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Money Laundering - Case Laws
Showing 421 to 440 of 1544 Records
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2022 (11) TMI 1369
Applications for exemption from filing c/c of the impugned judgment and official translation is allowed.
This matter is liable to be tagged with Civil Appeal No. 8588/2019 which is pending consideration before a Larger Bench of seven Judges in view of the Reference order reported as ROJER MATHEW VERSUS SOUTH INDIAN BANK LTD. & OTHERS [2019 (11) TMI 716 - SUPREME COURT].
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2022 (11) TMI 1354
Seeking grant of bail - money laundering - proceeds of crime - predicate offences - provisional attachment of the proceeds - Section 45 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Scam/fraud committed by the accused-applicant and other accused is gigantic and mammoth. 1.75 lakh investors investing their hard earned money who were lured by the accused-applicant, and his brother in scheme BIKEBOT. Thousands of crores had been collected by them out of which they had purchased movable and immovable assets of several hundred of crores which is evident from the investigation. Economic offences are to be viewed differently while considering the bail application of an accused.
Considering the rigours of Section 45 of the PMLA, this Court does not find this case to be a fit case to enlarge the accused-applicant on bail and, thus the bail application is hereby rejected.
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2022 (11) TMI 1326
Seeking bail in anticipation of arrest of the accused-applicants - Money Laundering - proceeds of crime - economic offences - Applicability of Section 45 of the PMLA, 2022 - HELD THAT:- It is well settled that anticipatory bail should be granted only in exceptional circumstances, where the Court is prima facie of the view that the applicant has falsely been en-roped in the crime and would not misuse his liberty. Power under Section 438 Cr.P.C. is an extraordinary power and the same is to be exercised sparingly. Economic offences stand as a different class as they affect the economic fabric of the society. Economic offences constitute a class apart and need to be visited with different approach in the matter of bail.
Considering the rigour of Section 45 of the PMLA, 2022 and the contents of the complaint, this Court is of the view that the accused-applicants are not entitled to be enlarged on anticipatory bail - all the anticipatory bail applications are rejected.
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2022 (11) TMI 1311
Money Laundering - scheduled offence - illegal gain of property as a result of criminal activity - HELD THAT:- The record as it stands today, the petitioners stand discharged of the scheduled offence and therefore, in view of the law declared by this Court, there could arise no question of they being prosecuted for illegal gain of property as a result of the criminal activity relating to the alleged scheduled offence.
That being the position, there are no reason to allow the proceedings against the petitioners under PMLA to proceed further - petition allowed.
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2022 (11) TMI 1280
Interpretation of statute - whether quashing of a regular case of scheduled offence shall automatically quashed the subsequent case registered under the provisions of PMLA Act? - money laundering - proceeds of crime - HELD THAT:- This court is a view that the pendency of PMLA case cannot be sustained at this juncture. Moreover, Hon’ble Appellate Tribunal PMLA is of specific finding that no proceeds of crime of the PMLA case has arisen from the regular case No. RCBSK2009E0008. The said regular case has already been quashed by this court. Thus, at the situation there is no proceeds of crime by virtue of order of quashing of the regular case.
The quashing of FIR of regular case automatically created a situation that the offences, stated and alleged in the FIR has no existence; thus the “Scheduled Offence” has also no existence after quashing of the FIR. When there is no “Scheduled Offence”, the proceeding initiated under the provisions of Prevention of Money Laundering Act, 2002 cannot stand alone.
The instant criminal revisional application has merit to entertain and it is allowed.
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2022 (11) TMI 1232
Seeking grant of bail - Money Laundering - diversion/misappropriation of the public money and causing huge loss to YES Bank - allegations of granting various credit facilities to several companies by not following the banking norms thereby causing huge amount of losses to the YES Bank in lieu of illegal gratification - applicability and interpretation of case of SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT] - HELD THAT:- The Supreme Court in Satinder Kumar Antil [2022 (8) TMI 152 - SUPREME COURT] took note of the continuous supply of cases seeking bail after filing of the final report on a wrong interpretation of Section 170 of the Code and an endeavor was made to categorize the types of offenses to be used as guidelines for the future. The Supreme Court in Siddharth V State of UP, [2021 (8) TMI 977 - SUPREME COURT] clarified that it is not necessary for the police to arrest the accused prior to filing of chargesheet nor could the Court direct that the accused be arrested and be produced before it at the time of filing of chargesheet.
The applicant is implicated in PMLA which was enacted to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. Section 45 provides that offences punishable under PMLA are cognizable and non-bailable also provides stringent conditions in grant of bail.
The applicant was implicated in present criminal complaint filed by the respondent/ED and arrayed as accused no 2. The investigating officer consciously did not arrest the applicant. The applicant participated in investigation as his three statements under section 50 PMLA were recorded. The respondent also did not allege that the applicant neither participated nor cooperated in investigation. The concerned Special Court after taking cognizance on present criminal complaint ordered for summoning of the accused persons including the applicant. The investigating officer even after filing of present complaint did not apply for custody of the applicant - There is legal force in argument advanced by the learned Senior Counsel of the applicant that applicant is entitled to bail in view of observations/legal proposition as laid down by the Supreme Court in Satinder Kumar Antil. It is not mandate of section 170 of the Code that if the accused is not taken into custody or arrested during investigation can be arrested or taken into custody after appearance in court post summoning order particularly when neither investigation agency nor prosecution agency sought arrest of accused.
