Money Laundering Independent Offence, Jharkhand Mining Case 'Crime Thriller'- High Court

The Jharkhand High Court while denying bail to a man arrested by the Enforcement Directorate (ED) in an illegal stone mining case observed that money laundering is an independent offence.

The Court also said that the prosecution story reminds one of a crime thriller.

A Single Bench of Justice Gautam Kumar Choudhary held, “... this Court is of the view that the argument advanced on behalf of the E.D. is persuasive enough to reject the petition for bail. Contrary to the submission by the learned Counsel on behalf of the petitioner, the offence of money laundering is an independent offence and it is not necessary that the accused charged with the offence of money laundering are the same who are made accused in predicate offence as per the ratio decided in Vijay Madan Lal Choudhary (supra) (Para 269 and 270).”

The Bench further observed that law enforcement agencies are now confronted with a new species of crime in the form of money laundering, which necessitated the special Act.

“The prosecution story reminds one of a crime thriller, where the State withers and the crime cartels with political connection, clash for natural resources of the State”, the Court noted.

Advocate Vikash Pahwa appeared for the petitioner while ASG Anil Kumar appeared for the Enforcement Directorate.

In this case, the petitioner was in custody in connection with the offences registered under Sections 147, 149, 341, 342, 323, 379, 504, and 506 read with Section 120B of the Indian Penal Code, Section 3 read with Section 70 of Prevention of Money Laundering Act, 2002.

In July 2022, the ED while raiding 19 locations in Jharkhand arrested the petitioner. The ED called him to be an associate of a man and two others alleged to have been handling huge cash funds generated through illegal stone mining in the State. The petitioner hence moved to the High Court by filing a bail application.

The High Court relied upon the decision of Obulapuram Mining Company Pvt. Ltd. v. Joint Director, Directorate of Enforcement & Others Writ Petition No.5962 of 2016 in which the Karnataka High Court quashed the ECIR and the order passed by the adjudicating authority on the ground that mining was not a scheduled offence.

The Court further asserted, “The law is evolving with different amendments and judicial pronouncements. These are not like conventional crime and the modus operandi involves three stages: (a) Placement: which is to move the funds from direct association of the crime. (b) Layering: which is disguising the trail to foil pursuit. (c) Integration: which is making the money available to the criminal from what seem to be legitimate sources.”

It was also noted by the Court that a normal business transaction between the different entities involved in the criminal conspiracy cannot be expected in such cases and therefore, the provision for reverse burden has also been made under Sections 23 and 24 of the PMLA.

“The case is still at its nascent stage and it will not be in the interest of justice to enlarge the petitioner on bail”, the Court further said.

Accordingly, the Court rejected the bail plea of the petitioner.

Cause Title- Prem Prakash v. Union of India through the Directorate of Enforcement

Click here to read/download the Order