V. Senthil Balaji vs Deputy Director, Directorate of Enforcement Crl. Appeal NO. 4011 of 2024

Brief Facts

  • Between 2011 and 2016, the Appellant was holding the post of Transport Minister in the Government of Tamil Nadu.
  • Broadly, the allegation against the Appellant is that while discharging his duties as a Minister, in connivance with his personal assistant and his brother, he collected large amount by promising job opportunities to several persons in various positions in the Transport Department. Consequently, three FIRs were registered against him, viz., FIR No. 441 of 2015, FIR No. 298 of 2017 and FIR No. 344 of 2018.
  • The offences alleged in the aforementioned crimes are mainly under Sections 120B, 419, 420, 467 and 471, IPC and Sections 7, 12, 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988. These offences are scheduled offences within the meaning of Section 2 (y) of PMLA. The Appellant was subsequently arrested in furtherance of the same.
  • The Appellant filed a bail application before the Madras High Court stating that the Appellant had already undergone incarceration under the PMLA Act for more than 14 months. The Appellant also submitted that there are more than 2000 accused and 600 prosecution witnesses in the predicate offence, and there was no chances that the trial was getting over in near future.
  • The Appellant filed the present appeal before the Apex Court against the order of Madras High Court cancelling the bail application filed by the Appellant

Issues

  • Whether prima facie case made out against the Appellant under Section 44 (1)(b) of the PMLA?
  • Effect of Delay in disposal of the cases.

Held

  • The Apex Court allowed the appeal, granting bail to the Appellant, imposing stringent conditions on him, considering the Appellant’s influential position.
  • The Apex Court held that at this stage, all materials and evidences established that the prima facie case had been established against the Appellant.
  • There is also prima facie material to show a deposit of cash amount of Rs. 1.34 crores in the Appellant’s bank account. At this stage, the contention of the Appellant regarding the deposit of remuneration received in the absence of any prima facie evidence to show the existence of the Appellant’s cash income as MLA and the Appellant’s agriculture income. Therefore, at this stage, it will be very difficult to hold that there is no prima facie case against the Appellant in the complaint under Section 44 (1)(b) of the PMLA and material relied upon therein.
  • As of now, the Appellant has been incarcerated for more than 15 months in connection with the offence punishable under Section 4 of the PMLA. The minimum punishment for an offence punishable under Section 4 is imprisonment for three   years,   which   may   extend   to   seven   years.     If   the scheduled offences are under paragraph 2 of Part A of the Schedule in the PMLA, the sentence may extend to 10 years. In the Appellant’s case, the maximum sentence can be of 7 years as there is no scheduled offence under paragraph 2 of Part A of Schedule II alleged against the Appellant.
  • In the main case (CC Nos. 22 and 24 of 2021), there are about 2000 accused and 550 prosecution witnesses cited. Thus, it can be said that there are more than 2000 accused in the three scheduled offences, and the number of witnesses proposed to be examined exceeds 600.
  • Thus, on the issue of framing of charge or discharge, a large number of accused will have to be heard. Therefore, even if   the   trials   of   the   scheduled   offences   are   expedited,   the process of framing charges may take a few months as many advocates representing more than 2000 accused persons will have to be heard.
  • Hence, the existence of a scheduled offence is sine qua non for alleging the existence of proceeds of crime. A property derived or obtained, directly or indirectly, by a person as a result of the criminal activity relating to a scheduled offence constitutes proceeds of crime.   The existence of proceeds of crime at the time of the trial of the offence under Section 3 of PMLA   can   be   proved   only   if   the   scheduled   offence   is established   in   the   prosecution   of   the   scheduled   offence. Therefore,   even   if   the   trial   of   the   case   under   the   PMLA proceeds,   it   cannot   be   finally   decided   unless   the   trial   of scheduled offences concludes. In the facts of the case, there is no   possibility   of   the   trial   of   the   scheduled   offences commencing   in   the   near   future. Therefore, we   see   no possibility of both trials concluding within a few years.
  • As stated earlier, the Appellant has been incarcerated for 15 months or more for the offence punishable under the PMLA. In the facts of the case, the trial of the scheduled offences and, consequently, the PMLA offence is not likely to be   completed   in   three   to   four   years   or  even   more.   If   the Appellant’s   detention   is   continued,   it   will   amount   to   an infringement of his fundamental right under Article 21 of the Constitution of India of speedy trial.
  • Therefore, the appeal is allowed, and the appellant shall be enlarged on bail.

Relevant Para Nos.

  • 13, 14, 17, 21, 31

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