In a recent case of Preeti Chandra vs Directorate of Enforcement, Bail Appln. 3494/2022, CRL.M.A. 24331/2022, CRL.M. (Bail) 183/2023, Hon’ble Justice Jasmeet Singh passed a Judgment dated 14-06-2023 and made observations regarding the triple test to be satisfied before grant of bail.
i) The Applicant, Preeti Chandra, wife of Mr. Sanjay Chandra, the Director of M/s Unitech Group (Unitech), was the Director of M/s Prakausali Investments (India) Pvt. Ltd. (“Prakausali”) and M/s Mayfair Investments Pvt. Ltd. (“Mayfair”).
ii) Several FIRs were registered by Delhi Police, Economic Offences Wing (EOW), Saket and by the Central Bureau of Investigation (CBI) against the Promoters of Unitech i.e. Ramesh Chandra, Sanjay Chandra, Ajay Chandra and other Associates, under Sections 34 (Acts done by several persons in furtherance of common intention), 201 (Causing disappearance of evidence of offence, or giving false information, to screen offender), 406 (Punishment for criminal breach of trust), 409 (Criminal breach of trust by public, servant. or by banker, merchant or agent), 120B (Punishment of criminal conspiracy) and 420 (Cheating and dishonestly inducing delivery of property) of the Indian Penal Code 1860 (IPC) and under Section 7 (Offence relating to public servant being bribed), 7A (Taking undue advantage to influence public servant by corrupt or illegal means or by exercise of personal influence), 8 (Offence relating to bribing of a public servant), 9 (Offence relating to bribing a public servant by a commercial organisation), 10 (Person in charge of commercial organisation to be guilty of offence), 12 (Punishment for abetment of offences) and 13 (Criminal misconduct by a public servant) of the Prevention of Corruption Act 1988 (PC Act).
iii) The FIRs were registered based on various complaints made by homebuyers alleging that (i) they were cheated by Unitech and their hard-earned money, that was invested in Unitech, was mis-utilised and laundered. (ii) It was further alleged that around Rs. 380.08 Crores was diverted from the Unitech Account and transferred to Carnoustie Management Pvt. Ltd. (“Carnoustie”) in 2011. (iii) Further, out of the said Rs. 380.08 Crores, a sum of Rs. 107.40 Crores was transferred to Prakausali, through its Holding Company, Mayfair and the same was allegedly authorised by the Applicant, who was the Director of Prakausali and Mayfair. (iv) Furthermore, the Applicant was accused of managing a benami organisation called Trikar Group with her husband, Sanjay Chandra, where funds to the tune of Rs. 401.07 Crores obtained from illegal activities were transferred to the Indian accounts associated with Trikar Group in 2015-18.
iv) Hence, investigation was taken up to trace the proceeds of crime and to investigate potential money laundering under the Prevention of Money Laundering Act 2002 (PMLA) on 06-06-2018. The Applicant was later taken into custody on 04-10-2021.
Delhi High Court Observations
Aggrieved, the Applicant filed Bail Application bearing Bail Appln. 3494/2022 and Miscellaneous Applications bearing CRL.M.A. 24331/2022, CRL.M. (Bail) 183/2023 before the Hon’ble Delhi High Court seeking grant of release on bail. The High Court passed a Judgment dated 14-06-2023 and made the following observations:
(1) That ‘mens rea’ / intention is an essential ingredient to establish the offence of money laundering. Under Section 3 of PMLA, “the Court at the stage of considering the application for grant of bail, is expected to consider the question from the angle as to whether the accused was possessed of the requisite mens rea.”
(2) That the Prosecution in the present case, has not produced on record any evidence to show that (a) the Applicant was involved in the day-to-day activities of Prakausali, Mayfair and other Unitech Companies and/or subsidiaries and that she was responsible for taking the key managerial decisions. (b) In fact, the Applicant was only a Nominee Director of Prakausali from 2010-2013 like other family members of her husband and the main Accused, Sanjay Chandra. (c) Moreover, the said Company was incorporated in 1981, years before they got married. (d) Furthermore, the balance sheets of Prakausali were signed by the Applicant’s mother-in-law from 2010-2013, but she has not been named as an Accused by the Police. (e) Further, the Applicant was outside India when the Board Resolution was passed on 25-01-2011 allegedly authorising the illegal transfer of Rs. 107.40 Crores to Prakausali.
(3) That merely because the Applicant is the wife of the main Accused, Sanjay Chandra, it would not lead to an automatic inference that she had knowledge that the money in her hands pertained to proceeds of crime.
(4) Further, the Trikar Group was also being managed and handled by the other Accused, Ajay Chandra and Sanjay Chandra and there was no connection to link the Applicant with the Trikar Group business activities.
(5) That in respect of the Prosecution’s concern that if the Applicant is released on bail, she may flee from India and it would be difficult to bring her back to India, as she is a citizen of Dominican Republic, with which India does not have any extradition treaty, the High Court observed that the Applicant has prima facie satisfied the Triple Test for grant of bail as follows. Thus, she is entitled to be released on bail:
(i) Flight risk– Earlier, the Hon’ble Supreme Court vide Order dated 10-08-2022 had permitted the Applicant to approach the Sessions Court for seeking regular bail once the conclusion of interrogation by the Sessions Court. The Sessions Court further noted in its Order dated 07-11-2022 that the Applicant is not at flight risk, as she is in the process of renouncing her citizenship of Dominican Republic and taking up Indian citizenship, as a condition for grant of bail.
(ii) Tampering with Evidence– All the documents and evidences are in the custody of the Enforcement Directorate (ED), hence, there is no scope for the Applicant to tamper with the evidence.
(iii) Influencing Witnesses– The Prosecution has not been able to produce on record any incriminating material to show that the Applicant has attempted to influence witnesses.
(6) However, whether the Applicant had any knowledge / intention / ‘mens rea’ that she was dealing with proceeds of crime can be established only by leading evidence in the Trial Court.
Hence, the Hon’ble Delhi High Court held that as the Applicant has satisfied the Triple Test for grant of bail, so she is entitled to be released on bail, on the conditions that (1) the Applicant furnishes a personal bond with surety of Rs. 1,00,000.00 (Rupees One Lakh only), (2) she produces proof of renunciation of citizenship of Dominican Republic within 1 week of release on bail before the Sessions Court, (3) surrenders her Dominican Republic Passport before the Trial Court, (4) joins the investigation whenever called by the Investigating Officer, etc. As a result, the Bail Application filed by Applicant was allowed.
The Indian Lawyer
 Section 3 of PMLA: Offence of money-laundering.—
Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering.
Explanation.—For the removal of doubts, it is hereby clarified that,—
(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:—
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property, in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.