PMLA Act Cannot Be Invoked Unless Scheduled Offence Is Registered Or Any Investigation Or Enquiry Is Pending: Jharkhand HC

The Jharkhand High Court observed that action against any person under the Prevention of Money Laundering Act, 2002 (PMLA) cannot be taken unless the scheduled offence is registered or any investigation or enquiry is pending.

The Court was dealing with an application preferred for the grant of regular bail for the offences under Sections 3 and 4 of PMLA.

A Single Bench of Justice Deepak Roshan said, “In so far as the other two properties are concerned that is the land situated at Pugru and Siram, it is an admitted position that no schedule offence has been reported to be committed in respect of these lands and further it has not brought to the notice of this Court that as a result of such commission of an offence any investigation or enquiry is pending. The Hon'ble Supreme Court in the case of Vijay Madanlal Choudhry (Supra) at paragraph 253 has held that the authorities under the 2002 Act cannot resort to action against any person for a money laundering on an assumption that the property recovered by them must be proceeds of crime and the schedule offence has been committed unless the same is registered with the jurisdictional police or pending enquiry by way of a complaint before the competent forum.”

Senior Advocate S.D. Sanjay represented the petitioner while ASGI Anil Kumar represented the opposite party.

In this case, an FIR was registered for the alleged offences under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323, and 34 of the Indian Penal Code (IPC) against various individuals including the petitioner/accused. It was alleged that the petitioner accused fraudulently acquired plot of land. It was concluded by the Investigating Officer that none of the accused persons were required to be sent up for trial, as the concerned case was a civil dispute. However, the accused was summoned by the Enforcement Directorate (ED) and he duly cooperated with the investigation.

It was submitted that merely because the accused did not reply in the manner as it suited the ED, it cannot be said that he did not cooperate with the investigation. Despite this, he was arrested which was according to the counsel, in contravention of Section 19(1) of PMLA as no written grounds of arrest were provided to him.

The High Court in view of the above submissions noted, “… this Court is also not impressed with the arguments of the petitioner for grant of bail on the ground of non-compliance of the requirement of section 19 of PMLA in view of the recent decision rendered in the Case of Ram Kishor Arora v. Directorate of Enforcement, 2023 INSC 1082, which is squarely applicable to the present case.”

The Court referred to Section 45(1)(ii) of the PMLA that stipulates that where the public prosecutor opposes the application, then the Court on being satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail can order release of an accused on bail.

“In the case of Vijay Madanlal Choudhary (Supra) it was held that no meticulous examination is required and only prima facie satisfaction that the accused is not guilty is to be invoked by the Court. From the facts of the present case, it transpires that the petitioner has satisfied both the conditions engrafted in Section 45(1)(ii) of the PMLA Act”, it said.

Accordingly, the High Court granted bail to the petitioner.

Cause Title- Bishnu Kumar Agarwala @ Bishnu Kumar Agarwal v. Union of India through Directorate of Enforcement

Appearance:

Petitioner: Advocates Indrajeet Sinha, Sumeet Gadodia, Anshuman Sinha, Arpan Mishra, Vinay Prakash, and Yash Badkar.

Opposite Party: Advocate Chandana Kumari

Click here to read/download the Judgment