Allowed

Kusum Lata v. Union of India Thru. the Directorate of Enforcement

Allahabad HC17 Mar 2023/2890/2023

Case brief

AI extract

What is this about?

The Allahabad High Court allowed a bail application filed by Kusum Lata, wife of a co-accused in a Prevention of Money Laundering Act case. The court held that under the proviso to Section 45(1) PMLA, 2002, a woman accused in money laundering of less than one crore rupees is entitled to bail, especially given her medical conditions and the fact that other co-accused were released while she remaine

What did the court decide?

Released on bail upon furnishing a personal bond and two sureties for Rs. 1,00,000/- each.

Kusum Lata Vs Union of India Thru. the Directorate of… — Cheque Dishonour | Allahabad HC (2023)

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Court No. - 16

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Case :- CRIMINAL MISC. BAIL APPLICATION No. - 2890 of 2023

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Applicant :- Kusum Lata Opposite Party :- Union Of India Thru. The Directorate Of Enforcement Counsel for Applicant :- Pranjal Krishna Counsel for Opposite Party :- Kuldeep Srivastava

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Hon’ble Subhash Vidyarthi J.

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1. Heard Sri S. C. Mishra, Senior Advocate assisted by Sri Purnendu. Chakrawarti and Sri. Pranjal Krishna Advocates, the learned counsel for the applicant, Sri Kuldeep Srivastava, the learned counsel for the Directorate of Enforcement and perused the record.

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2. This is the second bail application for release of the applicant on bail in Complaint Case No. 13 of 2017 (Assistant Director, Directorate of Enforcement, Lucknow Vs. Yadav Singh and others) in the Court of Session Judge/ Special Judge, PMLA, Lucknow under Sections 3 and 4 of Prevention of Money Laundering Act, 2002, (hereinafter referred as ‘PMLA, 2002’) arising out of Complaint No. ECIR/04/PMLA/LZO/2015, registered with the Directorate of Enforcement, Lucknow Zonal Office, Lucknow.

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3. On 30.07.2015, a First Information Report was lodged in furtherance of an order dated 16.07.2015 passed by this Court in Writ Petition No. 12396 (M/B) of 2014 against one Yadav Singh, the then Chief Engineer, Noida/Greater Noida, Yamuna Expressway Authorities and some unknown persons, for alleged corrupt practices adopted in executing some engineering works between 14.12.2011 and 23.12.2011.

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4. On 02.05.2017, the Enforcement Directorate filed a Complaint No.13 of 2017, ECIR/04/PMLA/LZO/2015 in which the applicant was also named as an accused person. The applicant happens to be wife of the co-accused Yadav Singh. It is stated in the complaint that the statement of co-accused Pradeep Garg was recorded under Section 50 of the PMLA, 2002, wherein, he stated that he had given Rs. 1,00,00,000/- to Countrywide Electronics Pvt. Ltd for investment in

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shares from his group Company Gannayak Finance & Leasing Pvt. Ltd. Countrywide Company was controlled by co-accused Mohan Lal Rathi. Mohan Lal Rathi stated that the Pradeep Garg had provided Rs. 1,00,00,000/- to his Countrywide Holdings Pvt. Ltd for purchase of equity share. The said amount was invested in the listed equity shares but there was no written agreement about the alleged investment of Rs. 1,00,00,000/- in equity shares. He further stated that he had given a loan of Rs. 50,00,000/- to M/s Kusum Garments Pvt. Ltd. on interest. However, no agreement was executed in this regard. The applicant is a Director of M/s Kusum Garments.

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5. The complaint further states that M/s Kusum Garments had received Rs. 50,00,000/- as loan from Countrywide Electronic Pvt. Ltd, a unit owned by Sri Mohan Lal Rathi, C.A. and the amount was transferred in three installments on 23.03.2012, 26.03.2012 and 27.03.2012 without executing any agreement. It is alleged that Sri Pradeep Garg had transferred Rs. 50,00,000/- to M/s Kusum Garments through Sri Mohan Lal Rathi by layering so that it could not be detected and in fact this amount was proceed of Crime and the amount was given in lieu of contracts given to M/s N.K.G. Infrastructure Limited by Yadav Singh.

