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2014 (12) TMI 1261 - DELHI HIGH COURT

2014 (12) TMI 1261 - DELHI HIGH COURT - TMI - Bail application - Offence of money laundering - Held that:- After going into all the details furnished by the respondent/ Directorate of Enforcement in the form of reply, without expressing any opinion on merits, feel that at this stage, the release of the petitioner would hamper further investigation as it may influence the witnesses. Though, it is pointed out by learned senior counsel for the petitioner that the petitioner is in no way connected w .....

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e case against the accused if the prosecution will be able to produce prima facie evidence in support of the charge. At this stage, it is not expected to have the evidence establishing the guilt of the accused beyond reasonable doubt. Thus the petitioner cannot be released on bail at this stage. - Bail Appl No. 2354/2014 - Dated:- 3-12-2014 - Ved Prakash Vaish, J Appellants Rep by: Mr. P.V. Kapur Mr Siddarth Luthara Ms. Geeta Luthra, Sr. Adv. & Mr. K.K. Manan, Mr. P.K. Dubey, Adv. Respondent .....

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4 of Prevention of Money Laundering Act, 2002 (for short, 'PMLA') registered by the Enforcement Department, New Delhi on 03.07.2014. 2. The facts of the case as borne out from Enforcement Case Information Report (for short, 'ECIR') are that on 08.02.2010 Ministry of Defence, Government of India signed a Contract No. Air (HQ)/S 96062/6/ASI with M/s. Agustawestland International Ltd. (hereinafter referred to as 'AWIL') for the supply of 12 AW 101 VVIP/VIP Helicopters with .....

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, India was sealed. Subsequently, Mr. Giuseppe Orsi, CEO, M/s. Finmeccania, Italy and Mr. Bruno Spagnolini, CEO, M/s. Agustawestland, UK apparently with the purpose to pump these amounts in India and abroad, signed engineering contracts with IDS Infotech, India and IDS Tunisia which were established with the main purpose of providing illegal gratification to the concerned public officials and the intermediaries. Agustawestland paid kickbacks worth Euro 51 million out of which Mr. Christian Micha .....

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2.166 million from Agustawestland during the period November, 2007 to April, 2010. Subsequently, IDS Tunisia was incorporated as 100% subsidiary of IDS Infotech, India, however the Indian company sold the Tunisian company to Mr Haschke and Mr Gerosa, after a few months of its incorporation. Thereafter, the business of M/s IDS Infotech, India was transferred to M/s Aeromatrix which was incorporated in Delhi vide a business transfer agreement (BTA) and Mr. Haschke and Mr. Gerosa along with Mr. Ga .....

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getting from M/s Augusta Westland, went to IDS Tunisia after its incorporation. Initially, M/s IDS Infotech, India started receiving the alleged work through M/s. IDS Tunisia, but after incorporation of M/s Aeromatrix Info Solution Pvt. Ltd, M/s IDS Tunisia stopped entrusting any work to IDS Infotech, India and started giving it to M/s Aeromatrix. M/s Aeromatrix received purchase orders from IDS Tunisia and after execution of alleged work, invoiced product was delivered directly to M/s Agustawes .....

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s Agustawestland. However, M/s IDS Infotech, India and M/s Aeromatrix were paid only Euro 1.88 million and 3.8 million respectively for the same work for which M/s IDS, Tunisia raised bills on M/s Agustawestland amounting to Euro 24.37 million. Hence, M/s IDS, Tunisia inflated the invoices and this money was eventually brought to India through Mauritius route by Mr. Gautam Khaitan for payment of illegal gratification. 5. Based on the aforesaid allegations the Directorate of Enforcement arrested .....

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itioner for further interrogation. Vide order dated 30.09.2014 Duty Metropolitan Magistrate, New Delhi remanded the petitioner to the custody of the respondent for a period of 5 days. On 01.10.2014 petitioner moved an application seeking bail. Vide order dated 07.10.2014 learned Chief Metropolitan Magistrate observed that the power to grant bail for the offences under PMLA lies with the concerned Special Judge/ Additional Sessions Judge and the said application was referred to learned District & .....

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rrogation, he appeared and cooperated. Thereafter, CBI registered RC No.217/2013-A0003/CBI-ACU(V) for the offences under the PC Act. Vide order dated 10.04.2013, learned Special Judge (PC Act) CBI-01, Patiala House Courts, New Delhi suspended the lookout circular issued against the petitioner. 8. Learned senior counsel for the petitioner also submitted that the provisions of Section 45 of PMLA apply to the offences under Part A of the Schedule under the Act. As per provisions of PMLA the investi .....

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ceeds, and, therefore, the PMLA is not applicable. 10. Learned senior counsel for the petitioner has relied upon judgment in 'Shivkant Tripathi vs. State of U.P. & Ors.', 2013 (6) ADJ 672: MANU/UP/0935/2013 to contend that from proviso to Section 17(1) and 18(1) of PMLA, it prima facie, appears that the Directorate of Enforcement comes into action in respect of the money laundering allegations only after a charge-sheet is submitted by the police investigating the question whether any .....

