AAP Leader Satyendar Jain Prima Facie Guilty Of Money Laundering, ED Collected Sufficient Materials: Supreme Court

“Having regard to the totality of the facts and circumstances of the case, we are of the opinion that the appellants have miserably failed to satisfy us that there are reasonable grounds for believing that they are not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that they are prima facie guilty of the alleged offences.”

The court's observation came as it refused to grant bail to Satyendar Jain in a money laundering case, highlighting the failure of the accused to fulfil the twin conditions set out in Section 45 of the Prevention of Money Laundering Act for bail.

The case, which dates back to 2022 when Satyendar Jain was arrested by the Enforcement Directorate (ED), revolves around allegations of money laundering through four companies during 2010-12 and 2015-16.

The central agency, represented by Additional Solicitor-General SV Raju, argued that Jain exercised effective control over the companies involved in the alleged money-laundering racket, despite relinquishing his position as a director. On the other hand, Senior Advocate Abhishek Manu Singhvi vehemently refuted these allegations on behalf of Jain, alleging a lack of credible links tying Jain to the alleged money laundering activities.

Singhvi's argument did not find favour with the court, which concluded that Satyendar Jain was responsible for conceptualising the idea of accommodation entries against cash, and was directly involved in the accommodation entries totalling approximately Rs. 4.81 crores.

“There remains no shadow of doubt,” the bench comprising Justices Bela M Trivedi and Pankaj Mithal said about Satyendar Jain's role. The judgment was authored by Justice Trivedi. 

Furthermore, the court highlighted the assistance provided by Ankush Jain and Vaibhav Jain to Satyendar Jain in making false declarations under the Income Declaration Scheme, 2016. These false declarations, each declaring an alleged undisclosed income of Rs. 8.26 crores, were made to protect Satyendar Kumar Jain. Although these declarations were later deemed 'void' by the income tax authorities, the court stated that the appellants could not be permitted to take advantage of their own wrongdoing to mislead the authorities.

“The declarations made by Ankush Jain and Vaibhav Jain under IDS have not been accepted by the income tax authorities on the ground that they had misrepresented the fact that the investments in the said companies belonged to them, which in fact belonged to Satyendar Jain. The appellants cannot be permitted to take advantage of their own wrongdoing of filing the false declarations to mislead the income tax authorities, and now to submit in the present proceedings under PMLA that the said declarations under the IDS were void. The declarations made by them under the IDS though were held to be void, the observations and proceedings recorded in the said orders passed by the authorities and by the high court cannot be brushed aside merely because the said declarations were deemed to be void under Section 193 of the Finance Act, 2016.”

In view of these, the court concluded that the appellants – Satyendar Jain and his aides – had not complied with the twin mandatory conditions laid down in Section 45 of the Prevention of Money Laundering Act. Accordingly, the Delhi High Court's ruling which had been challenged in these proceedings was found to not suffer from any 'illegality' or 'infirmity'.

Accordingly, the court denied bail to the three accused and directed Satyendar Jain – who had been granted interim bail on medical grounds – to immediately surrender before the special court.

In parting, the court observed, “It is needless to say that the right to speedy trial and access to justice is a valuable right enshrined in the Constitution of India, and provisions of Section 436A of the Code of Criminal Procedure would apply with full force to the cases of money laundering falling under Section 3 of the Prevention of Money Laundering Act, subject to the provisos and the explanation contained therein.”

Jain was arrested by the Enforcement Directorate in May 2022 on charges of money laundering under the Prevention of Money Laundering Act. This verdict, declining his plea for bail in the case, was handed down by a bench led by Justices Trivedi. Over four days, it heard Jain's special leave petition against an April 2023 Delhi High Court order denying him bail. The judgment in this case was reserved in January.

Satyendar Kumar Jain v. Directorate of Enforcement | Special Leave Petition (Criminal) No. 6561 of 2023

Citation : 2024 LiveLaw (SC) 240

Click here to read the judgment