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TMI Blog2021 (12) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant is material link in the process of generation, placement, layering and integration of proceeds of crime (POC) and thereby involved in a serious offence of money laundering. There is strong evidence against him. Offence is serious and grave. There is every possibility of vanishing evidence and threatening the witnesses as the applicant is an influential person, aide and very close to M.P. Ms. Bhawana Gawali. With this, it is contended to reject the application. 3. Heard Ld. Sr. Counsel Mr. Abad Ponda @ Ld. Adv. Mr. Inderpal Singh and Ld. Adv. Mr. Sajal Yadav for the applicant and Ld. S.P.P. Mr. Sunil Gonsalves at length. Following points arise for my determination. I am recording following findings thereon for the reasons discussed below :- POINTS FINDINGS 1. Whether the applicant has made out exceptionally strong prima-facie case to release him on bail in this economic offence ? No 2. What Order ? Application stands rejected. REASONS POINT NO.1. 4. FACTS INVOLVED IN ECIR/MBZO-I/78/2021. On 12.05.2020 M.P. Ms. Bhawanatai Gawli lodged FIR No.0389 at Risod Police Station, Dist. Washim, against 12 persons. Offence under Ss.406, 408, 420, 34 of I.P.C. was register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilized the amount and siphoned off to pay Rs. 3.58 Crore to Mr. Deepak Prajapati and paid the same to him in cash and further obtained the same from him i.e. Deepak Prajapati, as a loan. Such entry in the statement regarding the said amount was only to show the same ostensibly as untainted money, but the said money was in fact paid by the applicant to Mr. Deepak Prajapati and again received the same from him as a loan. In this way, Mr. Deepak Prajapati (A4) was instrumental in aiding the present applicant Saeed Khan to divert and siphon off funds received by various educational institutions of the said Trust. It was revealed that Mr. Deepak Prajapati (A4) has main job to provide bogus purchase-sell and loan entries. He simply showed the entries in respect of Rs. 3.58 Crore given to him in cash by the present applicant Saeed Khan. Saeed Khan then utilized the said loan for purchase of property situated at Office No.16, First floor, Plot No.227, Nariman Bhavan, Nariman Point. In this way all accused were found involved in the offence of money laundering. These are the facts. 7. GROUNDS CLAIM FOR BAIL. (a) In view of law laid down in Nikesh Tarachand Shah, (2018 )11 SCC 1 by the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings under ECIR are only to vindicate the applicant in false case. (c) Copy of quashing petition [LDVC Criminal Application (APL) No.198 of 2020] indicates no allegation that, the amount withdrawn by Mr. Ashok Gandole had been given to applicant Saeed and Ms.Bhawana Gawli. (d) Sec.8 of the Companies Act allows such conversion. Therefore, the question of generating any proceeds of crime does not arise. (e) No document was forged and NOC was given by the Office of Charity Commissioner for conversion of Trust to Sec. 8 company. There is no scheduled offence nor ED has any authority or power to investigate scheduled offence. Entire reply of ED to the bail application does not indicate which is particular scheduled offence and there is complete silence about the same. (f) Actually, money was laundered by Ashok Gandole and others and scheduled offence is against them. (g) Applicant Saeed Khan was neither Trustee nor a part of dispute between Ms. Bhawana Gawali and Mr. Ashok Gandole. (h) ED has no jurisdiction to investigate. Even if it is assumed that, ED has jurisdiction, yet whatever alleged is a clear money and not tainted. (i) Contention of ED is about forged documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain control. Money-laundering can be either a relatively simple process, undertaken at the local or National level, or a highly sophisticated one that exploits the international financial system and involves numerous financial intermediaries in a variety of jurisdiction. Money-laundering is necessary for two reasons : first, the perpetrator must avoid being connected with the crimes that gave rise to the criminal proceeds (known as predicate offence); Second, the perpetrator must be about to use the proceeds as if they were of legal origin. In other words money laundering disguises the criminal origin of financial assets so that, they can be freely used. Money laundering has three stages : placement, layering and integration. In each stage of the process launderer can employ variety of mechanisms and monetary instruments to disguise the illicit nature of the criminal proceeds, more sophisticated techniques are also used. Hence, money laundering is a serious threat. It has devastating consequences for the financial system. 11. It is necessary to refer the concept of "proceeds of crime" and true purport of Sec. 3 of PML Act. Sec. 2(1)(u) of PML Act defines "proceeds of crime" means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on the basis of ECIR. According to ED, offence under Sec.420 of I.P.C. is scheduled offence. Therefore, investigation on the strength of ECIR for an offence under Sec.3 of PML Act is qualified. 14. Similarly, though Ld. Sr. Counsel Mr. Ponda argued that, there is no scheduled offence mentioned in the reply of ED and ED is investigating forgery when forgery itself is not a scheduled offence, is not relevant. If ED is investigating the source, generation, layering, placement and integration of proceeds of crime and while doing so comes across some patently forged documents which are prima-facie reflecting the object thereof for laundering money; generating proceeds of crime, it cannot be said that ED is investigating a scheduled offence or an offence which is not scheduled for example forgery. Compass of inquiry of ED is very wide in view of broad definition of Sec.2(1)(u) r.w. Sec.3 of PML Act. Therefore, the argument as such of Ld. Sr. Counsel Mr. Ponda is not justified. 