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nistration)', AIR 1978 SC 179. 11. Per contra, learned Additional Solicitor General appearing for respondent urged that CBI is an independent agency. The CBI registered the case for the offences under Sections 7/8/9/12/13 of PC Act. 12. Learned Additional Solicitor General also contended that as per Section 24 of PMLA burden of proof that the proceeds of crime are not involved in money laundering lies upon the accused. He had also submitted that according to Section 45 of the PMLA, the petit .....

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tu Khaitan and Sanjeev Tyagi under Section 50 of PMLA were recorded. 13. Learned Additional Solicitor General also submitted that the petitioner was engaged in incorporating business in India for foreign/ local clients by executing a modus operandi that initially the company was incorporated on the address of M/s. O. P. Khaitan & Co. by appointing the employees as Directors and shareholders of the said incorporated company and subsequently the incorporated company is sold to foreign/ local c .....

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otech Design System Ltd., Mauritius, Mr. Carlos Gerosa and Mr. Guido Ralph Haschke were also appointed Directors of the company and the name of the company was changed to M/s. Aeromatrix Info Solutions Pvt. Ltd. The petitioner was instrumental in incorporating M/s. IDS, Tunisia in which Mr. Guido Ralph Haschke, Mr. Carlos Gerosa and Mr. Gautam Khaitan (the petitioner) generated proceeds of crime in connivance with M/s. Agustawestland SPA in the form of payments towards inflated/ increased invoic .....

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he petitioner against issue of his arrest warrant, rejecting the said appeal and copy of a document which was seized by the Italian authorities from the house of Haschke's mother, which contained details of various payments made to several persons including the petitioner. The hard disk of laptop of Mr. Manish Jain, one of the employees of M/s O. P. Khaitan & Co. was also seized. Later on the said employee surrendered his laptop to the officers of Directorate of Enforcement. Copies of th .....

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ar, Mauritius, which shows transfer of money through swift messages to the accounts of Ms. Ritu Khaitan w/o Mr. Gautam Khaitan. 15. It was further submitted that Ms. Nidhi Mathur, another employee of M/s O.P. Khaitan & Co. whose computer was seized and copies of documents were retrieved by the officers of Directorate of Enforcement in her presence and two other independent witnesses, in her statement recorded under Section 50 of PMLA, inter alia, stated that the documents related to M/s.Inte .....

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ble Supreme Court in 'Union of India vs. Hassan Ali Khan & Anr.', 2011 (4) JCC 2758 and 'Narender Mohan Singh and Ankita Singh vs. Directorate of Enforcement and Anr.', 2014 (2) AJR 670: MANU/JH/0515/2014. 17. I have given my thoughtful consideration to the submissions of learned senior counsel for the petitioner and learned Additional Solicitor General for the respondent and have also gone through the material on record. 18. Before adverting to the merits of the case, it is .....

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f offence of money-laundering." 19. The expression proceeds of crime" is defined under clause (u) of Section 2 of PMLA, which reads as under: "(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property." 20. Section 24 of PMLA assigns the burden of proof relating to proceeds of crime under PMLA, which reads as under: "24. .....

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ilable, which reads as under: "45. Offences to be cognizable and non-bailable. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless - (i) The Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) Where the Public Prosecutor opposes .....

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) The Director; or (ii) Any officer of the Central Government or State Government authorized in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government. (1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorized, by the Central Government by a general or special order .....

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Laundering Act, 2002 that the Directorate of Enforcement comes into action in respect of the money laundering allegations only after a charge-sheet is submitted by the police/ agency investigating the question whether any of the 'scheduled offences' has been committed. We will assume that even if the police submits a final report, alleging that no scheduled offence has been committed, but the Magistrate does not accept the same and issues process, even then the directorate can initiate i .....

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nly when one commits scheduled offence particularly offence under Section 13 of the Prevention of Corruption Act, when it was incorporated in the statute by way of amendment, projection of the proceeds of the crime by the person would be liable to be prosecuted, rather the offence of money laundering is committed on the date when the proceeds of crime is being projected as untainted property, which proposition has been laid down by this Court in a case of Hari Narayan Rai v. Union of India & .....

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itted an offence punishable under Section 4 of PMLA and while cancelling the bail the Hon'ble Supreme Court of India observed as under: "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 .....

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the same as untainted money. The said allegations may not ultimately be established, but having been made, the burden of proof that the said monies were not the proceeds of crime and were not, therefore, tainted shifted to the Respondent No.1 under Section 24 of the PML Act, 2002. For the sake of reference, Section 24 is extracted herein below: 24. Burden of proof. - When a person is accused of having committed the offence under Section 3, the burden of proving that proceeds of crime are in tai .....

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rule regarding grant or refusal of bail. Each case has to be considered on its own merits. The matter always calls for judicious exercise of discretion by the Court. Where the offence is of serious nature, the Court has to decide the question of grant of bail in the light of considerations such as nature and seriousness of offence, nature and character of evidence in support thereof, the severity of the punishment for which conviction will entail the character of the accused, circumstances whic .....

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ewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 27. At this juncture, it is relevant to mention here that the economic offences have serious repercussions on the development of the country as a whole. The Apex Court in 'State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr.', (1987) 2 SCC 364, while considering a request of the prosecution for adducing additional ev .....

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ing the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest….." 28. After going into all the details furnished by the respondent/ Directorate of Enforcement in the form of reply, without expressing any opinion on merits, I feel that at this stage, the release of the petitio .....

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