While denying bail to Satyendra Jain in the money laundering case, the Delhi High Court in a most learned, logical, laudable, landmark and latest judgment titled Satyendar Kumar Jain vs Directorate Of Enforcement in Bail Appln. 3590, 3705 & 3710 of 2022, Crl.M.A. 25088/2022 whose Neutral Citation No. is 2023:DHC:2380 and that was reserved on March 21, 2023 and then finally pronounced on April 6, 2023 has minced absolutely no words in expounding that witness statements show that the Aam Aadmi Party leader is the conceptualizer, visualize and executor of the entire operation. The Court also unequivocally said that he is an influential person having the potential to tamper with evidence. It must also be mentioned that in this order that is running into 46 pages, Hon’ble Mr Justice Dinesh Kumar Sharma observed that Satyendar Jain, Vaibhav Jain and Ankush Jain failed to meet the twin conditions provided under Section 45 of PMLA and the conditions laid down under Section 439 of the CrPC and thus, are not entitled for bail.

Preface
At the very outset, this notable judgment authored by the learned Single Judge Bench of Hon’ble Mr Dinsh Kumar Sharma of the Delhi High Court sets the ball rolling by first and foremost putting forth in para 1 that:
This order shall dispose of applications filed under Section 439 Cr.P.C. seeking bail by the petitioners Satyendar Kumar Jain, Vaibhav Jain and Ankush Jain for an offence punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the PMLA) in ED complaint bearing No.ECIR/HQ/14/2017 dated 30.08.2017 which was registered in pursuance of CBI case bearing FIR No. RC-AC-1-2017-A-0005 dated 24.08.2017.

In hindsight, the Bench then recapitulates in para 2 stating that:
The bail application filed by the petitioner Satyender Kumar Jain was rejected by the learned Special Judge (P.C. Act) (CBI) -23 (MPs/MLAs cases) vide a detailed order dated 17.11.2022 having regard to the mandatory twin conditions u/s 45 of the PMLA. The Ld. Special Judge prima facie opined that the applicant/accused Satyendar Kumar Jain was involved in concealing proceeds of crime by giving cash to Kolkata-based entry operators and thereafter, bringing the cash into the companies namely, M/s.Manglayatan Developers/Projects Pvt.Ltd., M/s. Akinchan Developers Pvt. Ltd. and M/s.Paryas Infosolutions Pvt. Ltd. against sale of shares to project that the income of these three companies was untainted. It was held by the Ld. Special Court, PMLA that apart from that, accused Satyendar Kumar Jain has also used the same modus operandi to convert his proceeds of crime of Rs.15,00,000/- by receiving accommodation entries from Kolkatabased entry operators in his company M/s.J.J.Ideal Estate Pvt. Ltd. It was held that the applicant/accused Satyendar Kumar Jain had knowingly done such an activity to mask tracing of the source of the ill-gotten money and accordingly such proceeds of crime were layered through Kolkata based entry operators. It was further held that as and when during the check period, cash was paid by applicant/accused Satyendar Kumar Jain to the Kolkata based entry operators, the proceeds of crime stood generated. It is pertinent to mention that in the detailed bail order passed by the learned Additional Sessions Judge, it was recorded that petitioner Satyendar Kumar Jain did not dispute that accommodation entry to the tune of Rs.4.61 Crore had been received during the check period in three companies namely, M/s.Manglayatan Projects Pvt.Ltd., M/s. Akinchan Developers Pvt.Ltd. and M/s.Paryas Infosolutions Pvt. Ltd. from Kolkata based entry operators against cash. The Ld. Special Judge has discussed in detail the statement of the witnesses recorded under Section 50 PMLA (2002).

