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2014 (11) TMI 1105 - BOMBAY HIGH COURT

2014 (11) TMI 1105 - BOMBAY HIGH COURT - TMI - Bail application - offence of Money Laundering - Held that:- In this case, not only that the applicant is in custody for a period more than 3 years, but there is absolutely no possibility of the trial of this case commencing within a reasonable time. This is not disputed by the learned Public Prosecutor who submitted that steps for bringing the cases in respect of the scheduled offences allegedly committed by the applicant are before the Special Cou .....

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uired to give sureties/securities not only in the present case if released on bail, but also in all the other cases of scheduled offences, though they would form a part of the present case only. As such, it would not be easy for him to abscond. In any case, appropriate conditions can be imposed upon the applicant to ensure that he would not abscond. Detaining the applicant further in custody without granting bail, in the circumstances, would be unfair, unreasonable and would violate the provisio .....

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Case No.1 of 2013 pending before the Special Court constituted under the Prevention of Money Laundering Act, 2002 (for short, 'PMLA Act'), at Mumbai. The allegation against him is that he has committed the offence of Money Laundering as defined in section 3 of the PMLA Act, and punishable under section 4 thereof. By the present application, he seeks bail. 2. I have heard Mr.Mahesh Jethmalani with Mr.Dinesh Tiwari, the learned counsel for the applicant. I have heard Mr.S.K.Shinde, Public .....

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no.1. Additionally, a compilation of a number of documents has been tendered by the parties. 4. In brief, the case against the applicant may be stated as follows :- That the applicant was, at the material time, Chairman and Managing Director of M/s.City Limosins (India) Ltd, City Realcom Ltd, and some other companies described as 'City Group of Companies'. That, 90% of the share capital of M/s.City Limosin India Ltd is held by the applicant and the Razaki family, two from which family ar .....

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is more than 42,000. Various criminal cases came to be registered against the applicant and other Directors of the aforesaid Companies, alleging cheating and criminal conspiracy. 42 criminal cases, based on 42 First Information Reports have been registered against the applicants, the said Companies and other Directors of the said Companies. These cases are not only in Mumbai or Maharashtra, but also in Karnataka, Andhra Pradesh, Rajasthan and Delhi. In some cases, the investigation is over and .....

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iminal breach of trust, cheating, criminal conspiracy etc, and has laundered the money earned by committing the offences in question. 5. The complaint gives details of various transactions which allegedly show the activities of the applicant amounting to money laundering as mentioned in section 3 of the PMLA Act, and claims that the applicant has committed an offence punishable under section 4 of the PMLA Act. An attempt has been made by the applicant to refute such claims by offering explanatio .....

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said crimes, which are said to be around ₹ 500 crores. 6. The hearing of the present application was somewhat protracted because of the pendency of another Bail Application filed by the applicant which was arising out of a case of cheating and/or criminal breach of trust registered against him at Nagpada Police Station (Bail Application No.216/14 arising out of C.R.No.205/10 of Nagpada Police Station). The investors had sought intervention in the said application, and due to the vehement .....

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paying those amounts. It that case, the applicant had been initially released on bail on certain terms and conditions, but the bail granted to him was cancelled, as the applicant had failed to comply with the terms and conditions imposed on him. By pointing it out, it was contended that the applicant would do the same again, if released on bail. It was also put forth that the cancellation of bail, as ordered by this Court, was upheld by the Supreme Court of India. That application (Criminal Appl .....

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e difficulties, it became impossible for the applicant to return the amounts to the investors though efforts were made to do so. It is submitted that it is because of the arrest of the applicant, the working of the Companies came in danger, and it became difficult for the applicant to fulfil his obligations towards the investors. It is submitted that inspite of this, efforts are still being made to repay the amounts received from investors and 16 cases filed against the applicant have already be .....

