‘Where liberty of a person is concerned, cannot proceed on assumptions’: Delhi HC on granting bail under PMLA

The evidentiary value of the statement recorded under Section 50 of PMLA [Prevention of Money Laundering Act] has to be tested at the end of the trial and not at the stage of bail. The twin conditions of Section 45 do not put an absolute restrain on the grant of bail or require a positive finding qua guilt”.

The court said that for punishment under Section 3 of the PMLA, it is necessary that the person dealing with the “proceed of crime” must have some knowledge that it is “tainted money”.

“Though, the direct evidence in this regard may not be possible and the court is also conscious of the fact that at this stage, the evidence cannot meticulously be examined for this purpose. At the same time, for the purposes that evidence cannot be meticulously examined at this stage, the court cannot merely proceed on the basis of assumption. There has to be some substantial link between the money received and criminal activity relating to scheduled offence which can be attributed to the petitioner,” Justice Sharma said.

Justice Sharma further observed that at the stage of bail, the court is only required to look at the “prima facie case and is not required to look into the test of guilt”. It is required to maintain a “delicate balance” between the “judgment of acquittal and conviction” and an order granting bail before “commencement of trial”, the judge said.

The court also said that it cannot conduct a “mini trial” at this stage and is only required to examine the case based on “broad probabilities”.

According to the Enforcement Directorate (ED), Naresh Jain, along with his brother Bimal Jain and other accomplices, hatched a criminal conspiracy to cause a loss to the exchequer and banks by indulging in illegal foreign exchange transactions on the basis of forged and fabricated documents.

The ED said that in furtherance of the conspiracy, Agarwal acquired shares of a company at a lesser price than the actual valuation and also took loans from the shell companies of the co-accused. This, according to ED, allegedly amounts to “indulging knowingly in any process or activity connected with the proceeds of crime”. The ED had also alleged that the proceeds of the crime were laundered through M/s R C Warehousing.

Considering all arguments, the court said, “I consider therefore on the basis of discussions made herein above, there is a broad probability. Besides this, the serious medical conditions of the petitioner…has not improved and he has been under regular treatment and has already undergone two procedures. The applicant has also been stated to undergo further procedures and/or surgeries as and when advised. It has been stated that the petitioner is suffering from numbness of limbs which is a precursor to possible paralysis which requires urgent medical attention”.

The high court granted bail to Agarwal on furnishing a personal bond of Rs 25,00,000 with two sureties of the like amount, subject to certain conditions.

On the right to bail, the court said that it is “linked to Article 21” of the Constitution of India, which confers the right to live with freedom and dignity. The court, however, observed that while protecting the right of an individual to their freedom and liberty, the court also has to consider the “right of the society at large as well as the prosecuting agency”.

In this light, the gravity of the offence is to be taken into account, adding that economic offences like money laundering fall within the category of “grave offences”.

“While dealing with the economic offence cases, the court has to be sensitive to the nature of allegation made against the accused. Such economic offences normally involve the public exchequer and money of the honest taxpayer. The offence of money laundering in itself is a very serious offence,” the court observed.