Accused In Money Laundering Case Can’t Be Equated With Those Accused Of Murder, Rape Or Dacoity: Delhi HC Grants Bail To PMLA Accused

The Delhi High Court while granting bail to an accused, observed that an accused in a money laundering case cannot be equated with those accused of the offences like Murder, Rape, Dacoity, etc.

The Court observed thus in an Application preferred by the accused seeking Bail in the proceedings arising out of an FIR under Sections 417, 120B, and 420 of the Indian Penal Code (IPC).

A Single Bench of Justice Manoj Kumar Ohri said, “Liberty of an accused cannot be curtailed by Section 45 without taking all other germane considerations into account. It is also pertinent to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc.”

Senior Advocate Vikas Pahwa appeared for the Applicant/accused while Advocate (Special Counsel) Zoheb Hossain appeared for the Respondent/Enforcement Directorate (ED).

In this case, it was alleged that Vivo Mobile Communication Co. Ltd. China (Vivo China) along with others conspired to fraudulently set up Vivo group of companies in India without revealing their true beneficial ownership and carried out mis-declarations before government bodies. It was alleged that Vivo Mobile India Private Limited (Vivo India) and its State Distribution Companies (SDCs) concealed their Chinese ownership. While it was projected that Vivo India is a subsidiary of a Hong Kong based company viz. Multi Accord Limited, however investigation established that it was under the ultimate control of Vivo China.

The Applicant was the Managing Director of M/s Lava International Ltd. (Lava) and it was alleged he invited Chinese Nationals from Vivo China with the intent of enabling them to set up a web of companies in India by concealing true ownership. He was also alleged to have provided them logistical and ground support and helped them get a foothold in India by circumventing FDI (Foreign Direct Investment) norms. He was further alleged to have transferred around Rs. 3.17 Crores in total, including Rs. 2.62 Crores from Lava and Rs. 55 lacs from his personal account to one company to help Vivo China set up a number of companies without disclosing that it is the controller of those entities.

The High Court in the above regard, noted, “Examining the present case in the aforenoted backdrop, it is noted that the investigation was initiated in the year 2022 and the Prosecution Complaint has named 48 accused persons and cited 527 witnesses. There are 80,000 pages of documents which need to be analysed. A supplementary Prosecution Complaint dated 19.02.2024 has also been filed as per which the number of accused has increased to 53, 15 additional witnesses have been cited and an additional 3500 pages of documents have been placed on record.”

The Court remarked that in a situation such as in this case, where there are multiple accused persons, thousands of pages of evidence to assess, scores of witnesses to be examined and the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) a tool for incarceration or as a shackle is not permissible.

“Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as a hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations”, it added.

Considering that the twin conditions under Section 45 PMLA stand satisfied, all other accused persons are out on bail, the period of custody undergone, and the trial is at nascent stage of supply of documents under Section 207 of the Criminal Procedure Code (CrPC), the Court directed that the Applicant be released on regular bail subject to him furnishing a personal bond of Rs. 1 lakh.

Accordingly, the High Court disposed of the Bail Application and granted bail to the accused.

Cause Title- Hari Om Rai v. Directorate of Enforcement (Neutral Citation: 2024:DHC:8972)

Appearance:

Applicant: Senior Advocate Vikas Pahwa, Advocates Abhay Raj, Anshay, Namisha, and Sanskriti.

Respondent: Special Counsel Zoheb Hossain, SPP Manish Jain, Advocates Vivek, Pranjal, and Rishabh.

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