The court emphasized the need for prima facie evidence and considered the specific provisions of the Prevention of Money Laundering Act, 2002, in granting bail to the petitioner.

JUDGMENT :

RAHUL BHARTI, J.

1. Heard the learned counsel for both sides. Perused the pleadings and the documents therewith.

2. The petitioner is suffering continuing judicial custody on account of his arrest carried out by the Directorate of Enforcement (“ED” in short) Srinagar Zonal Office by reference to a Case No. ECIR/SRZO/04/2021 dated 31.03.2021.

3. The petitioner came to be arrested on 30.11.2023 by the ED in purported exercise of its power to arrest vested under section 19 of the Prevention of Money Laundering Act, 2002.

4. The factual background in which the ED came to emerge on the scene and register an Enforcement Case Information Report (“ECIR” in short) No. ECIR/SRZO/04/2021 dated 31.03.2021 needs to be set out first before coming to deal with the facts and circumstances of the present case in light of which the petitioner is pressing for and seeking bail under section 439 of Criminal Procedure Code, 1973 read with section 44(2) of the Prevention of Money Laundering Act, 2002.

5. The petitioner is claimed to have been elected to be on the Board of Directors of the J&K State Cooperative Bank, Srinagar in December 2018. The tenure of the elected Board of Directors of the J&K State Cooperative Bank, Srinagar was for three (3) years to expire in December 2021.

6. However, the elected Board of Directors of the J&K State Cooperative Bank, Srinagaris said to have been prematurely dislodged on 15.05.2020 when the Government, in purported exercise of its statutory power under the J&K Cooperative Societies Act, 1989, came to nominate a governing body of the J&K State Cooperative Bank, Srinagar. Thus, only from December 2018 to May, 2020, the petitioner purportedly served as Chairman of the J&K State Cooperative Bank, Srinagar.

7. An alleged registered cooperative society in the name of “River Jhelum Cooperative House Building Society” purported to be a registered and governed under the J&K State Cooperative Societies Act, 1989 had come to approach the J&K Cooperative Bank, Srinagar with an application for loan routed through the end of the Registrar Cooperative Societies J&K, for the purpose of availing a loan of rupees three hundred crores (Rs. 300/- crores) for the purported purpose of development of a housing colony upon 300 kanals of land situated at Shivpora, Srinagar meant to be a satellite township.

8. The said loan case of the River Jhelum Cooperative House Building Society is reported to have been sanctioned by the governing body/council of the J&K State Cooperative Bank Limited in September, 2018 wherefrom the Board of Directors of the J&K State Cooperative Bank, Srinagar had accorded its approval for the grant of loan in favour of the River Jhelum Cooperative House Building Society by virtue of a decision taken in March, 2019.

9. Thus, as per the statement of facts in the present petition, the process of availing of loan by the River Jhelum Cooperative House Building Society from the J&K State Cooperative Bank, Srinagar had originated from the Registrar Cooperative Societies J&K end before the petitioners becoming the Chairman of the Board of Directors of the J&K State Cooperative Bank, Srinagar and further that the approval for grant of loan of rupees 250/- crore was not accorded by the petitioner in his own discretion and authority but by the Board of Directors of the J&K State Cooperative Bank, Srinagar approval of which the petitioner was one of the directors.

10. The loan amount of rupees two hundred and thirty-three crores (Rs. 233/- crores) allegedly came to be loaned to the River Jhelum Cooperative House Building Society on 25.4.2019.The mode in which the sanctioned loan amount of rupees 233/- crores stood disbursed by the J&K State Cooperative Bank, Srinagar was in the form of payments to the actual identified landowners/land holders from whom the River Jhelum Cooperative House Building Society was in purported deals to acquire 257.19 kanals of land. For the land so acquired/ purchased in plots’ shape from the diff