15. Ld. Sr. Counsel Mr. Abad Ponda further argued that, whatever done while converting Trust into a company is legally permissible under Sec.8 of Companies Act. Careful reading of Sec.8 of Companies Act indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kh from the account of Mahila Utkarsh Pratishthan indicating as joint account : Ms. Bhawana Gawali to the account of Saeed Khan. Again other bank statement dt.16.11.2019 of the Trust indicates that an amount of Rs. 14,00,047.20 was debited and on the same day i.e. 16.11.2019 it was credited in the account of Saeed Khan Shergul Khan. These dates are material because applicant contends that he was Director of the company for a short period from 03.01.2020 to 27.08.2020. It is material to note that, this is the period contemporary to the period when Mahila Utkarsh Pratishthan Trust was converted to Company under Sec.8 of Companies Act. 18. Account statement dt.03.06.2020 indicates withdrawal of Rs. 1 Crore from the account of company. It is argument of Ld. Sr. Counsel Mr. Ponda that, assets of the company were freeze by the Central Government on account of conversion process. If this argument is accepted, how amount of Rs. 1 Crore got withdrawn from the account of company ? This speaks volumes. All this prima-facie indicates that, Trust money was siphoned for laundering the same and bring it under control of applicant and Ms. Bhawana Gawli. These monies are nothing but proceeds of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 18.18 Crore was not possible; but the same was planned by the present applicant in association with Ms. Bhawanatai Gawali by way of dissolution of the Trust and formation of the company under Sec.8 with the present applicant Saeed Khan as the main Director thereof. He further gave elaborate description of in all 4 material documents which were forged for the purpose of formation of company. Stepping ahead, he stated that, on 17.09.2019 Saeed Khan had come to his office at Aurangabad and informed him that Madam (Ms. Bhawana Gawali) had come to Aurangabad to meet him. Therefore, he met her and the applicant at Subhedari Rest House, beside the Collector Office where she threatened him that, if he did not cooperate her, then she would destroy his life. Further she pressurized him to file her Trust's ITR as well which he filed on 17.09.2019, after she had signed and digitally approved the same as well on the IT site. He also met the officials of the Trust and got their signatures on the closure agreement dt.28.09.2019 at the instance of Ms. Bhawana Gawali and draft copy of the closure agreement which she had mailed him. He further stated that, he was asked to finalize the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. with Sec.50 of PML Act indicates that statements recorded by the Designated Officer of ED, as mentioned in Sec.50 (2) of PML Act, are basically part of judicial proceeding. Over all reading of provisions under Sec.50 of PML Act demonstrates that, statements recorded under Sec.50 of the PML Act play an important role. Hence, it is necessary to refer Section 50 of the PML Act. It confers wide powers on ED which are vested in Civil Court under the Code of Civil Procedure for discovery and inspection, enforcing the attendance, and so many as prescribed in Section 50 (1) (a) to (f). Not only this but also Section 50 (2) again prescribes wide powers to the designated ED Officer to summon any person whose attendance is necessary for giving evidence or to produce any record and such persons so summoned are bound to attend in person. Section 50 (4) clearly indicates that every proceedings under sub-Sections (2) and (3) of Section 50 shall be deemed to be judicial proceedings within the meaning of Section 193 and Section 228 of the I.P.C.as held by The Hon'ble High Court in Shri Vijay Narendra Kumar Kothari Vs. Directorate of Enforcement (Bail application No.2109 of 2019, decided on Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided on June 6, 2018), wherein the Hon'ble High Court held that, the original Sub-section 45 (1)(ii) has neither revived nor resurrected by the amending act and therefore, as of today, there is no rigor of said two further conditions under original Section 45 (1)(ii) of PML Act for releasing the accused on bail under the said Act. Hence, the application has to be considered and decided under Sec.439 of Cr.P.C. with or without conditions. 28. Ld. Sr. Counsel Mr. Abad Ponda further placed his reliance Vinod Bhandari Vs. Assistant Director, (2018 SCC OnLine MP 1559), wherein the Hon'ble M.P. High Court relying on Nikesh Tarachand Shah Vs. Union of India (supra) and held that, "twin conditions under Sec.45 of PML Act has been struck down." He further placed his reliance on Sushila Aggarwal and Others Vs. State (NCT Of Delhi) And Anr.(2020) 5 SCC 1, wherein the Hon'ble Supreme Court referred Gurbaksh Singh Sibbia Vs. State of Punjab, (1980) 2 SCC 565, and held that, the narrow, instructed interpretation of Sec.438 was not warranted. It is also held that, if anticipatory bail can be given, certainly bail can be given. Ld. Sr. Counsel Mr. Ponda further placed his reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of M/s. Shree Chamundi Mopeds Ltd. Vs. Church South India Trust Association, CSI Cinod Secretariat, (supra), the twin conditions under Sec.45 of PML Act will have no effect while dealing with the merit of this bail application. 31. In the aforesaid premises if law laid down by the Hon'ble Supreme Court in respect of bail application under Sec.439 of Cr.P.C. is considered by applying tripod test and various other factors, it is necessary to examine whether the case of the applicant qualifies the same. In my opinion and in view of legal value of statements under Sec.50 (2) and (3) of PML Act, the role of present applicant has to be examined and then it is to be decided whether he is entitled to bail under remaining part of Sec. 45 of PML Act r.w. Sec.439 of Cr.P.C. 32. It is necessary to note role of the present applicant. I have already noted above various documents and the statements recorded under Sec.50(2) and (3) of PML Act. Role of the applicant from the voluminous documents prima-facie indicates that, he was instrumental in conversion of the Mahila Utkarsh Pratishthan Trust into Sec.8 company under the Companies Act, 2013 by submitting forged/fake documents w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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