The arguments advanced by the learned Special Counsel for the respondent that the applicant has misinterpreted para no 65 of Satinder Kumar Antil is misplaced. There is no force in argument advanced by the learned Special Counsel for the respondent that the applicant before grant of bail required to pass test of 45 of PMLA. The position would have been different, had the applicant arrested during investigation. The investigating agency as mentioned hereinabove consciously preferred not to arrest the applicant during investigation or post filing of charge sheet. The arguments advanced and case law relied on by the Special Counsel for the respondent are considered in right perspective to the given facts and circumstances but they do not provide much legal help to the respondent in opposing present bail application.
The applicant is admitted to bail on furnishing a personal bond in the sum of Rs.10,00,000/- with one surety of the like amount to the satisfaction of the concerned trial court on the conditions imposed - the present bail application is allowed.
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2022 (11) TMI 1231
Money Laundering - conspiracy - proceeds of crime - GST violation or not - commission of any scheduled offence in terms of the Scheduled Part A & B in terms of Section 2(x) of the PMLA, 2002 or not - admissible statements under Section 50 of the PMLA, 2002 - judicial proceedings within the meaning of Section 193 & 228 of the Indian Penal Code, 1860 or not.
HELD THAT:- The observations in Vijay Madanlal Choudhary &Ors. vs. Union of India &Ors [2022 (7) TMI 1316 - SUPREME COURT] do not detract from the factum of statements recorded in terms of Section 50(3) of the PMLA, 2002 r/w sub-clause 3 of the said enactment falling within the ambit of judicial proceedings and though, undoubtedly, the consequences of Article 20(3) of the Constitution in Section 25 of the Indian Evidence Act, 1872 may come into play to urge that the statements made after arrest would be in the nature of a confession, the same would relate only to the accused and not to a witness as was the witness Rahul Kasana, who is not an accused in the ECIR.
As put forth by the Directorate of Enforcement, the petitioner had hatched a criminal conspiracy with his associates to fraudulently withdraw money from the accounts of companies i.e. M/s. Show Effect Advertisement Pvt. Ltd. (SEAPL), M/s. Essence Cellcom Pvt. Ltd. (ECPL) and M/s. Essence Global Services Pvt. Ltd. (EGSPL) owned and controlled by him through bogus and mala fide transactions with bogus entry operators on the strength of fake bills and used this money to fund the Delhi riots.
The witness named Nitesh Kumar Gupta further admitted that the said transfer of Rs. 1.12 Crore from the accounts of ECPL and EGSPL in the garb of payment for supply of manpower was done on the instructions of Tahir Hussain i.e. the petitioner herein and Roshan Pathak, the accountant of Tahir Hussain, assisted Tahir Hussain and facilitated these transactions along with Amit Aggarwal on the instructions of Tahir Hussain - The statements of other witnesses recorded under Section 50 of the PMLA, 2002 already adverted to elsewhere hereinabove as reproduced from the ECIR, all prima facie indicate the alleged complicity of the petitioner with persons to cause an illegal act to be done through illegal means which would fall within the ambit of Section 120A of the Indian Penal Code, 1860 making the offence allegedly committed punishable under Section 120B of the Indian Penal Code, 1860.
The offence punishable under Section 120B of the Indian Penal Code, 1860 is a scheduled offence in terms of the Scheduled Para 1 to Section 2(y) of the PMLA, 2002 and falls in Part A of the Schedule. As per Section 2(u) and the explanation thereto, the “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, which thus falls within the ambit of proceeds of crime, which proceeds of crime fall withing the ambit of culpability in terms of Section 3 of the PMLA, 2002 making a person who has so allegedly committed such an offence, guilty of the offence of money laundering, which is punishable in terms of Section 4 of the PMLA, 2002 - the contention of the petitioner that what the petitioner was allegedly involved in, can at the most be considered to be a GST violation and that a GST violation may be punishable under the enactment dealing with GST violation and under the Income Tax Act, 1961 but that the same would not amount to the commission of any scheduled offence in terms of the Scheduled Part A & B in terms of Section 2(x) of the PMLA, 2002 and thus, no offence described under Section 3 of the PMLA, 2002 punishable under Section 4 thereof, can be held to have been prima facie committed,- cannot be accepted.
Thus, the alleged commission of a conspiracy even for the purpose of GST violation in order to avail cash i.e. money through the process of the criminal conspiracy for use of the said proceeds i.e. the commission of the crime to commit riots in the North Eastern part of Delhi between 23/25.02.2020 and to cause unrest, falls prima facie within the ambit of commission of a scheduled offence, in as much as, the offence for commission of a criminal conspiracy is a standalone offence and a scheduled offence in terms of Section 2(y) of the PMLA, 2002 - Apparently thus, the agreement to enter into an agreement to commit a crime, falls within the ambit of Section 120A of the Indian Penal Code, 1860 falling thus, within the ambit of a scheduled offence.
There is no infirmity in the impugned order dated 03.11.2022 of the learned Trial Court holding that prima facie case is made out against the accused/ petitioner herein of the alleged commission of the offence under Section 3 of the PMLA, 2002 punishable under Section 4 of the said enactment, in as much as, the petitioner allegedly acted prima facie in conspiracy and engaged in money laundering with the proceeds of crime generated having been put to use for riots by way of fraudulently withdrawing money from the accounts of companies owned or controlled by him through bogus and malafide transactions with bogus entry operators on the strength of fake bills and being the beneficiary of the same and with intent to put the said money to fund the Delhi riots and thus, obtained property as the result of the criminal activity relatable to the scheduled offence as the proceeds of crime to make him prima facie culpable under Section 3 of the PMLA, 2002.
