HC Grants Bail to Petitioner in Money Laundering Case Due to no Evidence Tampering Allegations

Case Details: Chandra Prakash Khandelwal v. Directorate of Enforcement - [2023] 150 taxmann.com 194 (HC-Delhi)

Judiciary and Counsel Details

• • Yogesh Khanna, J.
  • Dayan Krishnan, Sr. Adv., Manu Sharma, Nitesh Jain, Anuj Berry, Hridhay Khurana, Adrish Guha, Shiv Johar, Shreedhar Kale, Abhudaya Sharma, Somit Kumar Singh & Ms Sanjana Mehra, Advs. for the Petitioner.
  • Zoheb Hossain, Spl. Counsel, Vivek Gurnani, Siddharth Kaushik & Kavish Garach, Advs. for the Respondent.

Facts of the Case

In the instant case, PACL, a real estate company was declared to be running an illegal Collective Investment Schemes (CIS) by SEBI and, thus, culminated into a series of proceedings.

Based on the reference from SEBI, the respondent registered a money laundering case against the petitioner, an investor and non-executive director of company DDPL, alleging that the petitioner’s company received proceeds of crime.

It was also alleged that the petitioner was involved in dealing with the proceeds of the crime. The petitioner was thus, taken into judicial custody. It was noted that the petitioner was cooperating with the respondent.

It was also noted that except petitioner no other accused involved under PMLA was ever arrested by the respondent. Further, the petitioner was a downstream investor of funds and hence, his submission that he did not knowingly become a party to money laundering could not be brushed aside lightly.

Further, there were no allegations of tampering with evidence or influencing witnesses by the petitioner. In fact, all the evidence and information (including digital devices) were in the custody of the respondent and were of a documentary nature.

It was also alleged that the petitioner was illegally arrested and the transactions complained of against the petitioner dated back to the year 2012.

High Court Held

The High Court held that since the petitioner had already undergone custody of about 8 months, the petitioner’s bail application was to be allowed upon the execution of a personal bond of Rs. 25 lakhs with one surety of the like amount to the satisfaction of the Trial Court.

List of Cases Referred to

• • Subrata Bhattacharya v. SEBI [Civil Appeal No. 13301 of 2015, dated 6-10-2021] (para 8)
  • CBI v. Vijay Sai Reddy [2013] 7 SCC 452 (para 11)
  • Dr.Ashok Singhvi v. Union of India 2020 SCC OnLine Raj 1075 (para 11)
  • Ram Narain Popli v. Central Bureau of Investigation [2003] 42 SCL 275 (SC)/3 SCC 641 (para 11)
  • Rohit Tandon v. Directorate of Enforcement [2017] 87 taxmann.com 260/[2008] 145 SCL 1 (SC) (para 11)
  • Union of India v. Rattan Mallik @ Habul [2009] 2 SCC 624 (para 11)
  • Vijay Madanlal Choudhary v. Union of India [2022] 140 taxmann.com 610 (SC)/2022 SCC OnLine SC 929 (para 31)
  • Sanjay Pandey v. Directorate of Enforcement 2022 SCC OnLine Del 4279 (para 32)
  • Raman Bhuraria v. Directorate of Enforcement [BAIL APPL. 4330 of 2021 dated 8-2-2023] (para 32)
  • Chitra Ramkrishna v. Asstt. Director, Enforcement Directorate, [BAIL APPL. 2919 of 2022 dated 9-2-2023] (para 32)
  • Anil Vasantrao Deshmukh v. State of Maharashtra [2022] 143 taxmann.com 83 (Bom.)/2022 SCC OnLine Bom 3150 (para 32)
  • Ramchand Karunakaran, Managing Director v. Directorate of Enforcement [CRL.A. 1650 of 2022 dated 23-9-2022] (para 33)
  • Dr. Bindu Rana v. Serious Fraud Investigation Office [2023] 146 taxmann.com 562 (Delhi) (para 33)
  • Sanjay Agarwal v. Directorate of Enforcement [2022] 143 taxmann.com 415/174 SCL 519 (SC) (para 33)
  • Jainam Rathod v. State of Haryana 2022 SCC OnLine SC 1506 (para 33)
  • Sanjay U Desai v. Serious Fraud Investigation Office, 2022 SCC OnLine SC 1507 (para 33)
  • PACL India Ltd. v. Union of India [2004] 49 SCL 250 (para 34)
  • SEBI v. PACL India Ltd. [2013] 31 taxmann.com 316/118 SCL 356 (SC) (para 34).