Delhi HC Grants Bail To CA Accused In Shakti Bhog Money Laundering Case

The Delhi High Court has granted bail to a Chartered Accountant who has been accused in the Shakti Bhog Foods money laundering case.

The Court observed that the period of incarceration of the accused and the delay in investigation justified a prima facie release on bail.

The bench of Justice Jasmeet Singh also noted that the twin conditions as enumerated under Section 45 of Prevention of Money Laundering Act have been met.

In this case, an FIR was registered on the allegations of financial irregularity and siphoning of funds in relation to credit facilities obtained by Shakti Bhog Foods Limited from a consortium of banks thereby causing a loss of Rs 3269 crore.

The allegations against the bail applicant are that the applicant had designed the entire plan of laundering of loan funds through dummy entities.

It was stated that by virtue of this mechanism on one hand the turnover and the stock of the company was inflated and on the other hand the loan funds were laundered.

On analysis of the bank statement of shell corporations, it was revealed that funds received from SBFL were either withdrawn in cash or re-routed to further shell companies.

It was submitted that the applicant was an internal auditor of SBFL and was actively involved in creation and projection of the inflated financials which involved dummy entities.

The ED alleged that the applicant was the mastermind of the whole operation.

Advocate Arshdeep Singh appeared for the bail applicant whereas Advocate Zoheb Hossain appeared for ED.

The Court noted that the applicant is not named in the FIR and is not named as an accused in the ECIR registered by the ED.

The Court further observed “Admittedly the applicant has the 15-year association with SBFL, but despite the allegation that he was the mastermind of the whole operation the ED has relied on 5 documents to show the applicant’s complicity. For the reasons as noted, the documents do not show that the applicant is guilty of offences as alleged against him.”

The Court also pointed out that without completion of investigation, no charges can be framed nor can trial begin. Thus the Court said that it cannot let the applicant undergo long period of detention.

“If this court allows the continuing pre-trial incarceration, the same will amount to deprivation of personal liberty as well as travesty of justice as the same is equivalent to punishment without trial.”, the Court held.

The Court held that the applicant should be released on bail.

Accordingly, the Court allowed the plea while directing the accused to be released on bail.

Cause Title- Raman Bhuraria v. Directorate Of Enforcement

Click here to read/download Judgment