TMI Blog2017 (9) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... rther orders; (iii) The applicant shall not leave country without the permission of the Court; (iv) The applicant is permitted to furnish cash security in the sum of ₹ 1 lakh for a period of four weeks in lieu of sureties; - BAIL APPLICATION NO. 1581 OF 2017 - - - Dated:- 4-8-2017 - PRAKASH D. NAIK, J. Mr.Vikram Chaudhari a/w. Mr.Pankaj Jain i/b. M/s.P.D. Jain Co., Advocate for the Applicant. Mr.H.S. Venegaonkar, Advocate And Mr.Arfan Sait, APP for Respondent JUDGEMENT This is an application for bail under Section 439 of Cr.P.C. seeking enlargement of the applicant on regular bail in ECIR/MBZO-II/05/16, registered by Enforcement Directorate, Mumbai for an offence punishable under Section 3 read with Section 4 of Prevention of Money Laundering Act, 2002 (hereinafter referred to as PML Act , for short). 2 The brief facts of the prosecution case are as follows: (a) FIR bearing No.365 of 2015 was filed with D.B. Marg Police Station, Mumbai on 24th December, 2015 for offences punishable under Section 420, 465, 467, 468 and 471 read with Section 120-B of the Indian Penal Code (hereinafter referred to as IPC , for short). In the First Inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uja Diamonds Limited and M/s. Yogeshwar Diamonds Pvt. Ltd. (d) Based on the investigation it was established that amount was remitted to Hong-Kong based company/consignor by way of illegal bills of entry having same invoices number and invoices were manipulated along with other import documents by furnishing forged remittance. (e) The scrutiny of the bank statement of IndusInd Bank in respect of M/s.Kanika Gems Pvt. Ltd, revealed that the said company had account with IndusInd Bank, Mumbai and that the applicant and others accused were the Directors of M/s. Kanika Gems Pvt.Ltd. From the said bank account, during the investigation it revealed that an amount of ₹ 60,80,30,398/- had been remitted in the guise of import advance to Hong-Kong based exporters. However, despite repeated reminders by the Bank, M/s. Kanika Gems Pvt. Ltd. did not submit the requisite import documents to the bank to establish that the import has taken place against the said advance import remitted to overseas exporter. The amount was also remitted towards direct import by using forged bills of entry and bogus invoices to Hong-Kong based exporters. Funds were maintained and received from the associa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 of IPC. The applicant was arrested on 19th May, 2015 for the offence punishable under Section 135(1)(A) of Customs Act. He was released on bail by order dated 14th June, 2015. Since no action was taken against the actual culprits, the applicant gave his representation dated 15th August, 2016 to the Enforcement Directorate and gave details about the acts and omissions committed by Vijay Kothari and his associates. In reply to the representation of the applicant, he received a call from the Enforcement Directorates asking him to visit the office on 23rd August, 2016. The applicant appeared before the officer. He was interrogated. Surprisingly on the same day, he was handed over summons for appearing on 24th August, 2016. The applicant then visited the office of Enforcement Directorate on 24th August, 2016 and provided the list of the persons who are involved in the Hawala Racket which was carried out by Vijay Kohtari and his associates. It is submitted that the applicant had appeared before the E.D. Office, Mumbai on several occasions and provided the information. The applicant appeared on 26th August, 2016, 28th August, 2016, 31st August, 2016, 1st September, 2016, 17th October, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ML Act shall not be applicable to offences which were falling under Part B earlier and pursuant to the 2013 amendment included in Part A. He relied upon the decision in the case of Gorav Kathuria Vs. Union of India (2013 SCC Online Punjab Hariyana 3428) . In the said decision, it was observed that the bar under Section 45(1) of the PML Act shall not be applicable for the offence punishable under part-B and in pursuant to the amendment of 2013 included in part A. It is submitted that the said judgment was challenged before the Apex Court vide criminal Appeal No.737 of 2016 which was rejected by the Supreme Court vide order dated 2nd August, 2016. 7 Learned counsel for the applicant further submitted that the judgment of the High Court of Punjab and Hariyana stated hereinabove, has merged into the decision of the Hon'ble Supreme Court dated 12th August, 2016. It is further submitted that the doctrine of Merger would apply in this case. To support his arguments, he also relied upon the decision of the V.M. Salgaocar Bros. (P) Ltd. Vs. CIT (2000) 5 SCC 373). It is also submitted that in the light of the observations in the said decision, the doctrine of merger will have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogeshwar Diamonds Pvt. Ltd. It is further revealed that huge funds were transferred to the account of the applicant and his wife. The applicant and his wife having an account with Axis Bank as well as other banks. Scrutiny of the account of the bank revealed that the amount was transferred to M/s.Keshav Impex to the tune of ₹ 5,75,000/-, ₹ 2,00,000/- and ₹ 16,40,000/- on 16th January, 2014, 5th February, 2014 and 1st January, 2015, respectively. The applicant is director of M/s.Kanika Gems Pvt. Ltd. The applicant had generated funds and managed bank account with intention of laundering funds and he had played a major role in the scheduled offence. The applicant had also purchased properties. 9 Learned counsel further submitted that on account of rigor of Section 45(1) of the PML Act, bail should not be granted to the applicant. There is substantive evidence against the applicant and there are reasonable ground for believing that the applicant is guilty of the offence. He submitted that as per Section 24 of the Act, in any proceedings relating to proceeds of crime, in the case of persons charged with offence of money laundering under Section 3, the Authority or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation of Section 45 of PML Act. It is further submitted that as per Section 24 of the Act, in case of a person charged with the offence under Section 3, the authority or the Court shall unless the contrary is roved presume, that such proceedings of crime are involved in money laundering. 