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2022 Supreme(Ker) 291
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Kauser Edappagath, J.
Abdul Gafoor @ Kunhumon – Petitioner
Versus
Asst. Director, Directorate Of Enforcement And Ors. – Respondents
Bail Appl. No. 2840 of 2022, Crl. Miscellaneous Petition No.375 of 2022
Decided On : 27-05-2022
Advocate Appeared:
For the Petitioner: Amal George
For the Respondent: Sri.Suvin R. Menon, CGC, Sri George Thomas- Sr Adv
Point of Law : Any confession made by a person summoned under Section 50(3) of PMLA before the Investigating Officer is admissible in law since it is not hit by Section 25 or 26 of the Evidence Act.
Headnote:
Criminal Procedure Code, 1973 - Section 439- Prevention of Money Laundering Act, 2002 – Section 3 – Rejection of Bail – Offence of cheating - Exchange Morris Coins – Crypto currency – Cheating several investors by accepting investment under an investment scheme through his three Bangalore based companies (1) Long Reach Global (2) Long Reach Technologies and (3) Morris Trading –accused No. 1 is absconding. It is made clear that it is for the limited purpose of considering this bail application, that too at this stage, these findings have been arrived at. Indeed, different yardsticks might be required at different stages of the investigation – Para 18.
Finding of the Court:
Reasonable ground mentioned in Section 45(1)(ii) of PMLA connotes substantial probable causes for believing that the accused is not guilty of the offence charged. The investigation is going on and the same is at a crucial stage. Undoubtedly, the investigating agency may require further time to collect all the materials, particularly, the alleged nexus of the petitioner with the crime. The accused No. 1 is absconding. It is made clear that it is for the limited purpose of considering this bail application, that too at this stage, these findings have been arrived at Indeed, different yardsticks might be required at different stages of the investigation.
ORDER :
This is an application for regular bail filed by the accused No.12 in ECIR No. KZSZO/07/2021 of the Enforcement Directorate, Kozhikode under Section 439 of the Code of Criminal Procedure, 1973 (for short, “Cr. P.C”).
2. The accused is alleged to have committed the offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (for short, 'PMLA').
3. Multiple FIRs were registered at various police stations in Kerala against one Sri. Nishad (the accused No.1 in the above ECIR) and others alleging the offences punishable under Sections 406, 420 and 506 r/w 34 of IPC from January 2021 to March 2021. It was alleged in those FIRs that Sri. Nishad, the main accused, along with the remaining accused had cheated several investors by accepting investment under an investment scheme through his three Bangalore based companies (1) Long Reach Global (2) Long Reach Technologies and (3) Morris Trading, by promising high returns of dividend. As per the scheme, the investors will be able to exchange Morris Coins – Crypto currency after the 300-day lock-up period. It was further alleged that the accused also offered high commission income for those who bring more investors to invest in the Morris Coin Crypto currency. It was also alleged that even though the dividend was paid as agreed initially, the accused persons neither paid any dividend thereafter, nor returned the money collected from the investors. The investigation revealed that the accused persons defrauded a total amount of Rs.1200 crore under the above-mentioned scheme.
4. The Deputy Superintendent of Police, C-Branch, Malappuram who conducted the investigation into one of the crimes (Cr.No.356/2020 of Pookottumpadam PS) forwarded a report about all the crimes registered against Sri. Nishad and others to the Directorate of Enforcement, Kochi on 11/05/2021. On the basis of the said information, since the offences committed under Section 420 of IPC is a scheduled offence under Section 2(1)(x) and 2(1)(y) of PMLA, an Enforcement Case Information Report (ECIR) was recorded vide number ECIR/KZSZO/07/2021 dated 2/8/2021 and investigation under the PMLA was initiated by the Director of Enforcement. Altogether 12 persons were arrayed as the accused. The petitioner is the accused No.12 and Sri. Nishad is the accused No.1.
5. According to respondent No.1, during the investigation by the Enforcement Directorate, it was revealed that Sri. Nishad, the main accused, appointed pin stockists to those who had invested a minimum of Rs.10,00,000/-in his scheme and he promised them that he would give 5% as commission on the investment. It is alleged that Sri. Nishad and pin stockists of the scheme in their hot pursuit of making quick and easy money, fraudulently and dishonestly promoted the three companies mentioned above and made aggressive enrolment of new members into an illegal money circulation scheme under the grab of multi-level marketing and resorted to the fraudulent practice of investing the money received from the investors in the scheme by inducing the downline members for such further enrolment which led to the viral proliferation of the network of the scheme and thereby made huge wrongful gain noted against each and wrongful loss to a large number of downline members. It is further alleged that the petitioner is one of the main pin stockists of the scheme who promoted and conducted the said scheme. It is also alleged that the petitioner has directly received funds from various investors which were later on utilized to facilitate the layering of the proceeds of the crime. Thus, Sri. Nishad and other accused persons including the petitioner have indulged in criminal activities and committed scheduled offences and by indulging in criminal activities related to scheduled offences, a huge amount of proceeds of crime was generated and they are processing/concealing/using such proceeds of crime, it is alleged.
6. The petitioner was arrested on 24/3/2022 and he was rem
