Money Laundering Case- Delhi HC Grants Bail To Shakti Bhog CMD Kewal Krishan Kumar

The Delhi High Court has granted bail to the Chairman and Managing Director (CMD) of the Shakti Bhog Foods Limited Kewal Krishan Kumar.

“In the present case, a perusal of the Applicant’s medical records show that he has had seizure disorders and mild behavioural disorder which coupled with old age is a cause of concern. Requiring an attendant for quotidian activities further go to show the seriousness of the Applicant’s infirmities.”, Justice Jasmeet Singh noted while granting bail to the accused.

The allegations are that Shakti Bhog Foods Limited (SBFL), where the Applicant was one of the directors, promoter and guarantor and had availed of various loan facilities from a consortium of banks led by State Bank of India from 2006 onwards, and in order to acquire more loan funds from Banks, the company resorted to round tripping and money laundering using its various group companies as platforms.

The role ascribed to the Applicant in the prosecution complaint is that the Applicant was a director, guarantor and promoter of SBFL. It was alleged that the Applicant in cohorts with other accused persons generated and acquired proceeds of crime by availing loan from a consortium of banks after submitting fake invoices of shell companies, fake transport documents for LC payments, forged and inflated financials and Monthly Stock Statements/ DP Statements. The complaint states that the Applicant was a master of the entire scheme to dupe the banks of public money.

The grounds of bail urged before the Court was with regards to the proviso to section 45(1) PMLA that the Applicant is sick and infirm.

It was stated that the Applicant is 70 years of age and has a chronic medical history having undergone bariatric surgery and is a chronic case of varicose veins and is functioning with 20% stomach capacity due to bariatric surgery. It was also submitted that the Applicant is suffering from seizure and behavioural disorders and hypertension.

Senior Advocate Mohit Mathur appeared for the accused-applicant whereas Advocate Zoheb Hossain appeared for ED.

The Court observed that “In the present case, I am of the view that the Applicant is not ‘sick’ to be granted bail under proviso to Section 45(1) PMLA. The ailments that the Applicant is suffering from are not grave or life threatening that entitle him to bail on medical grounds. I rely upon the opinion of the medical board that has opined that the Applicant is „stable‟ and can be treated in Tihar Jail Hospital.”

The Court noted that granting bail on every sickness will render the proviso to section 45(1) PMLA otiose.

“The proviso should only be invoked in cases where the sickness suffered by the Applicant is so serious and life endangering that it cannot be treated in jail, or the specialized treatment as required cannot be provided from jail hospitals.”, the Court observed.

Thus the Court held that the Applicant cannot be termed to be ‘sick’ to fall within the proviso to section 45(1) PMLA. However the Court noted that the legislature has carved out another category i.e., ‘infirm’ in the proviso to section 45(1) PMLA.

“Since ‘sick and ‘infirm’ are separated by ‘or’, consequently, a person who, though, not sick but infirm would still be entitled to seek the benefit of the exception in the proviso to section 45(1) PMLA and vice-versa.”, the Court noted.

“…a perusal of the medical records of the Applicant shows that his seizures have become more frequent than before, that makes him more vulnerable to injuries such as hemorrhage, and for which the dosage of medication has been increased.”, the Court observed.

“…the aforementioned infirmities in a senile stage combined with constant ‘attendant’ support as noted in the report dated 13.02.2023 coupled with frequent seizures and abnormal behavioural disorder make the Applicant ‘infirm’ under the proviso to section 45(1) PMLA.”, the Court held.

Thus the Court granted bail to the applicant-accused.

Cause Title- Kewal Krishan Kumar v. ED

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