HC Denies Bail to a PMLA Accused for Projecting Crime Proceeds as Untainted and Making Huge Cash Deposits

Case Details: Satheesh Kumar P. v. Assistant Director, Directorate of Enforcement - [2024] 166 taxmann.com 361 (HC-Kerala)

Judiciary and Counsel Details

• C.S. Dias, J
• R. Anil, Adv. B. Raman Pillai, Sr. Adv., Sujesh Menon V.B., Thomas Sabu Vadakekut, Mahesh Bhanu S., Ressil Lonan, Joel George Kampiyil, Advs. for the Petitioner.
• L. Sundareshan, ASG, Jaishankar V. Nair, SC for the Respondent.

Facts of the Case

In the instant case, the petitioner was arrested in connection with a massive loan scam from 2014 to 2020, where bank officials disbursed multiple illegal loans, accepting the same property as collateral.

The accused had also manipulated records and software to fraudulently secure the loans, misappropriating Rs. 100 crores from the bank. The petitioner- accused no.14, accused of influencing bank officials and profiting from these illegal loans, filed an instant bail petition, claiming no involvement and accusing the investigative agency of coercion.

However, investigations revealed that the petitioner had received large sums of money, maintained 44 bank accounts, and had ties with influential figures.

It was alleged that the petitioner influenced the bank and got loans sanctioned to one KP, out of which the petitioner took Rs. 14 crores. Further, the power of the Court to grant bail to a person accused of an offence under PMLA is not only subject to limitations imposed under section 439 of the Code of Criminal Procedure, 1973, but also subject to rigour imposed by twin conditions under sub-section (1) of section 45.

High Court Held

The High Court noted that since the petitioner had raised a specific ground that written grounds of arrest were not served on him and since the Authorised Officer had specifically recorded that he had reason to believe that the petitioner was guilty of an offence under PMLA, the contention of the petitioner that written grounds of arrest were not served on him was untenable.

The High Court held that there were no reasonable grounds for believing that the petitioner was not guilty of the offences alleged and that he was not likely to commit offences if he was enlarged on bail. Thus, based on the serious nature, gravity, and severity of the accusations levelled against the petitioner, he was not entitled to be released on bail. Accordingly, the bail application was to be dismissed.

List of Cases Reviewed

• Manish Sisodia v. Directorate of Enforcement [2024 INSC 595] (para 22) distinguished.

List of Cases Referred to

• Nimmagadda Prasad v. CBI (2013) 7 SCC 466 (para 8)
• Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439 (para 8)
• Gautam Kundu v. Directorate of Enforcement (2015) 16 SCC 1 (para 8)
• Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46 (para 8)
• Y.S Jagan Mohan Reddy v. CBI (2013) 7 SCC 439 (para 16)
• Himanshu Chandravadan Desai v. State of Gujarat (2005) 13 SCC 234 (para 23).