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case under the PMLA Act. It is submitted, lastly, that since the applicant is in custody for a period of more than three years, and since there is no likelihood of the trial of the case proceeding, the applicant be released on bail on such terms and conditions as the Court may think fit to impose. 8. The emphasis of the learned Public Prosecutor and the learned counsel for the Respondent no.1 has been only on the magnitude of the offences allegedly committed by the applicant. As aforesaid, since .....

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205 of 2010 of Nagpada Police Station) did not confine themselves only to the facts of that case and in order show the magnitude of the offences allegedly committed by the applicant referred to the allegations levelled against the applicant in the present case also. Though, the investors had not sought intervention in the present case - and rightly so - since the arguments advanced by the counsel for the intervenors in that bail application touched some general aspects about the desirability of .....

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hold meeting with the investors, and make an attempt to repay the amounts due and payable to the investors, but the applicant had willfully failed to hold any such meeting with the investors. 9. While arguing on behalf of the intervenors and while opposing the Bail Application No. 216 of 2014, Mr. Solkar submitted that the applicant has dishonestly managed to divert the illegal gains for purchasing properties abroad, and that, if released on bail, the applicant is likely to leave India and absc .....

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relevant aspects of the matter. Accordingly, such details have been given. The following facts are not in dispute. (a) The applicant is in custody in this case from 14th December 2012. (b) Pursuant to the provisional attachment orders passed, property worth more than ₹ 133 crores belonging to the applicant and his Companies has been attached in the course of investigation of this case, and adjudication proceedings are going on. (c) Search for other properties, if any, of the applicant and .....

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tors having been deceived and cheated. These cases are pending in various parts of the country. 16 cases out of these have been compounded. (f) The applicant was initially arrested in the year 2010. He continued to remain in custody till October 2011 when he came to be released on bail. This was prior to the filing of the present case. The applicant was rearrested on 14th December 2013 consequent to the order of cancellation of bail, and thereafter, has remained in custody. It in this background .....

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as such, there is not even a likelihood of the trial commencing in near future. 13. The learned Public Prosecutor, and the counsel for the respondent no.1 did not dispute this aspect. Even otherwise, it is clear from the scheme of PMLA Act that the scheduled offence/offences, and the offence of Money Laundering both shall be tried by the Special Court constituted under the PMLA Act. Section 44 of the PMLA Act makes this clear. Therefore, admittedly, there is no likelihood of the trial of the PM .....

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asing a person accused of an offence under the PMLA Act, is not attracted in the instant case. 14. The question that arises is whether the provisions of section 45 of the PMLA Act which restrict the powers of the Court in the matter of grant of bail to a person accused of an offence punishable under the PMLA Act, are attracted in this case. Section 45, inter alia, provides that 'no person accused of an offence punishable for a term of imprisonment of more than three years under Part-A of the .....

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g of an offence listed in Part-A of the schedule. 15. The contention advanced by the learned counsel for the applicant is that the scheduled offence/s in this case are of cheating and that the offence of cheating did not find a place in Part A of the Schedule at the material time. It is submitted that the offence of cheating was brought in Part A only after the complaint had been filed. According to him, therefore, in the present case, the bar provided under section 45 of the PMLA Act is not att .....

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in Part-B of the schedule. It is by the Prevention of Money Laundering (Amendment) Act 2012 (Act 2 of 2013) that the schedule was amended, and the offence punishable under section 420 of the IPC was brought in PartA of the Schedule. It is not in dispute that this change was brought into force with effect from 15th February 2013. 17. The learned Public Prosecutor however, contended that since the offence punishable under section 420 of the IPC now finds a place in Part-A of the schedule, the rest .....

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t case, the learned Judge observed that the offence punishable under the Money Laundering Act is a continuing offence, but the proposition as spelt out by the learned Public Prosecutor, cannot be seen to have been laid down in the said decision. Moreover, in that case, the applicant before this Court had approached this Court for Anticipatory Bail, and investigation into the matter was yet to be carried out. 19. The question as to whether a person who is alleged to have committed the offence of .....

