The Delhi High Court has passed a judgment on 17-03-2023 in the case of Kewal Krishna Kumar vs Enforcement Directorate BAIL APPLN. 3575/2022. Justice Jasmeet Singh allowed the petition.
FACTS OF THE CASE
The Applicant was arrested in the present case on 04.07.2021. He was on interim bail for a period of 31 days from 10.06.2022 to 11.07.2022 on medical grounds. The application for extension of interim bail was rejected and pursuant thereto, the Applicant surrendered. As per the allegations levelled in ECIR, on 31.12.2020, CBI registered an FIR bearing R.C. No. 0742020E0014 u/s 120B r/w 420, 476, 468, 471, 13(2) r/w 13(1)(d), PC Act on the complaint of State Bank of India against the Applicant and other Accused Persons regarding bank fraud committed during 2013-2017.
The allegations are that Shakti Bhog Foods Limited (SBFL), where the Applicant was one of the directors, promoter and guarantor and had availed of various loan facilities from a consortium of banks led by State Bank of India from 2006 onwards, and in order to acquire more loan funds from Banks, the company resorted to round tripping and money laundering using its various group companies as platforms. SBFL had rotated its funds to group companies in the form of share investment, share application money, share premium, inter corporate deposits, compulsory convertible debentures, loans and advances and inter group purchases with the sole intent to launder and change colour of these loan funds from liabilities to assets.
The role ascribed to the Applicant in the prosecution complaint is that the Applicant was a director, guarantor and promoter of SBFL. The Applicant in cohorts with other accused persons generated and acquired proceeds of crime by availing loan from a consortium of banks after submitting fake invoices of shell companies, fake transport documents for LC payments, forged and inflated financials and Monthly Stock Statements/ DP Statements. He knowingly and deliberately concealed the actual financial condition of the group companies from lending banks and misled them to sanction credit facilities and loans.
He diverted the funds released by the banks to group companies and the disbursed funds were utilised for purposes other than for which it was sanctioned, thereby cheating the banks. He was also instrumental in routing and re-routing the borrowed funds through group companies and shell companies and ultimately used for purchasing of various assets. The complaint states that the Applicant was a master of the entire scheme to dupe the banks of public money. He is a direct beneficiary of the proceeds of crime and therefore, liable of the offence under section 3 PMLA.
In the present case, the grounds of bail urged before me is with regards to the proviso to section 45(1) PMLA that the Applicant is sick and infirm. The Applicant is not resting his bail application on the merits of the case but only on proviso to section 45(1) PMLA. 9. The limited point before this court is whether the Applicant is “sick or infirm” in terms of the proviso under section 45(1) PMLA. Thus, I am not required to deal with the merits of the allegations in the ECIR regarding money laundering.
JUDGMENT
This court in this case directed that the applicant needs to be examined by a Board of Doctors who will opine whether the applicant requires continuous psychiatric observation and medicines and whether the applicant can be provided adequate treatment from jail authorities.
Justice Jasmeet Singh said since ‘sick’ and ‘infirm’ are separated by ‘or’, “a person who, though, not sick but infirm would still be entitled to seek benefit of the exception in the proviso to section 45(1) PMLA and vice versa. However, the court said mere old age does not make a person ‘infirm’ to fall within Section 45 (1) proviso. It said infirmity is defined as not something that is only relatable to age but must consist of a disability which incapacitate a person to perform ordinary routine activities on day to day basis.
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JUDGMENT REVIEWED BY ABHINAV CHATURVEDI
