PANAJI
The High Court of Bombay at Goa refused to cancel bail granted to a Kerala native, accused in Rs 3.96-crore laundering operation linked to a narcotics investigation, observing that the Enforcement Directorate’s ongoing probe did not in any way reveal a connection to or part of a larger activity of money laundering.
The Bench of Justice S G Chapalgaonkar, in its order pronounced on Monday, stated that while money laundering has to be viewed in the context of the entire criminal enterprise, the prosecution must still establish the accused -- Nihal Vadakkencherry Nazer’s actual connection with the proceeds of crime before denying him the benefit of the monetary threshold under the Prevention of Money Laundering Act (PMLA).
“When prosecution was filed against seven accused persons ... they are accused of money laundering of total sum of Rs 3.96 crore. The respondent’s role is connected with transfer of money by Madhupan for conversion into dirham. There is nothing to show that respondent has role, directly or indirectly, in money laundering of any more amount beyond Rs 12.88 lakh. Prima facie, respondent cannot be individually or vicariously linked to money laundering of total proceeds of crime of Rs 3.96 crore on the basis of money trail flow chart relied by prosecution. Even from investigation so far, nothing is discernible that respondent was any way connected or part of larger activity of money laundering,” reads the order.
The ED had challenged the August 18 bail order of the Special Court, arguing that the accused was an important link in the laundering chain and had facilitated conversion of Indian currency into USDT and its cross-border movement.
The central agency’s probe was initiated following the Anti-Narcotics Cell’s FIR into the seizure of Rs 1.01 crore worth of narcotic substances.
The ED alleged that Nazer arranged bank accounts through which funds were routed for conversion into cryptocurrency and that Rs 12.25 lakh had been transferred through accounts arranged by him. It contended that he was not merely an accommodation party but a cross-border conversion conduit for the syndicate.
The High Court, however, closely examined the money trail and found that the material showed transactions totalling Rs 12.88 lakh involving Nazer.
The court also stressed that money laundering must be examined in the context of the entire criminal enterprise and the financial interlinks between accused persons. In the present case, however, the court found no material showing that Nazer was part of a larger organised money-laundering activity or that further investigation was likely to establish a larger role.
The court also found that the stringent conditions imposed by the Special Court adequately addressed the prosecution’s apprehension of flight risk.
“There is nothing to demonstrate that further investigation may reveal involvement of respondent in larger organized activity of money laundering that would disentitle him to seek exemption from twin test,” it held.
Rejecting the ED’s plea for cancellation of bail, the High Court said the Special Court’s exercise of discretion was neither arbitrary nor prejudicial to a fair investigation.
“We do not find that exercise of discretion by Special Court was arbitrary or prejudicial to interest of fair investigation,” the court said, adding that there was no ground to interfere with the bail order. The ED’s application was accordingly rejected while the Court maintained the bail order.
