Case Title: Manish Kothari (Presently in JC) v. Director of Enforcement, Ministry of Finance, Dept. of Revenue Headquarter Investigation Unit
Date of Decision: 22nd September 2023
Case Number: Bail Application 2341 of 2023
Coram: Hon’ble Mr. Justice Dinesh Kumar Sharma
This case revolved around a bail application filed under Section 439 read with Section 167(2) and Section 482 of the Criminal Procedure Code (Cr.P.C.) by Manish Kothari, the petitioner, who was in judicial custody. The petitioner sought bail in connection with CT Case No. 13/2022-ECR/KLZ0/41/2020 dated 25/09/20 under the Prevention of Money Laundering Act, 2002 (PMLA).
The petitioner’s bail application had been previously dismissed by the Special Judge on 09.06.2023. The dismissal was primarily based on the ground that the petitioner failed to meet the threshold of Section 45 of the PMLA. The trial court had held that the petitioner actively assisted co-accused individuals in converting illicit funds into legitimate money and was involved in money laundering.
Additionally, the trial court considered the case a serious economic offense, emphasizing that the petitioner could not be treated differently under the proviso clause of Section 45 of the PMLA, which deals with the share of an accused in the tainted money. The trial court was of the opinion that the petitioner’s role was connected to a substantial amount, approximately Rs. 48 Crores, attributed to the co-accused Anubrata Mondal and his daughter Sukanya Mondal.
- Whether the petitioner meets the criteria for bail under Section 45 of the PMLA?
- Is there sufficient evidence to establish the petitioner’s involvement in money laundering?
- Are the statements recorded under Section 50 of the PMLA admissible as evidence?
Contentions of the Petitioner
- The petitioner’s counsel argued that the petitioner is a law-abiding citizen and a qualified chartered accountant with no prior criminal record.
- The petitioner provided professional services to Anubrata Mondal and his family, primarily related to income tax filing.
- The petitioner’s role was limited to filing income tax returns and was not involved in any illegal activities.
- The prosecution’s case is based mainly on statements of co-accused individuals, which contain contradictions and should not be relied upon.
- The petitioner’s arrest grounds were not supplied to him, violating his rights.
Arguments by the Prosecution
- The prosecution argued that the petitioner played a significant role in managing the finances of Anubrata Mondal and his family in connection with the proceeds of crime generated from illegal activities like cross-border cattle smuggling.
- They alleged that the petitioner helped in projecting tainted money as untainted and participated in the creation of benami assets and companies for laundering the proceeds of crime.
- The prosecution emphasized the seriousness of economic offenses and the need to treat them differently.
Observation and Analysis
The court observed that at the bail stage, it should consider the probability of the accused’s guilt and whether they are likely to commit further offenses while on bail. The court should not conduct a detailed examination of evidence or make definitive findings of innocence.
The petitioner’s role as a chartered accountant primarily involved tax-related services. The court noted that the allegations against the petitioner did not involve activities beyond the scope of his profession. The veracity of the prosecution’s case and the shifting of blame by co-accused should be evaluated during the trial.
Decision of the Court
The court granted bail to the petitioner, considering the principles of broad probabilities and the prima facie nature of the case. The bail was granted with specific conditions, including surrendering the passport, providing contact information, and refraining from tampering with witnesses or engaging in criminal activities.
“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”
Written by – Ananya Chaudhary