The Supreme Court on Thursday granted bail to former Tamil Nadu Minister Senthil Balaji in a money laundering case related to the alleged cash-for-job scam.
The Bench of Justice Abhay Oka and Justice Augustine George Masih had earlier reserved its verdict on August 12.
Pronouncing the judgment, Justice Oka today said that stringent and higher thresholds of bail and a delay in prosecution could not go together.
Referring to Najeeb and other verdicts, the Supreme Court judge said the Bench slightly expanded the scope in the Najeeb verdict and granted bail to the accused, while putting very onerous conditions on him.
A detailed copy of the judgment is awaited.
Senior Advocates Mukul Rohatgi and Sidharth Luthra, appearing for Balaji, contended that the deposits of Rs 1.34 crore in his bank account between 2013 and 2021 were derived from his agricultural income and salary as an MLA.
Rohatgi argued that the prosecution has overlooked these legitimate sources of income and wrongly attributed them to the alleged scam.
Rohatgi, while alleging that the search and seizure operations by the investigating agencies were flawed, specifically pointed out discrepancies in the hard disk evidence, where a Seagate hard disk was mentioned in court proceedings, however, an HP hard disk was actually recovered.
He asserted that no incriminating files named ‘CSAC’ allegedly detailing Rs 67 crores in proceeds from the scam, were found in the seized pen drive and hard disk.
The Senior Counsel further highlighted that Balaji has been incarcerated for over 13 months and underwent a coronary bypass surgery while in custody.
He said this, combined with the long delay in the trial’s commencement, qualified Balaji for bail under Section 45 of the PMLA, which allowed bail in exceptional circumstances like illness.
Solicitor General Tushar Mehta and Advocate Zoheb Hossain, appearing for ED, refuted Balaji’s claims, asserting that Rs 1.34 crore in cash deposits had no connection to his MLA salary or agricultural income. They argued that MLA’s salary was deposited directly into their bank accounts. Balaji’s declared income in his election affidavits significantly differed from the amounts he has now claimed as agricultural income.
The national agency submitted that an incriminating ‘csac.xlsx’ file, detailing the amounts allegedly received in the scam, was found in the pen drive recovered from Balaji’s residence. It also presented other documents and emails implicating Balaji, including the files recovered from his computer showing the detailed management of the alleged scam.
The ED emphasised Balaji’s continued influence, stating that the state of Tamil Nadu was helping the accused and ensuring that the trial in the predicate offence was not likely to conclude. The national agency further contented that Balaji was compromising witnesses and victims in the predicate offence.
During the hearings, the Supreme Court raised questions about the feasibility of proceeding with the PMLA trial without the completion of the trial in the predicate offence, which involved over 2,000 accused. The court also focused on whether the incriminating file ‘CSAC’ was indeed found in the seized pen drive, pressing the ED to substantiate its claims.
The Apex Court further asked the ED whether it intended to rely on all three predicate offences in the money laundering case against Balaji or exclude one of the cases involving more than 1,000 accused.
The top court of the country directed the ED to either rely on a complete trial of all three predicate offences against Balaji in the money laundering case against him or decide to let go of some cases as predicate offence.
The Bench noted that splitting the trial would not serve any purpose.
Earlier, the Madras High Court had rejected Balaji’s bail plea on the grounds of lack of merits. The High Court noted that the ED’s investigation relied on documents already present in the predicate offence and found no grounds to suspect evidence tampering. It further directed the Special Court to expedite the trial, considering Balaji’s long incarceration.
The former Tamil Nadu Minister moved the Apex Court challenging the High Court order.
The Directorate of Enforcement (ED) had arrested Balaji in June 2023 under the Prevention of Money Laundering Act (PMLA), 2002 over his alleged involvement in the cash-for-job scam that took place during his tenure as Tamil Nadu Transport Minister between 2011 and 2016.
The MLA was accused of orchestrating a scheme with his personal assistants and brother to collect money from job seekers in exchange for promises of employment in the Tamil Nadu Transport Department. Numerous complaints were filed by candidates who paid substantial amounts but did not secure the promised jobs. Based on these allegations, the ED registered an Enforcement Case Information Report (ECIR) and proceeded with his arrest in June 2023.