Petition dismissed.
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2022 (11) TMI 1230
Money Laundering - seeking supply of the documents which according to the petitioners were seized during the raids by the respondent-ED - relied upon documents - unrelied upon documents.
Whether the petitioners are entitled for supply of documents which have been allegedly seized by the Directorate of Enforcement or not?
HELD THAT:- The respondent-ED has taken up categorical stand both while replying to the applications made by the petitioners before the learned Special Judge, Gurugram and also before this Court that all the documents relied upon by the Directorate of Enforcement in the present case have already been supplied to the accused persons including the petitioners of the present two cases. Replies filed by the respondent-ED before the learned Special Judge, Gurugram have already been reproduced above. Therefore, so far as the supply of the relied upon documents is concerned, there is no dispute with regard to the same that the same have already been supplied to the petitioners - Since the relied upon documents have already been supplied to the petitioners, the question for determination would now be as to whether the petitioners have any right for the supply of unrelied upon documents or not.
Regarding supply of unrelied upon documents, the learned Amicus Curiae before the Hon'ble Supreme Court in Re: To Issue Certain Guidelines Regarding Inadequacies and Deficiencies in Criminal Trials Versus The State of Andhra Pradesh and others [2021 (4) TMI 1270 - SUPREME COURT] had pointed out with regard to the supply of documents and statements at the time of the commencement of trial and the Hon'ble Supreme Court was of the opinion that while furnishing the list of statements, documents and material objects, the Magistrate should also ensure that list of other materials, even if they are not relied upon should be furnished to the accused. During the course of arguments Mr. Raju had submitted that even the Hon'ble Supreme Court was emphasizing on the list of statements, documents and material objects and not the supply of the documents which were unrelied upon.
In pursuance of the aforesaid judgment the Hon'ble Punjab and Haryana High Court amended its Rules and Orders. Amendment was effected in Chapter-1, Part D of Volume III pertaining to Procedure in enquires and trials by Magistrate and Rule 6 was substituted on 10.12.2021 - it has been so provided by the aforesaid Rules that those documents which are not relied upon by the Investigating Officer, qua them a list should be supplied to the accused person. However, there is nothing in the aforesaid Rules that the unrelied upon documents should also be supplied to the accused.
As per the aforesaid Punjab and Haryana High Court Rules and Orders, the petitioners may ask for a list of those documents which are not relied upon by the Investigating Officer. However, the petitioners have not prayed for seeking a list of the documents which are not relied upon by the prosecution either in the present petitions or before the learned Special Judge but they have prayed for supply of all the documents.
The Hon'ble Supreme Court in State of Orissa Versus Debendra Nath Padhi [2004 (11) TMI 564 - SUPREME COURT] had observed that at the stage of framing of charges, roving and fishing inquiry was not permissible and in case the contention of the accused is accepted it would mean permitting the accused to adduce his defence at the stage of framing of charge and for examination thereof at that stage which is against the criminal Jurisprudence. It observed that at the stage of framing of charges what is to be considered is only the material filed by the prosecution and the documents submitted therein and nothing more and therefore, what is to be seen at the stage of framing of charges is the relied upon documents and not the unrelied upon documents - In the present case the charges are yet to be framed and therefore, considering the aforesaid judgment of the Hon'ble Supreme Court as well as the Punjab and Haryana High Court Rules and Orders, the petitioners would not be entitled for the supply of unrelied upon documents. At the most in case the petitioners so require or demand, then they may file appropriate application for supply of a list of the unrelied upon documents before the learned Special Judge in accordance with law.
So far as the judgment relied upon by the learned counsels for the petitioners in CBI Versus INX Media Pvt. Ltd. [2021 (11) TMI 1048 - DELHI HIGH COURT] is concerned, the facts of the aforesaid judgment would not be applicable to the present case because the Delhi High Court had allowed inspection of the documents in view of CBI Manual which had provided for the same.
So far as the another argument raised by the learned counsel for the petitioners that non-supply of all the documents would prejudice the rights of the petitioners and in so far as the right of fair trial to the petitioners is concerned, the said argument seems to be attractive but does not cut any ice. There is no doubt that every accused has a right to fair trial but in the present case the trial has not commenced as yet. The charges have not been framed in the present case and the petitioners are seeking supply of unrelied upon documents at the pre-charge stage and therefore, considering the aforesaid judgment of the Hon'ble Supreme Court, the petitioners can at the most be permitted to file an appropriate application for supply of list of unrelied upon documents, if they so require and so desire.
Petition dismissed.
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2022 (11) TMI 1221
Money Laundering - proceeds of crime - predicate offence/scheduled offences - criminal conspiracy hatched for committing large scale rioting - admissibility of statements under section 50 of the PMLA - HELD THAT:- If an accused directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting and claiming it as untainted property, is guilty of offence of money laundering and proceeds of crime would include not only property derived or obtained from the scheduled offence but also directly or indirectly derived or obtained as a result of any criminal activity relatable (associated with/has to do with) to the scheduled offence.
