Delhi High Court Denies Bail to Accused in Money Laundering Case of Shakti Bhog Foods Limited - “Reasonable Grounds” for Involvement

In a significant development, the High Court of Delhi has dismissed the bail application of Mr. Tarun Kumar, a key accused in a high-profile money laundering case. The court, in its judgment delivered on July 18, 2023, cited “reasonable grounds” for believing that Mr. Kumar was actively involved in fraudulent activities and money laundering. The case revolves around allegations of diversion of loan funds and fraudulent increase of inventory in a company, Shakti Bhog Foods Limited (SBFL).

Justice Jasmeet Singh, presiding over the case, observed, “The evidence presented, including statements, emails, and documents, categorically leads one to infer that the applicant was directly involved in activities connected to the proceeds of crime.” The court highlighted the significance of Section 50 statements recorded under the Prevention of Money Laundering Act, considering them as important pieces of evidence that can be relied upon to reject bail.

The judgment referred to various emails that explicitly marked Mr. Kumar and revealed his role in the process of laundering the proceeds of crime. One such email mentioned in the judgment read, “Please find enclosed the Bank of Baroda current account details along with this mail. As discussed with Tarun Sir, an amount of INR 1.8 Crs needs to be deposited in this account by tomorrow morning.”

The court also relied on statements given by several employees of SBFL, further strengthening the case against the applicant. One employee, Sandeep Mishra, stated, “Tarun Kumar used to coordinate with entry operators for purchasing fake bills, and he was in complete knowledge about accommodation entries provided by entry operators to SBFL through their shell entities.”

While rejecting the bail application, the court emphasized that it was not required to conduct a detailed examination of the evidence or make a finding of guilt. The decision was based on the assessment of the available material, which pointed towards the applicant’s active involvement in the offense of money laundering. The court clarified that the judgment did not express an opinion on the merits of the case but was solely rendered for the purpose of deciding the bail application.

This judgment underscores the court’s stance on the standard for granting bail in cases involving money laundering and fraudulent activities. It serves as a reminder that “reasonable grounds” for belief in the accused’s guilt require more than just prima facie evidence.

The dismissal of Mr. Kumar’s bail application comes as a blow to his defense, which claimed that he had no knowledge of any illegal transactions. The court’s decision to deny bail reflects its conviction that there exists sufficient incriminating evidence against the applicant. The case is set to continue its proceedings in due course, with the court’s focus now shifting to the trial.

Date of Decision: July 18, 2023

TARUN KUMAR vs ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT