Section 45 of PMLA Will Apply Only If a Person Is Arrested by the Directorate of Enforcement: Delhi Court

The order was passed by the Court of Sh. Naveen Kumar Kashyap, Ld. Special Judge, Tis Hazari, while deciding the regular bail applications filed by the Accused persons under section 439 Cr.P.C. The applications were filed by the Accused persons pursuant to the issuance of summons by the Ld. Special Court, on the complaint filed by the Directorate of Enforcement alleging commission of offences under section 3 read with 70 of the Act. Suffice to state that the accused persons were never arrested by the ED during investigation.

Senior Advocate Mr. Pramod Kumar Dubey, appearing for the Accused persons argued that the twin test laid down under section 45 (1) (ii) Prevention of Money Laundering Act 2002, would be attracted only when considering the bail need not be applied, while adjudicating upon a bail plea of accused who has been arrested by the ED under section 19 of the Act. It was also argued that the amendment in 2018in section 45 of PMLA does not revive the twin conditions already struck down by the Supreme Court in the matter of Nikesh Tarachand. It was also brought to the knowledge of the Court that vide order dated16.12.2021, Hon'ble Supreme Court in the case of Satinder Kumar Antil, clarified that the earlier order dated 07.10.2021 was passed with intent to ease process of bail and not to restrict it. It was further argued that the Supreme Court has further clarified that in category C inadvertently section 45 of PMLA has been mentioned which has been struck down by Hon'ble Supreme Court. The Supreme Court in the same order also clarified that mere filing of charge sheet, would not be an ipso facto cause to arrest the accused persons, which aspect in general has been clarified in another matter titled as Siddharth V State of Uttar Pradesh.

On the other hand, it was argued by Spl. PP for ED that the twin condition for grant of bail under section 45 (1) is required to be complied with, as the validity of the provision was restored by 2018 Amendment to PMLA Act, 2002. It was further argued on behalf of ED that the application of section 45 (1) has neither been stayed nor its operation rendered as nullity by any order of the Hon'ble Supreme court. It was further argued that economic offences having deep rooted conspiracy and involving loss to public funds needs to be viewed seriously and therefore accused persons should be denied bail.

The Additional Sessions Judge, District Court Tis Hazari, Sh.Naveen Kumar Kashyap while granting bail observed that:

" 9 Further, on bare reading of section 45(1) PMLA as it stands today it can be noted that it contains the phrase "shall be released on bail". As such, for the section 45 PMLA to come into operation/get activated, a person has to be arrested first, as there cannot be any occasion to release without there being accused under arrest.....

14... In this background, it may further be noted that consistent view taken by Hon'ble Higher Courts that economic offences stand on a different footing than other offences, therefore, in the considered view of this court, same view cannot be taken in case, a case is filed by the concerned agency without arrest in Special Act vis-a-vis under a General Act/IPC. In this regard, the ratio guidelines by Hon'ble Supreme Court including in the case of Satender Kumar (supra) is to be kept in mind, which consciously made offences under Special Acta different category, from other general/IPC offences.

Under these facts and circumstances of the present case, when the concerned official of ED chose not to exercise their power u/s 19 of PMLA to arrest, this court is of the considered view that provision of section 45 PMLA and therefore, related case laws relied by the parties thereto, are not relevant to decide the present regular bail application.......

17. ....... Further Article 21 of the constitution mandates that no person shall be deprived office life and personal liberty except according to procedure established by law. Further India is a signatory to The International Covenant On Civil And Political Rights, 1966 and, therefore, article 21 of the Constitution has to be understood in the light of the International Covenant On Civil And Political Rights, 1966. further presumption of innocence is a human right. Article twenty one in view of its expansive meaning not only protects life and liberty, but also envisages a fair procedure. Liberty of a person should not ordinarily be interfered with unless there exist cogent grounds therefor. The fundamental principle of our system of justice is that a persons should not be deprived of his liberty except for a distinct breach of law...

Accordingly, the court granted bail to the Accused Persons.

Earlier the EOW has registered an FIR dated 28.08.2018, against the Accused Persons, who were authorized dealers for Audi and Porsche, under sections 406/420/468/471/120-B of Indian Penal Code. Since, the offences find mention in the Schedule appended to the Prevention of Money Laundering Act 2002, a case was also registered by the Directorate of Enforcement (DoE), on 07.09.2018, and investigation was therefore taken up for a possible action under PMLA. The charge sheet was filed on 19.02.2021, alleging therein that based on the evidence recorded and gathered during the course of investigation, the Accused Persons have knowingly indulged and are actively connected with proceeds of crime including its concealment, possession, use and projecting it as untainted and therefore they have committed the offence of money laundering under section 3 of the PMLA Act 2002, punishable under section 4 of the PMLA Act 2002.

Accused Persons were represented by Senior Advocate Mr. Pramod Kumar Dubey and instructed by a team of Karanjawala & Co., Advocates led by Mr. Samarjit Pattnaik-Partner and Mr. Puneet Relan and Mr. Irfan Muzamil- Senior Associates.

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