Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(P&H) 514

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Harnaresh Singh Gill, J.
Vikram Kumar Seth – Appellant
Versus
Directorate Of Enforcement, Jalandhar – Respondent
CRM-M-35565-2021 (O & M)
Decided On : 22-03-2022

Advocates Appeared:
Mr. Sardavinder Goyal, Mr. Nitin Kant Setia, Mr. Sarwinder Goyal and Mr. Raj Kumar Selwan, Advocates,, for the Appellant; Mr. Satya Pal Jain, Additional Solicitor General with Mr. Sanjay Vashisth, Senior Panel Counsel for the respondent-ED, for the Respondent

The main legal point established is the constitutional validity of Section 45(1) of the PML Act and the principle of granting bail in economic offences when the investigation is complete and the trial is likely to take a long time.

Headnote:
Money Laundering - Bail Application - Prevention of Money Laundering Act 2002 - Section 3, Section 4
Fact of the Case:

The petitioner sought regular bail in a case registered under Section 3 punishable under Section 4 of Prevention of Money Laundering Act 2002. The petitioner was accused of obtaining loans from banks on the basis of forged documents and diverting the proceeds of crime into various properties.
Finding of the Court:

The court considered the constitutional validity of Section 45(1) of the PML Act and the Supreme Court's declaration of its unconstitutionality. It noted divergent views on the revival of the twin conditions for bail and referred to similar cases where bail was granted in similar circumstances.
Issues: Constitutional validity of Section 45(1) of the PML Act, revival of twin conditions for bail, and grant of bail in economic offences.
Ratio Decidendi: The court held that the twin conditions for release on bail under Section 45(1) of the PML Act were declared unconstitutional by the Supreme Court. It referred to cases where bail was granted in similar circumstances and emphasized the principle of granting bail when the investigation is complete and the trial is likely to take a long time.
Final Decision: The court granted bail to the petitioner subject to various conditions including furnishing bail/surety bonds, surrendering passport, and not leaving the jurisdiction without prior permission.

JUDGMENT

Harnaresh Singh Gill, J. - Through this petition, the petitioner seeks regular bail in case bearing ECIR No.JLZO/ECIR/03/2017 dated 07.11.2017, registered under Section 3 punishable under Section 4 of Prevention of Money Laundering Act 2002 (for brevity, 'PML Act').

2. Brief facts of the case, as noticed by the learned Judge, Special Court, PMLA, Jalandhar, while dismissing the bail application of the petitioner, are as under:

'3. The facts necessary for the disposal of the present bail application are that CBI, ACB, Chandigarh registered FIR No. RCCHG2015A0002 dated 15.01.2015, under Sections 120-B, 420, 467, 468, 471 IPC and Sections 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, against applicant-accused Vikram Kumar Seth and others, on the allegations that on the basis of forged and fabricated documents, they obtained loan from the banks. FIR No. 86 dated 30.07.2013 and FIR No. 61 dated 13.05.2013, under Sections 420,467,468,471,120-B IPC have also been registered against Vikram Seth and others, at Police Station Phagwara. Since. The offences under Sections 120-B,420,467,471 IPC and Section 13 of Prevention of Corruption Act are scheduled offences, hence the Directorate of Enforcement, Jalandhar registered the present ECIR under the Prevention of Money Laundering Act, 2002 (for short, PMLA, 2002) against the applicant-accused. It is alleged that during investigation by the Directorate of Enforcement, it is found that accused Vikram Seth is the mastermind of this fraud and he generated proceeds of crime by availing bank loans on the basis of forged documents and further diverted, siphoned off and parked those proceeds of crime in various movable and immovable properties. It is further alleged that accused Vikram Seth had operated bogus entities viz M/s B.L.Seth Steels Ltd., M/s B.L.Seth Coal Sales Pvt. Ltd., M/s V.S.Traders, M/s V.S.Enterprises, M/s P.K.Enterprises, M/s Goel Sales Corporation, M/s Subhash Singh & company, M/s Unique Traders, M/s Quality Lime Product, M/s U.R.Sales Pvt. Ltd, M/s U.R.Enterprises and M/s M.K.Trasders, in his name and in the name of his family members, availed 19 loans from Bank of Baroda, G.T. Road, Phagwara and defaulted in repayment of these loans amounting to Rs.21.31 crore. It is further alleged that with the proceeds of crime, the accused purchased the following properties:-

i. Property measuring 4 kanals vide vasika no. 1170 dated 24.06.2021 at village Narangshahpur, Tehsil Phagwara, in the name of Smt. Veena Handa for Rs.18,50,000/-, out of which Rs..1,00,000/- was paid in cash and the remaining amount of Rs.17,50,000/- was paid from the account of M/s B.L.Seth Steel Ltd.

ii. A loan of Rs.30,00,000/- was obtained by the accused in his name from ICICI Home Loan against property bearing H. No. 524-B, Adarsh Nagar, Phagwara, and the payments to repay this loan was made by utilizing the loan availed from BOB, Phagwara. An another loan amounting to Rs.6,00,000/- was obtained from ICICI Top Up loan and this loan was also repaid by utilizing the loan availed from BOB, Phagwara.

4. It is further alleged that an amount of Rs.8,07,16,024/- was siphoned off by Seth group through net cash withdrawals and utilized the same in purchasing following properties:-

i. Property measuring 8.5 marlas vide vasika No. 814 dated 23.05.2012 at village Narangshahpur, Tehsil Phagwara, in the name of Smt. Sunita Seth, for a consideration of Rs.6,80,000/-.

ii. Property measuring 5.75 marlas vide vasika No. 813 dated 22.05.2012 at village Narangshahpur, Tehsil Phagwara, in the name of Smt. Anita Seth for a consideration of Rs.4,60,000/-.

iii. Property measuring 2 kanals 2.25 marlas vide vasika No. 3182 dated 29.12.2014 at village Naranshahpur, Tehsil Phagwara, in the name of smt. Veenda Handa, for a consideration of Rs.29,61,000/-.

iv. Property measuring 2 kanals 6 marlas vide vasika No. 2989 dated 12.12.2014 at village Narangshahpur, Tehsil Phagwara, in the name of Smt. Sunita Seth for a total