TMI Blog2017 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... aw does not extricate the appellant from disclosing the source of its receipt. No provision in the taxation laws has been brought to our notice which grants immunity to the appellant from prosecution for an offence of moneylaundering. The argument of the appellant that there is no allegation in the chargesheet filed in the scheduled offence case or in the prosecution complaint that the unaccounted cash deposited by the appellant is the result of criminal activity, will not come to the aid of the appellant. That will have to be negatived in light of the materials already on record. The possession of such huge quantum of demonetized currency and new currency in the form of ₹ 2000/notes, without disclosing the source from where it is received and the purpose for which it is received, the appellant has failed to dispel the legal presumption that he was involved in moneylaundering and the property was proceeds of crime. Therefore, we are not inclined to interfere with the well considered opinion of the Sessions Court and the High Court rejecting the prayer for grant of regular bail to the appellant. However, considering the fact that the appellant is in custody since 28th Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Raj Kumar Goel and other unknown persons for offences punishable under Sections 3/4 of the Act of 2002 on the basis of information/material, as evident from the predicate offence registered by P.S. Crime Branch, Delhi against the named accused and unknown accused for offences punishable under Sections 420, 406, 409, 467, 468, 471, 188 and 120B of IPC, being FIR No.205/2016 dated 25th December, 2016. The relevant facts noted in the ECIR read thus: A. It is reported that during the course of investigation of Case FIR No.242/16 u/s 420, 467,468,471, 120B IPC, PS C.R. Park, Delhi, it is revealed that Accused Raj Kumar Goel along with associates are engaged into earning profits by routing money into various accounts by using forged documents and thereby receiving commission from the prospective clients who either need money by cheque or in cash. In order to obtain large profits, accused Raj Kumar Goel and few of his associates have opened many Bank Accounts in Kotak Mahindra and ICICI Bank at Naya Bazar, Chandni Chowk, Delhi. B. On 08.11.2016, the Government if India announced demonetization of one thousand( 1000) and five hundred (500) rupee notes. On this accused Raj Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act of 2002 and rules framed thereunder. 4. The learned Sessions Judge while considering the bail application adverted to the relevant materials including the CDR analysis of Mobile number of Ashish Kumar, Branch Manager, Kotak Mahindra Bank, K.G. Marg Branch, Kamal Jain, CA of Rohit Tandon (hereinafter referred to as appellant ), Dinesh Bhola, Raj Kumar Goel; the statements of Kamal Jain, Dinesh Bhola and Ashish Kumar, recorded under Section 50 of the Act of 2002; and analysis of bank statements of stated companies. All these reveal that Ashish Kumar conspired with other persons to get deposited ₹ 38.53 Crore in cash of demonetized currency into bank accounts of companies and got demand drafts issued in fictitious names with intention of getting them cancelled and thereby converting the demonetized currency into monetized currency on commission basis. Further, the investigation also revealed that the entire cash was collected on the instructions of the appellant herein, by Ashish Kumar, Raj Kumar Goel and others through Dinesh Bhola, an employee of the appellant. According to the prosecution, all the associates of the appellant acted on instructions of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote of the material pressed into service by the prosecution and analysed the same in the following words: 21. Pursuant to registration of FIR No.205/2016 under section 420, 406, 409, 468, 471, 188, 120B IPC by Crime Branch, the matter was taken up by ED and ECIR No.18/16 was opened for investigation. Transaction statements of accounts in Kotak Mahindra Bank in FIR No.205/16 in respect of companies i.e. Delhi Training Company, Kwality Tading Company, Mahalaxmi Industries, R.K. International, Sapna Trading Company, Shree Ganesh Enterprises, Swastik Trading Company arid Virgo International were sought and scrutinized, Huge cash deposits in the said accounts were identified during November, 2016, post demonetization announcement it was found that demand drafts were issued in fictitious names like Dinesh Kumar, Sunil Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai. 22. Statement of Ashish Kumar, accused named in FIR No.205/16, Branch Manager, Kotak Mahindra Bank, K.G. Marg branch was recorded under section 50 of PMLA which revealed that Kamal Jain, CA of accused Rohit Tandon contacted him to get the demonetized currency on behalf of accused/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to satisfy this court that he is not guilty of alleged offence punishable under section 3 of PMLA. He has not been able to discharge the burden as contemplated under section 24 of the Act. 26. Accused is alleged to have been found involved in a white collar crime. The alleged offence was committed by accused in conspiracy with other coaccused persons in a well planned and thoughtful manner. It has been observed in a catena of decisions by Hon ble Superior Courts that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public, funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. (emphasis supplied) 6. Having formed that opinion and noticing that the investigation was at the initial and crucial stage and that the source of funds of proceeds of crime was yet to be ascertained till then and that the recovery of balance proceeds of crime was in the process, the question of enlarging the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Demand Drafts issued in fictitious names. It is further alleged in the said FIR that accused therein opened bank accounts in the name of Group of Companies in Kotak Mahindra Bank. In ECIR No.18, transactions statements of accounts were collected pertaining to these Group of Companies from Kotak Mahindra Bank and it emerged that from 15.11.2016 to 19.11.2016, there was huge cash deposit to the tune of `31.75 crores by Raj Kumar Goel and his associates. It was also found that the Demand Drafts amounting to `38 crores were issued in fictitious names during that period. It cannot be said at this stage that offences referred in FIR No.205/2016 and the ECIR No.18 have no nexus. 