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2024 Supreme(Online)(Ker) 83925
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.S.DIAS, J
SHRI.SATHEESH KUMAR.P – Appellant
Versus
ASSISTANT DIRECTOR – Respondent
Bail Application | ECIR/KCZO/45/2021
For the Appellants/Petitioners: Sri.B.Raman Pillai
For the Respondents: Sri.L.Sundareshan, Sri.Jaishankar V.Nair
The court held that the serious nature of economic offenses and substantial evidence against the petitioner justified the denial of bail under the Prevention of Money Laundering Act.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 3, 4, and 17 - Code of Criminal Procedure, 1973 - Section 439 - Bail application by accused in a money laundering case relating to fraudulent loans sanctioned by a cooperative bank - Allegations include manipulation of records and misappropriation of funds totaling Rs.100 Crore - Petitioner claims innocence and non-involvement in the alleged crime - Court finds sufficient evidence of involvement, including financial discrepancies and corroborated witness statements - Dismissal of bail application justified due to the serious nature of accusations and potential for influencing ongoing investigations. (Paras 1-24)
Facts of the case:
The petitioner was arrested in connection with a money laundering case involving fraudulent loans sanctioned from a cooperative bank, allegedly resulting in a loss of Rs.100 Crore. The petitioner is accused of facilitating the fraudulent activities of another accused, Kiran P.P, who obtained loans without proper collateral.
Findings of Court:
The court found substantial evidence linking the petitioner to the proceeds of crime and determined that the allegations were serious enough to deny bail, emphasizing the risk of tampering with evidence and the gravity of economic offenses.
Issues: The key issues were the petitioner’s alleged involvement in money laundering activities, the legitimacy of the evidence against him, and whether he posed a risk of committing further offenses if granted bail.
Ratio Decidendi: The court ruled that the evidence presented, including financial records and witness testimonies, established a prima facie case against the petitioner, justifying the denial of bail under the stringent conditions of the Prevention of Money Laundering Act.
Result: Bail application dismissed.
| Table of Content |
|---|
| 1. overview of the allegations and accused's actions. (Para 1 , 2 , 3) |
| 2. petitioner's claims of innocence and procedural errors. (Para 4) |
| 3. prosecution's view on the scale of the alleged financial crimes. (Para 5) |
| 4. arguments presented by both sides in the bail hearing. (Para 6 , 7) |
| 5. prosecution's evidence against the petitioner. (Para 8 , 9) |
| 6. legal framework governing bail under the prevention of money laundering act. (Para 10 , 11 , 12 , 13) |
| 7. judicial interpretation of bail conditions and economic offences. (Para 14 , 15 , 16) |
| 8. court's evaluation of evidence and decision-making process. (Para 17 , 18 , 19) |
| 9. comparison with precedent cases and rationale for bail denial. (Para 20 , 21 , 22 , 23) |
| 10. final decision on the bail application. (Para 24) |
ORDER
The application is filed under Section 439 of the Code of Criminal Procedure, 1973 , by the fourteenth accused in Crime No.ECIR/KCZO/45/2021, registered by the Enforcement Directorate, Cochin, against the fifty five accused persons for allegedly committing the offences under Section 3 read with Section 17 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (‘Act’, in short). The petitioner was arrested on 04.09.2023.
2. The prosecution case, in brief, is that, from 2014 to 2020, the accused 1 to 6 had sanctioned and disbursed multiple loans from the Karuvannur Service Co-operative Bank Ltd - 112 (hereinafter referred to as ‘Bank’) to the same person, against the loan limits set by the Bank, and by accepting the title deeds of the same property as collateral security, after forging the membership records by including persons who are not members of the Society, by furnishing false addresses and manipulating the software of the computer system, and by falsely disbursing loans in the names of property owners without their knowledge or consent and manipulating the inventory of supermarket run by the Bank. Accordingly, the accused have cheated and misappropriated Rs.100/- Crore from the Bank. The first informant, Smt.Sreekala, Secretary-in-Charge of the Bank, filed a complaint before the Irinjalakkuda Police Station and FIR No.0650/2021 was registered on 14.7.2021 against Sunil Kumar T.R, the former Secretary of the Bank (presently the thirty third accused); Biju.M.K, the former Branch Manager of the Bank (presently the thirty fourth accused); Jilse.C.K, the former Senior Accountant of the Bank (presently the sixteenth accused); Kiran.P.P., a member of the Society (presently the ninth accused); Bijoy.A.K, a Commission Agent (presently the first accused) and Reji Anil, the Accountant of the Supermarket for committing the offences under Sections 406 , 420 , 409 and 465 read with Sec.34 of the Indian Penal Code (‘ IPC ’). Subsequently, the crime was transferred to the Crime Branch by order No. D3- 108924/2021/PHQ dated 21.7.2021 and was re-registered as Crime No.0165/2021. The DYSP-1, Crime Branch, Thrissur, by letter bearing No.289/DY.SP-I/CB/TSR/21 dated 22.9.2021, informed the Deputy Director of Enforcement Directorate, Kochi regarding the details of the accused and the status of the crime. As Section 420 of the is a scheduled offence under the Act, enquiries were initiated against the accused persons after recording the facts of the scheduled offence as ECIR No.KCZO/45/2021 dated 2.8.2021. By committing the above criminal activity, the accused have obtained and possessed the proceeds of crime, layered and projected the proceeds of the crime as untainted money as defined under Sec.2(1)(u) and 2(1) (v) of the Act. The proceeds of the crime generated, acquired, possessed and concealed by the accused persons are now being projected and claimed as untainted money and properties. Thus, the accused have committed the above offences.
3. The allegations attributed against the petitioner (fourteenth accused) in the complaint, in a nutshell, are that, while the petitioner was conducting a money lending business, he approached the defaulters of N
