The acceptance of fraudulent documents to establish shell companies qualifies the resulting funds as 'proceeds of crime' under the PMLA, necessitating rejection of bail due to the applicant's significant involvement in illegal financial activities.

1JUDGMENT :

SHYAM C. CHANDAK, J.

1. This bail application arises on account of rejection of the application for bail filed by the Applicant before the trial Court invoking Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”) r/w Section 45 of the Prevention of Money Laundering Act, 2002 (“PMLA”), in an ECIR bearing No.ECIR/MBZO-II/20/2024.

Respondent No.1 filed an Affidavit-in-Reply and opposed this application.

2. Heard Mr. Aabad Ponda, the learned Senior Counsel appearing for the Applicant and Ms. Manisha Jagtap, the learned Special PP for Respondent No.1-ED. Perused the Application, the reply and the written submissions presented by the respective Counsel.

3. Based on an F.I.R. bearing No.295 of 2024, dated 07/11/2024 under Sections 318 (4) 338, 340 (2) of BNS, 2023, registered with Malegaon Chawani Police Station, Nashik, Respondent No.1 has registered the said ECIR bearing No.ECIR/MBZO-II/20/2024 on 11/11/2024.

3.1 Said F.I.R. No.295 of 2024 was registered on the complaint filed by Jayesh Lotan Misal, wherein it is stated that one Seraj Ahmed Mohammad Harun Memon had collected the documents of identity from the informant, his brother Ganesh Misal and some other persons in the guise of giving them a financial benefit, .i.e., a job in APMC, Malegaon. Said Seraj Ahmed and his accomplices then used those documents to establish shell entities. Further, certain bank accounts were opened in NAMCO Bank, Malegaon, Nashik in the name of such shell entities. It is alleged that, in addition, Seraj Ahmed acquired new SIM Cards in the name of the informant and others and linked the SIM Cards with those bank accounts for the purpose of taking control and to operate those bank accounts. Later on, the said bank accounts were used to carry financial transactions including circular transactions running into hundreds of cores and also to make term deposits from that money. Investigation revealed that in all 14 such bank accounts were opened with said NAMCO Bank in the name of different shell entities by said Mr. Seraj Ahmed.

3.2 The transaction statements, account opening forms, KYC documents etc. of said 14 bank accounts revealed that, credits amounting to more than Rs.112.72 Crores approx. were made from the accounts of around 200 firms/companies, within a span of 1 to 2 months only. Immediately after accumulating the amounts by way of such credits, said amounts were transferred to various other accounts maintained in the name of different persons/entities. Majority of the amount was transferred through online banking including RTGS/NEFT/IMPS. Out of the credited amounts, three fixed deposits were created in said NAMCO Bank in the name of Pratik P. Jadhav, Ganesh L. Mishal and Jayesh L. Mishal, who were proprietors of M/s Choice Marketing, M/s Red Rose Trading Co. and M/s Sunrise Traders, respectively.

3.3 Five such accounts were maintained with the Bank of Maharashtra in the name of M/s. Dhanraj Agro, M/s. Red Rose Trading Co., M/s. Choice Marketing, M/s. Megha Traders and M/s. Sunrise Traders, which were established by said Siraj Ahmed with the help of the documents of identity of i) Moin Khan Ismail Khan, ii) Ganesh Lothan Misal, iii) Pratik Popat Jadhav, iv) Manoj Gorakh Misal, and v) Jayesh Lotan Misal, respectively. Rs.45.06 crores approx. were received in these five accounts from the accounts of various firms/companies within 3-4 months. Immediately, the amounts so credited in those accounts were transferred to several other accounts maintained in the name of various entities.

3.4 An analysis of the bank accounts of M/s. Hardik Enterprises and M/s. Haresh Trading Co. maintained with Axis Bank revealed that cash amounting to Rs.28,22,00,