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RAKESH MANEKCHAND KOTHARI Versus UNION OF INDIA & 2

2015 (8) TMI 1341 - GUJARAT HIGH COURT

Bail application - money laundering - nature of offence - Held that:- We have perused the supplementary complaint No.4/2014 which shows that fraud has been committed by some of the accused. However, the complaint does not show any material evidence, direct or circumstantial, against the petitioner. Allegations against the petitioner are of handling money belonging to his uncle from Mumbai. So far as the petitioner is concerned, there is no recovery or discovery from or at the instance of the pet .....

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pursuant to quashing of non-bailable warrant issued against him by a single Judge of this Court, while observing that order was obtained by the respondents by misrepresenting and suppression of vital facts. Out of 89 accused persons and entities, all are on bail except eight or nine, including the petitioner. If about 80 out of 89 accused are ordered to join investigation under protection of Court orders, present petitioner who had already undergone about 11 months is entitled to the interim rel .....

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ish surety in cash and cash surety will be replaced by solvent surety within a period of 15 days. - SPECIAL CRIMINAL APPLICATION (HABEAS CORPUS) NO. 4247 of 2015 - Dated:- 3-8-2015 - MR.JUSTICE MOHINDER PAL and MR.JUSTICE R.D.KOTHARI MR VIKRAM CHAUDHARY, SR. ADVOCATE with MR HARDIK MODH, ADVOCATE WITH MR CHETAN K PANDYA, ADVOCATE FOR THE APPLICANT. MR DEVANG VYAS, ASISTANT SOLICITOR GENERAL, MR HL JANI ADDL PUBLIC PROSECUTOR FOR THE RESPONDENT ORAL ORDER (PER : HONOURABLE MR.JUSTICE MOHINDER PAL .....

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s petitioner had earlier preferred Special Criminal Application (Direction) No.4496 of 2014 with prayer for issuance of writ of habeas corpus wherein vires of Section 45 of the PMLA was challenged alleging lack of jurisdiction of respondent No.2 under this Act for effective arrest under section 19, due to absence of proper appointment under section 49 and authorization by the Central Government and alleging illegal arrest for non-communication of grounds of arrest to the petitioner. The same was .....

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ever, petitioner was granted liberty to apply for bail by appropriate application as envisaged under the provision of the Code of Criminal Procedure, 1973 after expiry of six months. Special Leave Petition against judgment dated 16.01.2015 in Special Criminal Application (Direction) No.4496 of 2014 was also preferred by the petitioner, but the same was disposed of by permitting the petitioner to withdraw the same. Writ Petition (Cri.) No.61 of 2015 under Article 32 of the Constitution of India w .....

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r preferred this petition with categorical stand that the earlier writ petition was filed before this Court and secondly liberty was granted by the Supreme Court to file this fresh petition vide order dated 07.07.2015. 2. After notice of Rule, respondent Department has filed counter-affidavit wherein issue of maintainability of the second habeas corpus petition was raised. In view of the objection of maintainability raised by the respondent authority and because of two orders dated 12.5.2015 and .....

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Special Criminal Application (Habeas Corpus) ] pending before it, on merits.... In view of this specific clarification, we are taking up the petition for consideration on merits. 3. Facts in brief for disposal of this case are that, an ECIR was registered by respondent no.2 on receipt of information from Deputy Commissioner of Police of Crime Branch, Surat, which was investigated and two FIRs dated 11.4.2014 & 13.4.2014 for scheduled offences were registered under sections 420, 464, 467, 468 .....

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itioner under section 19 of PMLA on 18.7.2014 after investigation, a complaint bearing No.03/2014 was lodged against 79 accused persons in this ECIR under PMLA. Petitioner was not amongst those 79 accused. Thereafter, petitioner was arrested on 01.9.2014 in a supplementary complaint No.04/2014 which was filed on 29.10.2014 before Designated Special Court under PMLA at Ahmedabad, wherein petitioner is one among 10 accused named therein. Cognizance was taken by the trial Court in said supplementar .....

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izable were deleted by way of deletion of clause (a) and substitution in section 45 (1). Learned counsel also tried to explain it by way of illustration that section 179 (1) of Income Tax Act, which provided for liberty of directors of private company, misleading heading refers only a private company company in liquidation. Although the said section was amended by substitution with effect from 01.10.1975, however the heading remained unaltered. In such identical situation, the Allahabad High Cou .....

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misleading heading showing the offence as cognizable after amendment in 2005 by necessary implication of offence under PMLA is not cognizable offence. It is further submitted that neither can the heading govern the amendment nor can interpretation process the fact of amendment whittled down to still construe the offence as cognizable . He submits that since the offence is non-cognizable and there is no corresponding provision under PMLA over-riding the provisions of section 155 of Cr.P.C., by a .....

