The Jharkhand High Court, while hearing a money laundering case, granted bail, ruling that it is unreasonable to expect an ordinary citizen to conduct a forensic investigation on a deed found in the registrar's records and further reiterated that action for money laundering cannot be based on mere assumptions without a registered or pending scheduled offence.
Brief Facts:
In this case, the petitioner is accused of various accusations related to the purchase of disputed land, which escalated into charges of money laundering. He was alleged to have acquired several properties utilizing forged documents. The allegations extended to his involvement in the process of creating and using these forged records, implicating him in fraudulent activities and raising serious legal questions under the framework of money laundering laws. The current application has been preferred to get bail from judicial custody.
Contentions of the Petitioner:
The counsel for the petitioners argued that he had fully cooperated with the Enforcement Directorate's investigation, attending all summons and complying with searches, yet his responses were deemed insufficient by the ED. The counsel highlighted procedural irregularities by the ED, including not providing written grounds for the petitioner's arrest as mandated by the PMLA Act. They pointed out his serious health issues, exacerbated by his detention, emphasizing his medical condition and the treatment he received. The counsel further challenged the allegations against the petitioner, maintaining that the properties were legally purchased and that Agarwal was not involved in any forgery or illegal activities.
Contentions of the Respondent:
The respondent's counsel submitted that the petitioner was involved in the purchase of disputed lands and was aware of the nature of the lands and the associated forgeries. They argued that the lands are 'proceeds of crime' as defined by the PMLA Act, indicating a prima facie case against the petitioner. They also emphasized the serious nature of the economic offences alleged against the petitioner, contending that these factors justify denying bail. The counsel argued that the severity of the charges and the evidence presented in the prosecution complaint warrant treating the bail considerations differently from other offences.
Observations of the Court:
The Bench observed that it was not inclined to grant bail on medical grounds for two main reasons: firstly because the petitioner's senior counsel did not strongly advocate for this point during the arguments, even though it was detailed in the bail application and written submissions; and secondly, the court citing Ram Kishor Arora v. Directorate of Enforcement, the court noted the PMLA does not grant bail solely on health grounds.
The Bench observed that the allegations involved the acquisition of three properties by the petitioner, focusing on the first property purchased through two companies controlled by him. The court observed that there were claims of forged documents in the transaction but found no evidence implicating the petitioner directly in the forgery. It was also noted that the petitioner had conducted due diligence before the purchase. The court recognized that an ordinary citizen cannot be expected to conduct a forensic investigation on a deed from the Registrar's records. The absence of the petitioner's name in related FIRs and the lack of evidence of his involvement in the creation of forged documents were also highlighted, leading to the conclusion that he may not have known about the disputes related to the land, suggesting a lack of criminal intent.
The court noted that for the other two properties at Pugru and Siram, no scheduled offence was reported, and no related investigation or inquiry was pending. Citing the Supreme Court's judgment in Vijay Madanlal Choudhry, the court stated that action for money laundering cannot be based on mere assumptions without a registered or pending scheduled offence. The court acknowledged the lack of evidence linking these properties to criminal activities and deemed the ongoing proceedings against these properties as possibly leading to a miscarriage of justice. This perspective aligns with the Supreme Court's stance that the dropping of proceedings related to the predicate offence should result in the termination of proceedings under the PMLA.
The court considered whether the petitioner met the two conditions under Section 45 of the PMLA. Referencing the Supreme Court's decision in Vijay Madanlal Choudhary, the court concluded that the petitioner had not engaged in money laundering nor intended to commit such an offence, particularly regarding the properties at Cheshire Home Road, Mouza Pugru, and Siram. There was also no evidence suggesting the petitioner would commit any offence while on bail. The case of Ranjit Singh Brahmajeetsing Sharma vs. the State of Maharashtra further influenced the court's decision, leading to the satisfaction that the petitioner was not guilty under the PMLA.
The court observed that the petitioner has been in custody for more than 5 months, and the trial has yet to start, with numerous witnesses and extensive documentary evidence. Given the investigation status of the Chesire Home Road property and no registered complaints for the other properties, the court deemed prolonged detention unnecessary. Citing the Manish Sisodia v. Central Bureau of Investigation case, the court noted the nature of the accusations, which are not of significant harm to the public or government, and thus found no reason for the petitioner's continued custody to be essential for the trial.
The decision of the Court:
Considering the case's details, the court granted bail to the petitioner with conditions. He must surrender his passport to the trial court, not interfere with evidence or threaten witnesses, and must appear before the Special Judge on each court date unless excused for valid reasons presented to the court.
Case Title: Bishnu Kumar Agarwala vs Union of India through Directorate of Enforcement
Coram: Hon’ble Mr. Justice Deepak Roshan
Case No.: B.A. No. 10166 of 2023
Advocate for the Applicant: Mr. S.D Sanjay, Mr. Indrajeet Sinha, Mr. Sumeet Gadodia, Mr. Anshuman Sinha, Mr. Arpan Mishra, Mr. Arpan Mishra, Mr. Vinay Prakash, Mr. Yash Badkar
Advocate for the Respondent: Mr. Anil Kumar, Ms. Chandana Kumari
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