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6. The Enforcement Directorate has provisionally attached an industrial Plot No. H-60, Sector-63 Noida and a building, which are owned by M/s Kusum Garments.

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7. By means of an order dated 07.09.2018 passed in Writ Petition (Criminal) No. 177 of 2018, the Hon’ble Supreme Court had allowed the applicant to appear before the Trial Court within two weeks and had given her the liberty to file a bail application, and the application was directed to be considered by the Trial Court forthwith. The order further provided that even if the bail application was rejected, the applicant would not be arrested for a period of 30 days in order to enable her to approach the higher forum.

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8. By means of an order dated 11.07.2018, the period of interim protection granted by the Hon'ble Supreme Court vide order dated 07.09.2018, was further extended by 30 days.

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9. The applicant surrendered before the Trial Court on 15.09.2018 and moved a bail application which was rejected on the same day. The applicant thereafter, filed Criminal Misc. Bail Application No. 42101 of 2018 and by means of an order dated 01.11.2018, a Division Bench of this Court had granted interim bail to the applicant, after considering the facts that the applicant is an old lady who is suffering from various old aged diseases. However, the bail application 42101 of 2018 was rejected by means of an order dated 18.12.2018.

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10. The applicant again approached the Hon’ble Supreme Court by filing Special Leave to Appeal (Crl.) No (s). 322-325 of 2019 and the Hon’ble Supreme Court passed an interim order dated 10.01.2019 providing that no coercive action will be taken till the next date of hearing. On 07.12.2022, the Hon’ble Supreme Court dismissed the Special Leave Petition and provided that if the applicant surrenders within a week and applies for regular bail, her bail plea may be considered by the Trial Court expeditiously and on priority. It was further provided that the interim protection granted to the applicant shall continue for a period of one week or till her bail plea is considered by the Trial Court, whichever be the earlier. The period of one week granted in the aforesaid order dated 07.12.2022, was extended for four weeks by means of an order dated 16.12.2022.

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11. In furtherance of the aforesaid order passed by the Hon’ble Supreme Court, the applicant filed a bail application, which was rejected by the Sessions Judge, Lucknow by means of an order dated 16.01.2023 on the sole ground that the applicant had not surrendered and she was not in custody, and the time granted by the Hon’ble Supreme Court had expired on 13.01.2023.

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12. The applicant challenged the aforesaid order dated 16.01.2023 by filing an Application U/S 482 No.- 662 of 2023 and a coordinate bench of this Court disposed of the aforesaid application by means of an order dated 25.01.2023. The order states that: -

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“However, considering the ailments of the present applicant which has been indicated in para 19 of the application and such critical physical condition has been considered by this Court in earlier occasion and by the Apex Court, therefore, liberty is given to the present applicant to appear before the learned trial

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court within one week from today. To be more precise on or before 1.2.2023 and file her bail application. The said bail application shall be heard and disposed of expeditiously preferably on the same date, if possible.

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It is further provided that the learned counsel for the applicant shall supply the advance copy of the bail application to the learned counsel for the opposite parties by 30.1.2023, so that the learned counsel for the opposite parties may seek instructions and may file objection, if so needed.

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Till her appearance before the learned trial court in terms of this order or a period of one week from today i.e. on or before 1.2.2023, whichever is earlier no coercive action shall be taken against the present applicant. However, it is made clear that if the present applicant does not appear before the learned trial court within time stipulated, the benefit of this order shall not be available to her and the prosecution / investigating agency / trial court would be at liberty to take appropriate coercive steps against her strictly in accordance with law.”

