SC warns: Money Laundering poses real threat to financial systems with Tech and AI advancements

SC warns: Money Laundering poses real threat to financial systems with Tech and AI advancements

The Supreme Court, on Monday, emphasized the increasing risk posed by technological advancements and artificial intelligence to the financial system, highlighting money laundering as a significant economic offense. In the context of a specific case, the court denied bail to an accused individual, underscoring the serious implications of such offenses in the modern technological landscape.

The bench of Justices Aniruddha Bose and Bela M Trivedi, while rejecting the bail request of a Shakti Bhog Foods Limited employee involved in a money laundering case, emphasized the profound impact of economic offenses on the overall development of the country.

The progress of technology and artificial intelligence has elevated economic offenses such as money laundering to significant threats against the operational integrity of the country's financial system. This development poses a substantial challenge for investigating agencies, as they grapple with the intricate nature of transactions and the roles played by individuals involved in such offenses.

The bench expressed the need for meticulous efforts by the investigating agency to ensure that innocent individuals are not wrongly implicated and that no wrongdoer eludes legal consequences. The statement suggests that a distinctive approach should be adopted when considering bail in cases related to economic offenses.

The bench underscored the gravity of economic offenses characterized by intricate conspiracies and substantial losses of public funds. It emphasized the need for a serious perspective, considering such offenses as grave crimes that significantly impact the overall economy of the country and pose a serious threat to its financial well-being.

The Supreme Court also emphasized that when the court extends the detention of an accused individual, it should also endeavor to conclude the trials within a reasonable timeframe. This is crucial in upholding the right to a speedy trial, as guaranteed by Article 21 of the Constitution.

The Supreme Court stated that the accused, Tarun Kumar, is required to establish, at a preliminary stage, that he is not prima facie guilty of the alleged offense and that there is no likelihood of him committing any offense while on bail.

The bench emphasized that the burden of proof lies with the accused concerning the conditions outlined in Section 45 for the grant of bail, which requires demonstrating innocence of the alleged offense. While acknowledging that the burden can be discharged based on probabilities, the court noted the presence of ample evidence in the case, presented by the respondent, indicating the deep involvement of the appellant in the alleged money laundering offense under Section 3 of the relevant Act. Consequently, the court expressed its disinclination to grant bail to the appellant.

The Enforcement Directorate's money laundering case against Shakti Bhog Foods Limited stemmed from a First Information Report (FIR) filed by the Central Bureau of Investigation (CBI). The CBI's FIR accused the company and others of criminal conspiracy, cheating, and criminal misconduct, forming the basis for the subsequent money laundering investigation by the Enforcement Directorate.

The Central Bureau of Investigation (CBI) filed a First Information Report (FIR) against Shakti Bhog Foods Limited and its promoters following a complaint lodged by the State Bank of India (SBI). The SBI's complaint appears to have prompted the CBI's action, leading to the investigation against the company and its promoters.

According to the State Bank of India (SBI), the directors of Shakti Bhog Foods Limited are accused of engaging in fraudulent activities, including the falsification of accounts and the forging of documents.

The company, at 24 years old, is involved in the manufacturing and sale of various food products such as wheat, flour, rice, biscuits, cookies, etc. Over a decade, it pursued food-related diversification, experiencing organic growth. According to the bank complaint, the company's turnover increased from Rs 1,411 crore in 2008 to Rs 6,000 crore in 2014.


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