While continuing in the same vein, the Bench then discloses in para 3 that, Further, the Ld. Special Court, PMLA, vide separate order of the same date i.e. 17.11.2022, also rejected the bail applications of applicants/accused Vaibhav Jain and Ankush Jain, predominately on the ground that Vaibhav Jain and Ankush Jain knowingly assisted co-accused Satyendar Kumar Jain in the concealment of proceeds of crime. It was held, inter alia, that it was prima facie established on record that cash for obtaining accommodation entries was paid by petitioners Satyendar Kumar Jain, Vaibhav Jain and Ankush Jain. Learned ASJ returned a finding that during the check period, even if the transactions were made by Vaibhav Jain and Akash Jain, the same were done by them on behalf of petitioner Satyendar Kumar Jain. It was held that the applicants/accused Vaibhav Jain and Ankush Jain projected the proceeds of the crime as untainted by claiming the proceeds of the crime to be their unaccounted income under IDS, 2016. In view thereof, Ld. Special Judge dismissed the bail applications of Vaibhav Jain and Ankush Jain.

Background Facts:

To put things in perspective, the Bench envisages in para 4 that:
Briefly stated facts are that CBI registered FIR No. RC-AC-1-2017-A0005 dated 24.08.2017 under Sections 13 (2) r/w 13 (1) (e) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘P.C.Act’) and under Section 109 IPC against petitioners Satyendar Kumar Jain, Ms.Poonam Jain w/o Satyendar Kumar Jain, Sh. Ajit Prasad Jain, Sh. Sunil Kumar Jain, Sh. Vaibhav Jain and Sh. Ankush Jain. CBI after investigation filed the charge sheet against the abovementioned accused persons wherein it was alleged that the accused Satyendar Kumar Jain was found to be in possession of assets to the tune of Rs.1,47,60,497.67/- (i.e. 217.20 % of the income) disproportionate to his known source of income, which he could not explain satisfactorily. The applicant/accused Satyendar Kumar Jain was alleged to have committed an offence under Section 13 (2) r/w 13 (1) (e) of the P.C. Act and it was further alleged by the CBI that Smt. Poonam Jain w/o Satyendar Kumar Jain and other business associates of Satyendar Kumar Jain namely Sh. Ajit Prasad Jain, Sh. Sunil Kumar Jain, Sh. Vaibhav Jain and Sh. Ankush Jain abetted Satyendar Kumar Jain in the commission of acquisition of disproportionate assets and thus committed the offence punishable under Section 109 IPC r/w 13 (1) (e) of the PC Act.

Adding more to it, the Bench observes in para 5 that:
An investigation was initiated under the provisions of the PMLA after recording ECIR bearing ECIR/HQ/14/2017 dated 30.08.2017 as the offences under Sections 13 (2) r/w 13 (1) (e) of PC Act are ‘scheduled offences’ under the PMLA. It was alleged that during the check period from 14.02.2015 to 31.05.2017, four companies, M/s Akinchan Developers Pvt. Ltd., M/s Prayas Infosolution Pvt. Ltd., M/s Mangalayatan Projects Pvt. Ltd. and M/s J.J.Ideal Estate Pvt. Ltd. received accommodation entries from Kolkata based entry operators through shell companies against cash in sum of Rs.2,01,83,200/-, Rs.69,00,300/-, Rs.1,90,00,000/- and Rs.15,00,000/- respectively totaling Rs. 4,75,83,500/-. The said companies have been alleged to be beneficially owned and controlled by accused/petitioner Satyendar Kumar Jain. During this period, it has been alleged that a sum of Rs.5,32,935/- was also received on account of commission.

