Filing of charge sheet in the predicate offense is not the basis of bail for the accused in money laundering case: Supreme Court

Filing of charge sheet in the predicate offense is not the basis of bail for the accused in money laundering case: Supreme Court

The Supreme Court has recently held that mere filing of charge sheet in predicate offenses cannot be a ground for releasing the accused on bail in respect of offenses under the Prevention of Money Laundering Act.

A bench of Justice MR Shah and Justice CT Ravikumar passed the order while hearing an appeal filed by the Enforcement Directorate against the order of the Telangana High Court releasing an accused on bail.

The Bench set aside the Telangana High Court’s order granting bail to the accused and ordered the accused to surrender within a week.

What is the Issue?

The matter pertains to the High Court granting bail to an accused in a case under investigation by the Enforcement Directorate, Hyderabad.

In this case, on April 10, 2019, the Economic Offenses Wing, Bhopal registered a case against 20 persons / companies under sections 120B, 420, 468, 471 of IPC and section 66 of the Information Technology Act, 2000 and section 13 (2) of the Prevention of Corruption Act. ) including 7(c) was made accused.

After preliminary investigation against the accused, it was revealed that in the e-tender of Madhya Pradesh Water Department worth Rs 1769 crore, some companies have been tampered with to make the tender the lowest.

The Economic Offenses Wing, Bhopal completed the investigation and filed a charge sheet in the matter on July 4, 2019.

After studying the charge sheet, it was found that offenses under the Prevention of Money Laundering Act, 2002 were also made out against the accused. After which the Enforcement Directorate, Hyderabad started investigation against the concerned accused and arrested them on January 19, 2021.

In this case, the accused had filed an appeal for bail before the High Court. The High Court had ordered the accused to be released on bail.

Judgement 

The Court observed that the High Court, while granting bail to the accused by the impugned order, did not consider the rigor of Section 45 of the Prevention of Money Laundering Act, 2002.

The Court further observed that while granting bail to the accused, the High Court did not at all consider the nature of the allegations and the seriousness of the alleged offenses under the Prevention of Money Laundering Act.

The court said that looking at the nature of the allegations, it can be said that these fall under the category of very serious allegations of money laundering which need to be thoroughly investigated.

The Court also rejected the submission made by the respondent that the other accused in this case have been acquitted so far as the predicate offenses are concerned.

The Court observed that it appears that the High Court has granted bail to Respondent 1 on the pretext that the charge sheet has been filed against him in the matter and therefore the investigation is complete. Whereas the High Court failed to take note of the ongoing investigation of the Directorate of Enforcement under the Prevention of Money Laundering Act in respect of scheduled offenses against Respondent 1 (accused).

The Court held that the investigation of predicate offenses and the investigation for scheduled offenses being carried out by the Enforcement Directorate under the Prevention of Money Laundering Act are different. Therefore, the High Court took into account the extraneous consideration while granting bail to the accused.

In view of the aforesaid facts and reasons, the Court while allowing the appeal of the Enforcement Directorate, ordered the quashing of the impugned order of the High Court.

Case: Directorate of Enforcement Vs Aditya Tripathi, Criminal Appeal No. 1401 & 1402 of 2023

Read the copy of judgement here: