Constitution of India.”
JUDGEMENT
A division bench granted bail on the grounds of prolonged incarceration and the absence of a scheduled offence at the time of filing of the ED complaint under the Prevention of Money Laundering Act, 2002 (PMLA).
The Court also noted that about the circumstance that the facts of both cases are identical as the come from the same Enforcement Case Information Report and the same complaint under Section 44 of PMLA. Appellant has been in custody for nearly two years respect to sustained learning outcomes while as Appellant no 2 had been in prison for one year and nine months the Court noted.
The Court highlighted that out of these, only Section 120-B was classified as an offense under PMLA. Still, it was that the Supreme Court ruling in Pavana Dibbur v. Directorate of Enforcement had enabled the prosecution to move away from Section 120-B as a scheduled offence because no conspiracy to commit a scheduled offence was charged and therefore none was proved to the detriment of the accused.
The Court further observed that Section 384 (extortion) was incorporated in the First Information Report “FIR’ at a later stage and that an ECIR was drawn up in respect of that FIR.
However, since both Appellant were respectively now released on bail by the Supreme Court, it was insisted that they be forthwith produced before the Special Court because it may enlarge them on bail with appropriate terms and conditions after hearing the ED’s counsel. The Court further explained that these remarks of theirs were not to be construed as the findings of this Court on the aspects of the complaint but were restricted only for consideration of the issue of bail.
ANALYSIS
The bail was granted to the appellants due to their continued custody and scarceness of scheduled offense when first accused by the ED under the Act PMLA. The Court considered, however, that the erstwhile incarceration of the Section 120-B of IPC as a scheduled offense could not be the case after the Supreme Court decision in Pavana Dibbur v. Directorate of Enforcement. Addition of Section 384 (extortion) in the FIR came very late, when the appellants had by now spent almost two/ two years and one year and nine months in remand. The Court ordered that after hearing the ED, the appellants be released on bail by the Special Court on suitable conditions, but also made it clear that its remarks were restricted to the grant of bail and did not go into the merits of the case.
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