Gujarat HC granted bail to Applicant in a money-laundering case involving sum of less than Rs. 1 crore

Case Details: Pasumarthi Venkata Satyanarayana Sarma v. Assistant Director, Enforcement Directorate - [2021] 129 taxmann.com 218 (Gujarat)

Judiciary and Counsel Details

• • A.S. Supehia, J. 
  • I.H. Syed, Sr. Adv., Aniq A. Kadri and Arjun M. Joshi for the Applicant. 
  • Devang Vyas and Ms. Moxa Thakker, APP for the Respondent.

Facts of the Case

In the instant case, the applicant and one ‘S’ were the directors of ‘SM’, which was engaged in printing and publishing a newspaper ‘Satyam Times’ in Gujarati and English languages. The applicant was arrested under section 19(1) of the PMLA Act. The arrest order revealed that the applicant and ‘S’ had falsely declared very high numbers of circulation of those newspapers whereas actual circulation was much less.

The false figures of higher circulation were used to attract the prospective advertisement agencies, including the Directorate of Advertisement and Visual Publicity. By virtue of forgery and use of such fraudulent circulation claims, the applicant and ‘S’ cheated the Government and private advertisement agencies and thereby gained a huge amount towards advertisement. They used bogus purchase invoices and made false entries in the books of account for showing higher circulation and commission of the fraud.

The applicant was arrested and thereafter the authority, by undertaking necessary exercise in detail and confiscating the necessary papers in connection with the aforesaid offence, had filed the complaint before the Principal District and Sessions Judge. However, the applicant filed an instant application under section 439 of the Code of Criminal Procedure, 1973 read with sections 44 and 45 of PMLA Act seeking regular bail in connection with the arrest passed by the Enforcement Directorate

High Court Held

The Gujarat High Court stated that the complicity of an applicant in offence concerning gaining of an amount of Rs. 70,00,000 by defrauding Government was established in the instant case, however, while considering facts and circumstances and also in light of proviso to section 45, which provides for release on bail if money laundering sum is less than 1 crore.

As a result, the application was allowed and the applicant was ordered to be released on regular bail in connection with a complaint on executing a personal bond of Rs. 10,000 (Rupees Ten Thousand Only) with one local surety of the like amount to the satisfaction of the Trial Court.

List of Cases Referred to

• • Nikesh Tarachand Shah v. Union of India [2017] 87 taxmann.com 257/[2018] 145 SCL 96 (SC) (para 6)
  • D.K.Shivakumar v. Director of Enforcement [2019] 112 taxmann.com 228 (Delhi.) (para 6)
  • P. Chidambram v. Directorate of Enforcement [2020] 113 taxmann.com 403/157 SCL 649 (SC) (para 6)
  • M. Sivasankar v. Union of India [2021] 123 taxmann.com 433/164 SCL 487 (Ker.) (para 6)
  • P. Chidambram v. Directorate of Enforcement [2019] 109 taxmann.com 57/156 SCL 104 (SC) (para 7)
  • Directorate of Enforcement v. Upendra Rai [Criminal Diary No. 5150 of 2020, dated 3-6-2020] (para 7)
  • Upendra Rai v. Directorate of Enforcement [2020] 116 taxmann.com 471 (Delhi.) (para 7)
  • Rohit Tandon v. Enforcement of Directorate [2017] 87 taxmann.com 260/[2018] 145 SCL 1(SC) (para 7)
  • Serious Fraud Investigation Office v. Nitin Johari [2019] 109 taxmann.com 224/156 SCL 500 (SC) (para 7)
  • Y S Jagan Mohan Reddy v. Central Bureau of Investigation [2013] 7 SCC 439 (para 7)
  • Vidyut Kumar Sarkar @ Ashok Das v. State of Bihar [Crl. Misc. No. 73325 of 2019, dated 17-6-2020] (para 7)
  • Jainam Rathod v. State of Haryana [2020] 119 taxmann.com 272 (Punj. & Har.) (para 7).