Recently, Hon'ble Supreme Court of India in DIRECTORATE OF ENFORCEMENT VERSUS PADMANABHAN KISHORE [] on the question of proceeds of crime and money-laundering under PMLA inter alia stated that The offences punishable under Sections 7, 12 and 13 are scheduled offences, as is evident from paragraph 8 of Part-A of the Schedule to the PML Act. Any property thus derived as a result of criminal activity relating to offence mentioned in said paragraph 8 of Part-A of the Schedule would certainly be “proceeds of crime”.
In view of the statutory provisions, the transactions of Tahir Hussain in a conspiracy to fraudulently withdraw money from the accounts of certain companies owned or controlled by him through bogus and malafide transactions with bogus entry operators on the strength of fake bills with him being the beneficiary and with intent putting it to use towards riots, then accused Tahir Hussain would be set to be deriving or obtaining property as a result of criminal activity associated with/relatable to scheduled offence as the proceeds of crime and will be guilty of money laundering.
In terms of the contents of the complaint and the accompanying documents and statements, it emerges, prima facie, that accused Tahir Hussain, acting in conspiracy, engaged in money laundering, under the provisions of PMLA. The proceeds of crime generated in the conspiracy was put to use for riots.
There is sufficient material on record, prima facie, creating grave suspicion against the accused for framing charge against him and to proceed further with the trial of the case - it is stated that a charge be framed against the accused Tahir Hussain for the offence under Section 3 of the Prevention of Money Laundering Act, 2002 punishable under Section 4 of the Prevention of Money Laundering Act, 2002.
Application disposed off.
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2022 (11) TMI 1191
Smuggling - proceeds of crime - mere presence can be termed as participation or not? - summon under Section 4 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The scope of the jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 is quite wide but much restricted by the principles of law as laid down by the Hon’ble Supreme Court in umpteen judgments. In case prima facie case is made out, generally interference is not warranted in this jurisdiction.
What is being argued is that the role of the petitioners does not make out any case. The witnesses have categorically told about it. Not only Dr. Tarun Rao but other witnesses have also stated about the role of the petitioners. It is not a case of mere presence of the petitioners, which is the basis of their implication. It is the case of assisting someone to acquire proceeds of crime. The role assigned to the petitioners is that they assisted someone to acquire and conceal the proceeds of crime. It definitely makes out a prima facie case under Section 4 of the Act against the petitioners. A detailed examination or mini-trial at this stage, is not expected of.
This Court is of the view that prima facie offence is made out against the petitioners. There is no reason to make any interference in the petitions. Accordingly, both the petitions deserve to be dismissed.
Petition dismissed.
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2022 (11) TMI 1150
Grant of bail - Smuggling - Gold - diversion of 54 Kgs of primary gold which was imported by the appellant through the canalizing Agency-Metals & Minerals Trading Corporation (MMTC) - predicate or scheduled offence - HELD THAT:- It appears that the appellant was admitted to regular bail in connection with the aforesaid offences punishable under the provisions of Customs Act vide order dated 28.08.2018. Upon registration of the proceedings by the Enforcement Directorate on 03.02.2021, the appellant came to be arrested in said PMLA case on 28.11.2021 and has since then been in custody - The fact of the matter is that for an offence where the maximum sentence could be punishable with imprisonment for seven years, the appellant has undergone custody for about a year.
It further appears that the investigation is still pending and the matter is not ripe for trial on merits before the appropriate Court.
The appellant shall be produced before the concerned Court within three days and the concerned Court shall release the appellant on bail subject to such conditions as the Court may deem it appropriate to impose - Petition allowed.
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2022 (11) TMI 1149
Seeking grant of Default bail - misappropriation of money - whether, after filling of a complaint and when the further investigation is still pending, the petitioner is entitled to default bail under Section 167(2) of the CrPC - HELD THAT:- Section 173 of the CrPC does not prescribe piecemeal investigation and filing of incomplete charge sheet before the court. Section 173(8) CrPC prescribes that even after filing of charge sheet further investigation can be done. In that case, if the investigating officer gathers additional evidence, he can produce it after filing of the charge sheet. The law does not permit the State to expand the maximum period stipulated under Section 167(2) CrPC by filing supplementary charge sheet.
This Court has the reason to hold that the incomplete complaint (charge sheet in CrPC parlance) filed against the petitioner is against the law stipulated by Section 173 CrPC because law does not permit piecemeal investigation. Therefore, this Court holds that the petitioner is entitled to bail under Section 167(2) of the CrPC because investigation of the case is not yet complete.
The petitioner Sri Subhra Jyoti Bharali is allowed to go on bail of Rs.1,000,00/- with a surety of like amount to the satisfaction of the learned Special Judge, Assam, Kamrup(M), Guwahati subject to the conditions imposed - application allowed.
