The court emphasized the importance of balancing personal liberty with the interest of society and considered the legal principle of mens rea in the context of the petitioner's alleged involvement in abetting the offence of money laundering.

ORDER :

The petitioner, who was arrested by the respondent on 12.7.2022 and remanded to judicial custody on 13.7.2022 for the offence punishable under Section 4 of the Prevention of Money Launder Act, 2002 in ECIR Nos.CEZO-I/05/2019, CEZO-I/37/2020 and CEZO-I/42/2020 on the file of the respondent, seeks bail.

2. The factual aspects in brief are as under:-

(i) Originally three separate complaints dated 1.11.2019, 8.9.2020 and 8.10.2020 were registered by the Central Bureau of Investigation, Bangalore, against (i) Surana Industries Ltd and Promoters and Directors (ii) Surana Power Ltd and others and (iii) Surana Corporation Ltd. and others at the instance of the Bankers viz., IDBI and State Bank of India on their behalf and on behalf of other consortium lenders for misappropriation and criminal breach of trust, manipulation of books of accounts through fictitious accounts and conversion of property against unknown public servants, for the offences punishable under Sections 120-B read with Sections 420, 467, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988.

(ii) The allegations levelled against the said Companies are that credit facilities were extended to those Companies to the tune of several crores at various stages from the year 1998. Later, due to macro-economic conditions, the Companies started facing severe liquidity issues and thereupon, restructure of liabilities was done and similarly short renewal of credit facilities was also made, however, the Companies had defaulted its interest servicing and repayment obligations to member banks and hence, the Companies were classified as Non Performing Asset (NPA) and the loans were recalled and notices were issued for invoking the personal guarantees of Promoters/Guarantors of the Companies and subsequently, the Companies were also liquidated.

(iii) Subsequently, Forensic Auditors were appointed to carry out Transaction Audit and they had observed certain unusual indicators/irregularities related to different transactions in their Report as under:-

(a) Several crores of rupees were given as capital advances to potentially related parties.

(b) Majority of the trading transactions were executed with the potentially related parties with inadequate documentation, marginal/no collection, setting off balances through various adjustments and issuing of unwarranted payments.

(c) Entered into fictitious transactions with parties related amongst themselves.

(iv) On receipt of the Forensic Reports, the commission of fraud/misappropriation by the Companies and diversion of public funds came to light and it was exposed that the Companies were fraud ones and thereupon, the Complaints came to be lodged with the Central Bureau of Investigation alleging that the aggregate amount of fraud comes to Rs.1083,14,35,709/- in respect of Surana Industries Limited, Rs.1495.76 crores in respect of Surana Power Limited and Rs.2930 crores in respect of Surana Corporation Limited.

(v) Subsequently, the respondent had lodged the Enforcement Case Information Reports (ECIR) and issued summons on 12.2.2021 to the petitioner being the Designated Partner of Bell Tower Enterprises LLP to appear for enquiry. The petitioner had submitted his replies on 16.2.2021 and 22.2.2021. Second summon was also issued by the respondent on 14.2.2022 to which, the petitioner had replied on 16.2.2022. After exchange of such communications, the petitioner came to be arrested on 12.7.2022 and remanded to judicial custody on 13.7.2022.

(vi) The respondent had filed Crl.M.p.No.12223 of 2022 seeking custody of the petitioner and the petitioner had filed Crl.M.P.No.12116 of 2022 seeking bail before the Principal Sessions Judge (Special Court under PMLA 2002).

(vii) The Special Court had granted 48 hours custody to the respondent by its order dated 18.7.2022 and dismissed the bail petition by order