Keeping Accused In Custody By Using Section 45 PMLA As Tool For Incarceration Not Permissible When Trial Delay Not Attributable To Him: Delhi HC

The Delhi High Court observed that, keeping the accused in custody by using Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) as a tool for incarceration is not permissible when the delay in trial is not attributable to him.

The Court observed thus in bail applications in relation to the case under Section 447 of the Companies Act, 2013 and Sections 409, 467, 468, 471, and 120B of the Indian Penal Code (IPC).

A Single Bench of Justice Manoj Kumar Ohri held, “When there are multiple accused persons, lacs of pages of evidence to assess, scores of witnesses to be examined, the trial is not expected to end anytime in the near future. Importantly, the delay being not attributable to accused, keeping the accused in custody by using Section 45 PMLA as a tool for incarceration is not permissible. Flow of liberty cannot be dammed by Section 45 without taking all other germane considerations into account. It is the duty of Constitutional Courts to champion the constitutional cause of Liberty and uphold the majesty of Article 21.”

Senior Advocates Sanjay Jain and Rebecca M. John appeared for the applicants while Special Counsel Manish Jain appeared for the respondents.

In this case, as per the prosecution complaint filed by the Enforcement Directorate (ED), the allegations were that as per the SFIO investigation report, ex-promoters of a company (BSL) had obtained loan of Rs. 56,000/- crores from various banks and financial institutions before it went into insolvency. The accused needed to infuse capital in BSL in order to avail credit facilities from the lender banks for its teel plant in Orissa.

The accused persons assisted by their employees and close associates siphoned off funds from BSL and Bhushan Energy Ltd. (BEL) by using complex web of companies and financial transactions. It was further alleged that the accused persons in the garb of availing credit facilities from banks, used forged documents.

The High Court in view of the facts and circumstances of the case, noted, “… as repeatedly held, Constitutional Courts can always exercise their powers to grant bail on the grounds of violation of Part III of the Constitution of India and stringent provisions for the grant of bail such as those provided in Section 45 of the PMLA do not take away the power of Constitutional Courts to do so. The right of liberty and speedy trial guaranteed under Article 21 is a sacrosanct right which needs to be protected and duly enforced even in cases where stringent provisions have been made applicable by way of special legislation.”

The Court added that the stringent provisions would have to be interpreted with due regard to Article 21 and in case of a conflict, the stringent provisions, such as Section 45 of the PMLA in this case, would have to give way.

“Thus, where it is evident that the trial is not likely to conclude in a reasonable time, Section 45 cannot be allowed to become a shackle which leads to unreasonably long detention of the accused persons. What is reasonable and unreasonable would have to be assessed in light of the maximum and minimum sentences provided for in the statute”, it said.

The Court further observed that, in cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years and the same has to be kept in mind while considering the period of incarceration which has been undergone.

“In the present cases, both the applicants were arrested on 11.01.2024. They have been in custody since more than 9 months. Moreover, the trial in the predicate as well as the present complaint is yet to commence and would take some time to conclude. It is also pertinent to note that the main accused and other similarly placed co-accused persons have been enlarged on bail”, it also noted.

The Court concluded that, no evidence has been led to show that the applicants are a flight risk and they have joined investigation on multiple occasions. It said that there is no incident alleged by the respondent wherein the applicants have tried to tamper with evidence or influence witnesses.

Accordingly, the High Court granted bail to the accused on furnishing a personal bond of Rs. 1 lakh with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M.

Cause Title- Pankaj Kumar Tiwari v. Enforcement Directorate (Neutral Citation: 2024:DHC:8280)

Appearance:

Petitioners: Senior Advocates Sanjay Jain, Rebecca M. John, Advocates Abhijit Mittal, Anukalp Jain, Palak Jain, Harshita Sukhija, Nishank Tripathi, Tapan Sangal, Dharmendra Singh, and Pravir Singh.

Respondents: Special Counsel Manish Jain, Advocates Sougata Ganguly, Snehal Sharda, and Gulnaz Khan.

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