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13. In furtherance of the aforesaid order passed by this Court, the applicant appeared before the Trial Court and filed an application for her release on bail, which has been rejected by the learned Sessions Judge/Special Court PMLA, 2002, Lucknow by observing that the amount at Rs. 50,00,000/- deposited in the account of M/S Kusum Garments was bribe taken by the applicant’s husband. The aforesaid money was routed through the accused/applicant and it is proceed of crime regarding which a case is pending against Yadav Singh and other unknown person. Regarding the plea of the applicant’s sickness, the Trial Court observed that: -

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“It could not be ruled out at this stage that only in order to create evidence in her favour, such papers of her sickness are procured by her. It also reflects that accused applicant is indulged in creating evidences of her sickness, as and when required. There is nothing on record to show that earlier, in the span of seven years, barring some period, accused/applicant got herself treated in the Hospital.”

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14. Sri S.C. Mishra Senior Advocate, the learned counsel for the applicant has submitted that it is only the applicant who is still languishing in jail in the present case and besides the applicant, all other co-accused person have already been enlarged on bail. Co-accused Yadav Singh has already been granted bail by means of an order dated 25.10.2017 passed by the Hon’ble Supreme Court in Criminal Appeal No. 1826 of

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Another co-accused Pankaj Jain has been granted bail by means of an order dated 16.04.2019 passed by a coordinate bench of this Court in Bail No. 2504 of 2019. Yet another co-accused Vinod Kumar Goel has been granted bail by means of an order dated 28.02.2019 passed by this Court in Bail No. 7566 of 2018.

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15. One of the co-accused persons Pradeep Garg has been granted bail by means of an order dated 04.09.2018 passed by the learned Session Judge/Special Judge, PMLA, Lucknow.

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16. Sri Mishra has further submitted that the applicant is a woman and she is suffering from various diseases. One of the kidneys of the applicant has been removed and she is surviving with one kidney. The applicant is also suffering from anxiety, depression, and panic attacks. The applicant had to remain admitted to a hospital from 16.01.2023 and 17.01.2023 and copies of documents regarding her ailments and treatment have been annexed with the affidavit. He has submitted that keeping in view the aforesaid facts, the applicant is entitled to be released on bail.

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17. The Enforcement Directorate has filed a counter affidavit opposing the bail application. Sri. Kuldeep Srivastava, the learned Counsel for the Enforcement Directorate has vehemently opposed the prayer for grant of bail to the applicant. He has submitted that from the statements of Pradeep Garg and Mohan Lal Rathi referred above, is clear that the applicant is the beneficiary of proceeds of crime. He has further submitted that there is no sufficient ground for this Court to believe that the applicant is not guilty of being in possession of proceeds of crime and, therefore, her bail application is liable to be rejected. Sri Srivastava, has relied upon the judgment of the Hon’ble Supreme Court in the case of Vijay Madanlal Choudhary and others Vs. Union of India and others , 2022 SCC Online SC 929, wherein the Hon’ble Supreme court held that: -

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“ 412. As a result, we have no hesitation in observing that in whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned

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to uphold the objectives of the 2002 Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering.”

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18. Sri. Srivastava has placed reliance upon a judgment of the Hon’ble Supreme Court in Y.S. Jagan Mohan Reddy v. CBI , (2013) 7 SCC 439, wherein the Hon’ble Supreme Court held that: -

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“34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

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19. The learned Counsel for the respondent has also relied upon the dictum of the Hon’ble Supreme Court in State of Bihar v. Amit Kumar , (2017) 13 SCC 751, wherein it was held that: -

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“13…. It is well settled that socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. Usually socio-economic offence has deeprooted conspiracies affecting the moral fibre of the society and causing irreparable harm, needs to be considered seriously.”

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20. I have considered the aforesaid facts and circumstances and the submissions advanced by the learned counsel for the parties.

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21. Section 45 (1) of the Prevention of Money Laundering Act, 2002, provides that the offences under the Act will be cognizable and nonbailable. The relevant provision of Section 45 (a) of the Act reads thus: -

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“Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence (under this Act) shall be released on bail or on his own bond unless-

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(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

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(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:

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Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm 112(or is accused either on his own or along with other co-accused of money-laundering a sum

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of less than one crore rupees), may be released on bail, if the Special Court so directs: ”

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22. In Vijay Madanlal Choudhary and others Vs. Union of India and others (Supra), the Hon’ble Supreme Court held that: -

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“401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma (2005) 5 SCC 294. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad (2013) 7 SCC 466, the words used in Section 45 of the 2002 Act are “reasonable grounds for believing” which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt.”