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2022 (11) TMI 927
Money Laundering - generation of proceeds of crime - predicate offence - whether materials indicates existence of scheduled offence - approbate and reprobate of proceeds of crime - whatever monies and trail thereof mentioned, demonstrate that no monies have been received by the applicant(A3) from the alleged FSI Sale Proceeds? - twin conditions of section 45(1) of PMLA fulfilled or not - HELD THAT:- This Court reached at following conclusion.
i. Extreme and exceptional power of effecting arrest which ought to have been used very very sparingly, has been used by the ED Investigating Officers under Sec.19 of the PML Act, is abinitio illegal. Hence, on this count alone the question of attracting rigors of stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act does not arise and both accused cannot be detained in the judicial custody henceforth, for the same.
ii. Simply labeling pure civil disputes with “moneylaundering” or “an Economic Offence” itself cannot automatically acquire such status and ultimately drag an innocent person in a miserable situation in the guise of arrest under Sec.19 and stringent twin conditions of Sec.45(1)(i)(ii) of the PML Act. THE Court has to do what is right irrespective of who is before it.
iii. From the records materials and the detailed discussion made above, it is clear how Pravin Raut (A3) is arrested for a pure civil litigation, whereas Sanjay Raut(A5) for no reason. This truth is glaring. The Court is under legal obligation and duty to find out truth even at the stage of bail. The Hon'ble Supreme Court time and again laid down, “Truth is the guiding star. Criminal trial is voyage of discovery of truth. The truth alone triumphs and every endeavour has to be made by the Court to discover the truth and make justice.”
iv. Even otherwise the twin conditions cast such an important duty on the Court to have a thorough examination and assessment at the stage of bail without making any minitrial
v Even if MHADA, who is party to the every stage and every litigation, which had reached upto the Hon'ble High Court, yet astonishingly lodged FIR No.22 of 2018 for the facts and circumstances of transaction which had allegedly taken place during 2006 to 2013. In this way the conduct of MHADA right from beginning till date is suspicious and even ED admitted the same in their complaints, yet ED has not made any MHADA staff accused.
vi MHADA's attitude as such lodging FIR No.22 of 2018 on one fine morning can neither throw dust in the eyes of the Court nor can brush of and wash out long civil litigations which were even acknowledged by the Hon'High Court. Hence, this Court cannot join its voice in the chorus of ED and MHADA.
vii Rakesh and Sarang (A1 and A2) for their misdeeds and being the main accused persons admitted the same by affidvit of Sarang Wadhawan, were not arrested by the ED but they have been left scotfree. But at the same time Pravin Raut(A3) was arrested for civil dispute, whereas Sanjay Raut(A5) for no reason. All this clearly indicates disparity, pick and choose attitude of the ED and the Court cannot put premium on the same but legally bound to make parity.
viii If the Court still accepts contention of ED and MHADA and further rejects the bail applications of Pravin Raut (A3) and Sanjay Raut(A5) that will amount putting premium on such pick and choose strategies of the Agency. Certainly in that event any common man, innocent and honest people, will loose faith and confidence which they have reposed in the judicial system as a temple of justice. Hence, judicial principles which guide the Court cannot be ignored.
ix. Many statements of witnesses recorded by ED clearly refer the prominent role of Wadhawans (A1 and A2) and their HDIL, but they were not arrested and Pravin Raut (A3) and Sanjay Raut(A5) who have absolutely no concern in generating POC or laundering money as well as indulging the criminal activities relating to the Scheduled Offence, were arrested for subsequent transactions, they have made from their own money. Such conduct of the Agency cannot be garbed for detaining both accused (A3 and A5) behind bars for an uncertain period.
x. Like the laudable object of the PML Act casting duty on the Court to safeguard it, equally the court is protector of rights of accused and innocent persons who are illegally arrested. The Court cannot become predator of such valuable rights of the accused, but is duty bound to be a protector thereof as laid down by the Hon'ble Supreme Court. If the Court ignores this aspect, where the people will go for justice?
xi. This Court being the Court of First Instance has great responsibility of not committing a slightest mistake which will turn into miscarriage of justice. Therefore, this Court has taken a thorough survey of the available records/materials within four corners of the limits required to resolve this question relating to the twin conditions and only thereafter, arrived at such conclusion by not transgressing the boundaries and not committing any minitrial.
xii. In PMLA bail matters, orders become long and run into at least around 4050 pages, does not mean that Court has done minitrial as argued by the Ld. A.S.G. Mr. Anil Singh. On the contrary the stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act prescribe primafacie thorough examination. Even the recent order of the Hon'ble High Court in the case of Anil Vasantrao Deshmukh (supra) runs into 53 pages. The present order is a common order for two bail applications relating to voluminous record, hence bound to run in number of pages.
Both accused are basically arrested illegally. Both of them are entitled to parity in view of disparity made by the ED in not arresting the main accused persons Rakesh(A1), Sarang (A2), their HDIL, MHADA and Government Officials/staff responsible for misdeeds of A1 and A2 at the relevant time in 20062018. Apart from this, I also held that both accused have satisfied twin conditions under Sec.45(1)(i)(ii) of the PML Act. There is absolutely nothing before the Court that eversince Pravin Raut (A3) has been released on bail in a Scheduled Offence, he has committed any breach of the conditions imposed by the said Court. Similarly, whatever contended by ED against Sanjay Raut(A5) can be safeguarded by imposing certain conditions on him.
Application allowed.
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2022 (11) TMI 755
Seeking grant of Regular Bail - scheduled offences - proceeds of crime - illegal mining - using proceeds of the crime for procuring property/money - allegations against the accused named in the FIR are/were that they were found stealing sand from the river Swan Khad Una, which areas was otherwise not leased out to present bail petitioner - HELD THAT:- In the case at hand, on the one hand Enforcement Directorate shared information with the police Under Section 66(2) of the prevention of Money Laundering Act, 2002, with the State Police but at the same time arrested bail petitioner on the basis of ECIR as detailed hereinafter. Now question which needs determination is, “whether without there being any evidence of en-massing/procurement of 'proceeds of crime' if any by bail petitioner, Enforcement Agency could proceed to register the case under Section 3 and 4 of Prevention of Money Laundering Act, 2002 or not? No doubt, had some material emerged in the earlier FIR 252 of 2021 against the petitioner suggestive the fact that he after having indulged in criminal activity possessed/ acquired or procured wealth/property with the help and aid of the proceeds of crime, Enforcement Department would have been justified to proceed against bail petitioner under Section 3 and 4 of Prevention of Money Laundering Act, 2002.
No doubt, the petitioner is accused of having committed serious offence under Sections 3 and 4 of Prevention of Money Laundering Act, 2002, but guilt if any of the bail petitioner is yet to be established on record by leading cogent and the convincing evidence and as such there appears to be no reason to curtail his freedom for an indefinite period during trial, especially when investigating agency has already taken into custody entire record from the accused and he is in judicial custody for over a month - apprehension expressed by the learned Deputy Solicitor General of India that in the event of petitioner being enlarged on bail, he may flee from justice and tamper with the prosecution evidence can be best met by putting him to stringent conditions.
By now, it is well settled that gravity alone cannot be a decisive ground to deny bail, rather competing factors are required to be balanced by the court while exercising its discretion. It has been repeatedly held by the Hon’ble Apex Court that object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative.
Bail petitioner has carved out a case for himself. Consequently, present petition is allowed. Bail petitioner is ordered to be enlarged on bail, subject to furnishing bail bonds in the sum of Rs.25 lac/- with two local sureties in the like amount each, to the satisfaction of the Investigating Officer, besides the other conditions imposed - application allowed.
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2022 (11) TMI 754
Seeking grant of Regular Bail - Scheduled offence - laundering of black money and political money - these companies are used as Shell Companies by politicians - HELD THAT:- Rigor of Sub-Section-(i) of Section 45 of PML Act is not in dispute, the court comes to a conclusion either to allow or reject the bail, these two conditions are required to be followed. ED has been provided full opportunity to oppose the bail. Prima facie the records are required to be considered for believing that the accused persons are not guilty of such offence and that he is not likely to commit any offence while on bail. Proviso to said Section speaks of granting bail, if it is less than Rs. 1 crore.
The petitioner is a practicing advocate, in that circumstance, the liability of the petitioner for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not at ‘flight risk’ and there is no possibility of tampering the evidence or influencing / intimidating the witnesses, as has been submitted by the Mr. Nilesh Kumar, learned counsel appearing for the petitioner. It has been reported that in Hare Street P.S. Case No. 222 of 2022, the petitioner has already been granted bail and this case has been registered on the basis of that case, which is in view of the provisions of PML Act and the offence is also coming under the scheduled offence.
Considering all these aspects of the matter including the duration of custody of the petitioner in the present case, as he is in jail custody since 18.08.2022, the court comes to a conclusion that he is entitled to be granted bail - application allowed.
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2022 (11) TMI 753
Seeking grant of Regular bail - Money Laundering - embezzlement of government fund - scheduled offences - proceeds of crime - HELD THAT:- In reading the entire complaint case there are allegations against this petitioner who happened to be a senior I.A.S officer of the State of Jharkhand to deposit a huge cash amount. A sum of Rs. 01.33 crore has been in the form of cash in the name of brother of her Chartered Accountant and mother of this petitioner has been also found to be invested which has come in the investigation. Thus, it cannot be said that the petitioner was not using the proceeds of crime in light of section 2(1)( u ) of the Act.
There is no doubt that even if the allegation is one of the grave economic offence it is not a rule that the bail should be denied in every case since there is no such bar under the relevant enactment passed by the Legislature nor does the bail jurisprudence provides so as has been discussed by the Hon’ble Supreme Court in the case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (12) TMI 186 - SUPREME COURT], but at the same time the consideration will have to be on case to case basis on the facts involved therein and seeking the presence of the accused to stand trial. The bail are being granted on certain conditions in appropriate cases and the object of putting such conditions should be to avoid possibility by the person hampering the investigation Section 45 of the Act is no more res integra.
The conditions as embodied under section 45 of the Act will have to be complied even in respect of application for bail made under section 439 of the Cr. P.C. There are allegations against this petitioner of laundering a huge amount of money which has come in the investigation and it has been elaborately discussed - The modus operandi as adopted by the petitioner disclosed that she first open bank accounts for short duration, then deposited huge cash into it, then converted those cash into dem and drafts to purchase insurance policies of longer durations and prematurely closed those policies to bring back liquidity in her accounts for further investment. She used to invest the same either in the form of capital infusion by her brother Siddharth Singhal and her husband Abhishek Jha who is also an accused in their company M/s Pulse Sanjeevani Healthcare Private Ltd. Huge amount of cash amounting to Rs.73.81 lakhs was deposited in her various ICICI bank accounts.
Admittedly, the petitioner is a senior I.A.S officer of the State of Jharkhand. In the departmental proceeding she has been exonerated. The Court does not want to make any comment on that exoneration as this Court is only considering the regular bail application of the petitioner - the apprehension of the Enforcement Directorate E.D with regard to tempering with the evidence cannot be ruled out.
The Court is not inclined to grant regular bail to the petitioner at this stage - Petition dismissed.
