BAIL APPLN. 1113/2017 & Crl.M.A.No.244/2018

BAIL APPLN. 1114/2017 & Crl.M.A.No.239/2018

1. By way of the present applications, petitioners Virendra Jain and Surender Kumar Jain, the two brothers seek regular bail in ECIR/01/DLZO-II/2017 dated 11th February, 2017 under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (in short ‘PMLA’).

2. The above-noted complaint was lodged after an order dated 28th October, 2013 was passed by the Ministry of Corporate Affairs directing investigation by Serious Fraud Investigating Officer (in short ‘SFIO’) into affairs of the various companies. On the basis of the investigation report a Criminal Complaint No. 57463/2016 dated 29th November, 2016 was filed by SFIO against 31 accused persons including the two petitioners for violation of the provisions under Sections 233/628 read with Sections 211/240 (3) of the Companies Act and under Sections 420/468/477-A/120B IPC before the learned Additional Chief Metropolitan Magistrate (Central) Special Acts, Tis Hazari Courts, Delhi.

3. These bail applications came up before this Court earlier and vide order dated 20th September, 2017, this Court dismissed the two bail applications.

4. Aggrieved by the order dated 20th September, 2017 dismissing the bail applications, the petitioners preferred Special Leave Petition before the Hon’ble Supreme Court and vide order dated 23rd November, 2017 in a batch of writ petitions and criminal appeals, the Hon’ble Supreme Court declared the two further conditions imposed for release on bail in Section 45 (1) of PMLA to be unconstitutional, violative of Articles 14 and 21 of the Constitution of India and remanded back the matter to the respective Courts which denied the bail, to be heard on merits without application of the twin conditions mentioned in Section 45 of the PMLA. The petitioners, in the meantime also applied before the learned Special Judge, PMLA for grant of bail after passing of the order of the Supreme Court however, the same was declined vide order dated 8th December, 2017. Thus in both the petitions additional applications challenging the order dated 8th December, 2017 passed by the learned Special Judge have also been filed.

5. Case of the prosecution originates from the allegation that M/s Jagat Projects Ltd. laundered its unaccounted income through the set of companies controlled by the petitioners in guise of share subscription money at a huge premium to the tune of Rs.64.70 crores during the financial year 2008-09 with the help of a professional Chartered Accountant Rajesh Aggarwal. It is the case of prosecution that the petitioners received Rs.1,11,46,000/- as commission @1.80% on the total accommodation entries of Rs.64.70 crores.

6. As per the petitioners after the income tax raids were conducted at their residential and business premises on 14th September, 2010 an assessment order was passed by the Assessing Authority, Income Tax Department against M/s Jagat Projects Ltd. opining that the share capital and share premium received by M/s Jagat Projects Ltd. were accommodation entries by routing unexplained money and the Assessing Authority treated the entire amount of share capital and premium of Rs.64.70 crores as income and added the same under Section 68 of the Income Tax Act to the total income of the assessee. The Assessing Officer also recorded a finding that M/s Jagat Projects Ltd. had paid commission of Rs.1,16,46,000/- for receiving the share capital to the petitioners. Appeals filed before the Commissioner, Income Tax were dismissed however, the challenge before the Income Tax Appellate Tribunal succeeded and both the orders of the Assessing Authority and CIT (Appeals) were set aside and the matter remanded back with directions to provide adequate opportunity to the petitioners after confronting them with the entire material. On remand the Commissioner, Income Tax (Appeals) held that the share capital received by M/s Jagat Projects was not in the nature of accommoda