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23. The bail application of the applicant has to be decided keeping in view the provisions contained in Section 45 (1) of the PMLA, including proviso appended thereto.

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24. From a narration made above, it transpires that the instant case has been lodged primarily with the allegation that the named co-accused Yadav Singh had committed corrupt practices while awarding certain engineering works, regarding which agreement bonds for Rs. 954.38 Crores were executed. The applicant happens to be the wife to Yadav Singh. She is a director of M/s Kusum Garments, in whose account Rs. 50,00,000/- were deposited. The amount deposited is claimed to have been given to M/s Kusum Garments by way of loan and it is the case of the Enforcement Directorate, that the amount has been transferred by layering so that it could not be detected and in fact it was a part of the proceeds of crime committed by the co-accused Yadav Singh.

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25. The applicant is a woman and one of her kidneys has been removed and she is surviving with one kidney and she is suffering from anxiety, depression and panic attacks. The Proviso appended to Section 45 (1) of PMLA provides that a woman or a sick or infirm person may be

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released on bail. The amount deposited in the account of M/s Kusum Garments is Rs.50,00,000/- and the Proviso also provides that a person who is accused of money-laundering a sum of less than one crore rupees, may be granted bail.

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26. The principal co-accused Yadav Singh has already been granted bail. Sri Mohan Lal Rathi, who had deposited the amount in the account of Kusum Garments, and who has stated in his statement recorded by the Enforcement Directorate, that he had given this amount to Kusum Garments as loan, has not been made accused in the present case. Sri Mohan Lal Rathi had received the amount from co-accused Pradeep Garg and Pradeep Garg has also been granted bail. Other co-accused person Pankaj Jain and Vinod Kumar Goel have also been granted bail. It is only the applicant who is in jail in connection with the present case. Thus all the other co-accused persons, against whom there are allegations of having committed some or the other act of commission, have already been granted bail whereas the applicant alone, who is a women and against whom there is no allegation of having committed any act and who is a director of a company in whose account proceeds of crime were deposited by a co-accused, is languishing in jail for an offence which carries the maximum punishment of imprisonment for a period of seven years, alongwith fine.

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27. Without making any observations of the facts and merits of the case, I am of the view that the aforesaid facts are sufficient for making out a case for enlargement of the applicant on bail in the aforesaid case.

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28. Accordingly, this bail application stands allowed.

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29. Let the applicant Kusum Lata be released on bail in Complaint Case No. 13 of 2017 (Assistant Director, Directorate of Enforcement, Lucknow Vs. Yadav Singh and others) in the Court of Session Judge/ Special Judge, PMLA, Lucknow under Sections 3 and 4 of Prevention of Money Laundering Act, 2002, arising out of Complaint No. ECIR/04/PMLA/LZO/2015, registered with the Directorate of Enforcement, Lucknow Zonal Office, Lucknow on furnishing a personal bond and two sureties each for Rs.1,00,000/- each to the

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satisfaction of magistrate/court concerned, subject to the following conditions:-

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(i) the applicant shall not tamper with the prosecution evidence;

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(ii) the applicant shall not pressurize the prosecution witnesses;

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(iii) the applicant shall appear on each and every date fixed by the trial court.

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(iv) the applicant shall not go out of the Country without obtaining prior permission of the Court.

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30. In case of breach of any of the above conditions, the prosecution shall be at liberty to move an application for cancellation of bail before this Court.

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(Subhash Vidyarthi, J.)

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Order Date :- 17.3.2023 Preeti.

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Digitally signed by :- PREETI GAUTAM High Court of Judicature at Allahabad, Lucknow Bench

Kusum Lata v. Union of India Thru. the Directorate of Enforcement

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Kusum Lata v. Union of India Thru. the Directorate of Enforcement

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Kusum Lata Vs Union of India Thru. Directorate of Enforcement