TMI Blog2022 (6) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... eit these offences are likely to adversely impact the economic fabric of the Country. But each case must be adjudged on the basis of the peculiar facts and circumstances, while striking a balance between the right to personal liberty of the applicant and the interest of the society in general. The embargo imposed by Section 45(1) PMLA on grant of bail that has taken form of twin conditions (i) that the Public Prosecutor shall be given an opportunity to oppose the application for release, and (ii) where the Public Prosecutor opposes such application, the Court should be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and that he is not likely to commit any offence while on bail. The limitations so imposed are in addition to those imposed under Cr.P.C. and have an overriding effect over the provisions of the Code, in case there occurred any inconsistency between the provisions of the two - Be that as it may, in 2017, the constitutional validity of Section 45 of the PMLA came to be challenged before the Supreme Court in Nikesh Tarachand Shah [ 2017 (11) TMI 1336 - SUPREME COURT ], wherefore, by a judgment rendered in 2018, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 2019 leading to filing of prosecution complaint by the Directorate of Enforcement (hereinafter ED ) dated 23rd November 2021 under Section 3 read with Sections 4/44/45/70 of the Prevention of Money Laundering Act, 2002 (hereinafter PMLA ). FACTUAL MATRIX 2. The background of the case is discussed as under: - (i) The applicant is one of the directors in M/s Durga Apparels Pvt Ltd ( DAPL ), having its registered office at L-93, Chanakaya Place Part 2, New Delhi- 110059. The said company is involved in the business of export/import of garments and carpets. (ii) A prosecution complaint was filed against the applicant by the Directorate of Revenue Intelligence (hereinafter DRI ) on 23rd April 2018, alleging commission of predicate offences under Sections 132 and 135 of the Customs Act, 1962, during 20102011 with respect to disbursal of duty drawback on the overvalued exports subsequently leading to extra duty drawbacks to the tune of Rs.32.25 Crores. (iii) After investigating the case for almost 7 years, DRI registered the abovementioned ECIR on 23rd December 2019 on twin allegations:- - that Low value invoices were submitted by Representative of foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indulged in exporting the goods at inflated values. c. The investigation was also conducted with the banks and during investigation, it was found that the accused/applicant received the duty drawback in the bank account of DAPL, M/s Om Shreem Ananda Foods Pvt Ltd, M/s Threepence Graft, M/s Designer Innovation and M/s White Swan Inc. d. The accused/applicant converted the duty drawback and other benefits into cash through entry operators. e. The applicant used the services of Mr. Deep Chand Singhal, Ghanshyam Das Gupta and Rajeev Goel to get fund reintroduced into the banking channels and then utilized the same for purchasing assets and in this regard relevant bank account statements, registry documents and statements were recorded. f. The applicant also got prepared forged documents of the property at Sainik Enclave to depict the purchase of subject property in the year 2006, so as to dissociate the purchase made in the year 2011 from the proceeds of crime. The roles of individuals and firms were also recorded who knowingly indulged in the said activity. g. The main issue before the Court was whether the twin conditions as envisaged under Section 45 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. The allegations levelled against the applicant are unsustainable as the total quantum of the alleged money laundering is calculated using extra duty draw back availed by the five firms/companies namely M/s Durga Apparels Pvt Ltd, M/s Om Shreem Ananda Foods Pvt Ltd, M/s Threepence Graft, M/s Designer Innovation and M/s White Swan Inc. It is submitted that the applicant is only the director of M/s Durga Apparels Pvt Ltd and is in no way involved in the conduct of the business by the other four companies/firms. Apart from few isolated transactions the applicant never conducted any business with them. Moreover, none of these companies/firms or any of the persons engaged in the conduct of these business are arraigned as an accused in the present case. 7. Learned senior counsel for the applicant submitted that the arrest effected on 25th September 2021 at 4:15 AM is manifestly arbitrary not only on the ground and for the reason that, in the predicate offence the investigating authorities of DRI have already placed the prosecution complaint on record on 23rd April 2018 before the designated trial Court without arresting the applicant but also on the ground that the cognizance of of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence in any manner whatsoever. The Hon ble Supreme Court in order dated 16th December 2021 clarified that in Satender Kumar Antil vs. CBI decided on 7th October 2021, stating that in the said order dated 7th October 2021 Section 45 of the PMLA is inadvertently mentioned in Category C and that Section 45 of PMLA stands stuck down. Thus, the twin conditions of bail as laid in Section 45 of PMLA do not exist and normal principles of bail would apply. 12. It is submitted on behalf of the applicant that the Court below rejected the first bail application of the applicant on 9th December 2021 on the ground of seriousness of allegation and nature of offence, while as the second bail application was rejected on the ground of moratorium of twin conditions of Section 45 of the PMLA due to order of the Hon ble Supreme Court in the case of Assistant Director, Directorate of Enforcement vs Dr. V.C Mohan, 2022 SCC OnLine SC 452. The order rejecting bail has been passed ignoring the fact that applicant s matter is about 10 years old, that he is already on bail in the scheduled offence and that there is no scope of him repeating the offence and even twin conditions have alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served as under:- .it is our earnest hope that our courts will exhibit acute awareness to the need to expand the footprint of liberty and use our approach as a decision-making yardstick for future cases involving the grant of bail . 