Supreme Court makes key clarifications on grounds for bail under PMLA

NEW DELHI: The Supreme Court has said that merely because a charge sheet is filed for the predicate offences, it cannot be a ground to release an accused on bail in connection with scheduled offences under the Prevention of Money Laundering Act, 2002 (PMLA).

A bench of Justices M.R. Shah and C.T. Ravikumar said: "Merely because, for the predicated offences, the charge sheet might have been filed, it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002."

Justice Shah, who authored the judgement on behalf of the bench, said: "The investigation for the predicated offences and the investigation by the Enforcement Directorate for the scheduled offences under the PML Act are different and distinct."

The top court made these observations while considering an appeal by the Enforcement Directorate against the Telangana High Court orders allowing the bail applications and a direction to enlarge Aditya Tripathi's bail in connection with the offences under the PMLA.

An FIR was registered in April 2019 by the Economic Offences Wing, Bhopal, naming about 20 persons or companies as accused for the offences punishable under Sections 120-B, 420, 468, and 471 of the IPC, Section 66 of the IT Act, 2000, and Section 7(c) read with Section 13(2) of the Prevention of Corruption Act, 1988.

It was found in the preliminary inquiry that the e-tender for total works amounting to Rs. 1,769.00 crore of the Madhya Pradesh Water Corporation was tampered with to change the price bid of M/s GVPR Engineers Ltd., M/s The Indian Hume Pipe Company Ltd., and M/s IMC (sic) Project India Ltd. to make them the lowest bidders. A charge sheet was filed before the competent court on July 4, 2019, and it was found that the accused had also committed the offences under PMLA, and the Enforcement Directorate, Hyderabad, initiated a money laundering investigation.

The top court said that from the high court orders, it appears that what is weighed with the court is that the charge sheet has been filed against respective respondent No. 1 (the accused), and therefore, the investigation is completed.

"The High Court has failed to notice and appreciate that the investigation with respect to the scheduled offences under the PML Act, 2002, by the Enforcement Directorate is still going on," it said.

The bench said the high court has taken into consideration irrelevant considerations and has neither considered the rigour of Section 45 of the PML Act nor the seriousness of the offences alleged against the accused for the scheduled offences under the PML Act, 2002.

"The High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002, is still going on, and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable, and the matters are required to be remitted back to the High Court for a fresh decision on the bail applications,", said the bench.

Tripathi's counsel contended that his client was not named in the FIR with respect to the scheduled offense(s) and that all the other accused are discharged or acquitted in so far as the predicate offences are concerned.

But the court said: "Merely because other accused are acquitted or discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1... "Consequently, the inquiry or investigation for the scheduled offences itself is sufficient at this stage," said the bench, adding that there are very serious allegations of money laundering that are required to be investigated thoroughly.

The top court set aside the high court orders and directed Tripathi to surrender before the competent court having jurisdiction or before the concerned jail authority within a period of one week. "The matters are remitted back to the High Court to consider the bail applications afresh in light of the observations made hereinabove and after respective respondent No. 1 surrenders within a period of one week as ordered above. "Pending appeals are accordingly allowed to the aforesaid extent," said the bench in the judgement delivered on Friday. (IANS)

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