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Court in para 112 thereof was pleased to hold that, criminal proceedings can be quashed if the procedure prescribed under section 155 of Cr.P.C. is not followed for investigation in a non-cognizable offence. On this basis, it has been argued that since neither an order from any Magistrate was sought before commencing investigation nor any warrant obtained for petitioner s arrest, for non-compliance of section 155 of Cr.P.C., arrest of the petitioner and keeping him in custody was illegal warrant .....

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any duly designated volume of case diary showing day-to-day progress as contemplated in section 172 (1B) is being maintained nor was the same produced before the Court when remand was sought although it was mandatory under section 161 (1) of Cr.P.C. It has been submitted that if the offence is held to be cognizable, it was mandatory to follow the provisions of section 157 apart from sections 167 (I1) and 172 of Cr.P.C. He has referred to a judgment of Constitution Bench of Supreme Court in Lali .....

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is entitled for release as prayed for. In this context, learned counsel has submitted as under: (i) An investigating officer under penal statute of PMLA exercises all police powers and is thus a police officer for all purposes, including for the purpose of sections 25 & 26 of the Evidence Act. While relying on judgment of the Supreme Court in Tofan Singh v. State of Tamil Nadu reported in (2013) 16 SCC 31, wherein after accepting similar contention in respect of statements recorded under ND .....

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t available opportunity. He has referred to a Constitution Bench decision of the Supreme Court in Ramanlal Bhogilal Shah v. D.K.Guha reported in (1973) 1 SCC 696 wherein it has been held that, on filing of FIR in respect of any offence, or on filing of a complaint before a competent Magistrate, or grounds of arrest are communicated to any person, he would have fundamental right and protection under Article 20(3) of the Constitution of India, but he has also relied on and supplied copy of judgmen .....

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50 of PMLA cannot be construed in such a manner which abrogates the fundamental rights conferred upon a citizen. According to him, statements obtained after taking into custody of an accused are irrelevant as per section 24 of the Evidence Act. While relying upon Constitution Bench decision in Haricharan Kurmi v. State of Bihar reported in AIR 1964 SC 1184, it has been submitted that in absence of any evidence against the petitioner, the case against him cannot be sustained merely on the basis o .....

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admissible statements, petitioner cannot be deprived of his liberty guaranteed by the Constitution of India. It is argued that the alleged crime as defined under section 2(u) of PMLA was regarding remittance of money abroad. No role of the petitioner is alleged to have been mentioned in the said proceeds of crime. 7. Finally, as per learned counsel, arrest of the petitioner and keeping him in custody was unwarranted, illegal and improper and in violation of his fundamental right guaranteed under .....

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ial Court, by this Court and thereafter by the Supreme Court. 9. It has been submitted that earlier a petition being Special Criminal Application No.4496 of 2014 was filed praying for various reliefs which included the relief praying for a writ of habeas corpus as is sought to be prayed in the present petition with regard to arrest and continuation in custody pursuant to his arrest on 01.9.2014. The reliefs prayed in the present petition and the reliefs prayed in the earlier petition are the sam .....

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of judgment delivered on an issue between the same parties which is not permissible in law and is specifically barred. 10. While referring to the liberty granted by the Apex Court, it has been submitted that the Hon ble Supreme Court while permitting withdrawal has neither granted any permission to file the present petition nor has given any such liberty of annulling the earlier order passed by this Court. It is submitted that the observations made by the Apex Court regarding withdrawal will no .....

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or opposes such bail application or petition. According to him, all relevant provisions have been followed while initiating the process against the petitioner and under this circumstance, the present petition was liable to be dismissed. 12. We have heard the arguments of both sides and we have also gone through the judgment dated 16.01.2015 dismissing the earlier writ petition preferred on behalf of the present petitioner. 13. Respondents raised the issue of maintainability of second habeas corp .....

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jection of maintainability raised on behalf of the respondents and in view of two orders dated 12.5.2015 and 07.07.2015 of the Hon ble Supreme Court, we vide our order dated 24.7.2015 prima facie found it suitable to ask the petitioner to seek clarification from the Supreme Court. Vide order dated 31.7.2015 passed in Special Leave Petition (Cri.) No.6053 of 2015 against our order dated 24.7.2015, the Hon ble Supreme Court has clarified the issue by passing the order that: ....We request the High .....

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ar v. Union of India reported in AIR 1967 SC 1335 and various other judgments on this issue, held as follows in para 7 & 8: 7. ....In the said case reference was also made to the earlier decision in Gulam Sarwar's case (supra). The position was finally summed up as follows: (Lallubhai Jogibhai Patel case SCC p.433, para 13: "13. The position that emerges from a survey of the above decisions is that the application of the doctrine of constructive res judicata is confined to civil act .....

