IN BAIL APPLN 3494 OF 2022- DEL HC- PMLA: Unitech Group promoter Sanjay Chandra’s wife Preeti Chandra enlarged on bail by Delhi High Court with condition that she would renounce her Dominican Republic Citizenship; bail order to take effect from June 16 at ED’s request

Read Order: Preeti Chandra v Directorate of Enforcement

Simran Singh

New Delhi, June 15, 2023: The Delhi High Court has enlarged on bail former Unitech Group promoter Sanjay Chandra’s wife Preeti Chandra, a 49 year old fashion designer and philanthropist, in a money laundering case probed by the Enforcement Directorate (ED). However, the Bench complied with the request of the ED for not giving effect to the order till 16-06-2023 since the agency wanted to challenge the order or else the appeal would become infructuous.

In the matter at hand, the case of money laundering was filed against the applicant after 74 FIRs which were filed by the Delhi Police and the Central Bureau of Investigation between the year 2006 to 2022, on the basis of complaints from homebuyers against the Unitech Group, its promoters and associates under Section 34, 201, 406, 409, 120B, 420, etc. of Indian Penal Code, 1860 (IPC.) and under section 7, 7(A), 8,9,10,12 & 13 of Prevention of Corruption Act, 1988 (Act of 1988).

The ED had filed a PMLA case in the year 2018 under various sections of the Prevention of Money Laundering Act, 2002 against the Unitech Group and its promoters over allegations that the owners namely Sanjay and Ajay Chandra illegally diverted more than Rs. 2,000 crore to Cyprus and the Cayman Islands.

It was the case of the agency that the funds collected from homebuyers for housing projects were not utilised for the intended purpose and the accused persons committed the act of money laundering. ED also alleged that Preeti Chandra received proceeds of crime amounting to Rs. 107.40 crores in her company ‘Prakausli Investments Private Limited’ but did not disclose the ultimate usage of the amount in question.

The agency had arrested the founder of the Unitech Group Ramesh Chandra, Preeti Chandra (Sanjay Chandra’s wife) and Rajesh Malik of Carnoustie Group in 2022 as they collected funds from home buyers, for housing projects The applicant had filed a bail application before the Trial Court in 2022 itself stating that she was a fashion designer and a philanthropist who had been in custody since 04-10-2021 and there were no proceeds of crime relatable to her. However, the same was denied in November 2022, taking note of the ‘enormity of the transactions and seriousness of the allegations.’

The applicant was also accused of incorporating, overseeing and managing a benami organisation called Trikar Group alongside her husband, Mr. Sanjay Chandra. The funds obtained from illegal activities, which were kept in foreign accounts of Trikar Group in locations such as Cayman Islands, Singapore, and Mauritius, were illegally transferred to the tune of Rs. 401.07 crores to the accounts of Indian companies associated with Trikar Group between the years 2015 and 2018, while the applicant resided in the UAE and managed the operations of Trikar Group.

The Bench navigated through Section 45 of PMLA and considered the question whether the proviso of Section 45(1) of the PMLA would be applicable to the applicant being a woman. However, Article 15(3) of the Constitution carved out an exception for ‘woman’ from rigours of twin condition of Section 45 of PMLA. “PMLA does not define a ‘woman’. It is neither the intention of the Constitution of India nor the intention of PMLA to classify women on the basis of their education and occupation, social standing, exposure to society, etc “ In view thereof, the Bench stated that once an accused was a woman, the proviso to Section 45(1) kicks in and the applicant would fall within the proviso. However, this did not mean that the applicant would not be required to satisfy the triple test for grant of bail.

The Bench stated that the applicant had a good prima facie case as the allegations against the applicant were of money laundering and siphoning off funds belonging to homebuyers of Unitech Group and mens rea was an important ingredient in the offence of money laundering and the intention was of paramount importance.

The Court noted that the applicant was not named in either of the two ECIR nor was it shown that the applicant was involved in day-to-day affairs of Mayfair, Prakausali and other Unitech companies and/or subsidiaries and was responsible for taking key managerial decisions, except the fact that the applicant was a director in Prakausali from 16.06.2010 to 23.04.2013. “To state today that the applicant being the wife of Mr. Sanjay Chandra and is a director in Prakausali and Mayfair, therefore she must have and/or has had knowledge that the funds in Prakausali and Mayfair were proceeds of crime is misplaced and the same can only be ascertained once evidence has been led. I find merit in the submission advanced by learned counsel for the applicant that the applicant‟s knowledge of the person who is accused of a predicate offence and that the applicant is the wife of the main accused does not lead to an automatic inference that the money in her hands are proceeds of crime.”

The Bench stated that to prove mens rea, the respondent/prosecuting agency was required to show something more than merely an allegation and the applicant had provided a prima facie reasonable, satisfactory explanation for each of the allegations. “Whether the prima facie satisfactory explanation crystallises into substantial defence leading to an acquittal or is merely an eye-wash or a sham can only be determined after evidence. The explanations furnished by the Applicant seem reasonable to me to believe that prima facie the Applicant is not guilty of the offence of money laundering…”

The Bench further noted that the applicant was a citizen of another country i.e., Dominican Republic, which did  not have an extradition treaty with India, however, the applicant was willing to renounce the citizenship of Dominican Republic as a bail condition and was already in the process of taking Indian citizenship.

The Bench stated that the applicant was in custody since 04.10.2021, charges were yet to be framed and the trial was yet to commence. The twin conditions of Section 45 of the PMLA would not be applicable to the applicant who had to satisfy the triple test which could be taken care of by imposing stringent conditions. The applicant had already been investigated for more than 13 occasions and had been in custody for more than 20 months. Thus, the Bail was granted to the applicant.