| CITATION | 2024 SSC ONLINE SC 317 |
| DATE OF JUDGMENT | 18th March 2024 |
| COURT | Supreme Court of India |
| APPELLANT | Satyendar Kumar Jain |
| RESPONDENT | Directorate of Enforcement |
| BENCH | Bela M. Trivedi, Pankaj Mithal |
INTRODUCTION
The case of Satyendar Kumar Jain Vs. Directorate of Enforcement is a recent decision of Supreme Court rejected the bail application of Shri Satyendar Kumar Jain and others involved in the case of money laundering as appellants have not complied with the twin mandatory condition laid down in Section 45 of Prevention of Money Laundering Act, 2002. Satyendar Jain, the leader of the Aam Aadmi Party (AAP), and two other individuals had their bail applications rejected by the Delhi High Court on April 6, 2023. The Division Bench of Bela M. Trivedi and Pankaj Mithal, JJ. dismissed the bail application in the excise policy money laundering case and ordered Jain to appear before the Special Court in response to appeals against this decision.
FACT
- An FIR came to be registered against Shri Satyendar Kumar Jain, Minister in the Government of National Capital Territory of Delhi & Others, for the offences under Section 109 IPC and 13(2) read with Section 13(1)(e) of the PC Act, 1988.
- After the investigation, a Charge-sheet came to be filed by the CBI in respect of the said FIR on 03.12.2018 in the Court of Special Judge, CBI, Patiala House Courts, New Delhi against the six accused viz. Sh. Satyendar Kumar Jain, Smt. Poonam Jain, Sh. Ajit Prasad Jain, Sh. Sunil Kumar Jain, Sh. Vaibhav Jain and Sh. Ankush Jain.
- Since Section 13(2) read with Section 13(1)(e) of the PC Act in the said FIR dated 24th August, 2017 were scheduled offences under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the “PMLA”) and since it was alleged inter alia that Sh. Satyendar Jain with the help of his family members and other persons had acquired disproportionate assets during the period from 14.02.2015 to 31.05.2017, while he was functioning as Minister of Govt. NCT of Delhi, and had laundered tainted cash amounts through Kolkata based shell companies, the Directorate of Enforcement had registered an ECIR against Satyendar Jain, Vaibhav Jain, Ankush Jain and others for investigation into the commission of the offence of Money laundering as defined under Section 3 and punishable under Section 4 of the PMLA.
- On the completion of the said investigation, the Prosecution Complaint came to be filed on 27.07.2022 by the Directorate of Enforcement in the Court of District and Sessions Judge, Rouse Avenue District Court, New Delhi, against the accused Sh. Satyendar Jain and others with a prayer to take cognizance of the offences of money laundering under Section 3 punishable under Section 4 of PMLA. The said Prosecution Complaint being is now pending at the stage of framing of charge against the appellants – accused.
ISSUES RAISED
- Whether Sateyendar Kumar Jain was involved in money laundering activities and whether he violated the provisions of the Prevention of Money Laundering Act (PMLA).
- The Enforcement Directorate has accused Jain of engaging in illegal financial transactions and money laundering, which is a serious offense under Indian law.
- Whether there is sufficient evidence to prove that Jain committed the alleged offenses, and whether the Enforcement Directorate followed the proper procedures in investigating and prosecuting the case.
- The defense may argue that Jain is innocent and that the charges against him are baseless or politically motivated.
CONTENTIONS OF APPEALENT
The arguments presented in the case of Vijay Madanlal Choudhary and the specific circumstances surrounding the appellant in this case suggest that there are valid reasons for granting bail. The appellant’s health condition, the lack of flight risk or tampering with evidence, and the fact that the IDS filing was declared void all support the argument for bail. The control of records and decisions by the appellants, as well as the clarification regarding the alleged error in the investigation process, further strengthen the case for bail. The prosecution’s attempt to link the appellants with unrelated individuals and the discrepancies in the figures mentioned in the complaint raise questions about the validity of the allegations.
Overall, it appears that the appellant is entitled to bail as per the provisions of the PMLA. The person in the case has health issues, won’t run away, and won’t hide evidence. The mistake in the investigation and unclear allegations also support giving bail. The prosecution’s claims seem weak, so the person should get bail under the law.
CONTENTIONS OF REPONDENT
The appellants Ankush Jain and Vaibhav Jain argued that there were discrepancies in the amounts mentioned by the ED and CBI in the case. They claimed that the amount attributed to disproportionate assets by the CBI was much lower than the proceeds of crime calculated by the ED.The appellants also stated that Satyendar Jain, one of the accused, had resigned from directorship before the alleged offense and did not have significant control over the companies involved.
JUDGEMENT
The judgment was delivered by the court. The court found the petitioner, Satyendar Kumar Jain, guilty of involvement in fraudulent activities related to commercial structures controlled by him and his family. Despite the petitioner’s claims of innocence, the court determined that there was sufficient evidence linking him to the offenses alleged. As a result, the court lifted the corporate veil and held Jain accountable for the fraudulent activities. Jain, who was on medical bail at the time, was directed to surrender before the Special Court to face trial for his involvement in the money laundering offenses under the Prevention of Money Laundering Act (PMLA).
The court emphasized the importance of a speedy trial and access to justice for all parties involved in such cases. By applying Section 436A of the Criminal Procedure Code (Cr.P.C.) to cases of money laundering under the PMLA, the court ensured that justice was served swiftly and efficiently. This judgment serves as a reminder of the consequences of engaging in fraudulent financial activities and highlights the significance of transparency and accountability in all financial dealings. It underscores the legal system’s commitment to upholding the rule of law and holding individuals accountable for their actions.
ANALYSIS
In this present case of Satyendar Kumar Jain vs Directorate of Enforcement, the Enforcement Directorate (ED) presented evidence that suggested Jain was the mastermind behind an accommodation entries scheme involving substantial amounts of money. The Court found that Jain and his family members were directly or indirectly controlling the companies involved in the scheme and had attempted to benefit from the Income Declaration Scheme by filing false declarations. The Court noted that the Income Tax authorities had deemed their declarations to be fraudulent and void, indicating a deliberate attempt to evade taxes. The Court ultimately concluded that Jain had orchestrated the accommodation entries scheme, which involved significant sums of money and was carried out through various companies controlled by him and his family. This case highlights the importance of transparency and compliance with tax laws. It also underscores the need for individuals in positions of power and influence to adhere to ethical standards and avoid engaging in fraudulent activities that could undermine the integrity of the financial system. The Court’s ruling serves as a reminder that those who engage in financial misconduct will be held accountable for their actions.
CONCLUSION The appellants have done nothing to show us that there are good reasons to think they are innocent of the charges against them. In contrast, there is enough evidence gathered by the respondent-ED to demonstrate their initial culpability of the accused offenses.
It is not tenable to conclude that the appellants met the two prerequisite requirements outlined in PMLA Section 45. After reviewing the evidence, the High Court also found the appellants first guilty of the claimed PMLA offenses in the contested judgment. This ruling is neither unconstitutional or wrong in any way.
REFERENCES
https://main.sci.gov.in/supremecourt/2023/20478/20478_2023_15_1501_51515_Judgement_18-Mar2024.pdf/ SCC ONLINE 2022 SCC OnLine SC 929
16 SCC 1(2018) 11 SCC 46
indiankanoon
MEENAKSHI (ASIAN LAW COLLEGE) Intern at Legal Vidhiya
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