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stance and not the form which is relevant. If some surgical changes are made with the context, substance and essence remaining the same, it cannot be said that challenge is on new or fresh grounds.... 15. After perusing the judgment dated 16.01.2015, we find that the grounds taken in the instant petition were not taken in the earlier writ petition dismissed by this Court. We, therefore, find it appropriate to consider merits of the petition. Moreover, the objections of respondents regarding main .....

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he contention raised on behalf of the petitioner that notwithstanding misleading heading, after specific amendment in 2005, offence under PMLA is non-cognizable offence. It could also be seen that in case of State of Haryana v. Bhajan Lal reported in 1992 Supp (1) SCC 335, the Hon ble Supreme Court was pleased to observe as follows: 34. ....In this connection, it may be noted that though a police officer cannot investigate a non-cognizable offence on his own as in case of a cognizable offence, h .....

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ustration specified in para 102 is as follows: 102. (4) .Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. .... 18. Thereafter, the matter of Lalita Kumari v. Government of U.P. reported in (2014) 2 SCC 1 considered importance of following the procedure prescribed under the Code and observed as .....

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under section 172 of the Code. ......Moreover every information received relating to commission of a non-cognizable offence also has to be registered under section 155 of the Code. 96. ......Sec.1571) deploys the word forthwith . Thus, any information received under section 154 (1) or otherwise has to be duly informed in the form of a report to the Magistrate. Thus, the commission of a cognizable offence is not only brought to the knowledge of the investigating agency but also to the subordinat .....

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procedure prescribed under the Code ought to have been followed in absence of any inconsistent provision under the PMLA concerning investigation and arrest amongst other proceedings. If the offence under PMLA is held to be cognizable, it was mandatory to comply with sections 154 & 157 apart from sections 167 (1) and 172 of the Code. If the offence under PMLA is held to be non-cognizable, it was mandatory to comply with section 155 apart from sections 167 (1) and 172 of the Code. We are unabl .....

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held to have no authority to arrest without warrant in non-cognizable offence under Central Excise Act 1944 in light of section 155 of the Code. 21. In view of the above, we find, prima facie, that the investigation was neither commenced nor progressed in accordance with the procedure established by law. The arrest and continued custody is, therefore, prima facie, in violation of Article 21 of the Constitution of India. Constitution Bench of the Supreme Court in relation to compliance with the p .....

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tution. For ready reference, Art.21 is reproduced as under: Art.21 No person shall be deprived of his life or personal liberty except according to procedure established by law. 23. Article 21 provides an embargo on deprivation of personal liberty except according to the procedure established by law. The object of Art.21 is to prevent encroachment upon personal liberty in arbitrary manner. Art.21 is repository of all human rights essential for a person or a citizen. 24. In any event, it is not in .....

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SCC 228, marginal note headings are not catchwords and amendments are not for altering them. For applicability of section 155 Cr.P.C. for non- cognizable offence, judgment of the Supreme Court has been shown to us. It is also seen that in PMLA there is a provision to file a complaint which is normally result of investigation of non-cognizable offence. Although the offence is punishable with imprisonment upto 7 years and can be cognizable as Part II of Schedule I to the Cr.P.C., however, such int .....

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even section 157 Cr.P.C. which has been held to be mandatory by Constitution Bench of the Supreme Court in Lalita Kumari (supra). 26. Next is the point regarding admissibility of statements recorded under PMLA. All the statements of co-accused and that of petitioner himself are recorded under PMLA. In judgment in Tofan Singh (supra), it is seen that the matter has already been referred to a Larger Bench of Supreme Court albeit in respect of statements recorded under NDPS Act. In this judgment, .....

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Punjab v. Barkat Ram reported in AIR 1962 SC 276 in which it was observed that: 33. ......It is, therefore, clear that section 25 of the Evidence Act was enacted to subserve a high purpose and that is to prevent the police from obtaining confessions by force, torture or inducement. The salutary principle underlying the section would apply equally to other officers, by whatever designation they may be known, who have the power and duty to detect and investigate into crimes and is for that purpose .....

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lal Bhogilal Shah v. D.K.Guha (supra) in case investigated by Enforcement Directorate has already held that Article 20 (3) would be attracted after arrest. Statements recorded after arrest are not admissible in evidence and are hit by Article 20(3) of the Constitution. Ratio of the decision laid down by Constitution Bench of the Supreme Court in Haricharan Kurmi (supra) would also be applicable in this case. 29. Learned Assistant Solicitor General has argued that the allegations against the peti .....

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tatements, there is no prima facie material evidence against the petitioner of any money laundering even today despite the fact that he is in custody for the last about 11 months. 30. Powers of this Court in writ jurisdiction under Article 226 of the Constitution are much wider than the jurisdiction for granting bail under Cr.P.C. We are informed of the fact that uncle of the petitioner, who is alleged to have much higher role and is stated to be the main accused, is on bail pursuant to quashing .....

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