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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Virender Singh, J.
Arvind Rajta - Applicant
Vs.
Directorate of Enforcement Office - Respondent
CrMP(M) No. : 2444 of 2023
Decided On : 12-01-2024
PMLA - Bail Application - Sections 3 and 4 of PMLA - [3, 4] - The court discussed the provisions of Section 3 and 4 of the Prevention of Money Laundering Act (PMLA) and their interpretation in the context of the bail application. The court highlighted the definition of 'proceeds of crime' and 'property' under PMLA, and emphasized the wide reach of Section 3 capturing every process and activity connected with the proceeds of crime. The court also discussed the mandatory provisions of Section 19 and Section 45 of PMLA, and their compliance in the present case.
Fact of the Case:
The applicant filed a bail application under Section 439 of the Code of Criminal Procedure seeking release during the pendency of trial in a case registered under Sections 3 and 4 of PMLA. The case was based on financial irregularities in the distribution of scholarships to SC/ST/OBC/MC students, and the applicant was alleged to have fraudulently acquired funds through shell companies and diverted scholarship funds.
Finding of the Court:
The court found that the mandatory provisions of Section 19 of PMLA were complied with in the arrest of the applicant. It held that the arrest was not violative of Article 22(1) of the Constitution and there was due compliance with the provisions of Section 19 of PMLA. The court also dismissed the bail application, stating that the twin conditions under Section 45 of PMLA were not satisfied, and the applicant failed to make a case for bail at that stage.
Issues: The issues involved the compliance with the mandatory provisions of PMLA in the arrest of the applicant, the interpretation of the bail provisions under Section 45, and the medical evidence presented for the bail application.
Ratio Decidendi: The court emphasized the need for compliance with the mandatory provisions of PMLA, including the furnishing of grounds of arrest in writing, and the satisfaction of the twin conditions under Section 45 for granting bail. It also considered the medical evidence presented and the interpretation of the term 'sick' under the proviso of Section 45.
Final Decision: The bail application was dismissed, and the court clarified that its observations should not be taken as an expression of opinion on the merits of the case.
JUDGMENT :
Virender Singh, J.
Applicant-Arvind Rajta has filed the present application, under Section 439 of the Code of Criminal Procedure (hereinafter referred to as ‘CrPC’), seeking, his release on bail, during the pendency of trial, in case No. ECIR/SHSZO/04/2019, dated 22nd July, 2019, registered with Police Station Sub Zonal Office, Directorate of Enforcement, Shimla, under Sections 3 and 4 of the Prevention of Money Laundering Act (hereinafter referred to as ‘PMLA’).
2. The said case is stated to be registered on the basis of RC, registered by Central Bureau of Investigation (hereinafter referred to as ‘CBI’), vide RC 0962019S0002, dated 7th May, 2019, under Sections 120B read with Section 409, 420, 467, 468 and 471 of the Indian Penal Code (hereinafter referred to as ‘IPC’) and Sections 13 (1) (c), 13 (1) (d) read with Section 13 (2) of the Prevention of Corruption Act (hereinafter referred to as ‘PC Act’).
3. The brief facts, leading to the file of the present ECIR, as per the applicant, are that a case FIR No. 133 of 2018, dated 16th November, 2018, was registered with Police Station East, Shimla, District Shimla, on the complaint made by State Project Officer, State Project Monitoring and New Initiative Unit, Department of Higher Education, H.P., Shimla, wherein, it has been alleged that the financial irregularities have been committed regarding distribution of Pre-matric and Post-matric Scholarships (PMS) to SC/ST/OBC/MC students of the State, under the Central Sponsored and State Sponsored Schemes. Pursuant to the notification, dated 20th March, 2019, investigation of the said case was entrusted/handed over to CHI, upon which, they have registered the said RC, on 7th May, 2019, under Sections 120B, 409, 420, 467, 468, 471 IPC and Sections 13(1)(c), 13(1)(d) and 13 (2) of the PC Act.
4. On the basis of the said RC, present RC is stated to have been registered on 22nd July, 2019, as, the scheduled offences, under which, CBI registered FIR, are mentioned in the schedule, appended to PMLA. Consequently, Directorate of Enforcement (hereinafter referred to as ‘ED’) has initiated the inquiries.
5. When, the matter was investigated by the CBI, the applicant was arrested and remanded to policy custody from time to time. Thereafter, he was remanded to judicial custody and was released on bail, by this Court, on 24th September, 2020, while deciding CrMP (M) No. 1040 of 2020.
6. After completion of the investigation, CBI had filed seven different reports, under Section 173 CrPC, arising out of the RC, including the challan of the allegations, made in the present ECIR, in the court of learned Additional Sessions Judge (CBI), Shimla. Thereafter, ED had called him a number of times, in connection with the investigation and according to the applicant, without fail, he has joined the investigation.
7. All the records pertaining to the present ECIR are stated to be in their possession and the investigation was continued since 2019 and requisite record has also been shared by the CBI with ED. The case is stated to be totally based upon the documentary evidence.
8. It is the further case of the applicant that he was arrested on 29th July, 2023 and was produced before Special Judge, Shimla. He was then remanded to police custody and presently, he is in judicial custody in District Jail, Kaithu, Shimla.
9. It is his further case that he has been arrested in the said case with the allegations that the applicant, alongwith persons, namely Rajdeep and Krishan Kumar, through ASAMS Group, Skill Development Society and Skill Development School, had fraudulently acquired amount to the tune of Rs. 29.00 crore approximately, by showing wrong and false affiliation of Karnataka State Open University and Lovely Professional University, by claiming scholarship, under PMS Scheme for SC/ST/OBC student of Himachal Pradesh from Directorate of Higher Education. The said act, according to the applicant, as per the allegations levelled against him, is stated to be
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The court upheld the legality of the arrest under the Prevention of Money Laundering Act, confirming compliance with statutory requirements, including timely communication of grounds for arrest.
In PMLA cases, constitutional courts grant bail despite Section 45 twin conditions if prolonged incarceration (over two years), trial delay not attributable to accused, and no reasonable trial conclu....
The main legal point established in the judgment is that the twin conditions under Section 45 of PMLA must be satisfied before granting bail in a money laundering case, and the accused's involvement ....
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