Directorate Of Enforcement vs. Shri Kancharla Srihari Babu

Facts

The Directorate of Enforcement (DOE) filed Criminal Petition Nos. 9825 and 9846 of 2021 under Section 482 of the Cr.P.C. seeking to quash orders dated December 18, 2021, passed by the Metropolitan Sessions Judge, Nampally, Hyderabad. These orders had apparently refused to remand the respondents into judicial custody or ED custody. In Criminal Petition No. 10021 of 2021, filed under Section 438 of the Cr.P.C., the petitioner sought anticipatory bail in connection with ECIR/HYZO/22/2019. The cases involved investigations into alleged money laundering activities, with the DOE alleging that the respondents were involved in misappropriating funds and generating proceeds of crime amounting to approximately Rs. 211 Crore, with traced proceeds of Rs. 144,42,67,8131-.

Held

The Court allowed Criminal Petition Nos. 9825 and 9846 of 2021, setting aside the orders dated December 18, 2021, passed by the Metropolitan Sessions Judge. The Court directed the accused in both cases to surrender before the Designated Court within ten days, and the Designated Court was instructed to consider the remand applications afresh in accordance with the law. The Court dismissed Criminal Petition No. 10021 of 2021, holding that, in view of Section 45 of the PMLA, the law laid down by the Supreme Court, the facts of the case, and the nature of the allegations, it could not prima facie satisfy itself that the accused was not guilty, thus dismissing the anticipatory bail application. The ratio for allowing the quashing of the remand refusal orders is that the Metropolitan Sessions Judge's order was not in accordance with the law, necessitating a fresh consideration by the Designated Court. The ratio for dismissing the anticipatory bail is the inability of the court to be satisfied of the accused's innocence under Section 45 of the PMLA.

Key Issues

1. Whether the Metropolitan Sessions Judge erred in not remanding the respondents into judicial or ED custody, thereby quashing the proceedings in SR. No. 8729 of 2021 and SR. No. 8731 of 2021, as argued by the petitioner (DOE). The petitioner contended that the respondents were non-cooperative and failed to divulge proceeds of crime and names of other involved individuals, necessitating custody for further investigation. The respondents argued that the ECIR was registered based on FIRs, they had cooperated with the investigation, appeared multiple times, provided documents, and their properties were attached, indicating the investigation was nearing completion. 2. Whether the petitioner in Criminal Petition No. 10021 of 2021 is entitled to anticipatory bail, as argued by the petitioner (accused). The petitioner argued that they had cooperated with the investigation and that the investigation was at its completion stage. The respondent (DOE) argued, citing Section 45 of the PMLA and Supreme Court precedents, that given the seriousness and pervasiveness of the allegations, and the petitioner's alleged non-cooperation, the court could not prima facie satisfy itself that the accused was not guilty.