Right to Bail in Money Laundering Cases by Bishal Basak @LexCliq.com

ABSTRACT:

The liberty of the individual must be guarded, protected and promoted but the interests of the society, of which the individual is component, must be taken into account if society is to move forward and prosper instead of becoming foul and dissembling. Bail has its roots from both incorporeal and concepts adopted by humans. It is the matter of law and practice that, any person who is related to the accused person may apply for parole from the custody of the accused person. It is the right given to the suspect or the accused person to be released or be free from custody while waiting for further investigations and other criminal policies to take place or to continue taking place. Such released must have a number of conditions which needs to be fulfilled by the suspect so as to be free from being detained, such as the presence of guarantor. Failure to abide by such conditions may result the suspect to continued being detained.

However, there are some grounds which prevent the suspect or accused person from being given this right. It depends with the degree of the crime perpetrated or the nature of the crime i.e., executed or sometimes the situations in which the crime was committed or the relationship between the suspect or accused person and the surrounding society. It also depends on the attributes or behaviours of the said person. For instance, if his release may influence the criminal investigations and procedures to the extent of affecting the protection of other’s rights hence render to injustice other than justice to the victim

Keywords: bail, granting, offence, criminal procedures

INTRODUCTION:

Money laundering is a jeopardy to our society where a person is engaged in illicit venture and because of such activity, he earns money and tries to spend it in a legitimate manner. In India, the Prevention of Money Laundering Act, 2002 provides provisions for the felon who engages themselves in illicit activities. The financial resources of any nation are eroded when there is an increase in money laundering which is a felony, and therefore, it is important to prohibit such pursuit which causes financial recoil. A person who is engaged in illicit activities, like, child abuse, bribery, malfeasance, trepidation, etc. And by such pursuit if he is earning money or asking someone on his furtherance to get engaged, but such earnings are shown as in the accounts as legally earned money, then it is known as money laundering. For example, A is involved in a business of selling clothes but the source from where he accumulated investments is through an illegitimate source that is from unconventional means and the money which is assembled from such act, he invests it in his apparel business through this the illicit money turns into licit money. This whole process from illicit money to licit money is called money laundering.

In money laundering, the main motive of the culprit is to change the radix from where the money is acquired. The source from where the assistance of money laundering is done cannot be unearthed easily because the money is tried to be conveyed in the bank account, however, banks scrutinize about the source of the money but they may or may not figure it out if the money is laundered or procured. So, even if they have a doubt regarding the large amount of sum which is conveyed or drawn out and they have to report such acts under Section 35A of the Banking Regulation Act, 1949 and also under the Prevention of Money Laundering Rules, 2005.

The followings are the way under which an illegally earned money turns legal:

  1. The criminal transfers convey money in financial institutions especially in banks.
  2. If any sum of money is to be amassed in the bank they ask about the origin of the obtained money. So, when money is obtained from an illegal source, they hide the illegal earning source by showing other legal investments for instance, by showing their allocations in any company and due to their allocation, they are earning profits, etc.
  3. After the money is accepted by the bank it turns into rightful money and they can withdraw the money as par their need.

RESPONSIBILITIES OF A BANK:

Banks are commercial institutes engaged in funding various enterprises, start-ups, etc. and they are the major players for profitable growth as they also accept down payments which in turn grows financial resources. Nevertheless, if banks engaged in accepting deposits from a person who is engaged in an illegal activity it will eventually cost them their market value because their recognition will be deteriorated and the trust of the customer will be hard to earn. Therefore, they are instructed by the Reserve Bank of India to follow certain instructions when they doubt any person transaction as they play a major role in prohibiting money laundering.

However, the Ministry of Finance has set up an individualistic body in 2004 FIU-IND (Financial Intelligence Unit – India) whose ultimate motive is to manage, inspect and propagate any information that is related to suspicious transactions. They are also involved in confronting money laundering at a global level. The functions of the FIU-IND are as follows:

  1. Recordkeeper: They are being reported with regard to several negotiations that are made in the purchase or sale of immovable property, NGOs, cross-border, and negotiations that are suspicious in nature.
  2. Inspect: The suspected negotiations are scrutinized by them.
  3. Share data: They share archives with foreign and national intelligence unit.
  4. A reservoir of data: They act as a reservoir of data that have been received from several reporting agencies.
  5. Identification: Identification and deliberation over various mechanisms for preventing money laundering are done by them.

The Reserve Bank of India (RBI) has also issued – in the Prevention of Money-Laundering (Maintenance of Records Rules), 2005 they are as follows:

Transaction records: The following transactions have to be reported:

  • Whenever there is a transaction made where the amount exceeds rupees 10 lakhs but the transacted currency is foreign.
  • There is a series of the transactions within a month and all are related to each other. The transacted amount need not be equivalent to rupees 10 lakhs.
  • When the transaction is related to any investment in NGO and the amount of the currency is more or equal to foreign currency of rupees 10 lakhs.
  • When a simulated currency is engaged or any forged security documents are used for assisting transactions.
  • When there is any suspicious transaction made even when cash is engaged or not.
  • If any purchase or sale takes place which has a market value of more than rupees 50 lakhs

Information records: Here, a bona fide detail concerning the mode of the transaction, value and the currency involved, date of the transaction, and the parties who are engaged while the proceedings have to be made by the regulator.