Further, the Bench enunciates in para 6 that:
The Directorate of Enforcement filed a complaint under Sections 44 and 45 of the PMLA for the commission of offence under PMLA as defined under Section 3 read with Section 70 punishable under Section 4 of PMLA Act against Satyendar Kumar Jain, Poonam Jain w/o Satyendar Kumar Jain, Sh. Ajit Prasad Jain, Sh. Sunil Kumar Jain, Sh. Vaibhav Jain and Sh. Ankush Jain, M/s Akinchan Developers Pvt. Ltd., M/s Prayas Infosolution Pvt. Ltd., M/s Mangalayatan Projects Pvt. Ltd. and M/s J.J.Ideal Estate Pvt. Ltd. The complainant has alleged that the petitioner Satyendar Kumar Jain hatched a criminal conspiracy and conceptualized the idea of accommodation entries against cash. The petitioner to execute this idea recommended appointing his old friend Sh. Jagdish Prasad Mohta, a Chartered Accountant, as the auditor of Akinchan Developers Pvt. Ltd., Paryas Info Solution Pvt. Ltd., Metalimpex Pvt. Ltd. and Mangalayatan Projects Pvt.Ltd. It has been alleged that at the instance of the petitioner, Sh. Jagdish Prasad Mohta arranged a meeting between Satyendar Kumar Jain and Rajendra Bansal, a Kolkata based accommodation entry provider in July/August, 2010. In the said meeting the modalities of taking accommodation entries was finalised like percentage of commission, process of cash transfer and documents to be maintained etc. ED has alleged that Satyendar Kumar Jain was the conceptualizer, initiator, and supervisor for the entire operation of these accommodation entries. Allegedly, Satyendar Kumar Jain was hiding behind the ‘Corporate Veil’ whereas actually he was managing and controlling the companies in which these accommodation entries were received. It was alleged that the accommodation entries totaling to Rs. 4.81 Crore were received during the period 2015-16 from Kolkata based entry operators in the bank accounts of the aforesaid companies and cash totaling Rs.4,65,99,635/- was paid to them. The petitioner Satyendar Kumar Jain allegedly received accommodation entries of Rs. 15,00,000/- in his company J.J. Ideal Estate Pvt. Ltd. during the year 2015-16 from Kolkata based entry operators by paying cash amounts of Rs. 15,00,000/- and commission of Rs. 16,800/-. Allegedly, the petitioner laundered the proceeds of crime acquired through disproportionate assets through a complex web of transactions in the companies controlled by him. It was alleged that the petitioner committed the offence of money laundering as defined under Section 3 of PMLA by actually acquiring, possessing, concealing and using the proceeds of crime to the tune of Rs.4,81,16,435/- and projecting and claiming the same as untainted. In the complaint the ED has alleged that the petitioners Vaibhav Jain and Ankush Jain are also involved in knowingly assisting Satyendar Kumar Jain by making separate and independent declarations under IDS 2016 for declaring undisclosed income of Rs. 8.26 crore for the period from 2010-11 to 2015-16 in order to protect Sh. Satyendar Kumar Jain. It is alleged that Vaibhav Jain and Ankush Jain also prepared ante dated documents with the help of Sunil Kumar Jain and Sh. Jagdish Prasad Mohta with regard to their Directorship in Akinchan Developers Pvt. Ltd., lndo Metalimpex Pvt. Ltd., Prayas Infosolution Pvt. Ltd. and Mangalayatan Projects Pvt. Ltd. by becoming Directors of aforesaid companies from back date for showing his IDS declaration as genuine. It was alleged that thus Vaibhav Jain and Ankush Jain have committed the offence of money laundering as defined under Section 3 of PMLA by being actually involved in and knowingly assisting petitioner Satyendar Kumar Jain in projecting his proceeds of crime to the tune of Rs.4,81,16,435/- as untainted in the mode and manner as aforesaid in the complaint. Cognizance of the complaint has already been taken on 29.07.2022.

Finding and Analysis

Be it noted, the Bench notes in para 70 that:
The ED has alleged conspiracy between Satyendar Kumar Jain and coaccused Vaibhav Jain and Ankush Jain. Generally in cases of criminal conspiracy, which are hatched in secrecy and executed in dark, it is herculean task to find the direct evidence of such offence. In particular, where there is transaction of cash, I consider that it is a near impossible to get the direct evidence. In such cases, the court has to resort back to see the past trend and attendant circumstances of the case. This is the case where the money has been round tripped through shell companies. As submitted, it is not disputed that Rs. 4.81 Crores was received in these four companies M/s Akinchan Developers Pvt. Ltd., M/s Prayas Infosolution Pvt. Ltd., M/s Mangalayatan Projects Pvt. Ltd. and M/s J.J.Ideal Estate Pvt. Ltd. It is also not disputed that these transactions have been carried out through Kolkata based entry operators. Accused Satyendar Kumar Jain in his statement under Section 50 of PMLA abandoned his responsibilities by saying that he has nothing to do with the same. Vaibhav Jain and Ankush Jain have stated that it was their money. However, the IDS filed by them has been rejected by the income tax department and such rejection has been affirmed by the High Court and the Supreme Court. The income tax authorities in IDS proceedings have attributed such money to Satyendar Kumar Jain and this finding has been upheld till Supreme Court.

