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2017 Supreme(Del) 3857
IN THE HIGH COURT OF DELHI AT NEW DELHI
I.S. MEHTA, J.
VIRENDRA JAIN – PETITIONER
Versus
ENFORCEMENT DIRECTORATE DELHI ZONAL OFFICE ZONE II NEW DELHI – RESPONDENT
BAIL APPLN. 1113, 1114 of 2017 & CRL.M.A.10245, 10232 of 2017
Decided On : 20-09-2017
For the Petitioner: Mr. Vikram Chaudhri, Mr. Sarvesh P Singh, Mr. Harshit Sethi, Ms. Pragati Sharma
For the Respondents: Mr. Sanjay Jain, Mr. Sanjeev Narula, Mr. Abhishek Ghai, Ms. Adrija Thakur
Headnote:
PMLA - Money Laundering - Sections 3 & 4 of Prevention of Money Laundering Act, 2002 - Summary of Acts and Sections: The court discussed the allegations against the petitioners under Sections 3 & 4 of the PMLA, involving money laundering activities, illegal share subscription, and receipt of proceeds of crime. The court emphasized the seriousness of economic offences and the overriding effect of Section 45 of PMLA on the general provisions of the Cr.P.C.
Fact of the Case:
The petitioners sought bail under Section 439 Cr.P.C. in a case involving allegations of money laundering under Sections 3 & 4 of the PMLA. The allegations included illegal share subscription, layering of transactions, and receipt of proceeds of crime. The petitioners argued that the allegations were based on documents subject to trial and that they had cooperated with the investigation.
Finding of the Court:
The court rejected the bail applications, emphasizing the seriousness of economic offences and the overriding effect of Section 45 of PMLA on the general provisions of the Cr.P.C. The court highlighted the allegations of money laundering, illegal share subscription, and receipt of proceeds of crime, and the need for a different approach in economic offence cases.
Ratio Decidendi: The court emphasized the seriousness of economic offences and the overriding effect of Section 45 of PMLA on the general provisions of the Cr.P.C. The court found no merit in the bail applications due to the allegations of money laundering, illegal share subscription, and receipt of proceeds of crime.
Final Decision: The bail applications of the petitioners were rejected, and the observations made in the order were stated to have no effect on the merit of the case.
I.S. MEHTA, J.
1. By way of the above captioned applications, i.e. BAIL APPLN. 1113/2017 & BAIL APPLN. 1114/2017, the present petitioners, i.e. (1) Virendra Jain and (2) Surendra Kumar Jain, seek regular bail under Section 439 Cr.P.C. in the case ECIR/01/DLZO-II/2017 dated 11.02.2017, under Sections 3 & 4 of Prevention of Money Laundering Act, 2002 (herein after referred to as PMLA).
2. The brief facts stated are that vide order dated 28.10.2013 the Ministry of Corporate Affairs ordered an investigation by the Serious Fraud Investigation Officer (SFIO) into the affairs of various companies. Pursuant to that an investigation was conducted by the SFIO and on 31.03.2016 an investigation report under Section 241 of the Companies Act, 1956 was filled. Thereafter, on the basis of the aforesaid investigation report, on 29.11.2016 a Criminal Complaint No. 57463 of 2016 was filed by the SFIO against various accused persons (including the petitioners herein) for violation of the provisions under Sections 233/628 read with 211/240 (3) of the Companies Act and under Sections 420/468/477-A/120-B IPC before the Court of learned Additional Chief Metropolitan Magistrate (Central) Special Acts, Tis Hazari Courts, Delhi.
3. Subsequently, on 11.02.2017 the respondent/department on the basis of the aforesaid complaint registered a case ECIR/01/DLZO-II/2017, under Sections 3 & 4 of Prevention of Money Laundering Act, 2002 against the accused persons (including the petitioners herein). It is alleged in the said complaint that during the period of 2004 to 2010 the accused persons/petitioners entered into a criminal conspiracy for the object of providing accommodation entries to the various beneficiary companies with an aim of converting their unaccounted money through legitimate transactions by charging commission with the assistance of mediators and in this process companies and firms were used as special purpose vehicle for camouflaging the laundering. Further, the Income Tax Officer vide assessment order dated 28.03.2013 has recorded a finding that M/s Jagat Projects Ltd. had laundering its unaccounted income through a set of companies controlled by the accused/petitioners in the guise of share subscription money at a huge premium to the tune of Rs. 64.70 Crore during the financial year 2008-09, with the help of a professional Chartered Accountant Rajesh Aggarwal. The entire share subscription of Rs. 64.70 Crore has been held to be unexplained cash credit under Section 68 of the Income Tax Act, 1961 in the hands of M/s Jagat Projects Ltd. for the assessment year 2009-10 and the commission payment of Rs. 1,16,46,000/- @ 1.80% on the total accommodation entries of Rs. 64.70 Crore made to the accused/petitioners for securing accommodation entries has been an unexplained expenses incurred during the assessment year 2009-10. It was further alleged that the accused/petitioners dishonestly and fraudulently inflated the balance sheet of the companies by fictitiously increasing its share capital and investment through rotation of cheques in the bank accounts while in fact actual value of investment in the group companies was nil. Thus, the accused/petitioners dishonestly and fraudulently made false balance sheets and thereby committed the forgery for the purpose of cheating, i.e. offences punishable under Sections 120-B/420 IPC which are Schedule Offences of Prevention of Money Laundering Act, 2002.
4. On 13.02.2017 Seizure Memo/Panchnama was prepared by the officers of the respondent/department and thereafter, summons dated 01.03.2017, 03.03.2017 and 16.03.2017 were issued to the petitioner-Virendra Jain and summons dated 13.02.2017, 14.02.2017, 27.02.2017, 03.03.2017, 15.03.2017 and 16.03.2017 were issued to the petitioner-Surendra Kumar Jain for their appearance before the Assistant Director of the respondent/department to give statements under Section 50 of the PMLA.
5. Consequently, on 20.03.2017 the petitioners were arrested by the officers of the
