Vijay Pal Dalmia, Advocate

Supreme Court of India & Delhi High Court

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In the present case ( titled Raj Kumar Goel and Ors. vs. Directorate of Enforcement available at and reported at MANU/DE/1735/2018) the petitioners, Rohit Tandon and Raj Kumar Goel, sought regular bail in ECIR recorded by Enforcement Directorate under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The abovementioned ECIR was recorded pursuant to FIR registered for the offences punishable under Sections 406/409/420/468/471/188/120B of the Indian Penal Code. The scheduled offence therein being punishable under Sections 420/471/120B IPC.

In the FIR both the petitioners were on bail and charge-sheet was filed without arrest. The allegations in the ECIR in nutshell were that the petitioners with other accused persons illegally converted the demonetized currency into monetized currency by depositing cash into the accounts of various firms, persons and subsequent issuance of demand drafts and also paying of commission to the conspirators who also deposited the money in various accounts and transferred it to satisfy their own liability.

It was submitted on behalf of the petitioners that neither the possession nor deposit of demonetized currency in one's own account was an offence much less a scheduled offence under PMLA. This contention was accepted by this Court. Additionally, it was held that the provisions of Specified Bank Notes (Cessation of Liabilities) Act, 2017 only provided for penalty for possession/transferring of demonetized currency notes after the appointed date. The Court had refrained from deciding the issue of whether the deposit of demonetized currency in the accounts of other persons would amount to an offence of cheating or not lest it would have prejudiced the parties at that stage of arguments on charge.

The Supreme Court (SC) in the case Nikesh Tarachand Shah v. Union of India and Ors. (AIR 2017 SC 5500)

[] had set aside the twin conditions imposed under Section 45 PMLA and declared that Section 45 (1) PMLA in so far as it imposed two further conditions for release on bail to be unconstitutional and violative of Articles 14 and 21 of the Constitution of India. The SC had noted that in all matters before it in which bail has been denied because of presence of twin conditions contained in Section 45 PMLA would now go back to respective Courts which had denied bail and the respective Courts were directed to hear the applications on merits without application of the twin conditions contained in Section 45 of the PMLA. Following this decision the petitioners sough bail.

With regards to the application for bail the Court considered the non-applicability of the twin conditions under Section 45 of PMLA which was the major reason for rejection of the earlier bail application of Rohit Tandon.

Furthermore, the Court held that the offence punishable under Section 4 PMLA provides for maximum sentence of imprisonment for seven years with a minimum sentence for imprisonment of three years. Petitioners had been in custody for a period more than 16 months and despite directions of the SC that day-to-day trial should continue, the arguments on charge had not begun. The Crime Branch had not arrested the petitioners and had filed a charge-sheet without arrest. The evidence in the present case was primarily documentary in nature and statements of accused which are admissible in evidence had already been recorded under Section 50 of PMLA. Moreover as per the requirement of Section 44 of PMLA trials in FIR for the scheduled offence as well as Section 4 PMLA in ECIR were required to be held together. Thus, considering that the trial was likely to take some time the Court had granted bail to the petitioners.

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