TMI Blog2021 (2) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... tate parking of her money in a locker. A2 has given statements to the effect that the applicant was aware of the deposits and withdrawals from the locker. It is true that the prosecution may not have been able to establish with precision how the proceeds of crime was generated. But indications about the applicant having knowledge of the smuggling activities in which A2 was involved suggests that he also had a share in the proceeds of crime. The term proceeds of crime is wide enough to include proceeds which have been directly or indirectly obtained as a result of criminal activities mentioned as scheduled offences. Reverting to the rigour of the twin test under section 45 of the PMLA, it has to be considered whether the applicant would qualify to get bail. There is no doubt about the complicity of the applicant and there are no reasonable grounds to believe that he is not guilty. However, it should also be considered whether there is a likelihood of the applicant committing any offence while on bail. I am afraid that the prosecution has not been able to establish this fact. Going by the allegations made by the ED, the applicant was indulged in laundering of ₹ 64 lakhs w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e UAE Consulate, claiming benefits of exemption from payment of Customs duty as imported diplomatic cargo. On the basis of intelligence report, the Customs decided to check the baggage with the permission of the Ambassador of the United Arab Emirates in India. That is when a cylindrical-shaped gold as stated above was seized. The National Investigating Agency ('NIA', for short), Kochi registered Crime No. 2/2020 on 10/07/2020 alleging offences punishable under sections 16, 17 and 18 of Unlawful Activities (Prevention) Act ('UAPA', for short) against four persons namely, the above-mentioned Sarith, Swapna Prabha Suresh-former Secretary to the Counsel General of UAE Consulate, Fasil Fareed and Sandeep Nair. Based on the aforesaid activity of smuggling under the guise of diplomatic baggage, the ED registered the aforesaid crime initially against four persons, on 13/07/2020 and a complaint was also filed before the special Court on 06/10/2020. During the course of investigation, all the persons acquainted with the facts and circumstances of this case were questioned in their statements recorded. The NIA and the Customs also had recorded statements of various persons inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the applicant. The applicant was therefore, summoned by the investigating agencies for questioning about those calls between him and A2. He was summoned by the ED, NIA and Customs several times between 14/07/2020 and 15/10/2020. He states that he was questioned by the ED for more than fifty hours on different dates. Signed statements were obtained from him and throughout he has been cooperating in the investigation. When such questioning continued disregarding his health conditions, he approached this Court for a pre-arrest bail, but the same was rejected by this Court. A story about the involvement of the accused in the Crime has been contrived on the basis of the statements allegedly given by A2 and Sri Venugopal, a Chartered Accountant, whom he had introduced to A2 for her financial solutions. A locker was arranged by Sri. Venugopal for A2 to keep her money. How she handled her money was none of his concern. The locker was got by A2 much before her involvement in the gold smuggling case. She alone had operated that locker. The applicant was arrested while he was undergoing Ayurvedic treatment. He was not permitted to complete the treatment. The details of the days and tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugopal conveyed WhatsApp messages to the applicant about the deposit in the locker as also the withdrawals made by A2 from that locker. The investigation by the NIA resulted in the seizure of ₹ 64 lakhs in cash and gold from that locker and a further amount of ₹ 36.50 lakhs in cash was seized from another locker in Federal Bank, Thiruvananthapuram. The applicant has in his statement admitted that A2 was not financially well off and that he had tried his best to help her in all possible ways and had also secured a good job for her when she lost her job in the UAE Consulate. He was very close to A2 and they exchanged WhatsApp messages all day long. Both A2 and Sri. Venugopal have admitted that the locker in SBI was opened under the instructions of the applicant and he was fully aware of the deposits and the withdrawals made therefrom. In their chats, A2 had even requested the applicant to intervene and contact the Terminal Manager/Airport Authority/Customs Authority with regard to clearance of diplomatic baggage without subjecting the same to customs examination. The applicant has himself admitted that he did speak to a senior customs officer on 15/10/2020 and made a requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the application for bail may be dismissed as it is devoid of any merits. 5. Heard the learned Senior Counsel Sri. Jaideep Gupta appearing for the applicant and and Sri. S.V. Raju, the learned ASG. Written submissions were also made on behalf of both. 6. The learned Senior Counsel Sri. Gupta submits that no offence under section 3 of the PMLA is made out or even properly alleged against the applicant. Referring to Section 3 of the PMLA, it is submitted that for an offence of money laundering to be attracted under section 3, it is necessary that the prosecution must be able to show the existence of applicant's involvement in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and also the applicant's projection of claiming the said proceeds of crime as untainted property. It is pointed out that the ED has two different narratives with regard to the proceeds of crime. As per the earlier narrative, proceeds of the crime in this case has been generated out of gold smuggling, while the later version appears to be that the proceeds of the crime is derived from kickbacks received in implementing the LIFE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection