Hari Narayan Rai vs The Union of India (UOI)

R.K. Merathia, J.—This bail application arises from Enforcement Case Information Report (in short ECIR) No. ECIR/01/PAT/09/AD

registered u/s 3 read with Section 4 of the Prevention of Money laundering Act, 2002 (the Act for short).

Mr. B. Poddar, learned senipr counsel, appearing for the petitioner submitted that the said act is not applicable, as the amendment was brought

w.e.f. 1.6.2009, by which the alleged sections of Indian Penal Code and Prevention of Corruption Act were inserted, whereas the check period in

the present case is prior to coming into force of the amendment i.e. between April, 2004 to 26.11.2008; that the petitioner is not continuing any

criminal activity; that while the petitioner is in judicial custody since 17.8.2009 in Vigilance P.S. Case No. 26 of 2008 dated 26.11.2008 (Special

Case No. 32 of 2008), the present case has been instituted on the basis of the Vigilance Case, which was instituted on the basis of Newspaper

report alleging that the petitioner has acquired the assets illegally worth Rs. 30 Crores and odds, whereas in the charge-sheet it is alleged that

petitioner has accumulated the assets of Rs. 2.54 Crore only; that petitioner, his wife and other family members have filed returns before the

Income Tax Department disclosing their income to the tune of Rs. 2.71 Crores; that there is no allegation in the F.I.R. attracting the provisions of

the Act and it has been filed without application of mind and. without verifying the correct position; and that there is no chance of tampering with

the evidence or absconding and therefore petitioner may be granted bail. He relied on the judgments reported in D.S.P., Chennai Vs. K.

Inbasgaran, ; M. Krishna Reddy Vs. State Deupty Superintendent of Police, Hyderabad, and State of Madhya Pradesh Vs. Mohanlal Soni, .

On the other hand, Mr. A.K. Das, learned Counsel, appearing for the Directorate of Enforcement, Patna vehemently opposed the prayer for

bail and submitted that at the time of contesting election in the year 2005, the petitioner declared his own and his wife''s assets together to the tune

of about 1.90 Lakh and 5.5 acres of agricultural lane}; that in the year 2005, the petitioner, his wife, his brothers and their wives were not even

income tax assessee, but after becoming Minister, he purchased several immovable properties in his and in the name of his wife and family

members, for projecting the proceeds of crime as untainted property; that after becoming Minister, he declared income to the tune of Rs. 15.39

Lakhs; but in the charge-sheet, submitted in the Vigilance case it has been found that the total assets of the petitioner is disproportionate to his

disclosed income to the extent of about Rs. 1.63 Crores after deducting his disclosed assets; which he acquired within a short span of 3 years,

when he was a Minister; that his prayer for bail was rejected on 18412009 in the said Vigilance Case No. 26 of 2008 (Special Case No. 32 of

2008) in B.A. No. 6312 of 2009; that the firm floated by him for laundering his illegal money has been found non-existent; that the judgments

relied by the petitioner is not applicable in this case; as the said cases relates to Prevention of Corruption Act under which though the initial burden

lies on prosecution to establish that the accused has acquired property disproportionate to his known source of income but then the burden shift''s

on the accused to offer plausible explanation against the charges, which onus was discharged in the said cases, whereas in the present case u/s 24

of the said Act; the burden to prove is on the petitioner that the proceeds of crime are untainted property, but the petitioner has not explained as to

how he and his family members acquired huge assets, within a short span of 3 years during which he was Minister. He further submitted that the

Act has been enacted in view of the seriousness of the offence of money laundering and it provides of confiscation of property, etc; that the Act is

applicable to the petitioner; that Section 7 to 10 of the Prevention of Corruption Act were already there in Schedule-B of the said act and

moreover lebelling of Section is not material at the stage of investigation. Further Section 3 of the said Act makes it clear that the offence under the

said Act will continue till the accused continues to hold proceeds of crime and gets himself involved in the process and activity connected with the

proceeds of crime projecting the same as untainted property and in the present case, petitioner has been attempting to convert and project the

proceeds of crime in the aforesaid manner. He further submitted that sufficient material has been collected during investigation to prove the guilt of

petitioner; that Section 45 of the Act provides that bail is to be granted by the Court only on the satisfaction that there are reasonable grounds for

believing that the petitioner is not guilty of such offence; and that he is not likely to commit-any offence while on bail.

In my opinion, the allegations against the petitioner are very serious. Sufficient material has come against him. In the circumstances, I am not

inclined to grant bail to the petitioner. Accordingly, the prayer for bail is rejected.