Stay updated with key 2024 High Court ruling on governance of Economic offences (PMLA) and Public Accountability, Vigilance and Prevention of Corruption. This update offers focused summary of judgments concerning power of authorities regarding summons, Twin conditions under S. 45, Bribe demanded by public servant and Sanction for prosecution.
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Economic offences — Prevention of Money Laundering Act, 2002 — Ss. 45, 3, 4 and 24 — Grant of bail — Applicant arrested in relation to case registered by ED — Whether twin conditions stipulated under S. 45 PMLA mandatory — Interpretation of “reasonable grounds for believing” under S. 45 — Held, S. 45(1) PMLA lists twin conditions that must be satisfied before accused can be enlarged on bail in case of money laundering — No bail in relation to offence of money laundering unless twin conditions are fulfilled — Twin conditions are firstly reasonable grounds for believing that accused is not guilty of offence of money laundering and secondly accused not likely to commit any offence while on bail — Court not required to conduct a mini trial for purpose of returning a finding of guilt — Rather material-on-record to be examined to reach conclusion whether there are reasonable grounds to believe accused is guilty of offence under PMLA — No ground for grant of bail made out, at this stage — Application disposed of [Sanjay Singh v. Enforcement Directorate, (2024) 1 HCC (Del) 312]
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Public Accountability, Vigilance and Prevention of Corruption — Prevention of Corruption Act, 1988 Ss. 7 and 13(1)(d)(i)(ii) — Bribe demanded by public servant — When established — Offences under S. 7 of the Act, 1988 relating to public servants taking bribe require a demand of illegal gratification and acceptance thereof — Proof of demand of bribe by a public servant and its acceptance by him is sine qua non for establishing offences under the Act, 1988 — Held, failure of prosecution to prove demand for illegal gratification would be fatal and mere recovery of amount from person accused of offences under Ss. 7 and 13 of the Act, 1988 would not entail his conviction thereunder — Observed, evidence as to demand of illegal gratification was not satisfactory and convincing and since proof of demand is a sine qua non for convicting accused in such cases, it cannot be said that prosecution has been successful in proving its case beyond reasonable doubt — Moreover, their evidence was also corroborated by circumstance that no glittering was found on hands of accused — If accused would have accepted amount by his hands, it would have been stained with anthracene powder and glittering ought to have appeared on his hands [Mohan v. State of Maharashtra, (2024) 1 HCC (Bom) 1]
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Economic Offences — Prevention of Money Powers of Laundering Act, 2002 — S. 50 — Power authorities regarding summons, production of documents and to give evidence, etc. — FIR registered for cheating, fraud, forgery Complainant received e-mail from bank informing that firm issued Form 15-CB certificates — ED informed certificates issued using credentials of complainant– Prima facie case of money laundering made out — Petitioner not arrayed as accused due to non-cooperation in investigation — Petitioner filed bail application under S. 438 CrPC — Whether statements of witness/accused admissible in evidence — Held, statements admissible Statements can make case regarding involvement of accused in commission of offence Evidentiary value to be tested at end of trial not at stage of bail — Bail granted [Amit Aggarwal v. Enforcement Directorate, (2024) 1 HCC (Del) 288]
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Public Accountability, Vigilance and Prevention of Corruption — Prevention of Corruption Act, 1988 — S. 19 — Sanction for prosecution — Granted of, after denial on first occasion — Permissibility — Held, once having exercised its power, Government had no jurisdiction or jurisdiction or authority to pass fresh order on same matter — Same would amount to review of earlier order declining sanction which be illegal and without jurisdiction — Material further revealed that no new material was considered while passing fresh order granting sanctions — Petition allowed [CBI v. R. Bhuvaneswari, (2024) 1 HCC (Bom) 32]
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Economic offences — Prevention of Money Laundering Act, 2002 — Ss. 65, 45, 19 and 2(na) — Default bail — Grounds Incomplete investigation — Money laundering case Default bail sought on the ground that investigation was incomplete on completion on 60 days though complaint had been filed within 60 days — Premised on two facts, firstly, FSL report was not attached with complaint — Secondly, summons were issued to another person after filing complaint — ED version was that investigation was complete qua petitioner though FSL report was awaited from agency concerned — Summons to another person did not mean that investigation was not completed against petitioner — Held, FSL report was the task of another agency — ED could not be blamed for it — Similarly, issue of summons to another person or seeking leave of court to file additional evidence does not lead to inference that investigation was not complete against petitioner — No case was made out for default bail [Ram Kishor Arora v. Enforcement Directorate, (2024) 1 HCC (Del) 155]
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Public Accountability, Vigilance and Prevention of Corruption — Prevention of Corruption Act, 1988 — Ss. 17-A (as amended in 2018) and 19 — Investigation of recommendation or decision made by public servant in his official capacity — Prior approval/sanction by competent authority Requirement of — At which stage of investigation — Held, requirement of “sanction” under S. 19 of the 1988 Act will arise only on completion of investigation and at the time of taking cognizance and not at pre-investigation stage — Provision under S. 17-A of the 1988 Act has been duly complied with on basis of valid “approval” by competent authority on basis of a preliminary enquiry and material before it — Petition dismissed [Arvind Kumar Singh v. State of W.B., (2024) 1 HCC (Cal) 300]
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Economic Offences — Prevention of Money-Laundering Act, 2002 — Ss. 50(2), 2(1)(na), 2(1)(u) and 3 — Money laundering investigation Summons issued under S. 50 — Whether summoned person can seek information relating to enforcement case information report (ECIR) or other documents — Held, power to summon is conferred by S. 50(2) for the purpose of “any investigation and proceeding — Summons can be issued to “any person whose attendance (Enforcement Directorate) considers necessary whether to give evidence or to produce records — Purpose is to identify proceeds of crime and to examine money laundering angle — Court cannot interfere at S. 50 stage on the ground that summons do not contain all relevant information — Moreover, ECIR is an internal document of the ED which sets in motion investigation process for examining money laundering angle information including ECIR — Court cannot interfere with process merely on apprehension that summoned — Not necessary that summons must contain entire person might be arrested, particularly when there are stringent bail conditions prescribed in S. 45 — Further held, provisions of S. 20(3) are also do not violated by S. 50 [Talib Hassan Darvesh v. Enforcement Directorate, (2024) 1 HCC (Del) 93]
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Economic Offences — Prevention of Money-Laundering Act, 2002 — Ss. 45(1) and 3, Expln. — Bail — Twin conditions under S. 45(1)(ii) — Held on facts, it was difficult to infer positively from the facts that petitioner had knowledge of allegedly fraudulent transactions at relevant time, and was responsible for money laundering merely because he received ad hoc commission Doubtful that ingredients of money laundering in terms of S. 3 were satisfied in this case — Held, reasonable grounds for believing that the petitioner not guilty of offence, as required under first limb of S. 45(1)(i) PMLA — Second limb of S. 45(1)(ii) — Accused “is not likely to commit any offence while on bail — This condition too was satisfied because investigation stood completed and there no material on record that evidence might be tampered accused had bad antecedents — There were only two doubtful facts, namely, deletion of some e-mails which were subsequently retrieved, and the petitioner’s wife acquiring control of the company — They can be taken care of, by imposing appropriate conditions of bail rather than keeping him in prolonged incarceration — Petitioner admitted to bail subject to usual conditions, notable among them was issue of look out circular against him so that he cannot leave country without permission of concerned authorities — Bail granted [Ramesh Manglani v. Enforcement Directorate, (2023) 7 HCC (Del) 134]