Jain will continue to remain in custody, as proceedings against him under the PMLA continue.
—
FORMER Delhi cabinet minister Satyendar Kumar Jain was denied bail by the Delhi High Court on today in the money laundering case against him being probed by Enforcement Directorate (ED). While ordering so, the high court refrained from interfering with the proceedings against Jain in the Prevention of Money Laundering Act (PMLA) Special Court for allegedly amassing assets disproportionate to his earnings.
Denying the bail application, a single-judge bench of Justice Dinesh Kumar Sharma of the high court observed that Jain is an influential person and has the potential to tamper with the evidence “as indicated by his conduct during the custody. However, this court has examined the entire facts objectively in accordance with the law without being influenced by the position of the petitioner.”
It was observed that Jain had failed to satisfy the ‘twin-test’ under the PMLA of proving that there are reasonable grounds to believe that he is not guilty and would not commit any offence, if released on bail.
Justice Sharma had reserved his judgment on March 22 after almost a month of hearing arguments by the Additional Solicitor General of India S.V. Raju for the ED and Senior Advocate N. Hariharan for Jain.
The high court also observed that the companies through which Jain allegedly laundered money are controlled and managed by Jain, either directly or indirectly. The “constant changing shareholding patterns (sic)” of the companies under scrutiny indicate that Jain or his family control the affairs of these companies, according to the court.
The evidence on record speaks volumes, Justice Sharma noted in his judgment, “but has not been discussed or examined in detail so as to not cause prejudice to the petitioner.”
Twin test for bail under PMLA
Based on the material placed on the record by the ED, the high court concluded that Jain cannot be held to have cleared the twin conditions laid down under Section 45 of the PMLA (offences to be cognisable and non-bailable) for the granting of bail by a court.
As per the ‘twin test’ under Section 45, an accused can only be released on bail or on their own bond if the following two conditions are satisfied:
“(i) The public prosecutor has been given an opportunity to oppose the application for such release; and
(ii) Where the public prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.”
On Section 45 of the PMLA, it was held that the use of the phrase ‘reasonable grounds’ means “something more” than ‘prima facie’, implying that a grant of bail by a court must be satisfied on “reasonable grounds” that the accused is not guilty of the offence.
The court being sought bail from has to arrive at a conclusion on whether the facts and circumstances are sufficient in themselves to justify satisfaction that the accused is not guilty of the offence, it was observed. Though the court while determining the issue of bail cannot go into meticulous examination of the facts, nor it can examine probative value of the witnesses.
In a case of money laundering, only “broad probabilities” have to be seen by the bail granting court, it was observed, noting previous judgments on bail jurisprudence. If the accused is able to demonstrate that there are broad probabilities that they are not guilty of the offence under Section 3 (offence of money-laundering) of the PMLA, then they have a right to be released on bail, the high court concluded.
While perusing Section 45, the court makes an error of interpretation by stating that the limitations on bail under this provision are in addition to those stipulated in the Code or Criminal Procedure (CrPC). Section 45 declares at the outset that the limitations contained therein are “[n]otwithstanding anything contained” in the CrPC.
Jain has been in custody since May 30, 2022, when he was arrested by the ED based on a first information report filed by the Central Bureau of Investigation (CBI) in 2017.
Jain is accused of having laundered money through five companies allegedly linked to him and his family. Following this case, the ED had provisionally attached immovable properties worth ₹4.81 crore belonging to these companies, namely Akinchan Developers Pvt Ltd., Indo Metal Impex Pvt. Ltd., Paryas Infosolutions Pvt Ltd., Manglayatan Projects Pvt Ltd., and JJ Ideal Estate Pvt Ltd.
Jain was refused bail on November 17 last year by special judge Vikas Dhull. Dhull had replaced special judge Gitanjali Goel, who had been previously hearing the case against Jain, on September 23 at the ED’s request.
Goel had reprimanded the ED while hearing the bail application of Jain, asking why the agency had gone beyond the existing case registered by the CBI.
Jain had then moved the Delhi High Court against the transfer of the judge, but his application was rejected on October 1.
The high court on Thursday held that it found no illegality or perversity in Dhull’s order rejecting Jain’s bail application. “The order rejecting the bail applications is well-reasoned based on material on record,” Justice Sharma said.
Jain is currently lodged in Tihar Jail in Delhi. Proceedings against Jain and two of his alleged accomplices, Ankush Jain and Vaibhav Jain, will continue.
Click here to view the Delhi High Court’s full judgment in Satyendra Kumar Jain versus Directorate Of Enforcement BAIL APPLN. 3590/2022 CRL.M.A 25088/2022.
