P&H HC grants bail to Dutch National involved in Hawala transactions, directs not to leave India without prior permission

Read Order:  Shiv Lal Pabbi vs. Directorate of Enforcement 

Tulip Kanth

Chandigarh, November 3,2021: The Punjab and Haryana High Court has allowed a petition filed under Section 439 of Cr.P.C., for grant of regular bail to the petitioner(Shiv Lal Pabbi) in the case registered by the respondent-Enforcement Directorate, STF-HQ, New Delhi for an offence under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA).

The aforesaid case was registered against petitioner Shiv Lal Pabbi at the instance of Enforcement Directorate, on the ground that a letter was received from the Ministry of Home Affairs, by which the original letter, sent by the Embassy of Netherlands was endorsed, wherein a request was made for legal assistance in the matter of petitioner Shiv Lal Pabbi and others for their involvement in money laundering as they were indulged in secret banking and were having various assets in Dubai and India. 

The letter further stated that the offence registered by the Dutch Police corresponded to Sections 420 and 467 of the IPC, which are scheduled offences under Part “A” of the PMLA. On the basis of the same, the aforesaid case/ECIR was registered by the ED as per Part “C” and Section 58 of the PMLA.

During investigation, it was found that the petitioner is involved in the acts of cheating and forgery in Netherlands by transferring of money of other persons through Hawala operations and earned commissions in the shape of cash.

Later, the petitioner was apprehended by the officials of Bureau of Immigration at New Delhi Airport in response to an LOC (Lookout Circular) as he was trying to board a flight in order to flee from India. Thereafter, he was produced before the Special Judge, CBI, Punjab, from where, he was remanded to ten days’ police custody and then, he was sent to judicial custody.

While finding merit in the present Petition, the Bench of Justice Arvind Singh Sangwan observed that the three conditions laid down under Section 45 are that the public prosecutor should be given an opportunity of hearing, which has been given in the present case; secondly, if the public prosecutor opposes the application, a reasoned order be passed that the person is not guilty of offence and not likely to commit offence while on bail and thirdly that in addition to provisions PMLA, the provisions of Cr.P.C., regarding grant of bail, shall apply. 

The Bench went on to state that entire proceedings were initiated on the basis of the mutual legal assistance sought by the Netherlands authorities in the year, 2017, to apprise about the assets of the petitioner in India, for which later on the competent Court at Netherlands had already convicted the petitioner for a period of 44 weeks, and, therefore, it would be a matter of trial whether the prosecution of the petitioner in India after his conviction in Netherlands would amount to double jeopardy.

According to the Court, there was no request on behalf of the Netherlands authorities to register a case under Section 44/45 or 65 of the PMLA as at the first instance, a mutual legal assistance was called in 2017 and it was not the case of the ED that by way of any further correspondence, it was communicated to corresponding authorities in Netherlands that the petitioner, who is a Dutch National, is being prosecuted in India, for which he has already been convicted by the Courts at Netherlands.

A perusal of order passed by the Special Judge, CBI, Punjab as well as reply filed by the ED nowhere revealed that when the petitioner had filed the aforesaid civil writ petition, which remained pending for a considerable long time, at any stage, it was conveyed to the writ Court that LOC had been issued against the petitioner and, therefore, the arrest of the petitioner on the basis of such LOC without communicating the grounds of arrest, showed that the petitioner was not informed about the LOC as even subsequent to that, show cause notices were issued to him and he attended the office of the ED for three occasions.

The Bench also reiterated that when the investigation is complete and charge sheet is filed in the Court, conclusion of trial is likely to take a long time, a person/accused like the present petitioner, who is aged about 63 years old, can be released on bail, subject to his furnishing bail/surety bonds and with a condition that his passport shall remain deposited with the Court/Prosecuting Agency and he will not leave the country without seeking prior permission of the Court.

Accordingly, it was held that the petitioner qualifies the test under Section 45 of the Act and therefore, the present petition was allowed.