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Section 45 of PMLA will Apply only if a Person is Arrested by the Directorate of Enforcement: Delhi Court

Team SoOLEGAL 17 Jan 2022 3:10pm

Section 45 of PMLA will Apply only if a Person is Arrested by the Directorate of Enforcement: Delhi Court

NEW DELHI: A Delhi Court recently granted bail to the accused in a case involving the conduct of offences under section 45 of the Prevention of Money Laundering Act, observing that the provisions of Section 45 of the PMLA will only apply if a person has been apprehended by the Directorate of Enforcement.

The judgment was issued by the court of Sh. Naveen Kumar Kashyap, Ld. Special judge, Tiz Hazari, while hearing regular bail petitions filed by the accused under section 439 Cr.P.C. the petitions were submitted by the accused in response to the Ld. Special Court issuing summons on a complaint filed by the Directorate of Enforcement claiming conduct of offences under Section 3 read with Section 70 of the Act. Suffice to state that the accused persons were never arrested by the ED during investigation.

Senior Advocate Mr. Pramod Kumar Dubey, acting for the accused, contended that the twin test set out in Section 45(1)(ii) of the PMLA 2002 would be used only while deciding on a bail request of an accused who has been arrested by the ED under Section 19 of the Act. It was also contended that the 2018 change to section 45 of the PMLA did not resurrect the twin requirements previously rejected by the Supreme Court in the case of Nikesh Tarachand. It was further brought to the Court’s attention that, by decision dated 16.12.2021, the Hon’ble Supreme Court in the matter of Satinder Kumar Antil stated that the prior order dated 07.10.2021 was given with the objective of easing the bail procedure rather than restricting it. It was also contended that the Supreme Court had clarified that in category C, Section 45 of the PMLA had been mentioned accidentally, which had been struck down by the Hon’ble Supreme Court. In the same ruling, the Supreme Court reaffirmed that the mere filing of a charge sheet would not be an ipso facto reason to arrest the accused, which element in general has been clarified in another case titled Siddharth V. State of Uttar Pradesh.

Spl. PP for ED, on the other hand, claimed that the dual criterion for grant of bail under Section 45(1) must be met since the legitimacy of the provision was restored by the 2018 amendment on the PMLA, 2002. On behalf of the ED, it was further contended that the application of Section 45(1) had not been delayed, nor had its operation been declared null and void by any ruling of the Hon’ble Supreme Court. It was also suggested that economic offences involving deep – seated conspiracy and theft of public monies should be taken severely, and hence accused offenders should be refused bail.

While granting the bail, Sh. Naveen Kumar Kashyap, Additional Session Judge, District Court, Tiz Hazari, observed:

“9 Further, on bare reading of Section 45(1) PMLA as it stands today it can be noted that it contains phrase ‘shall be released on bail’. As such, for the section 45 PMLA to come into operation/get activated, a person has to be arrested first, as there cannot be any occasion to release without there being accused under arrest……

14… In this background, it may further be noted that consistent view taken by Hon’ble Higher Courts that economic offences stand on a different footing than other offences, therefore, in the considered view of this court, same view cannot be taken in case, a case is filed by the concerned agency without arrest in Special Act via – a – vis under a General Act/IPC. In this regard, the ratio guidelines by Hon’ble Supreme Court including in the case of Satender Kumar (Supra) is to be kept in mind, which consciously made offences under Special Acta different category, from other general/IPC offences.

Under these facts and circumstances of the present case, when the concerned official of ED chose not to exercise their power u/s 19 of PMLA to arrest, this court is of the considered view that provision of Section 45 PMLA and therefore, related case laws relied by the parties thereto, are not relevant to decide the present regular bail application……

17, ……… Further Article 21 of the constitution mandates that no person shall be deprived office life and personal liberty except according to procedure established by law. Further India is a signatory to the International Covenant on Civil and Political Rights, 1966 and, therefore, article 21 of the Constitution has to be understood in the light of the international covenant on Civil and Political Rights, 1966, further presumption of innocence is a human right. Article twenty one in view of its expansive meaning not only protects life and liberty, but also envisages a fair procedure. Liberty of a person should not ordinarily be interfered with unless there exist cogent grounds therefore. The fundamental principle of our system of Justice is that a person’s should not be deprived of his liberty except for a distinct breach of law.”

As a result, the accused persons were granted bail by the court.

Previously, the EOW filed a FIR on August 28, 2018, against the accused persons, who were authorized Audi and Porsche dealers, under sections 406/420/468/471/120 – B of the Indian Penal Code. Since the violations are mentioned in the schedule to the Prevention of Money Laundering Act 2002, a case was also recorded by the Directorate of Enforcement (DoE) on 07.09.2018, and an investigation was initiated for a possible action under PMLA. The charge sheet was filed on 19.02.2021, alleging that, based on the evidence recorded and gathered during the course of the investigation, the accused persons have knowingly indulged in and are actively connected with proceeds of crime, including their concealment, possession, use, and projecting it as untainted, and thus they have committed the offence of money laundering under Section 3 of the PMLA Act 2002, punishable under Section 4 of the PMLA Act 2002.

Senior Advocate Mr. Pramod Kumar Dubey represented the accused, who were directed by a team of Karanjawala & Co., Advocated led by Mr. Samarjit Pattnaik – Partner and Mr. Puneet Relan and Mr. Irfan Muzamil – Senior Associates.



Tagged: Delhi Court   Section 45   Money Laundering Act   Senior Advocate   Mr.Pramod Kumar Dubey   Supreme Court   District Court   Tiz Hazari  
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