ORDER :

1. Seeking the Court to enlarge the petitioner who is arrayed as accused No. 1 in PMLA S.C. No. 240 of 2022 that is pending before the Metropolitan Sessions Judge-cum-Special Court under the Prevention of Money Laundering Act, Hyderabad, the present Criminal Petition is filed.

2. Heard the submission Sri T. Niranjan Reddy, learned senior counsel appearing for Sri T. Anirudh Reddy, learned counsel on record for the petitioner, as well as the learned Standing counsel for Enforcement Directorate.

3. The matrix of the prosecution case if narrated in a narrower compass is that Ms Servomax India Private Limited fraudulently availed credit facility of Rs.402 crores from banks on the basis of bogus bills/invoices and subsequently, discounted that amount in the group companies like M/s Murali Krishna Power Controls Private Limited, M/s Neutrino Power Systems Private Limited, M/s Akhila Power Products Private Limited, etc. and thereafter, transferred the said loan amount back to M/s Servomax India Private Limited directly or indirectly on the basis of dummy bills. On suspicion, the erstwhile State Bank of Hyderabad engaged a forensic auditor i.e. M/s Deloitte to conduct forensic audit. It was found that M/s Servomax India Private Limited fudged its debtors list with inflated receivables from non-existing entities or related parties or companies floated by its own employees to avail loan facility fraudulently. Both sales and purchase transactions were made with companies floated by the employees as shareholders/directors. Funds were diverted without actual trade/sales. Thus, M/s Servomax India Private Limited used the LC facilities through the said companies and thereby, involved in diverting/siphoning of funds.

4. The specific allegations that are directed against the petitioner/accused No. 1 are that he was a key person holding the position of Managing Director and C.E.O. of M/s Servomax India Private Limited and is responsible for divergence of the proceeds of crime. He committed the offence of money laundering by being actively involved in the process of acquiring, using, possessing and claiming the same to be untainted property. On his instructions, bogus invoices were issued and related entries were fraudulently used for encashment of funds through LC discounting. The petitioner got indulged in creation and concealment of the proceeds of crime by creating a web of entities by floating them in the name of his employees and rotated funds between them on the basis of bogus transactions to layer and concealed the floated amounts to claim the same as untainted property.

5. Placing much reliance on the aforesaid allegations, the learned Standing Counsel for Enforcement Directorate contended that with the active involvement of the petitioner, M/s Servomax India Private Limited has fudged its debtors list with inflated receivables from non-existing entities floated by its own employees to avail loan facility fraudulently. The learned Standing Counsel also stated that under the directions of the petitioner, M/s Servomax India Private Limited had maliciously approached the Board of Industrial and Financial Reconstructions (BIFR) for declaring the company as sick with a sole intention to avoid payment of dues to various lenders, Government departments and its employees. The learned Standing Counsel also submitted that the petitioner is the prime conspirator behind release of a total amount of Rs.402 crores by the consortium of banks to M/s Servomax India Private Limited for meeting its working capital demand and completion of projects. The learned Standing Counsel further submitted that the said funds were diverted and thereby, wrongful loss was caused to the consortium of banks. The learned Standing Counsel by stating thus, contended that such being the grave allegations against the petitioner, he is not entitled for bail either under Section 167 (2) or 439 Cr.P.C.

6. Coming to the entitlement of bail under Section 167 Cr.P.C. the learned