Source: Supreme Court

Why in News?

A bench of Justice Aniruddha Bose and Bela M Trivedi said that “When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution".

• The Supreme Court gave this judgment in the case of Tarun Kumar v. Assistant Director Directorate of Enforcement.

What is the Background of Tarun Kumar v. Assistant Director Directorate of Enforcement?

• M/s. Shakti Bhog Foods Ltd. (SBFL) was engaged in manufacturing and selling food items under the brand name of “Shakti Bhog”.
• The consortium of banks led by the State Bank of India vide the Letter of Engagement dated 18th May 2018 engaged the services of a Forensic Auditor – BDO India LLP for conducting the Forensic Audit of SBFL.
• The Forensic Auditor conducted audit review for the period 1st April 2013 to 31st March 2017 and submitted the report on 25th June 2019, disclosing several financial irregularities and discrepancies in the functioning of SBFL, and alleged that SBFL had failed to discharge its loan liability and caused loss to the consortium member banks to the tune of Rs.3269.42 crores.
• An FIR registered on 31st December 2020 by the Central Bureau of Investigation, Bank Securities and Fraud Cell, New Delhi for the offences under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 120B read with Sections 420, 465, 467, 468 and 471 of Indian Penal Code, 1860.
• An Enforcement Case Information Report came to be recorded on 31st January 2021 against SBFL and others with regard to the said FIR registered by the CBI against the accused for investigation of the commission of offence under Section 3 punishable under Section 4 of the PML Act.
• The appellant filed a bail application in a complaint case before the Special Judge (Prevention of Corruption Act) Rouse Avenue Court Complex, New Delhi on 18th October 2022, which came to be dismissed by the Special Judge vide the order dated 23rd December 2022.
• The bail application, No. 152 of 2023 preferred by the appellant before the High Court of Delhi also came to be rejected vide the impugned order dated 18th July 2023.

What was the Court’s Observation?

• It cannot be gainsaid that the burden of proof lies on the accused for the condition set out in Section 45 that he is not guilty of such offence. Of course, such discharge of burden could be on the probabilities, nonetheless in the instant case there being sufficient material on record adduced by the respondent showing the thick involvement of the appellant in the alleged offence of money laundering under Section 3 of the said act, the court is not inclined to grant bail to the appellant.

What is the Prevention of Money Laundering Act, 2002?

• About:
  • Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted by the National Democratic Alliance (NDA) government to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified thereunder came into force with effect from July 1, 2005.
• Objective of PMLA:
  • The PMLA seeks to combat money laundering in India and has three main objectives:
    • To prevent and control money laundering.
    • To confiscate and seize the property obtained from the laundered money.
    • To deal with any other issue connected with money laundering in India.
• Important Provisions of the Act
  • Section 45: Offences to be cognizable and non-bailable.
    • It lays down conditions to be satisfied for the purpose of granting bail to an accused charged with the offence of money laundering.
  • Section 50: Powers of authorities regarding summons, production of documents and to give evidence, etc.
    • It details the powers of authorities in issuing summons, producing documents, and giving evidence. It equates the director's powers to those of a civil court under the Code of Civil Procedure, 1908, for matters like discovery and inspection, enforcing attendance, compelling production of documents, and issuing commissions.
    • Section 50(2) empowers the Director and other officers to summon any person during any investigation or proceedings under the PMLA. Rule 2(p) and Rule 11 of PML Rules, 2005 further specify these powers.
    • Section 50(3) mandates that all summoned persons must attend in person or through authorized agents, state the truth upon examination, and produce required documents.
    • Section 50(4) deems every proceeding under Section 50(2) and Section 50(3) as a judicial proceeding as per Sections 193 and 228 of the Indian Penal Code, 1860.
    • Section 50(5) allows any officer referred to in Section 50(2) to impound and retain any records produced before him in any proceedings under Act 15 of 2003. There are safeguards in place to prevent misuse of this power.