Prima Facie Case Under PMLA Exists Against Senthil Balaji: Supreme Court While Granting Bail

The Supreme Court while granting bail former Tamil Nadu Minister Senthil Balaji in the money laundering case arising out of the cash for jobs allegations observed that there is a prima facie case against him.

While the bench of Justice Abhay Oka and Justice Augustine George Masih granted bail on the ground of delay in trial, it observed that there is no reason to doubt the incriminating files against Balaji at this stage.

The Court noted that printed version of files from the pen drive seized from Balaji's premises during the investigation into scheduled offences was certified by the Special Court MP/MLA Court, and at this stage, there was no reason to doubt its authenticity.

The Court also found prima facie evidence to support the allegation that Rs. 1.34 crores had been deposited in the appellant's bank account. It said that there was no prima facie evidence to support Balaji's explanation that cash deposit to his account was derived from his salary as an MLA and agricultural income.

“The concerned Court dealing with the scheduled offences has provided the printed version of the soft files in the seized pen drive. There is no reason, at this stage, to doubt the authenticity of the soft files. There is also prima facie material to show a deposit of cash amount of Rs.1.34 crores in the appellant's bank account. At this stage, the contention of the appellant regarding the deposit of remuneration received as MLA and agriculture income cannot be accepted in the absence of any prima facie evidence to show the existence of the appellant's cash income as MLA and the appellant's agriculture income. Therefore, at this stage, it will be very difficult to hold that there is no prima facie case against the appellant in the complaint under Section 44 (1)(b) of the PMLA and material relied upon therein”, the Court observed.

Between 2011 and 2016, while serving as the Transport Minister in Tamil Nadu, Senthil Balaji allegedly orchestrated a scheme involving the collection of large sums of money from job seekers in exchange for employment in various positions within the Transport Department. He is accused of conspiring with his personal assistants and his brother to promise jobs in return for money.

Balaji was booked for offences under Sections 120B, 419, 420, 467, 471 of the IPC and Sections 7, 12, 13(2), and 13(1)(d) of the Prevention of Corruption Act, 1988. As a result, the ED registered an ECIR on July 29, 2021.

Balaji was arrested on June 14, 2023, and remanded to judicial custody. On August 12, 2023, a formal complaint was filed against him under Section 3 of the PMLA, which is punishable under Section 4. The Special Court for Elected Members of Parliament and Members of the Legislative Assembly in Chennai took cognizance of the case. His bail plea was rejected by the Madras High Court, prompting him to file the present appeal before the Supreme Court.

Senior Advocates Mukul Rohatgi and Sidharth Luthra for Balaji said that evidence seized in the predicate offences, such as a seized pen drive containing incriminating files allegedly detailing the amounts collected for different jobs, was tainted.

According to the ED, the file named "CSAC" in the pen drive showed large amounts of money received in exchange for jobs such as Drivers, Conductors, Junior Tradesmen, Junior Engineers, and Assistant Engineers.

Balaji's counsels contested this, claiming that the Tamil Nadu Forensic Science Laboratory's (TNFSL) analysis found no such file named "CSAC." Instead, the FSL found a file named "csac.xlsx," which did not contain incriminating details. The defense also argued that the Rs. 1.34 crore deposited in Balaji's bank account represented his income from agriculture and his salary as an MLA, not proceeds from illegal activities.

They further argued that the Rs. 1.34 crore cash deposit in Balaji's bank account, cited as incriminating evidence by ED, could be explained as legitimate earnings from his salary as an MLA and agricultural income. They emphasized that all relevant documents and electronic evidence had already been seized in the predicate offences, and witness statements under Section 50 of the PMLA had been recorded.

Solicitor General Tushar Mehta for the ED argued that the contents of the pen drive show the collection of Rs. 67.74 crores from various job applicants. He maintained that there was no discrepancy in the file name "CS AC" found in the pen drive and the forensic report and explained that ".xlsx" was merely the file extension for an Excel spreadsheet.

The ED also refuted Balaji's explanation for the cash deposits, arguing that MLA salaries were typically credited directly to bank accounts, and there was no evidence to support the appellant's claim of receiving salary payments in cash. Further, ED contended that Balaji's declared agricultural income was significantly lower than the amount of cash deposits in question. Mehta further pointed to an unexplained deposit of Rs. 20.24 lakhs in the appellant's wife's account.

Advocate Zoheb Hossain for the ED cited a file named "AC1.xlsx," which showed the pricing of various jobs sold in the alleged scam. The investigation revealed that bribes were collected for job appointments, with posts such as Drivers, Conductors, and Junior Assistants being sold for specific sums, ranging from Rs. 1.25 lakhs to Rs. 4 lakhs, he said. According to the ED, Balaji collected at least Rs. 38 crores in exchange for these jobs, and there was ample material, including email communications, to implicate him.

Solicitor General Mehta also argued that Balaji's long-standing political influence could lead to witness tampering. He said that Balaji had previously facilitated illegal compromises between bribe givers and recipients. He further argued that the appellant's continued influence as a sitting MLA posed a risk to the fairness of the trial if he were to be released on bail.

Case no. – SLP (Crl) No. 3986/2024

Case Title – V. Senthil Balaji v. The Deputy Director

Citation : 2024 LiveLaw (SC) 750

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