PMLA | Grant Of Bail To Person Appearing In Response To Court Summons Can't Be Interfered With In Absence Of 'Supervening Circumstances': Calcutta HC

Justice Tirthankar Ghosh said there is a difference with regard to releasing a person on bail after his arrest by the investigating agency under PMLA and after his appearance in response to summons from the court.

"Taking into account the provisions of Section 65 of the PMLA, 2002 it can be held that if the learned Special Court intended to exercise its option under Section 88 of the Code of Criminal Procedure the same cannot be interfered with until and unless supervening circumstances are brought on record," said the court, while upholding the grant of 10 accused in a money laundering case.

The court passed the judgemention a petition filed by the Enforcement Directorate seeking cancellation of bail of accused Debabrata Halder in a Rs 173-crore bank fraud case. The alleged loss was caused to National Small Industries Corporation Limited "by wrongful invocation of Bank Guarantees/invocation of fake Bank Guarantees issued by various branches of the then United Bank of India", to avail benefits of its RMA Scheme for MSMEs.

The ED earlier this year filed its final report under Section 45 of PMLA against 13 accused persons including Debabrata Halder, who was already under custody since November 17, 2021. The trial court on January 15 took cognisance of the alleged offences and issued summons to the accused persons. 

The trial court on April 12 granted bail to Debabrata Halder, observing that there is no prayer for further investigation in the case and no purpose would be served by keeping the accused in custody for indefinite period. During the hearing of petition seeking cancellation of Debabrata Halder's bail, the high court noted that 10 other accused, who had surrendered, were also granted bail by Special Court on April 4 on the ground that they were on a different footing than the accused who was arrested.

"As the said order dated 04.04.2022 reflected that the learned Special Court did not take into consideration the provisions of PMLA and the order passed was in the nature of an order under Section 437/439 of the Code of Criminal Procedure this Court by its order dated 28th July, 2022 was pleased to issue show cause as to why their bail should not be cancelled and directed them to appear before this Court. Pursuant to such order the accused persons appeared before this Court and filed their affidavits," said the court.

Referring to Supreme Court's observations in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Others, the court said it can be said that ED exercised its discretion and authority under Section 19 of the PMLA, 2002 to arrest a person wherein they found higher standard of evidence relating to proceeds of crime which were available with them and the custodial detention of the accused was thought to be necessary.

"Needless to state that such powers are vested with the superior officers of the Enforcement Directorate and there are rigors on the exercise of the powers which have been thrusted on them, so that the authorised officers, arresting officer are to comply with the rules framed under Section 73 of the Act, which warrants the forwarding of a copy of the warrant of arrest of the person along with material to the adjudicating authority and the purpose of detention. Thus, the applicability of the twin conditions under Section 45 of the PMLA, 2002 for granting bail is to be satisfied in case of release of such an accused," said the bench.

The bench further said that the apex court in its verdict has emphasised on the issue relating to a delicate balance between the merits of appreciation while deciding a case at the stage of acquittal or conviction and an application for bail.

"For this purpose the phrase "reasonable grounds for believing" was also emphasized in relation to the material collected by the prosecution at the time of considering the bail application," it added.

However, the court said "be that as it may, there is difference with regard to releasing a person on bail who has appeared in response to summons and a person who was arrested in course of investigation under the PMLA, 2002 by the Investigating Authorities invoking their powers under Section 19 of the Act."

While the bench refused to interfere with the order granting bail to the 10 accused persons, it said that the Special Court's order to release Debabrata Halder on bail calls for interference. 

"Ordinarily, the considerations which weigh with a Court in granting bail in non-bailable offences are the nature and seriousness of the offences; the character of the evidence; circumstances which are peculiar to the accused; a reasonable possibility of the presence of the accused not being secured at the trial; reasonable apprehension of witness being tampered with; the larger interest of the public or the State and other similar factors which may be relevant in the facts and circumstances of the case."

The court said it was incumbent upon the Special Court to satisfy itself regarding the broad probabilities relating to the existence of reasonable grounds for believing that the accused was not guilty of the offence alleged under the PMLA, 2002 after the Public Prosecutor opposed the prayer for bail.

"The learned Special Court without adhering to the merits of the case and the provisions of law proceeded to allow the prayer for bail on reasons which are not applicable in respect of the offences under the PMLA, 2002," it added.

The court added that the complaint filed by the prosecution itself contained prayer for further investigation but the Special Court observed that there was no prayer for further investigation.

"It would be apposite to state that an investigating agency is not required to pray for permission for further investigation of the case which is a settled principle of law and the same is prerogative of the investigating agency. The duty of the investigating agency is to the extent of informing the Court which the investigating agency in this case has done by informing the Court in the complaint filed before it," it added.

Ruling that the bail order in respect of Debabrata Halder is in violation of the provisions of Section 45 of PMLA, the court set it aside and directed him to surrender before the Special Court.

Case: Enforcement Directorate v. Shri Debabrata Halder, CRM (SB) 93 of 2022

Date: 20.12.2022

Citation: 2022 LiveLaw (Cal) 376