15. Prosecution under Section 45 of PMLA for commission of offence under Section 3 punishable under Section 4 of PMLA has already been initiated by ED in the Special Court. By an order dated 25.02.2017, learned Addl. Sessions Judge / Special Court (PMLA) has taken cognizance against Rohit Tandon (present petitioner), Ashish Kumar and Raj Kumar Goel. Dinesh Bhola and Kamal Jain have also been summoned to face trial under Section 4 of PMLA. Raj Kumar Goel and Ashish Kumar continue to be in custody in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monetized currency by cancelling them subsequently. The petitioner also did not place on record any document whatsoever to show as to from which legal source, the cash was procured to deposit in the bank accounts of strangers. I find no substance in the petitioner s plea that petitioner s only liability was to pay income tax on the unaccounted money / income. In my considered view, mere payment of tax on the unaccounted money from any source whatever would not convert it into legal money. Needless to say, huge deposit was a sinister attempt / strategy by the petitioner and others to convert the old currency into new one to frustrate the Demonetization Policy primarily meant to unearth black money. 18. Allegations against the petitioner are not without substance. The prosecution has recorded statements of the petitioner on various dates and that of Dinesh Bhola, Ashish Kumar (Branch Manager, Kotak Mahindra Bank), Raj Kumar Goel, Kamal Jain (petitioner s Chartered Accountant), Vimal Negi, Jivan Singh and Varun Tandon under Section 50 PMLA on various dates. There statements have evidentiary value under Section 50 PMLA. Prima facie, the version given by them is in consonanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C No.700/2017 in relation to ECIR 18/2016, which refers to further material gathered during the investigation, indicating the complicity of the concerned accused in the crime for offence punishable under Section 3 of the Act of 2002. A comprehensive supplementary complaint has been filed before the District and Sessions Judge, Saket, New Delhi (Designated Court under the Prevention of MoneyLaundering Act, 2002) on 2nd August, 2017. 11. Before this supplementary complaint was filed, the appellant preferred second bail application in the present case before the High Court of Delhi at New Delhi, being Bail Application No.1361/2017. This application was filed on 12th July, 2017. Along with the said bail application the appellant filed an application being Criminal M.A. No.1293 of 2017 for directing his interim release in connection with ECIR/DZ/II/2016 on the assertion that his mother was seriously ill and required immediate medical attention because of the injuries suffered by her on 20th June, 2017. The said interim release application was allowed on 10th August, 2017. Notably, the appellant was advised to withdraw the regular (second) Bail Application No.1361/2017. The learned Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incarceration of the petitioner, submission of the charge sheet in the main case and the illness of the mother of the petitioner, this Court is inclined to grant interim bail to the petitioner for a period of 3 weeks. Let the petitioner be released on interim bail for the period of 3 weeks, to be counted from the date of his release, on his furnishing a bond in the sum of ₹ 25,000/with two sureties of the like amount to the satisfaction of special court. However it is made clear that the petitioner shall not tamper with the evidence or commit any act which would be prejudicial to the prosecution side. Should anything of that kind be reported, this Court would consider the desirability of withdrawing/cancelling the interim bail. The petitioner shall not, unnecessary, seek extension of the interim bail granted to him. It is also specified that the petitioner shall not leave the country under any circumstances whatsoever. Should the petitioner intend to go out of the territorial confines of NCR of Delhi, permission would be required to be taken from the Special Court. The petitioner shall also deposit his passport before the Special court while furnishing his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arceration of the Petitioner since 28.12.2016 in ECIR/18/DZII/ 2016/AD dated 26.12.2016 under Section 3/4 of the Prevention of Money Laundering Act, 2002 is illegal, unconstitutional and in violation of the fundamental right of the Petitioner guaranteed and protected under Article 21 of the Constitution of India; (iv) Issue a writ of mandamus or any other appropriate writ, order or direction in the nature of mandamus declaring that the offences under the Prevention of Money Laundering Act, 2002 (Act 15 of 2003) pursuant to the Prevention of Money Laundering (Amendment) Act, 2005 (Act 20 of 2005) which came into force w.e.f. 01.07.2005 are noncognizable offences and therefore, it is mandatory to comply with the provisions of Sections 155, 177(1) and 172 of the Code of Criminal Procedure, 1973 and declare that the law laid down by the Division Bench of the Hon ble Delhi High Court in its judgment dated 27.4.2016 (reported in 2016 SCC Online Delhi 2493) and by the Hon ble Gujarat High Court in Rakesh Manekchand Kothari vs. Union of India [Special Criminal Application (Habeas Corpus) No. 4247/2015] decided on 03.08.2015 holding that the offences under Section 3 of the Prevention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the illness of his mother. No more and no less. The other observations in the said order will have no bearing on the merits of the controversy and required to be reckoned whilst considering the prayer for grant of regular bail. For that, the appellant must succeed in overcoming the threshold of the rigors of Section 45 of the Act of 2002. Indubitably, the appellant having withdrawn the regular (second) bail application, the consideration of prayer for grant of interim release could not have been taken forward. Besides, in the backdrop of the opinion recorded by the Coordinate Bench of the High Court (in its decision dated 5th May, 2017) whilst considering the application for grant of regular bail, which was after filing of the initial complaint CC No.700/2017 (on 23rd February, 2017), was binding until reversed or a different view could be taken because of changed circumstances. Suffice it to observe that indulgence shown to the appellant in terms of order dated 10th August, 2017 will be of no avail. In that, the facts such as the appellant never tried to evade the investigation or that he has suffered incarceration for over 7 months or that the chargesheet has been fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directorate of Enforcement (Prevention of MoneyLaundering Act), Government of India, (2015) 16 SCC 1 this Court has had an occasion to examine it in paragraphs 2830. It will be useful to advert to paragraphs 28 to 30 of this decision which read thus: 28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with moneylaundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29 . Section 45 of the PMLA starts with a non obstante clause which indicates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 years or is a woman or is a sick or infirm. Therefore, there is no doubt that the conditions laid down under Section 45A of the PMLA, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of committing offence punishable under Section 4 of the PMLA, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure. The decisions of this Court in the case of Subrata Chattoraj Vs. Union of India, (2014) 8 SCC 768 Y.S. Jagan Mohan Reddy Vs. CBI (2013) 7 SCC 439, and Union of India Vs. Hassan Ali Khan (2011) 10 SCC 235 have been noticed in the aforesaid decision. 18. The consistent view taken by this Court is that economic offences having deeprooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommitting a crime after grant of bail. However, such an offence in futuro 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. 45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. 46. 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 Subsection (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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or knowingly is a party or is actually involved in any process or activity connected proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. 4. Punishment for money laundering. Whoever commits the offence of moneylaundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in moneylaundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years , the words which may extend to ten years had been substituted. 23. As the fulcrum of Section 3 quoted above, is expression proceeds of crime , the dictionary clause in the form of Section 2(1)(u) is of some relevance. The same reads thus: 2(1)(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 offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2002 requires to be read down to apply only to those scheduled offences which were included prior to the amendment in 2013 in the Schedule. It is contended that the offence, in particular, under Sections 420, 467 and 471 of IPC, may not be treated as having been included in the scheduled offences for the purpose of the Act of 2002. Further, if any other view was to be taken, the provision would be rendered ultra vires. We are in agreement with the stand taken by the respondents that the appellant cannot be permitted to raise the grounds urged in the writ petition, hearing whereof has been deferred on the request of the appellant. In other words, the appellant should be in a position to persuade the Court that the allegations in the complaint and the materials on record taken at its face value do not constitute the offence under Section 3 read with the schedule of the Act of 2002 as in force. 25. It has been brought to our notice that the decision in Gorav Kathuria (supra) was challenged before this Court by way of Criminal Appeal No.737 of 2016, which has already been dismissed on 12th August, 2016. The order originally passed on the said criminal appeal reads thus: Thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts. 27. Suffice it to observe that the appellant has not succeeded in persuading us about the inapplicability of the threshold stipulation under Section 45 of the Act. In the facts of the present case, we are in agreement with the view taken by the Sessions Court and by the High Court. We have independently examined the materials relied upon by the prosecution and also noted the inexplicable silence or reluctance of the appellant in disclosing the source from where such huge value of demonetized currency and also new currency has been acquired by him. The prosecution is relying on statements of 26 witnesses/accused already recorded, out of which 7 were considered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the Act of 2002. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of moneylaundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence. Further, the Courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itious persons and also the new currency notes for huge amount, leave no manner of doubt that it was the outcome of some process or activity connected with the proceeds of crime projecting the property as untainted property. No explanation has been offered by the appellant to dispel the legal presumption of the property being proceeds of crime. Similarly, the fact that the appellant has made declaration in the Income Tax Returns and paid tax as per law does not extricate the appellant from disclosing the source of its receipt. No provision in the taxation laws has been brought to our notice which grants immunity to the appellant from prosecution for an offence of moneylaundering. In other words, the property derived or obtained by the appellant was the result of criminal activity relating to a scheduled offence. The argument of the appellant that there is no allegation in the chargesheet filed in the scheduled offence case or in the prosecution complaint that the unaccounted cash deposited by the appellant is the result of criminal activity, will not come to the aid of the appellant. That will have to be negatived in light of the materials already on record. The possession of such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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