16. It is submitted that the applicant is innocent and has been wrongly implicated in the present case. The applicant s undeserved arrest is a gross abuse of process and his inclusion in the present case, alleging commission of serious offences, is a travesty of justice and amounts to a complete misuse of investigative powers. 17. It is submitted that the Hon'ble Supreme Court of India in the landmark judgment of Arnesh Kumar vs. State of Bihar (2014) 8 SCC 273 very clearly held that where the concerned Court/Magistrate before whom an accused is produced post arrest, finds that the arrest is in violation of law, he is bound to release the accused forthwith. As the very intent of the legislature has been violated in the present case, the investigating authorities have blatantly violated the solemn and sacrosanct principle of presumption of innocence in favour of the applicant in the present case. Learned senior counsel for the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 45 of the PMLA before grant of bail and in this regard, reliance is placed upon the judgment passed by the Bombay High Court in Ajay Kumar vs. Directorate of Enforcement, 2022 SCC OnLine Bom 196, wherein it is categorically held that amending act is not stuck down by any of the Court and challenge is still pending. The legislative amendment is in existence, therefore, the twin conditions have to be satisfied. 22. Learned counsel for the respondent has relied upon Satender Kumar Antil (Supra) wherein it is held that 37 of NDPS, Section 45 of PMLA, Section 212(6) of Companies Act, 43 d (5) of UAPA, POCSO, etc are to be complied before grant of bail. 23. It is also submitted that placing of reliance on various Single Bench decisions of the High Courts in connection with the issue is of no use to the applicant, considering the decision rendered by the Division Bench in Ajay Kumar (Supra) and the recent decisions of the Hon ble Supreme Court in the case of Directorate of Enforcement vs. Parkash Gurbaxani 2021 SCC OnLine SC 3185 and Dr. V.C. Mohan (Supra). It is further submitted that the economic offences constitute a class apart and bail should not be granted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the applicant was guilty of an offence punishable under PMLA, arrested him in terms of Section 19 of the Act. It is further submitted that the bail application of the applicant was rightly rejected by the Sessions Court as there was no change in circumstances since dismissal of his first bail application. In support of his arguments, learned counsel has placed reliance upon Virupakshappa Gouda and Another vs. State of Karnataka and Another, (2017) 5 SCC 406 and Kalyan Chandra Sarkar vs. Rajesh Ranjan alias Pappu Yadav and Another, (2005) 2 SCC 42. Learned counsel for the respondent vehemently submitted that considering the seriousness and high magnitude of the offence, the period of incarceration in jail should not be a governing factor in the present case. Learned counsel for the respondent submitted that the present application is devoid of any merit and is liable to be dismissed. ANALYSIS AND FINDINGS 25. Heard learned counsel for the parties at length and have also gone through the written submissions which have been placed on record on their behalf. 26. The allegation against the applicant is that he procured goods from various places within India to expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail : Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs : Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. 30. A plain reading of the provision would show the embargo imposed by Section 45(1) PMLA on grant of bail that has taken form of twin conditions (i) that the Public Prosecutor shall be given an opportunity to oppose the application for release, and (ii) where the Public Prosecutor opposes such application, the Court should be satisfied that there are reasonable grounds for believing that the accused is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 45 of the 2002 Act was to be fulfilled 31. Be that as it may, in 2017, the constitutional validity of Section 45 of the PMLA came to be challenged before the Supreme Court in Nikesh Tarachand Shah (Supra), wherefore, by a judgment rendered in 2018, explicating the defects inherent in the provision and the challenges posed thereby, the Supreme Court held that the twin conditions imposed by Section 45(1) of the PMLA were manifestly arbitrary, discriminatory and violative of Articles 14 and 21 of the Constitution of India. 32. Post the decision in Nikesh Tarachand Shah (Supra), an amendment was made to Section 45 of the PMLA vide the Finance Act, 2018 and brought into effect from 19th April 2018. The new Section 45(1) PMLA reads as follows:- 45. Offences to be cognizable and nonbailable.- (1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless-] (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 and State of Maharashtra vs. Vishwanath Maranna Shetty (2012) 10 SCC 561, the Hon ble Supreme Court outlined the parameters for adjudication of bail application in terms of Section 45(1)(ii) PMLA and held as under:- 22. It is not necessary to multiply the authorities on the sweep of Section 45 of the 2002 Act which, as aforementioned, is no more res integra. The decision in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and State of Maharashtra v. Vishwanath Maranna Shetty dealt with an analogous provision in the Maharashtra Control of Organised Crime Act, 1999. It has been expounded that the Court at the stage of considering the application for grant of bail, shall consider the question from the angle as to whether the accused was possessed of the requisite mens rea. The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. 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 br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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