Due diligence: The bank has to execute proper due persistence for his client so that they have all the details with respect to their customers who are unloading or taking a loan from them. They have to ask their clients to fill KYC.

PUNISHMENTS AWARDED WHEN PROVEN GUILTY:

A person or an organization can be held accountable as per section 3 of the PMLA, 2002. This section makes any directly or indirectly engaged party guilty. And, those who are manifested of being engaged in money laundering will be punished as per Section 4 of the PMLA, 2002.

The punishment for money laundering is that the guilty individual or organization will be granted  a minimum of 3 years of imprisonment which can extend for 7 years along with a fine of rupees 5 lakh.

BURDEN OF PROOF:

As per Section 24 of the Prevention of Money Laundering (Amendment) Act, 2012 the one who is charged with the felony of money laundering they have to prove their guiltiness in the court because the court, in this case, presumes that the accused person is related to the crime.

PROVISIONS OF BAIL UNDER THE PREVENTION OF MONEY LAUNDERING ACT:

The purpose of bail in our judiciary system is to confirm that the accused person will be present in the court whenever he is called for appearing for the hearing and anyone who is charged with a criminal offense can get bail by paying a specific amount. But the court before granting bail looks into various grounds and it may or may not be granted depending upon the severity of the crime.

In the case of those who are charged with the offense of money laundering, section 45 of the Prevention of Money Laundering Act, 2002 concerned with the provision of bail. And, the offense of money laundering is treated as a cognizable and non-bailable offense, so bail in this situation can only be conceded if anyone is charged with imprisonment of fewer than 3 years. In other respects, those who are charged with punishment of more than 3 years, have to file for a bail bond, and then court allows bail to them after having security from them in fiscal terms that they will appear in the further court trials.

However, the bail can only be granted if they are not opposed by respective personnel. The following are the conditions under which granted is granted by the special court:

  • When an accused person files for bail, the public prosecutor is given an opportunity to provide arguments against the grant of the bail by the court.
  • On the discretion of the special court juveniles who are underage as per law, woman and a person whose health condition is not good, can get bail. And also, those who do not fall under this convention for bail and can also get bail if the court believes that the convicted person is honest and will not do any such action in the future.
  • The money laundering offense will not be considered as a palpable offense until there is a written complaint received from the director or from the central or state government. On the other hand, there will be no inquiry taking place on the part of the police until the government gives them special order to do so.
  • The time period of granting bail in case of money laundering is according to the CrPC, 1973.

Nevertheless, for conceding bail to the accused who is engaged in money laundering case, is found to be aggressive in nature because those who are charged with this delinquency, they are yet to be proclaimed guilty and before being proved guilty they are being treated as criminal and because of which their fundamental right to be treated equally and right to life is infringed under Article 14 and Article 21 of the Constitution of India, as the court followed twin test.

CASES OF MONEY LAUNDERING IN INDIA:

K. Shivakumar vs Directorate of Enforcement: In this case, the person was prosecuted for holding money in cash in his supposition by Income tax officers owing to the fact that he was held in custody for questioning in Tihar Jail. However, the court conceded him bail on the successive rationales:

  • Along with two sureties he was interrogated to pay Rs. 25 lacs as bail bond.
  • The court’s initial consent has to be taken before flying to other countries.
  • His presence is mandatory for the investigation purpose.
  • He was also interrogated not to alleviate any evidence related to the case.

In Nikesh Talwar Shah vs. Union of India: The question of appreciating bail to those who were repudiated to get bail from the court as mentioned in section 45 of the PMLA, 2002 was responded. In this case, the petitioner filed a writ petition because there was a breach of his fundamental right. As those who have put an application for bail even before a suit has taken place that is anticipatory bail, the court concedes them bail but when a person was detained and after that, they apply for bail, then the court follows twin-circumstances for granting bail which is in solely prejudicial in nature. So, with this case, the Supreme Court removed these prejudices and interrogated for reapplying for bail in the court from where their bail application was declined.

CONCLUSION:

The peril of money laundering is still faced in India and in order to control and prevent its practicing government has introduced various stringent laws and punishments. But even if a person is charged with section 3 of the PMLA, 2002 they are given equal rights for applying for bail by paying bail bond money and providing sureties to the respective court. Although there were irregularities in section 45 of the PMLA, 2002 as the application of the bail were rejected depending upon their imprisonment that is if the accused person has applied for the bail even before being arrested they could be granted bail by the special courts, however, those who failed to apply for bail before being arrested the court followed twin-condition for availing them bail which was in itself violating the rights of the accused that is right to equality and right to life. However, the court in one of its landmark judgments in Nikesh Talwar Shah v. Union of India case removed this parameter of bail application and those who were denied bail they were asked to reapply in the court for bail.

REFERENCES:

 

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