Most fundamentally, the Bench propounds in para 75 that:
The simple fact is that CBI has filed the case of disproportionate assets against public servant Satyendar Kumar Jain and other persons including the other two petitioners, the cognizance of which has already been taken. Thus, the competent court is seized of the matter regarding the disproportionate assets and present court cannot go into the question of validity of institution of such proceedings. It is also not disputed that during this period certain entries have come into the company against the payment of the cash through Kolkata based entry operators. The two facts are placed on record to show that during the check period certain disproportionate assets were amassed and those were round-tripped into the company through entry operators. There is a long association amongst the petitioners evidencing the trend of getting entries through the same operators. The court has to see the prima facie case at this stage and to see whether there are reasonable grounds to believe that accused persons have not committed an offence and they are not likely to commit such offence. In view of the matter on record, the entire amount has rightly been attributed to the petitioners. The contradictions in statements under Section 50 of PMLA cannot be examined at this stage and is a matter of trial. The petitioner Satyendar Kumar Jain is an influential person and has a potential to tamper with the evidence as indicated by his conduct during the custody. However, this court has examined the entire facts objectively in accordance with the law without being influenced by the position of the petitioner, other accused persons as well qua the witnesses but the fact remains the same that the condition under Section 439 Cr.P.C. are in addition to the twin conditions under Section 45 of PMLA. Thus, taking into account the totality of the facts, the petitioners at this stage cannot be held to have cleared the twin conditions of PMLA or the triple test.

Most significantly, the Bench then holds in para 76 that:
The share holding patterns of M/s. Akinchan Developers Pvt.Ltd. M/s.Manglayatan Projects Pvt.Ltd. and M/s.J.J.Ideal Estate Pvt. Ltd. also shows that the petitioner Satyendar Kumar Jain or his family is controlling these companies directly or indirectly. The share pattern of these companies are quite intricate and really needs to be examined thoroughly. The testimony of Mr.Pankul Aggarwal shows the total control of Satyendar Kumar Jain on M/s.J.J.Ideal Estate Pvt. Ltd. Similarly, the testimony of Rajender Bansal, Jivendra Mishra, Ashish Chokhani and J.P.Mohta shows that Satyendar Kumar Jain is the conceptualizer, visualizer and executor of the entire operation and his being aided and abated by Vaibhav Jain and Ankush Jain. The investments were also being made by the persons at the instance of Satyendar Kumar Jain as reflected from the statements of Sh. Satyavrat Aggarwal, Nirmal Kumar Madhogaria and Mahender Pal Singh. In such cases, it is not essential whether the witnesses have personally met the accused or not.

As a corollary, the Bench holds in para 79 that:
I consider that in view of the discussion made hereinabove, the broad probabilities indicate that M/s Akinchan Developer Pvt. Ltd., M/s Mangalayatan Projects Pvt. Ltd. and M/s Prayas Infosolution Pvt. Ltd. are controlled and managed by Satyendar Kumar Jain.

It cannot be glossed over that the Bench then points out in para 80 that:
The constant changing pattern of the shareholding in the companies clearly indicates that Sh. Satyendar Kumar Jain was indirectly controlling the affairs of the companies. The evidence on record though speaks in volumes but has not been discussed or examined in detail so as to not cause prejudice to the petitioner.

Finally, the Bench concludes by holding that:
I have gone through the order of learned Special Judge rejecting the bail applications. I do not find any illegality or perversity in such order. The order rejecting the bail applications are well-reasoned orders based on material on record. The Court has taken note of the fact that Sh. Satyendar Kumar Jain has resigned as a Minister. However, in view of the discussion made hereinabove, I consider that petitioners have failed to meet the twin conditions as provided under Section 45 PMLA as well as the conditions as laid down under Section 439 Cr.P.C. and are thus not entitled for bail. Hence, the bail applications are rejected.

In sum, the Delhi High Court endorsed the order of learned Special Judge who had rejected the bail applications of the petitioners including Satyendra Jain. We have discussed the cogent reasons as aforesaid why the bail plea was rejected giving reasons for the same. No denying it!

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh.