TMI Blog2011 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... f diamond jewellery which is alleged to have been stolen from the collection of the Nizam of Hyderabad - total income of the Respondent No.1 for the assessment years 2001-02 to 2007-08 has been assessed at ₹ 110,412,68,85,303/- by the Income Tax Department and in terms of Section 24 of the PML Act, the Respondent No.1 had not been able to establish that the same were neither the proceeds of crime nor untainted property - Bombay High Court had granted bail to the Respondent No.1 on an incorrect interpretation of the law and the said order granting bail was, therefore, liable to be set aside - Order granting bail set aside - CRIMINAL APPEAL NO.1883 OF 2011 - - - Dated:- 30-9-2011 - ALTAMAS KABIR AND SURINDER SINGH NIJJAR, JJ. ORDER Altamas Kabir, J. - Leave granted. 2. The Special Leave Petition out of which this Appeal arises has been filed against the judgment and final order dated 12th August, 2011, passed by the Bombay High Court in Crl. Bail Application No.994 of 2011, whereby the High Court granted bail to the Respondent No.1, Hassan Ali Khan, in connection with Special Case No.1 of 2011, wherein the Respondent No.1 is the Accused No.1. 3. The alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Union Bank of Switzerland, AG, Zurich, Switzerland. 6. Inquiries also revealed that Shri Hassan Ali Khan had obtained at least three Passports in his name by submitting false documents, making false statements and by suppressing the fact that he already had a Passport. In addition to the above, it was also indicated that investigations had revealed that he had sold a diamond from the collection of the Nizam of Hyderabad and had routed the sale proceeds through his account in Sarasin Bank in Basel, Switzerland, to the Barclays Bank in the United Kingdom. 7. Based on the aforesaid material, the Directorate of Enforcement, Mumbai Zonal Office, arrested the Respondent No.1 on 7th March, 2011, and, thereafter, he was produced before the Special Judge, PMLA, Mumbai, on 8th March, 2011, and was remanded in custody. Subsequently, by an order dated 11th March, 2011, the Special Judge, PMLA, rejected the prayer made on behalf of the Directorate of Enforcement for remand of the Respondent No.1 to its custody and released him on bail. However, since a Public Interest Litigation was pending in this Court in which the Directorate of Enforcement was required to file a status report in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Foreign Exchange Management Act, 1959, (FEMA), show cause notices were issued to the Respondent No.1 for alleged violation of Sections 3A and 4 thereof for acquiring and holding foreign exchange and dealing with the same to the extent of US$ 80,004,53,000, equivalent to Rs. 36,000/- crores, approximately, in Indian currency, in his account with the Union Bank of Switzerland, AG, Zurich, Switzerland. 10. Mr. Raval submitted that the Respondent No.1, Shri Hassan Ali Khan, used the different passports which he had acquired by submitting false documents, to open bank accounts in foreign countries to engage in the laundering of tainted money which brought such transactions squarely within the scope and ambit of Section 3 of the PML Act, 2002. Mr. Raval submitted that Section 3 of the aforesaid Act by itself was an offence since it provides that any person directly or indirectly attempting to indulge in or knowingly assisting or knowingly being a party or actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, would be guilty of the offence of money-laundering. The learned ASG submitted that the key expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 50 of the PML Act, parts whereof were not hit by the provisions of Section 27 of the Indian Evidence Act. 13. The learned ASG also referred to the provisions of Section 45 of the aforesaid Act which make offences under the said Act cognizable and non-bailable and also provides that notwithstanding the provisions of the Code of Criminal Procedure, no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule to the Act, is to be released on bail or on his own bond, unless the Public Prosecutor has been given an opportunity to oppose the application for such release and where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The learned ASG submitted that an exception had been made for persons under the age of 16 years or a woman or a person who is sick or infirm. 14. Referring to Part A of the Schedule to the PML Act, the learned ASG submitted that the same had been divided into paragraphs 1 and 2. While paragraph 1 deals w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting bail to the Respondent No.1, the said provisions were not attracted to the facts of this case since charge sheet had already been filed within the statutory period and the High Court could not, therefore, have granted statutory bail to the Respondent No.1 on the ground that it had been submitted on behalf of the Appellant that it would still take some time for the Appellant to commence the trial. Mr. Mariarputham submitted that while the Respondent No.1 had been arrested on 7th March, 2011 and had been produced before the Special Judge and remanded to custody on 8th March, 2011, the charge sheet had been filed on 6th May, 2011 within the prescribed period of 60 days. It was submitted that the High Court had wrongly interpreted the provisions of Section 167(2) Cr.P.C. in granting bail to the Respondent No.1. 17. In support of his submissions, the learned counsel referred to the Constitution Bench decision of this Court in Sanjay Dutt v. State through CBI, Bombay (II) [1994] 5 SCC 410, wherein it was held that the indefeasible right of an accused to be released on bail by virtue of Section 20(4)( bb ) of the Terrorist and Disruptive Activities (Prevention) Act, 1987, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the instant case all that has been disclosed against the Respondent No.1 is that he dealt with large sums of money, even in foreign exchange and operated bank accounts from different countries, which in itself would not indicate that the monies in question were the proceeds of crime. Mr. Bagaria also submitted that at no stage has it been shown that the said amounts lying in the accounts of the Respondent No.1 in Switzerland, the United Kingdom and Indonesia had been projected as untainted money. Furthermore, as far as the allegation regarding the theft of the Nizam's jewellery is concerned, except for mere allegations, there was no material in support of such submission in the face of the case made out by the Respondent No.1 that he had brokered the sale of some portions of the jewellery for which he had received a commission of US$30,000 which he had spent in Dubai. 20. Mr. Bagaria submitted that in the complaint, reference had been made in paragraph 13 thereof to "scheduled offences" which have been set out in sub-paragraphs 13.1 to 13.5. Mr. Bagaria pointed out that the offences indicated related to alleged offences under the provisions of the Indian Penal Code, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that once it is accepted that the PML Act, 2002, would not apply to the Respondent No.1, the provisions of Section 45 thereof would also not apply to the Respondent's case and his further detention would be unlawful. Mr. Bagaria concluded on the note that, in any event, the PML Act had been introduced in the Lok Sabha on 4th August, 1998, and all the offences alleged to have been committed by the Respondent No.1, were long prior to the said date. 23. Having carefully considered the submissions made on behalf of the respective parties and the enormous amounts of money which the Respondent No.1 had been handling through his various bank accounts and the contents of the note signed by the Respondent No.1 and notarized in London, this case has to be treated a little differently from other cases of similar nature. It is true that at present there is only a nebulous link between the huge sums of money handled by the Respondent No.1 and any arms deal or intended arms deals, there is no attempt on the part of the Respondent No.1 to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said monies w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Department and in terms of Section 24 of the PML Act, the Respondent No.1 had not been able to establish that the same were neither the proceeds of crime nor untainted property. In addition to the above is the other factor involving the notarized document in which the name of Adnan Khashoggi figures. 26. Lastly, the manner in which the Respondent No.1 had procured three different passports in his name, after his original passport was directed to be deposited, lends support to the apprehension that, if released on bail, the Respondent No.1 may abscond. 27. As far as Mr. Bagaria's submissions regarding Section 439(2) Cr.P.C. are concerned, we cannot ignore the distinction between an application for cancellation of bail and an appeal preferred against an order granting bail. The two stand on different footings. While the ground for cancellation of bail would relate to post-bail incidents, indicating misuse of the said privilege, an appeal against an order granting bail would question the very legality of the order passed. This difference was explained by this Court in State of U.P. v. Amarmani Tripathi [2005] 8 SCC 21. 28. Taking a different view of the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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