The central legal point established in the judgment is the necessity of the existence of proceeds of crime for the commission of an offence of money laundering under the Prevention of Money Laundering Act, 2002, and the interpretation of relevant legal provisions and case law.

JUDGMENT

(Prayer: Criminal Original Petition is filed under Section 439 Cr.P.C, seeking to enlarge the petitioner on bail in connection with ECIR/CEZOI/ 14/2017 on the file of the respondent.)

1. The petitioner, who was arrested and remanded to judicial custody on 13.06.2022 for the alleged offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as “the PML Act”) in F.No.ECIR/CEZO-I/14/2017 pending on the file of the respondent, seeks bail.

2. The FIR has been registered in F.No.ECIR/CEZO-I/14/2017 with the allegation that during the year 2015, nineteen firms fraudulently opened current accounts in Punjab National Bank, Mint Street, Chennai, and the unknown public servants of the bank had entered into criminal conspiracy with 19 account holders and abused their official position and in furtherance to the criminal conspiracy, they were sending foreign exchange to Hong Kong without genuine business transactions. The modus operandi was that the remittances from various banks to their accounts by way of RTGSs and presented to make request, issued by foreign suppliers for 100% advance remittances. Each remittance amount was kept in such a way that it could not exceed the threshold limit of 1,00,000 USD in order to circumvent the regulatory requirements and applicability of RBI. There were around 700 advance remittances made for the import through various current accounts opened during the period from January 2015 to May 2015 to the tune of INR 424.58 Crores. All the advance remittances were routed through Nostro account maintained with HSBC, New York. The Bank verified the addresses of the said account holders on the advice of the Concurrent Auditors and found that none of the units were functioning in the available addresses. Thus, it is a case of money laundering through shell companies and there has been loss of foreign exchange to the tune of INR 424.58 Crores.

3. Further, it is alleged that the 19 bank accounts of Punjab National Bank, carried out 772 transactions and sent foreign exchange to the extent of USD 70871531.02/- equivant to INR 449,78,62,434/- outside India under the guise of advance import remittance. Despite, no import had taken place and the majority of the amount got diverted to Hong Kong and United Arab Emirates. As far as the petitioner is concerned, he incorporated several entities along with the bank accounts.

4. The learned Senior Counsel appearing for the petitioner submitted that according to the prosecution, the petitioner had incorporated a company under the name and style of M/s. Mehul Mining Ltd., at Hong Kong and opened a bank account and had received a sum of Rs.14,20,52,090/- from India under the guise of export advance but corresponding exports to India were never made. Further allegations is that the petitioner is the Director of two other companies viz., M/s.Sunrise Trading Pvt. Ltd., registered at Hong Kong and M/s.VS Trading Pvt. Ltd., registered at Hong Kong. He received similar export advances through the above said two companies at Rs.4,74,83,511/-and totally a sum of Rs.18,95,35,601/-, which are proceeds of the crime since unaccounted tainted money has been sent from untraceable dummy entities accounts in India to Hong Kong under the guise of export advance.

4.1. He further submitted that the petitioner was never involved any such money laundering activity and crime as alleged by the prosecution. During the year 2007, the petitioner joined with Hindustan Coca Cola Company, Delhi. Therefore, the petitioner has no role to play in incorporation of the companies which were allegedly incorporated by the petitioner. No amount have been transferred to the personal account of the petitioner at any point of time and no evidence to show that the petitioner is involved in the offence under Section 13(2) and 13(1)(d) of the Prevention of Corruption Act.

4.2. He further submitted that the petitioner name does not find in the FIR and it has b