A special Mumbai court on Monday granted interim bail to two men who were arrested by the Enforcement Directorate in a money-laundering case, The Indian Express reported. The court noted that proceedings under the Prevention of Money Laundering Act cannot continue against them in the absence of a scheduled offence.
The Enforcement Directorate can file a complaint under the Act only to investigate the allegations of fraudulent proceeds of crime. However, these proceeds have to be linked to a separate criminal offence (scheduled offence) committed by the person.
Special Judge MG Deshpande granted the interim relief to Omkar Realtors Group promoters Babulal Varma and Kamal Kishore Gupta. He relied his order on the guidelines issued by the Supreme Court last month, stating that if accused persons are absolved of the scheduled offence by a court, then no further action can be taken against them.
Varma and Gupta were arrested in January 2021 in connection with a money-laundering case linked to the Mumbai real estate group. The Enforcement Directorate’s action against them is based on a first information report filed in 2020 in Aurangabad on charges of cheating a gymkhana and its directors.
Recently, the Aurangabad Police had filed a closure report in the case, PTI reported.
“It is crystal clear that if there is no scheduled or predicate offence, the PMLA case cannot continue,” the judge said in the order on Monday interpreting the Supreme Court judgement. “Similarly, the PMLA court cannot have jurisdiction to continue a PMLA case in the absence of a case relating to scheduled offence.”
On July 27, a three-judge bench of the Supreme Court upheld the core amendments made to the Prevention of Money Laundering Act that gives the government and the Enforcement Directorate virtually unbridled powers of summons, arrest and raids.
At Monday’s hearing, advocates Vijay Aggarwal and Rahul Aggarwal, representing Varma and Gupta, sought an interim bail for their clients.
The lawyers argued that the accused persons were discharged from the scheduled offence, and so, keeping them in jail in the case filed by the Enforcement Directorate would mean “illegal detention”, PTI reported.
Advocate Hiten Venegaonkar, appearing for the central agency, opposed the interim bail. He argued that the court has taken cognisance of the chargesheet filed by the Enforcement Directorate in the money-laundering case and sought to extend their judicial custody.
Special Judge Deshpande, however, noted that the accused persons were discharged by a competent court and that the closure report was submitted by the Aurangabad Police in the scheduled offence, PTI reported.
The court granted interim relief to Varma and Gupta and directed them to execute a personal bond of Rs 5,00,000. The promoters were also asked not to leave the city without the court’s permission.