Home / Latest News / Supreme Court expounds- Jail a Rule and Bail an exception for Financial Scamsters and Money Laundrers

Supreme Court expounds- Jail a Rule and Bail an exception for Financial Scamsters and Money Laundrers


December,17,2015: The Supreme Court has made bail a tough ask for offenders involved in money laundering crimes as it termed it a “serious threat” to national interest.

Showing zero tolerance to persons accused of such crimes, the SC in a recent judgment refused bail to a corporate honcho accused of laundering public money collected under a debenture scheme. The bench of Justices PC Ghose and RK

Agrawal said, “We cannot forget that this case is relating to money laundering which we feel is a serious threat to the national economy and national interest.”

Dismissing the bail plea of Gautam Kundu, the Chairman of Kolkata-based Rose Valley Group of Companies, the bench cited past judgments which had placed offences involving money laundering at a different pedestal than other crimes. Whether it be the case against former Karnataka CM’s son YS Jagan Mohan Reddy of 2013 or the black money case involving Pune stud owner Hasan Ali Khan in 2011, the Court noted, “This Court has observed that

economic offences having deep rooted conspiracies and involving huge loss of public funds need to be viewed

seriously and considered as grave offences posing serious threat to the financial health of the country.”

Kundu had even lost before the Calcutta High Court which harboured an apprehension that the accused may commit crime during his release on bail. For the Enforcement Directorate, Solicitor General Ranjit Kumar pointed out that Kundu was arrested on March 25 this year for a slew of offences under Prevention of Money Laundering Act (PMLA), The Securities & Exchange Board of India Act, 1992, and Indian Companies Act. Kundu allegedly floated 27 companies and allured investors to invest over `1282 lakh through successive debenture schemes issued between 2001 and 2008. High returns were promised under the schemes but the money gathered was subsequently laundered to purchase moveable and immovable properties by Kundu.

Since the question of charge against Kundu is yet to be decided by High Court, the apex court restricted itself to the question of bail. Section 45 of the PMLA imposes severe restrictions on bail

to be granted to an accused charged under the Act. Solicitor General submitted that for money launders, jail is the rule while bail is an exception.

The Court held that Section 45 of Prevention of Money Laundering Act, 2002 will override the general provisions for bail under Criminal Procedure Code, thus setting a tough standard for bail in cases of PMLA offenders.

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