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tutes which create offences, or which have the effect of increasing penalties for existing offences will only be prospective - not only by reason of the restriction imposed by Article 20 of the Constitution - but even otherwise, on the principle of fairness and justice. In fact, it is the principle that it would be shocking to one's sense of justice that an act legal at the time of doing it, should be made unlawful by some subsequent enactment, that has been recognized in the said constituti .....

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learned counsel for the applicant, the complaint itself proceeds on the basis that the offences allegedly committed by the applicant, were covered under PartB of the Schedule(para 8). As such, it cannot be said that the provisions curtailing the discretion of the Court in the matter of grant of bail found in section 45 of the PMLA Act are attracted in the present case. In my opinion, since the offence punishable under section 420 of the IPC did not fall in Part-A of the Schedule at the time whe .....

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st him. 20. The question that now arises is whether the applicant should be released on bail. 21. As aforesaid, the applicant is in custody for a period of more than 3 years in connection with this case and the cases relating to the scheduled offences. The properties belonging to him and the aforesaid companies, have already been attached in various criminal cases pending against him and also in this case. The number of criminal cases registered against the applicant is too high. It is not clear .....

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ces. If the scheduled offences are to be tried by the Special Court, as required, the chargesheets filed against the applicant in respect of the said offences would be required to be forwarded to the Special Court at Mumbai. However, admittedly, the char ge sheets in all these cases have not been forwarded to the Special Court at Mumbai. Interestingly, it may be observed that even the case relating to the bail application no.216/14, (relating to C.R.No.205/10 of Nagpada Police Station) that has .....

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hat are allegedly laundered. The reason is that according to Mr.Solkar, the learned counsel for the intervenors/ investors in that case, the attachment of the properties of the applicant and his Companies by the Enforcement Directorate in connection with the present case does not help the investors in any manner, inasmuch as such properties would vest in the Government. He submitted that this will not enable the investors to get their monies back. 22. I have considered the grievance of the inves .....

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be for the concerned authorities to see as to in what manner the money of the investors can be recovered from the applicant and/or his companies. As aforesaid, the Official Liquidator has already been appointed, and the adjudication proceedings are going on. How much property belonging to the applicant has been seized in the criminal cases that have been filed by the police in respect of cheating, criminal breach of trust etc, is not clear, but these properties would be available to the investo .....

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kept in mind, it would be open for the different Investigating Agencies to arrive at a proper course to be adopted in the matter by mutual consultation. 23. That the trial of this case not likely to proceed or even commence within a reasonable time cannot and has not been disputed. How much time it would take for the Investigating/Prosecuting Agency to have the chargesheets in the case of the Scheduled offences placed before the Special Court is not at all clear and no commitment, except that & .....

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he part of the investors can very well be understood, but in the circumstances, the remedy is not to keep the applicant under detention for an indefinite period. In the case of Sanjay Chandra Vs CBI, AIR 2012 S.C 830, the Supreme Court of India reiterated the principles regarding grant of bail after having taken a review of various decisions rendered by the Supreme Court in bail matters, including that in Babu Singh Vs. State of Uttar Pradesh (1978) 1 SCC 579, Moti Ram Vs. State of Madhya Prades .....

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.................. one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any Court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson". (paragraph 14 of the judgment) In the same paragraph, Their Lordships have expressed that 'the Court .....

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offences allegedly committed by the applicant are before the Special Court under the PMLA Act, are being taken. As aforesaid, the properties belonging to the applicant and his Companies have already been attached, and the process of attachment is still being undertaken. Considering the volume of evidence that would be required to be adduced before the Special Court, it can be easily said that the trial would take several years for getting completed, after it commences; and presently even the co .....

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nces, would be unfair, unreasonable and would violate the provisions of Article 21 of the Constitution of India. 26. Considering all the relevant aspects of the matter, I am inclined to release the applicant on bail, subject to certain conditions. 27. Application is allowed. 28. Applicant is ordered to be released on bail in the sum of ₹ 5,00,000/- with one surety in like amount, on the following conditions : (i) The applicant shall report to the office of the Enforcement Directorate on th .....

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