10 I have perused the documents on record. The applicant was appointed as a Director of Kanika Gems Private Limited. In his statement recorded on 24th August, 2016 by the Assistant Director Enforcement Directorate, the applicant has stated that he came in contact with Vijay Kothari who is from his native place and he told the applicant that he was in business of diamonds in Mumbai and invited him to join him in his business at Mumbai. He came to Mumbai in February 2008 and assisted Mr.Kothari in his business activities. Subsequently, Mr.Kothari opened the firm namely M/s.Keshav Impexs wherein the applicant was proprietor. He also opened a private limited company namely M/s.Kanika Gems Private Limited in which the applicant made director along with one Anil Toshnival. The applicant furnished all the details of the transactions executed by M/s.Keshav Impex as well as M/s.Kanika Gems Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions. It was stated that the said transactions were made for purchase of the flat at Borivali. It was also stated by him that Flat No.203 situated at Borivali in Mahindra and Mahindra Co-operative Housing Society was sold by him and the details of the payment received were also disclosed. The Enforcement Directorate had relied upon the contents of the complaint filed before the Special Court designated for PML Act. The said complaint was filed against the applicant and others including Shri Vijay Kothari for the offence under Section 45 of PML Act for commission of offence under Section 3 and punishable under Section 4 of PML Act. It is pertinent to note that in paragraph no.6.11 of the complaint, it is stated that Shri. Vijay Kothari is the proprietor of M/s.Kanika Gems and director of various other companies. He has diverted huge funds and managed bank accounts with intent to laundering of funds with dubious companies, he has remitted huge funds to Hong-Kong based bogus company. He floated various fictitious companies for routing of funds with the help of other co-accused. On search, he could not be found at his premises and despite summons, he avoided the same and never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the offences punishable under Sections 420 and 406 read with 34 and 120-B of the IPC. The applicant's statement was recorded by police on 8th October, 2016. He also forwarded a representation dated 15th August, 2016 to the Enforcement Directorate and details of the acts of omission and commission by Vijay Kothari and his other associates. The applicant was called by the respondents on 23rd August, 2016. He complied the directions and had visited the respondents repeatedly and furnished all the information. His statements were also recorded. The applicant, thereafter, visited E.D. Office on 24th August, 2016, furnished requisite details showing involvement of accused. Thereafter, he repeatedly appeared before E.D. till about 14th March, 2017. It is the case of applicant that he was detained from 6th March, 2017 at 11:00 a.m. to 7th March, 2017 till 6:30 p.m. He was abused and manhandled and assaulted. complaints/E-mails forwarded on 7th March, 2017 of applicant regarding harassment by officers of E.D. on 15th March, 2017 applicant gave written complaint. He also forwarded a comprehensive representation to the Enforcement Directorate on 2nd April, 2017 for taking action aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged with money laundering or not shall thus depend only upon satisfying the requirement of Section 3 of PML Act. The interpretation made by the Gujarat High Court, as stated above appears to me to be sound and well reasoned. 14 The applicant is in custody from 20th April, 2017. The complaint has been already filed in the Court. No case for further detention is made out. Punishment contemplated under Section 4 of the Act is punishable with rigorous imprisonment of the term which shall not be less than three years but it may extend to seven years and shall also be liable to fine. It was, however, contended by the respondents that by virtue of Section 45 of the PML Act, the Court has to record reasonable ground for believe that the accused is not guilty of such offence and that he is not likely to commit any offence in the event of being enlarged on bail. It is, therefore, contended that Section 45 contains an embargo on the powers of the Court to grant bail. Section 45 reads as follows: 45. Offences to be cognizable and non-bailable.- (1) 1[Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 439 of Cr.P.C. The said proviso contemplate abundant caution while granting bail in economic cases. It would caused to prosecution or defence. The Court had placed reliance on the judgment of the Apex Court in the case of Ranjeet Singh Sharma Vs. State of Maharashtra Ors .(AIR 2005 SC 2277). The condition precedent under Section 21(4) of MCOC is para-material to Sub- Section 45 of PML Act. The principle offence therein was under IPC. This Court in the aforesaid decision delivered in criminal Bail Application No.174 of 2017 has also referred to Section 26 of the General Clauses Act, 1897. In paragraph 14 of the said decision, it was observed that the language of Section 45 of PML Act which connotes sentence to be imposed upon the accused. The Court, therefore, observed that Section 45 of the PML Act would not be embargo to consider the application for bail. The Court also dealt with the decision in the case of Goutam Kundu (Supra) , which is referred to hereinabove. The said decision is also relied upon by the respondents in the present case. In paragraph 15 of the said decision in aforesaid application this Court observed that there is no dispute that Section 45 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iberty of a person should not ordinarily be interfered with unless there exist cogent grounds therefor. Sub-Section (4) of Section 21 must be interpreted keeping in view the aforementioned salutary principles. Giving an opportunity to the public prosecutor to oppose an application for release of an accused appears to be reasonable restriction but Clause (b) of Sub-section (4) of Section 21 must be given a proper meaning. 47 Does this statute require that before a person is released on bail, the court, albeit prima facie, must come to the conclusion that he is not guilty of such offence? Is it necessary for the Court to record such a finding? Would there be any machinery available to the Court to ascertain that once the accused is enlarged on bail, he would not commit any offence whatsoever? 48 Such findings are required to be recorded only for the purpose of arriving at an objective finding on the basis of materials on records only for grant of bail and for no other purpose . 49 We are furthermore of the opinion that the restrictions on the power of the Court to grant bail should not be pushed too far. If the Court, having regard to the materials brought on record, is sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail. However, such an offence in future must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. 56 . 57 The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in Sub-section (4) of Section 21 of the Act, the Court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the Court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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