Delhi HC Denies Bail To Alleged International Hawala Dealers Bimal Jain And Naresh Jain

BACKGROUND

• In July 2017, the Enforcement Directorate commenced inquiry under FEMA against accused Naresh Jain and others.
• The investigation by ED revealed that Naresh Jain, with his brother Bimal Jain and other accomplices, conspired to cause loss to exchequer by indulging in illegal foreign exchange transactions by using forged/ fabricated documents.
• Naresh Jain also facilitated setting up funds abroad by Indian nationals by using his international hawala structure created in India and other foreign places.
• It was alleged that Naresh Jain and his accomplices, including his brother Bimal Jain, rotated funds approximately to the tune of Rs.96,000 through their hawala network.
• The ED arrested Naresh Jain on September 1, 2020, and Bimal Jain on November 30, 2020, and the petitioners Naresh and Bimal have moved to Delhi High Court seeking bail.

PETITIONER’S ARGUMENTS

• The counsel for the petitioner submitted that the ED did not follow the procedure under Section 19 of the Prevention of Money Laundering Act while making the arrests.
• He also stated that the Enforcement Directorate cannot be the complainant and the investigating officer at the same time.
• He submitted that the declaration of twin conditions under Section 45 of PMLA has been declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah vs. Union of India and Anr.

ORDER

• The Court noted that since the arrest of Bimal Jian was in execution of a non-bailable warrant, provisions of Section 19 of PMLA will not be applicable.
• The Court also noted that the special court, PMLA took cognizance of the complaint filed by ED and has reasonably believed that the petitioner Bimal Jain is guilty of the offence of money laundering.
• Making a note of the facts and circumstances, the Court denied the bail to the petitioners and stated that if the bail is granted, there is a chance that the petitioners might flee to Dubai or any other foreign country to avoid the process of law.

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