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Synopsis

Special Judge Vikas Dhull of the Rouse Avenue Court on Wednesday denied bail to Aam Aadmi Party Minister Satyendra Jain and the two co-accused Ankush Jain and Vaibhav Jain in a Money Laundering Case.

Contentions of Advocate Sushil Kumar for co-accused:

Advocate Sushil Gupta appearing for co-accused Ankush Jain and Vaibhav Jain argued that cash transactions made to 'Lal Sher Singh Charitable Trust' have been classified as "proceeds of crime" by ED and that their investigation is "unfair."

Gupta claimed that the ED conducted the investigation with a “bias from the start”, referring to it as the "Theory of Confirmation Bias," and that Vaibhav Jain was summoned three to four times by the agency, but he was never confronted with Satyendra Jain. He also stated that Vaibhav Jain was not interrogated in front of the camera and was forced to confess and write down things against Satyendra Jain, after which he refused and received life and family threats.

Relying on Apex Court’s judgment in the Vijay Madan Lal Choudhary's case, Gupta contended that there should be a clear nexus between the proceeds of crime and property acquired, otherwise their case would fall apart.

Gupta argued that the proceeds of crime in the present case are disproportionate assets (DA), which is the “scheduled offence”, but the ED is silent on it. He argued, “It is only on their whims and fancies they are after us”. He further argued, “Before amounting to money laundering, there has to be a scheduled offense. Where is it?”

Gupta argued that as the “accommodation entries” has got no connection with the ‘proceeds of crime” there is no case made out, and therefore, it is nowhere connected with Satyendra Jain being a public servant. Gupta further contended that ED just wanted to "harass Satyendra Jain, as he is a “political figure”. Furthermore, he argued that the conversion of “Black money” to “white” is not money laundering.

Contentions of Senior Advocate N. Hariharan for Satyendra Jain

Senior Advocate N. Hariharan appearing for Satyendra Jain contended that till the time the “scheduled offence” is not made out, “proceeds of crime” cannot be made out, and hence, there is no offence under the Prevention of Money Laundering Act (PMLA). He further relied on Apex Court’s judgment in Vijay Madanlal Choudhary's case and read a portion, “Everything that is attached cannot be associated as proceeds of crime”.

Hariharan contended that the criteria the Enforcement Directorate (ED) is using are “alien to law”. He further argued that the property obtained has to be a “derivative of the offence”, and that similarly, possession of the unaccounted property is not a scheduled offence, hence, there cannot be any derivative of ‘proceeds of crime’.

Furthermore, he asserted that the money of Ankush Jain, and Vaibhav Jain was rooted in accommodation entries. It may be a “tax violation” but not a scheduled offence under the PMLA, he said. He argued, “How can it be Satyendra Jain’s money?”

Hariharan further contended that neither the PMLA provisions nor the Vijay Madanlal judgment state that just because accommodation entries were made, it would amount to proceeds of crime. “Where is the scheduled offence?”, he argued.

The senior counsel argued the ED’s case is “All Assumed” and everything is “Notional”. Referring to ED’s complaint, where the agency said, “Satyendra Jain is an ordinary man, with his wife being a housewife”, Hariharan referred to Jain as, “Gareeb Das”, and concluded his arguments.

Thereafter, Senior Advocate Rahul Mehra appearing for Jain dealt with ED’s additional affidavit filed earlier, wherein CCTV footage showed how he was being provided VIP treatment inside the Tihar Jail. The footage showed an unknown person giving a foot, and body massage to Jain inside his cell in the presence of three other unknown persons. Jain was also being provided with fresh-cut fruits/green salad by some unknown person directly in his cell and the CCTV showed some unknown person sitting with him and having discussions inside his cell.

Mehra contended that the jail has a manual that is followed, and the jail manual itself specifies that every convict should have a bed, and should be given fresh fruits/vegetables. He argued that there is no violation of the Jail Manual and that ED is trying to mislead the court. Furthermore, he concluded by contending that for consideration of bail application, the affidavit filed by the ED cannot be taken.

Contentions of ASG SV Raju for ED

Additional Solicitor General (ASG) SV Raju appearing for the Directorate of Enforcement (ED) argued that all the five companies associated with Jain and his dummies Ankush Jain and Vaibhav Jain are just “paper companies” and did “no real Business”. He also argued that these companies have “no intrinsic value” and that they existed only to convert Jain’s “black money” into “white money”. Raju also contended that Jain’s modus operandi was to convert all his “cash” into “genuine money/non-tainted money”.

The ASG further asserted, “Satyendra Jain is deeply involved before the cheque period and during the cheque period as well, all these years he has been providing cash, currency note numbers to Calcutta based operators”.

Raju also argued that Satyendra Jain was the one who “controlled” and had “command” over JJ Ideal Company during the cheque period and before it. He further argued, that No prudent person would invest in a private company that has “No Business”, furthermore he argued that it was not a ‘one-time business’. Raju argued, “Why would someone invest in Calcutta-based companies…only to compensate black money”.

ASG argued that mainly to root the “black money”, Jain invested in the Shell companies. He further submitted that Vaibhav Jain is a close aide and is trying to protect Satyendra Jain when he said that he along with Jain had paid the money to the Calcutta-based operatives. Raju stated that as per the Income Tax records and Balance Sheet, Vaibhav Jain was not in the “capacity” to pay cash to the operators, he did not even have Rs.1 crore in his account. Therefore, ASG argued that this clearly indicates that it is all Satyendra Jain’s money.

Referring to the CCTV footage, submitted by the ED earlier, wherein Jain was being given VIP treatment ASG Raju stated, “kindly look at the conduct of Satyendra Jain in Jail, he is clearly abusing power sitting in the Jail”. He further contended that Jain is either in the hospital for some treatment or sitting and enjoying in Tihar jail. “Jail is not a place of enjoyment”, with this he concluded his arguments opposing Jain’s bail plea.

Bail Hearing resumed afresh

After the Delhi High Court dismissed the plea moved by Jain challenging the decision of the trial court allowing the plea filed by ED for transfer of his bail application in a Money Laundering case, the bail application hearing resumed afresh before Special Judge Vikas Dhull. Earlier it was being heard by Special Judge Geetanjali Goel.

The bail application filed by Satyendra Jain pertained to his arrest in a Money Laundering case in which he was arrested by the Enforcement Directorate on May 31, 2022.

In April, ED attached assets worth Rs. 4.81 crores linked to Jain and his family. ED initiated an investigation based on an FIR registered by the Central Bureau of Investigation (CBI) against Jain and others under relevant sections of the Indian Penal Code and the Prevention of Corruption Act.

It is alleged that when Jain was a public servant, companies owned and controlled by him received up to Rs. 4.81 crores from shell companies through the Hawala network.

Case Title: Directorate of Enforcement v. Satyendar Kumar Jain and Ors.