Simplified Explanation of the Judgment

The Patna High Court recently dismissed a bail application filed by a petitioner accused in a high-profile money laundering case under the Prevention of Money Laundering Act, 2002 (PMLA). The case stems from an alleged scam where government funds were fraudulently diverted into multiple fake bank accounts by cloning official cheques issued by state authorities.

According to the prosecution, the petitioner had opened 22 bank accounts in his own name using forged identity documents. These accounts were allegedly used to receive ₹9 lakh of public funds misappropriated through the fraudulent cheque cloning process. While the petitioner argued that the alleged amount linked to him was small compared to the overall ₹5 crore involved in the original scam, the Enforcement Directorate (ED) maintained that he was part of a larger criminal conspiracy and actively collaborated with bank officials and other accused persons.

The petitioner has been in custody since March 3, 2017. His lawyer argued that, given his prolonged incarceration of over three years and the fact that the maximum sentence for the offence could be seven years, he should be granted bail. The defence also pointed out that the petitioner was not convicted in any other case, though he was facing trial in an unrelated CBI case in Assam where he was already on bail.

The Additional Solicitor General (ASG) representing the Union of India opposed the bail, stressing that:

• The offence was not a simple crime but one under a special law with significant implications for the national economy.
• The petitioner admitted his involvement in a statement recorded under Section 50 of the PMLA, which is admissible in court.
• Similar cases involving the petitioner were under investigation in other states.
• The “twin conditions” under Section 45 of the PMLA require that the court must believe the accused is not guilty and is unlikely to commit the offence again while on bail — conditions the petitioner failed to meet.

The court carefully reviewed the legal position on bail under the PMLA. It noted that the Supreme Court had previously struck down the twin conditions in Nikesh Tarachand Shah v Union of India but that subsequent amendments revived them for offences under the Act. Importantly, the Supreme Court has stayed bail granted in similar PMLA cases, indicating a strict approach toward such offences.

The High Court highlighted the serious nature of economic offences, citing multiple Supreme Court judgments that emphasised their impact on the financial health of the country. The court observed that white-collar crimes like money laundering are often the result of calculated planning and can cause irreparable damage to public trust in the financial system.

Ultimately, the court concluded that:

• The petitioner faced serious allegations directly linked to defrauding the public exchequer.
• His own statement under Section 50 of the PMLA confirmed his role in the offence.
• The low amount involved and the time spent in custody did not outweigh the gravity of the crime and its wider implications.

The court dismissed the bail plea but directed the trial court to expedite the proceedings and conclude the trial within 12 months, given the petitioner’s long custody.

Significance or Implication of the Judgment

This judgment reinforces the strict stance Indian courts adopt in money laundering cases, especially when public funds are involved. It underscores that even if the alleged amount is relatively small, participation in a larger scheme to siphon government money is treated as a serious economic offence.

For the general public, the case is a reminder that economic crimes like cheque cloning and fraudulent account openings have far-reaching consequences, not only for the immediate victims but also for the country’s financial stability. For government agencies, the decision serves as judicial backing for stringent investigation and prosecution in PMLA cases, while also encouraging speedy trials in cases involving prolonged pre-trial detention.

Legal Issue(s) Decided and the Court’s Decision with Reasoning

• Whether the petitioner should be granted bail under the PMLA given his prolonged incarceration and the relatively small sum attributed to him.
  Decision: Bail denied.
  Reasoning:
  • The offence falls under a special law of national importance aimed at protecting the economic fabric of the country.
  • Serious allegations supported by the petitioner’s own admissible statement under Section 50 of the PMLA.
  • Multiple similar cases against the petitioner in other states raise the risk of reoffending.
  • The “twin conditions” under Section 45 of the PMLA were not satisfied.
  • The seriousness of economic offences outweighs the consideration of time already spent in custody.

Judgments Referred by Parties

• Moti Lal @ Moti Lal Patwa v Union of India, Cr. Misc. No. 73052 of 2019, MANU/BH/0274/2020
• Rohit Tandon v Enforcement Directorate, (2018) 11 SCC 46 | AIR 2017 SC 5309
• Gautam Kundu v Directorate of Enforcement (PMLA), (2015) 16 SCC 1
• Y S Jagan Mohan Reddy v CBI, (2013) 7 SCC 439

Judgments Relied Upon or Cited by Court

• Nikesh Tarachand Shah v Union of India, (2018) 11 SCC 1
• P Chidambaram v Directorate of Enforcement, (2019) 9 SCC 24
• Nimmagadda Prasad v CBI, (2013) 7 SCC 466
• State of Gujarat v Mohanlal Jitamalji Porwal, (1987) 2 SCC 364
• Central Bureau of Investigation v Ramendu Chattopadhyay, 2019 SCC OnLine SC 1491
• State of Bihar v Amit Kumar, (2017) 13 SCC 751
• Shree Chamundi Mopeds Ltd. v Church of South India Trust Association, (1992) 3 SCC 1
• V P Sheth v State of MP, (2004) 13 SCC 767

Case Title

Vidyut Kumar Sarkar @ Ashok Das v The State of Bihar & Ors.

Case Number

Criminal Miscellaneous No. 73325 of 2019

Citation(s)

2020 (3) PLJR 128

Coram and Names of Judges

Hon’ble Mr. Justice Ahsanuddin Amanullah

Names of Advocates and Who They Appeared For

• For the Petitioner: Mr. Sanjay Kumar, Advocate
• For the Union of India: Mr. S. D. Sanjay, Additional Solicitor General (Senior Advocate), Mr. Kumar Priya Ranjan, Central Government Counsel
• For the State: Mr. Ashok Kumar, Additional Public Prosecutor

Link to Judgment

https://patnahighcourt.gov.in/viewjudgment/NiM3MzMyNSMyMDE5IzEjTg==-rGMZuwwloU0=

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