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2022 (11) TMI 600
Money laundering - provisional attachment orders - proceeds of crime - Impact that a moratorium that comes into effect in terms of Section 14 of the Insolvency and Bankruptcy Code, 2006 on the powers of the Enforcement Directorate (ED) to enforce an attachment under the provisions of the Prevention of Money Laundering Act, 2002 - freezing of bank accounts of petitioner - HELD THAT:- While proceeding to attach the tainted property, the respondents are not in essence effacing the property rights that may be claimed by an individual. It is a symbolic taking over of the custody of the property and for its preservation till such time as the proceedings that may be initiated under the PMLA come to a conclusion. Attachment thus is not liable to be viewed as an effacement of all rights that may exist or be claimed to be exercisable in respect of a property. Attachment essentially seeks to stamp the tainted property of having been found to represent proceeds of crime pursuant to the adjudicatory process which is undertaken under Sections 5 and 8 of the Act. It is essentially a seizure of property bringing it into the constructive possession of a court or as in this case, the authorities under the PMLA.
An attachment is essentially aimed at preventing private alienations. It does not confer a title on the authority which has taken that step. The attachment only enables the authorities under the act to restrain any further transactions with respect to the aforesaid property till such time as a trial with respect to the commission of an offence of money laundering comes to an end. Attachment under the PMLA does not result in an extinguishment or effacement of property rights. It is essentially a fetter placed upon the possessor of that property to deal with the same till such time as proceedings under the aforesaid enactment come to a definitive conclusion on the question of confiscation - it is essentially an action aimed at bringing into the control of a court or an authority, property over which multiple claims may exist. In any case, since the act of attachment does not result in the effacement of rights in property, it would clearly stand and survive outside the scope of a moratorium or an action relating to an action in respect of a debt due or payable.
The attached property comes to vest in the Union Government only upon the passing of such an order as may be passed by the special Court either under sub-Sections 5 or 7 of Section 8 or Sections 58B or Section 60(2)(a). The provisional attachment of properties would in any case not violate the primary objectives of Section 14 of the IBC.
Non-obstante clause in the IBC and PMLA - HELD THAT:- While there can be no doubt that where two special statutes incorporate non obstante clauses it is the later enactment which would ordinarily or normally prevail, the same cannot possibly be recognised as constituting the solitary principle of interpretation which would apply or an inviolable rule. It must be fundamentally borne in mind that a non obstante clause in any statute is looked at principally in case of an asserted irreconcilable conflict between statutes. However, that does not preclude courts from identifying or discerning the core objectives of the competing statutes - More importantly and while dealing with the question which arises for determination in this case, the Court would have to bear in mind the undisputed fact that while the PMLA was originally promulgated on 01 July 2005, the IBC came to be enforced with effect from 28 May 2016 and on subsequent dates when its various provisions were separately enforced. Section 238 of the IBC came to be energised in terms of the notification dated 30 November 2016 and was ordained to come into effect from 01 December 2016. Section 32A of the IBC on the other was introduced by Amending Act No.1 of 2020 with retrospective effect from 28 December 2019.
The introduction of Section 32A constitutes an event of vital import since it embodies a provision which effectively shut out criminal proceedings including those under the PMLA upon the CIRP reaching the defining moment specified therein. However, when the Legislature introduced the said provision, it was conscious and aware of the fact that the provisions of the PMLA could be enforced against the properties of a corporate debtor notwithstanding the pendency of the CIRP - The Legislature thus in its wisdom chose to place an embargo upon the continuance of criminal proceedings including action of attachment under the PMLA only once a Resolution Plan were approved or a measure in aid of liquidation had been adopted.
The Court comes to the conclusion that Section 32A would constitute the pivot by virtue of being the later act and thus govern the extent to which the non obstante clause enshrined in the IBC would operate and exclude the operation of the PMLA - while both IBC and the PMLA are special statutes in the generic sense, they both seek to subserve independent and separate legislative objectives. The subject matter and focus of the two legislations is clearly distinct. When faced with a situation where both the special legislations incorporate non obstante clauses, it becomes the duty of the Court to discern the true intent and scope of the two legislations. Even though the IBC and Section 238 thereof constitute the later enactment when viewed against the PMLA which came to be enforced in 2005, the Court is of the considered opinion that the extent to which the latter was intended to capitulate to the IBC is an issue which must be answered on the basis of Section 32A. The introduction of that provision in 2020 represents the last expression of intent of the Legislature and thus the embodiment of the extent to which the provisions of the PMLA are to give way to proceedings initiated under the IBC.
The Court has independently come to the conclusion that the power to attach under the PMLA would not fall within the ken of Section 14(1)(a) of the IBC. Through Section 32A, the Legislature has authoritatively spoken of the terminal point whereafter the powers under the PMLA would not be exercisable. The events which trigger its application when reached would lead to the erection of an impregnable wall which cannot be breached by invocation of the provisions of the PMLA. The non obstante clause finding place in the IBC thus can neither be interpreted nor countenanced to have an impact far greater than that envisaged in Section 32A.
It is manifest that an order of attachment when made under the PMLA does not result in the corporate debtor or the Resolution Professional facing a fait accompli. The statutes provide adequate means and avenues for redressal of claims and grievances. It could be open to a Resolution Professional to approach the competent authorities under the PMLA for such reliefs in respect of tainted properties as may be legally permissible.
The challenge to the Provisional Attachment Orders as well as orders of confirmation passed by the Adjudicating Authority on grounds as raised fails and stands negatived - Petition dismissed.
