Delhi Court grants bail to Chinese national accused of money laundering

Read order: Directorate of Enforcement vs. Lou Sang @ Charlie Peng

LE Staff

New Delhi, July 26, 2021: While reiterating that the right to bail is a statutory recognition of the sacrosanct principle of presumption of innocence, a Delhi court recently granted bail to a foreign national accused of money laundering by the Enforcement Directorate (ED) and illegally staying in India and securing a passport after marrying an Indian woman

ASJ Devendra Rana admitted the bail application considering the period of incarceration, the fact that the applicant/accused is apparently not at flight risk, the intricate nature of the investigation and that the trial is expected to consume a considerable amount of time.

The Court granted bail with conditions that the accused shall drop a pin on Google maps to ensure that his location is available to the investigating agency and to surrender his passport before the court concerned at least seven days after his release from jail. 

Luo Sang, stated to be a Chinese national by the Enforcement Directorate (ED), was accused of money laundering by carrying out illegal business through companies created on the basis of forged documents. 

While refuting the contention of the ED that Section 45 of the Prevention of Money Laundering Act (PMLA) places a statutory bar on grant of bail, the Court held that there is no rule of law that says that bail cannot be granted in economic offence cases. 

ASJ referred to a Delhi High Court judgment in Sai Chandrashekhar vs. Directorate of Enforcement on the same issue and observed that the rigours of Section 45 of PMLA would not apply while considering the application for bail and hence it is required to be decided upon the touchstone of Section 439 CrPC.

The counsel for the applicant argued that the applicant was carrying out the legitimate businesses of customs clearance and that his consultancy was not connected to any agreements mentioned in the prosecution complaint. 

Urging that the allegation of forgery in the predicate offence is yet to be established by the court concerned, the counsel submitted that the onus to prove non-involvement in the offence of money laundering would be placed upon the accused only after framing of the charges and not at the stage of bail. 

The Court concurred with the contention that ‘proceeds of crime’ is a sine qua non for the commission of offence of money laundering, and found that the prosecution was stated to have conceded that the source of money involved was under investigation, and that at present, there was no material available with the agency to establish that the money involved in the present case came from a tainted source.