with the locker belonging to A2 in the Federal Bank. The statement of A2 dated 10/08/2020 indicates that the she had opened the locker in August 2019 along with the A1-Sarith. The NIA had seized the ₹ 64 lakhs and 982.5 grams of gold jewellery from the SBI locker. They seized ₹ 3,650,000/- from the Federal Bank locker on 23/08/2020 as is evident from the complaint filed by the NIA as also the seizure mahazar prepared on that day. Thus the applicant could be said to have been involved in money laundering only to the tune of ₹ 64 lakhs which was seized from the SBI locker and therefore, the proviso to Section 45 (1) would operate in such a scenario and would exempt the applicant from the rigours as stated earlier. Moreover, it is also submitted that the applicant is a sick person suffering from chronic degenerative disc disease. He was admitted to the Arya Vaidyasala for 15 days in 2019. He also a cancer survivor for having undergone treatment at the Amritha Institute of Medical Sciences in the year 2005 with cancer affecting his upper jaw on the right side. He was operated upon on 12/07/2005 and there were CT scan evaluations to rule out recurrence during a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on seizure of 30 KGs of 24 karat gold. It is pursuant to the further investigation by NIA that an amount of more than rupees one crore from different accounts held by A2 was seized. In the grounds of arrests, the ED contends that the amounts recovered from A2 are proceeds of crime from smuggling activities in which she was involved with the applicant's active support. The learned Senior Counsel points out that in the most shocking and unethical manner, the ED has changed the whole narrative relating to the proceeds of crime in its application for extension of custody of the applicant. There the ED has stated that the applicant had received kickbacks through A2 and others regarding LIFE Mission projects. The ED has however desisted from disclosing the actual role of the applicant in the alleged kickbacks received by A2 and others. There are glaring contradictions in the aspects of proceeds of crime and is therefore highly suspicious and smacks of malice. There is material change in the allegations as well as in the predicate offence alleged. 10. The claim of the ED that the applicant had tried to influence the customs officials is not true. The ED has not made any claim or st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India [2018] 11 SCC 1 2. Ahilya Devi v. State of Bihar 2020 Crl.LJ 2810 3. Dr. Shivindir Mohan Singh v. Directorate of Enforcement 2020 SCC OnLine Del 766 4. Upendra Rai v. Enforcement Directorate AIR OnLine 2019 Delhi 1177 5. Arvind Rajta v. CBI 2020 SCC OnLine HP 1713 6. D K Sivakuamr v. Directorate of Enforcement [BA 2484/2019 dated 23-10-2019 Delhi HC] 7. Gaurav Gupta v. Director of Enforcement [2015 SCC OnLine Del 9929] 8. Anil Tuneja v. M.Cr. C(A) 469/2020 Chattisgarh HC 9. P Chidambaram v. Directorate of Enforcement [2019] 9 SCC 24 10. Court on its own Motion v. State of Kerala dated 25-3-2020 in WPC 9400/2020 11. Tofan Singh v. State of Tamilnadu 2020 SCC OnLine SC 882 12. Chidambaram v. Directorate of Enforcement [2019] SCC Online SC 1549 These decisions are relied upon to point out that Section 45 of the PMLA has been declared to be unconsitutional and that the subsequent amendment in 2018 is not going to salvage the situation. 15. Per contra, the learned ASG, Sri S.V. Raju has relied upon the Decision of the Orissa High Court in Mohammed Arif v. Directorate of Enforcement 2020 SCC OnLine Ori 544 to argue that the amendment has cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntified and that the prosecution initially started with the proceeds of crime as that from the act of smuggling has later gone to 'kickbacks' in LIFE Mission project. This Court had the opportunity to consider the application for anticipatory bail filed by the applicant and it was held that the materials suggested the complicity of the applicant and that the prosecution has to get opportunity to delve further into the allegations in the light of the statements recorded. The applicant was confronted with the statements of the co-accused in this case pertaining to his involvement and he has not been able to give a satisfactory explanation regarding the variance between his version and the versions of the other witnesses as an accused. The applicant could not give a satisfactory explanation regarding why he was anxious to introduce the 2nd accused to the witness Venugopal to facilitate parking of her money in a locker. A2 has given statements to the effect that the applicant was aware of the deposits and withdrawals from the locker. It is true that the prosecution may not have been able to establish with precision how the proceeds of crime was generated. But indications about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the fact that the evidence is all documentary in nature and has already been collected according to the ED. In Sanjay Chandra v. CBI 2011 KHC 5051: AIR 2012 SC 830 it was held that the they object of bail is not punitive but to secure the presence of the accused for trial. The accused may not be detained just to give him a taste of imprisonment is what the Supreme Court held. 19. The applicant has been in custody since 28/10/2020. He has been subjected to interrogation including custodial interrogation in a number of times. The present pandemic times also does not encourage incarceration of an accused indefinitely. I find no rationale for continuing the applicant's judicial custody as an undertrial in this case The applicant is therefore, entitled to be released on regular bail on stringent conditions. In the result, the bail application is allowed and the applicant is directed to be released on bail on execution of bond for ₹ 5,00,000/- (Rupees five lakhs only) with two solvent sureties for like amount each to the satisfaction of the jurisdictional Court, and on following further conditions: 1. He shall surrender his passport and shall not go abroad except w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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