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2022 (11) TMI 503
Seeking grant of Regular Bail - money laundering - scheduled offences - Section 167(2) of Cr.P.C - HELD THAT:- A bare reading of the impugned orders (Annexures P-15) reveals that the trial Court has not bothered at all to abide by the directions of this Court while passing the same as neither it has properly discussed and dealt with all the contentions, as raised by the Special Public Prosecutor for the ED before it nor has distinguished the facts and circumstances of the matter remitted to it, from those of the cases wherein the judgments, as cited by him (the Special Public Prosecutor) in support of his contentions, had been passed and it has, rather, touched a different tangent by citing the case law to discard/ignore the same.
Though the impugned orders dated 02.03.2021 passed by the trial Court are not legally sustainable but however, this Court is no more competent to quash/ set aside the same as the order passed by this Court on 02.06.2021 granting the relief of regular bail to the respondents has not been interfered with and has, thus, been upheld by the Apex Court - Petition disposed off.
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2022 (11) TMI 502
Money Laundering - Jurisdiction of lower court - Summoning of petitioner by the ED for recording of the statement after registration of the crime - petitioner is in judicial custody - HELD THAT:- It is deemed appropriate to notice the statutory frame work of the PMLA. Section 2 of the PMLA deals with definitions. Section 2(1)(z) defines a ‘Special Court’ to mean a Court of Session designated as Special Court under sub-section (1) of Section 43. It is not in dispute that an ECIR is filed against the petitioner and it is in furtherance of the said registration of the crime, statements of the petitioner are sought to be recorded by the respondent/ED to consider whether there is an offence made out against the petitioner for offences punishable under the PMLA. Now PMLA would mean offences punishable under Chapter II which deals with offence of money laundering.
Section 50 empowers the authorities under the PMLA with regard to summons, production of documents and to give evidence. Sub-Section (3) of Section 50 directs that all persons so summoned shall be bound to attend in person or through authorized agents and shall be bound to state the truth upon any subject with respect to which they are examined or make statements and produce documents as may be required. Therefore, the authority under the PMLA does have power to summon and record statement of witnesses in terms of Section 50 of the Act - If the ED wants to invoke the provisions of the PMLA to discern the offence under Section 3 of the PMLA, the designated Court is the Court of Session alone which had the power to even consider any application emanating from the provisions of the PMLA as the offence supra, Section 43 supra and Section 71 clearly mean that the designate Court to try anything emanating from the PMLA is the Special Court and the Special Court is the Court of Session. Section 71 has overriding effect on any law.
A Three Judge Bench of the Apex Court in the case of HARSHAD S.MEHTA [2001 (9) TMI 991 - SUPREME COURT] followed the judgment in the case of A.R.ANTULAY [1984 (2) TMI 317 - SUPREME COURT] to hold, if a Special Court is created under the provisions of a special enactment, the proceedings falling under that enactment shall be held only before the Special Court. For this purpose the Apex Court holds that the Special Court enjoys all the powers of the court of original jurisdiction and it holds a dual capacity and powers of both the Magistrate and the Court of Session depending upon the stage of the case.
In the light of the statutory frame work of the PMLA and the application filed under Section 50 of the Act, this Court is of the considered view that the application was not maintainable before the learned Magistrate, since the Court did not have the power to direct recording of statements for it to become a record under the PMLA, the order which is passed by the Court which did not have a jurisdiction to even consider any application under the PMLA, is rendered unsustainable.
Petition allowed.
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2022 (11) TMI 401
Seeking grant of regular bail - siphoning off of funds - twin conditions for grant of bail satisfied or not - Section 4 read with Section 70 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Section 45(1) of PMLA 2002 imposes twin conditions before bail could be granted to a person accused of having committed an offence punishable under the PMLA. As per section 45(1) PMLA, the Public Prosecutor was required to be given an opportunity to oppose the plea for bail and that where the Public Prosecutor opposed such plea, the Court could grant bail only after recording satisfaction that there were reasonable grounds to believe that the person to be released was not guilty of the offence he was accused of and that while on bail he was not likely to commit any offence.
The constitutional validity of provisions of section 45 PMLA 2002, imposing the twin conditions for grant of bail, which were also there before amendment of section 45 PMLA in 2018, was questioned before Hon'ble the Supreme Court in Nikesh Tarachand Shah vs. Union of India [2017 (11) TMI 1336 - SUPREME COURT] and the Supreme Court, after holding that the prescribed twin conditions for release on bail were violative of Articles 14 and 21 of the Constitution of India, declared Section 45(1) of the PMLA, to that extent, to be unconstitutional - Thus it is apparent that despite the Supreme Court having declared that the twin conditions for release on bail as prescribed by un-amended provisions of Section 45(1) of the PMLA,were violative of Articles 14 and 21 of the Constitution of India and thus unconstitutional.
Obesity, as in the case of the petitioner, who weighs 153 kilograms is not just a symptom but is itself a disease which becomes root-cause of several other diseases. With such co-morbodities, the response, the resistance, the resilience and the capacity of the body to fight ailments and recuperate efficaciously, decreases substantially. The jail doctor or for that matter, a civil hospital may not be fully equiped to handle a patient having multiple aiments who apart from medical treatmet may require a certain level of monitoring, care and attention which ordinarily is not available in jail - Considering the co-morbodities of the petitioner, it can safely be said that he falls in the exception of being “sick” as carved out in Section 45 of the Act, so as to be entitled to be released on bail.
The petitioner is ordered to be released on regular bail on his furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned - petition allowed.
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