The Kerala High Court on Thursday dismissed the bail application filed by M Sivasankar, former Principal Secretary to the Chief Minister of Kerala, in the money laundering case related to alleged corruption in the LIFE (Livelihood, Inclusion and Financial Empowerment) Mission project, a housing project of the Kerala Government for the homeless.Justice A. Badharudeen observed that although...
The Kerala High Court on Thursday dismissed the bail application filed by M Sivasankar, former Principal Secretary to the Chief Minister of Kerala, in the money laundering case related to alleged corruption in the LIFE (Livelihood, Inclusion and Financial Empowerment) Mission project, a housing project of the Kerala Government for the homeless.
Justice A. Badharudeen observed that although the petitioner could not be regarded as a person who would flee from trial,
"...However, his propensity to tamper with the evidence and to influence witnesses could be foreseeable, since the petitioner is a person having very much influence in the ruling party of Kerala, particularly with the Chief Minister of Kerala".
The Court noted that even after his initial arrest and subsequent release on bail, the petitioner had been reinstated in service with effect from January 6, 2022, until his retirement, holding a pivotal post in the State.
"That is to say, his involvement in serious crimes prior to this crime, in no way affected his official stature because of his authority in the State Government," the Court remarked.
The Case
A Special PMLA Court at Kochi had rejected Sivasankar's bail application on March 2 and extended his custody till March 21. The money laundering case emanates out of alleged illegal gratification obtained for awarding the contract work for the LIFE Mission's project for building 140 housing units in Thrissur district utilizing the funds donated by UAE Red Crescent, that was meant for the flood victims of Kerala. Sivasankar has been under custody since his arrest by the Enforcement Directorate on February 14.
The prosecution case against Sivasankar was that he had interest in the upfront commission earned by the co-accused in the case, Swapna Suresh, from M/s Unitac Builders & Developers run by one Santhosh Eapen, in favour of which the contract for vendor for execution of the project was fixed. Suresh had admitted that an upfront commission was demanded as bribe and M/s Unitac Builders & Developers agreed to pay the amount before execution of the project. It was also found that the petitioner had directed a Chartered Accountant, Venugopal, to open the locker account of Suresh, where the proceeds of the crime was 'handled'. Additionally, Eapen admitted payment of upfront commission to procure the contract in the LIFE Mission Project. It was allegedly revealed from the bank statements that an amount of Rs.5.25 crore to the Federal Bank and an amount of Rs.2.25 crore to the Axis Bank were transferred from the Red Crescent Organization, and part of the said amount, namely, Rs. 3.80 Crore, in foreign money was subsequently withdrawn by Eapen and handed over as an upfront commission for allocating the content to him.
Pursuant to the rejection of the bail plea by the Special PMLA Court, Sivasankar had moved the High Court for bail alleging the arrest to be a "political stunt" and claiming that there was no direct allegation against him. He termed the entire case as a "political hit job by the Enforcement Directorate" using the professional privity he had with the Chief Minister of Kerala. The petitioner also sought regular bail on medical grounds, averring that the rigour under Section 45 of the PML Act would not apply to him as he was sick and infirm and the alleged money laundering pertaining to the petitioner was a sum less than Rs. 1 Crore. It was submitted that he was a cancer patient who had undergone surgery thrice, and that the Medical Board of Ernakulam General Hospital had also recommended surgical intervention in respect of the petitioner on February 23, 2023.
Additionally, it was submitted by the counsels for the petitioner that the allegations in the present case were exactly the same as that recorded by the ED in Crime No.ECIR/KCZO/31/2020, with the same proceeds of crime being projected here as well. In that particular case, the petitioner had been enlarged on bail, with the Court holding that he would be entitled to the benefit of the the proviso to Section 45 of PML Act. It was thus averred by the counsels that the petitioner was arrested in the present crime to defeat the said Order.
On behalf of the respondents however, it was argued that there were three different offences namely gold smuggling; bribery; and a portion of bribe being converted into foreign currency and taken through diplomatic channel to a foreign country. It was argued that the investigation by the ED under the PML Act was independent of the investigation conducted by any predicate agency and Sivasankar would not have been arrested in the scheduled offence if there had been any immunity from proceeding with the investigation under the PML Act. It was pointed out that the present case was different from that registered by the ED for gold smuggling through diplomatic channel. It was further argued that when the petitioner had been released on bail, he had rejoined duty, and continued in service till his retirement without undergoing any further treatment. It was submitted that he could thus not be given the benefit of sickness to relax the rigour under Section 45 of the PML Act. It was also submitted that the petitioner had not cooperated with the investigation during the custody period and had been evasive in his answers.
It was also argued that the petitioner was a highly influential person, and granting bail at the present stage would derail the investigation as there is a likelihood of tampering with the evidence and influencing other witnesses.
Findings of the Court
The Court in this case perused Section 45 of the PML Act, and noted that there were two conditions for release on bail for a person accused accused of an offence punishable for a term of imprisonment of more than 3 years under part A of the schedule, namely, that the Public Prosecutor has been given an opportunity to oppose the application for such release; and where the bail application has been opposed by the Public Prosecutor, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.
However, the Court noted that the proviso to Section 45(1) carves out three exceptions to the same, which are: i. in the case of a person aged 16 years; ii. a woman; and iii. a sick or an infirm person.
The Court thus observed that the `sick' or `infirm' condition of a person would have to be inferred from the materials available in each individual case. It added that release of a person covered by the proviso to Section 45(1) of PML Act was not mandatory, and the same was a matter of discretion of the Court.
The Court ascertained that the prime question herein was whether the petitioner was entitled to get exemption under the proviso to Section 45(1) of the PML Act. The Court was of the view that since the petitioner was not co-operating with the treatment offered, it was not inclined to release him on medical ground since his sickness could be addressed by the prosecution agency and jail authorities by providing adequate treatment.
It added that the chance of propensity to tamper with evidence or influencing witnesses by the petitioner, was also present since he is someone having "very much influence in the ruling party of Kerala, particularly with the Chief Minister of Kerala", as mentioned hereinabove.
The Court also questioned the prosecution in delaying the arrest of Swapna Suresh, and noted the same to be a 'matter of serious concern', while taking note that the investigation was still at the initial stage.
"For the above reasons, the petitioner cannot be released on bail at this stage and this application is liable to be dismissed," the Court held while dismissing the bai application.
The petitioner was represented by Senior Advocate Jayadeep Gupta, and Advocates Manu Srinath, George Varghese Perumpallikuttiyil, and Nimesh Thomas. The Assistant Solicitor General of India R. Sankara Narayanan, and Advocate Jaishankar V. Nair appeared on behalf of the respondents.
Case Title: M. Sivasankar v. Union of India & Anr.
Citation: 2023 LiveLaw (Ker) 190