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Synopsis

The bench of Justice Dinesh Kumar Sharma of the Delhi High Court on Thursday “dismissed” the bail pleas filed by Aam Aadmi Party (AAP) Leader Satyendar Jain and two co-accused Ankush Jain and Vaibhav Jain in a money laundering case registered by the Directorate of Enforcement (ED).

While denying bail to Jain, the court said that the broad probability indicated that four concerned companies were "controlled and operated by Satyendar Kumar Jain".

The constantly changing shareholding patterns of the company 'clearly indicate' that he was indirectly controlling the companies, court observed. 

"The shareholding patterns also show that petitioner Satyendar Kumar Jain or his family is controlling them directly or indirectly", the court added. The court further observed, "The petitioner Satyendar Jain is an influential person and has the potential to tamper with the evidence, as indicated by his conduct during the custody."

Furthermore, the court stated that taking in the totality the facts, the petitioners at this stage could not be held to have cleared the "Twin Conditions" of PMLA or the "Tripod Test".

Notably, the single-judge bench on March 21 had ‘reserved orders’ in the instant bail pleas.

Contentions of ASG SV Raju for ED:

Opposing the bail plea, Additional Solicitor General (ASG) SV Raju represented the ED before the court and had argued that although the trial court had denied bail, it had mentioned that the money actually belonged to Satyendar Jain and it was all fictitious and that the accused was a partner in the business.

ASG had also stated that the accused controlled the actions of the people responsible for the company's actions. It was further stated that the argument was not notional and that the "entire amount had been stamped under the name of Satyendar Jain" and was then transacted.

Raju had placed reliance on “DDA vs. Skipper Construction Pvt. Ltd.” wherein it was held that possession may not be actual but may also be constructive where the accused on behalf of someone has money. By relying on it, he had stated that the directors were family members and they did not maintain the sanctity of the company.

He had earlier contended, "Money laundering is crystal clear. Their case is that Satyendar Jain has nothing to do with it. I have to establish that Satyendar Jain was in the thick of these things". He had also submitted that the special treatment extended by the prison authorities to Satyendar Jain showed that the ED’s apprehension throughout was correct that being a former minister of prisons and health he was receiving favorable treatment from the prison officials including the prison doctors.

Furthermore, the ASG had submitted that Jain continues to be a sitting minister in the Government of NCT Delhi and has been influencing witnesses through his incarceration. “The above facts are borne out from the CCTV video footage of the Tihar jail premises submitted by the Directorate before the PMLA special judge”, he had said.

Raju had also submitted that there is a high likelihood that Jain may attempt to influence witnesses as was bore out from the video footage where he could be seen interacting with the co-accused on a regular basis. He further stated that there is a high likelihood that the applicant once released would seek to frustrate the proceedings under the Act.

Contentions of Senior Advocate N. Hariharan for Satyendar Jain:

Hariharan had argued that the money was Ankush and Vaibhav Jain’s, and it came back to their account without any premium, “Where is Satyendar Jain involved? How is the money related to me?” He added that “My (Satyendar Jain’s) assets before and after the cheque period remained the same." He had also argued that the assets of the company cannot be the assets of Satyendar Jain, the company is of Ankush and Vaibhav. He contended that this case is going on the assumption that Satyendar Jain is guilty, and even while asking the witnesses, the ED asked leading questions. "Look at the nature of the interrogation. It can't be assumptive”, he had argued.

Referring to the trial court’s order, wherein the Special Judge clearly stated that the 1/3rd shareholding of the company is not connected to Satyendar Jain, the senior counsel had contended that the case failed. "Can the Special Judge build an altogether new case?”, he had argued. Furthermore, he had stated that Jain is in custody for eight months now, this case was registered five years ago. “I have been cooperating since all these years, I have given S. 50 statements as well”, he had contended.

The senior counsel had contended, “I have never been on flight risk, even the trial court had stated the same while dismissing my first bail plea. It was dismissed on the ground that at that time chargesheet wasn't filed. Now chargesheet is filed. I clear the tripod test.” “I am liable for bail. My Lord!", he had contended.

Hariharan had argued that directly or indirectly there is no connection between Jain and the 'proceeds of crime' in the present money laundering case. "Others have a majority shareholding, they are sharing the majority," he had said. 

Furthermore, he had argued that only the cheque period should be taken into consideration & proceeds of crime will be generated only after an offence has been committed. Scheduled offence is not made out", the Senior Counsel had argued. Hariharan had argued that all the shares were acquired in 2008-10 when Satyendar Jain was not a public servant. 

Notably, Senior Advocate N. Hariharan appearing for Satyendar Jain had concluded his arguments in the plea on January 25. 

Contentions of Advocate Sushil Kumar Gupta for co-accused:

Gupta on behalf of Ankush and Vaibhav Jain had contended in the present case that the Directorate of Enforcement (ED) is just investigating the predicate offence not the money laundering case. He had argued that ED has assumed there is a disproportionate assets (DA) case, but this cannot be their case, the agency needs to first prove that there is a scheduled offence.

Furthermore, relying on the Vijay MadanLal Judgment of the Apex Court, Gupta had contended that "the role which the ED has assigned to us (Ankush Jain and Vaibhav Jain) in the present case should be different from the CBI case, but the ED has charged us under the same provisions".

While concluding, Gupta had argued that the “Proceeds of crime is the core” that needed to be established in the present case by ED to have a case against Ankush and Vaibhav Jain.

It is to be noted that Advocate Sushil Kumar Gupta appearing for co-accused Ankush Jain and Vaibhav Jain, the two aides of the Aam Aadmi Party (AAP) Minister Satyendar Jain concluded his submissions before the court on February 9.

Background:

Special Judge Vikas Dhull of the Rouse Avenue Court on November 17, denied bail to Jain in the money laundering case.

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: Satyendar Kumar Jain v. Directorate of Enforcement (two connected matters)

Statue: The Prevention of Money Laundering Act