Bail Under PMLA- Courts Required To Only See Preponderance Of Probability And Not Record Finding Of Acquittal: Delhi High Court

While granting bail to a chartered accountant accused of money laundering under the Prevention of Money Laundering Act, 2002 (PMLA), the Delhi High Court found that the allegation against the petitioner is not that he has done something which was beyond his scope of profession i.e. indulging in some activities which are totally unconnected with the chartered accountancy. 

The High Court found so, when it was considering a petition challenging an order whereby the bail application was dismissed by the Special Judge primarily on the grounds that the petitioner had failed to meet the threshold of Section 45 of the PMLA and the Trial court had alleged that the petitioner actively assisted co-accused individuals in converting tainted money into untainted money and was complicit in the money laundering activities. 

A Single Judge Bench of Justice Dinesh Kumar Sharma observed that “It is a settled a proposition that at the stage of consideration of the bail even under PMLA the court has only to see the preponderance of probability. The court at this stage is not required to record the positive finding of acquittal. Such finding can be recorded only after recording and appreciation of the evidence by the trial court”.

Advocate Yogesh Jagai appeared for the Petitioner, whereas Advocate Anupam S. Sharma appeared for the Respondent.

The brief facts of the case were that the petitioner, a practicing-chartered accountant, submitted that he met one co-accused Mr. Anubrata Mondal in course of his professional activities. Starting from the financial year 2017-2018, he provided professional services such as income computation and income tax return filing for Mr. Mondal and his family members, including Ms. Sukanya Mondol. The petitioner, as an auditor, was legally obliged to audit and submit reports under Section 145 of the Companies Act, 2013, and Section 44AB of the Income Tax Act, 1961, for tax audit purposes. Accordingly, bail was applied and it was submitted that if the petitioner is not released on bail, he would not be able to submit the mandated audit report which would result not only in losing the clients permanently but also will ruin his career. This bail application was opposed by the Enforcement Directorate (ED) and it was asserted that their investigation had uncovered the petitioner's involvement in managing the finances of co-accused and his family members in relation to the proceeds of illegal activities tied to cross-border cattle smuggling.

After considering the submission, the Bench referred to the decision in case of Vijay Madanlal Chaudhary & Ors. v. Union of India & Ors. [SLP (Criminal) 4634 of 2014], to emphasize that when considering bail applications, the court's primary concern should be whether the accused had the requisite mens rea for the alleged offense, and the court is not obligated to make a definitive determination regarding whether the accused is innocent or guilty under the relevant Act.

“It is an admitted case that the petitioner herein was a chartered accountant of Anubrata Mondal. The case of the ED is that present petitioner was instrumental in projecting the tainted money as untainted money. The apparent role of the petitioner is filing of the income tax return”, added the Bench.

The Bench elaborated that the professional would act on the instructions of his client, however, whether he has gone beyond his professional duty is something which is required to be seen and examined during the trial.

The Bench went on to explain that the allegation against the present petitioner is not that he has done something which was beyond his scope of profession i.e. indulging in some activities which are totally unconnected with the chartered accountancy, and therefore, the plea of the petitioner that he has acted on the basis of information and record provided to him cannot be rejected outrightly at this stage.

Accordingly, the High Court held that the petitioner is admitted to bail on furnishing personal bond in the sum of Rs.5 lakhs with a surety of the like amount to the satisfaction of the trial court, subject to terms and conditions.

Cause Title: Manish Kothari v. Director of Enforcement Ministry of Finance Dept. [Neutral Citation: 2023: DHC: 6912]

Click here to read/ download the Judgment