Court’s Decision
The Delhi High Court dismissed Amrit Pal Singh’s application for anticipatory bail in a Prevention of Money Laundering Act (PMLA) case, noting that the applicant failed to satisfy the twin conditions under Section 45 of PMLA, evaded investigation despite repeated statutory summons, and that custodial interrogation was necessary given the grave allegations of layered cross-border money laundering involving ₹20.75 crores. The Court held that anticipatory bail at this stage would impede the ongoing investigation and the statutory objectives under PMLA.
Facts
Amrit Pal Singh, a Hong Kong resident for 17 years and Director of M/s Broway Group Ltd., was implicated after the Directorate of Enforcement alleged his company received ₹20.75 crores from M/s Mizta Tradex Pvt. Ltd. under the guise of importing photosensitive semiconductor devices, forming part of a larger probe involving ₹300+ crores illegally remitted abroad using forged Form 15CBs. Singh was intercepted at Amritsar Airport due to a Look Out Circular and was served with summons under Section 50 PMLA but failed to appear on multiple dates, citing his father’s illness. His anticipatory bail plea was dismissed by the Sessions Court, following which he approached the High Court.
Issues
- Whether anticipatory bail should be granted when the applicant is alleged to have received proceeds of crime in a PMLA case but claims the transactions were bona fide.
- Whether non-appearance despite multiple summons under Section 50 PMLA constitutes grounds for denial of anticipatory bail.
- Whether the twin conditions under Section 45 PMLA were satisfied to justify pre-arrest bail.
Petitioner’s Arguments
The petitioner argued the remittance was for genuine import transactions, substantiated by invoices, airway bills, and RBI purpose code documentation, exempting them from Form 15CA/CB requirements. He contended he was not named in the predicate offence and that there was no scheduled offence attributable to him, invoking Vijay Madanlal Choudhary and Prem Prakash to argue the absence of proceeds of crime. It was further argued that as a sole director, he was arrayed only in a representative capacity, and individual liability could not be imputed without satisfying statutory conditions. Reliance was placed on Tarsem Lal, Sunil Bharti Mittal, Amit Aggarwal, and Parvez Ahmed, emphasizing that he had expressed willingness to cooperate and posed no flight risk.
Respondent’s Arguments
The Enforcement Directorate argued that Amrit Pal Singh repeatedly failed to comply with summons under Section 50 despite interception at the airport and subsequent notices, demonstrating deliberate non-cooperation. They contended that custodial interrogation was necessary, and protections under Satender Kumar Antil and Tarsem Lal were inapplicable, as the applicant evaded investigation. The Directorate cited SFIO v. Aditya Sarda, State v. Anil Sharma, Directorate of Enforcement v. V.C. Mohan, M. Gopal Reddy, and Virbhadra Singh, emphasizing the seriousness of economic offences and the necessity of stringent treatment under Section 45 PMLA.
Analysis of the Law
The Court reiterated that anticipatory bail in PMLA cases is governed by the twin conditions under Section 45, requiring the accused to demonstrate (i) reasonable grounds of innocence and (ii) assurance against further offences while on bail. The applicant failed to rebut the statutory presumption under Section 24 PMLA. The Court emphasized that non-compliance with Section 50 summons undermines the claim of bona fides essential for anticipatory bail. The transnational and layered nature of the alleged money laundering necessitated custodial interrogation to facilitate effective investigation under PMLA.
Precedent Analysis
The Court considered:
- Vijay Madanlal Choudhary v. Union of India: Affirmed the applicability of Section 45 twin conditions at the anticipatory bail stage.
- Tarsem Lal v. Directorate of Enforcement: Held summons should ordinarily issue if the accused was not arrested during the investigation; distinguished here since the applicant evaded summons.
- Satender Kumar Antil v. CBI: Inapplicable due to the applicant’s non-cooperation.
- Sunil Bharti Mittal v. CBI: Discussed lifting of the corporate veil for directors directly in control.
- SFIO v. Aditya Sarda: Reiterated stringent conditions for anticipatory bail in economic offences.
- State v. Anil Sharma: Stressed the necessity of custodial interrogation in white-collar crimes.
- Directorate of Enforcement v. V.C. Mohan, M. Gopal Reddy: Highlighted denial of anticipatory bail for non-cooperative foreign-based accused.
- Virbhadra Singh v. ED: Emphasized statutory force of Section 50 summons.
Court’s Reasoning
The Court found that Singh’s conduct reflected evasion rather than cooperation, undermining the presumption required for anticipatory bail. Given the gravity of alleged cross-border money laundering, structured transactions, forged documentation, and the necessity to ascertain the applicant’s role, custodial interrogation was found essential. The applicant’s argument of being arrayed only in a representative capacity was rejected, considering his status as the sole director and controlling mind of a one-person company, making him directly accountable under PMLA.
Conclusion
The Court dismissed the anticipatory bail plea, finding:
- The applicant failed to meet the statutory requirements under Section 45 PMLA.
- Non-appearance in response to multiple summons demonstrated lack of bona fides.
- The seriousness of the offence, transnational layering of funds, and the need for effective investigation warranted custodial interrogation.
- Granting anticipatory bail would risk impeding the ongoing investigation under PMLA.
Implications
- Reinforces stringent bail conditions in transnational money laundering cases.
- Establishes that non-cooperation during investigation will weigh heavily against pre-arrest bail.
- Signals the seriousness with which courts view cross-border layered transactions under PMLA.
- Clarifies that even directors of foreign companies receiving remittances from India can be subject to custodial interrogation in PMLA cases.
FAQs
Q1: Can anticipatory bail be granted in PMLA cases involving foreign remittances?
Anticipatory bail may be granted in PMLA cases only if the twin conditions under Section 45 are satisfied, requiring proof of innocence and assurance against re-offending. In cases of cross-border remittances with allegations of layering and forged documentation, courts are cautious in granting bail.
Q2: Does non-compliance with summons under Section 50 PMLA affect bail?
Yes, non-compliance with Section 50 summons demonstrates non-cooperation, which weighs heavily against granting anticipatory bail, as effective investigation under PMLA requires cooperation.
Q3: Is a director of a foreign company personally liable under PMLA for transactions of the company?
If the director is the controlling mind of the company and directly involved in its affairs, personal liability can be imputed, especially where the company is implicated in receiving proceeds of crime.
