TMI Blog2022 (7) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... ial collected in support thereto and to find out whether the prima-facie offence is made out. It is further held that unless the allegations are substantiated by the authorities and proved against a person in the Court of law, the person is innocent. The findings of the Forensic Audit Report, the observations are that the aforesaid eight firms received amounts from IMAAL with some unidentified receipts and the amount received have been withdrawn in cash and further, these firms did not carry any business relations with IMAAL - In this case, the scheduled offence was registered on 19/07/2018, whereas, the Forensic Audit Report is for the period January 2018 to July 2018. The findings of the Forensic Audit Report, as referred above, only mention that all the said firms received amount from IMAAL with some unidentified receipts and they did not carry any business relations with IMAAL. The expression proceeds of crime is defined under clause (u) of Section 2(1) of the PMLA which makes it clear that 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 offence or the value of any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 2. An offence was registered at Kuntur Police Station, Nanded under Section 420, 406, 467, 468, 471, 477-A and 120B of Indian Penal Code (hereinafter referred to as IPC) vide Crime No. 109/2018, dated 19/07/2018 against the present applicant and 18 others, on a report of Assistant Police Inspector, Nanded Police, who had received secrete information that essential commodities of Wheat and Rice is being illegally transported from the godown of Food Corporation of India (FCI) Jawahar Nagar, Tuppa to the company Baheti Group, M/s. India Mega Agro Anaj Limited (hereinafter referred to as IMAAL ). Thereupon raid was conducted in the premises of IMAAL on 18/07/2018. 3. In further investigation, it was revealed that total 192 trucks of various registrations were constantly ferried to IMAAL during the period 01/01/2018 to 18/07/2018. 4. Thus, it is alleged that the applicant conspired and was involved in illegal transportation of essential commodities of Wheat and Rice from godowns of FCI Jawahar Nagar, Tuppa to the company Baheti Group Mega Agro Anaj Limited. Accordingly the aforementioned crime was registered. 5. Since, Section 420 and 120(B) of IPC being the schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations meeting the above referred requirement to say that the applicant is involved in money laundering. 13. It is submitted that time and again the Hon ble Apex Court has held that grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. He submits that the applicant is in jail for more than one year and there is no material to show that the alleged proceeds of crime derived or obtained by the applicant directly or indirectly as a result of criminal activity, relating to scheduled offence. He, therefore, submits that Section 3 of the PMLA 2002 will not attract to the case of the applicant. 14. Shri Manohar, learned Senior Advocate submits that the allegations in the ECIR refers to the transactions between the period from January 2018 to July 2018. Whereas, the alleged scheduled offence was registered on 19/07/2018. He, therefore, submits that the alleged proceeds of crime Rs.55,27,43,000/- cannot be said to be the proceeds of crime derived or obtained by the accused as a result of criminal activity relating to the aforesaid scheduled offence. 15. He further submits that all the allegations are agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the predicate crime. 22. Shri Deshpande, learned ASGI submits that Forensic Audit Report is sufficient to show that the prosecution has identified 8 specific companies that have entered into the illegal transactions with IMAAL between January 2018 and July 2018. The report takes into consideration exhaustive material to identify and establish all legal transactions that have taken place between the accused and various shell companies. 23. The learned ASGI further points out the observations of the Forensic Audit Report, wherein the instances of withdrawal of amount in cash are referred in relation to M/s. Om Sai Satya Sai Traders, M/s. Kapil Trading Company, M/s. Balaji Traders, M/s. Sumeet Traders, M/s. Sanjay Traders, M/s. Shree Laxmi Trading Company, M/s. Dayanand Trading Company and M/s. Vijay Kumar Ganeshlal Pokarna. Thus, he submits that there is direct evidence of illegitimate transactions between January 2018 and July 2018, which is the period when the predicate crime was registered. 24. Shri Deshpande, learned ASGI while opposing the present application has placed reliance on the following judgments of the Hon ble Supreme Court of India: a) Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y may be mixed with legitimate money, even prior to placement in the financial system. 29. The Hon ble Supreme Court of India recently in the case of J.Sekar @ Sekar Reddy ..vs.. Directorate of Enforcement, on 5th May 2022 in Criminal Appeal No.738 of 2022, has held that in cases of PMLA, the Court cannot proceed on the basis of preponderance of probabilities. It is further observed that on perusal of the statement of objects and reasons specified in PMLA, it is the stringent law brought by Parliament to check money-laundering. Thus, the allegations must be proved beyond reasonable doubt in the Court. Even otherwise, it is incumbent upon the Court to look into the allegations and the material collected in support thereto and to find out whether the prima-facie offence is made out. It is further held that unless the allegations are substantiated by the authorities and proved against a person in the Court of law, the person is innocent. 30. The Delhi High Court in a case of Directorate of Enforcement..vs.. Gagandeep Singh and others, passed in Criminal Revision Petition No. 493 of 2017 has observed thus: 29. The legislation of PMLA had been enacted with the objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment, possession, acquisition or use can be guilty of money laundering, only if both of the two prerequisites are satisfied i.e. - (i) Firstly, if he - (a) directly or indirectly 'attempts' to indulge, (b) 'knowingly' either assists or is a party, or (c) is 'actually involved' in such activity; and (ii) Secondly, if he also projects or claims it asuntainted property. 38. The first of the two prerequisites to attract Section 3 of PMLA shall thus satisfy any of the following necessary ingredients A. Re : Direct or Indirect Attempt: In State of Maharashtra v. Mohd. Yakub, MANU/SC/ 0239/1980: (1980) 3 SCC 57, [1983 (13) ELT 1637 (S.C.)] the Hon'ble Supreme Court observed that - 13. Well then, what is an attempt ? .............. In sum, a person commits the offence of attempt to commit a particular offence when (i) he intends to commit that particular offence, and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against any of them. 39. The second of the two prerequisites to attract Section 3 of PMLA would be satisfied only if the person also projects or claims proceeds of crime as untainted property. For making such claim or to project 'proceeds of crime' as untainted, the knowledge of tainted nature i.e. the property being 'proceeds of crime' derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence , would be utmost necessary, which however is lacking in the instant case. 41. On the basis of the said Section 24 read with Section 3 of PMLA, it was contended on behalf of the respondent that 'knowledge' of the scheduled offence or proceeds of crime is not essential under Section 3, and mere assistance in handling proceeds of crime even without knowledge would attract offence of money laundering, and burden would shift on the accused to prove that he is not involved in money laundering. It was submitted that the petitioners are all adults having knowledge of right and wrong. The bank accounts in which they received payments and made further payments were all in their names and they were the signatories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 of the PMLA 2002 become : i) The proceeds of crime ii) Proceeds of crime arising out of the offences specified in schedule of the Act; iii) Factum of offence while committing the offence of money-laundering. 33. Further it is clear that the allegations must be proved beyond reasonable doubt and the Court cannot proceed on the basis of preponderance of probabilities. Unless the allegations are substantiated by the authorities and proved against a person in the Court of law, the person is innocent. 34. Thus, in this case, to consider whether there is any reasonable ground to believe that the applicant is guilty of alleged crime, it is necessary to examine whether the alleged property being proceeds of crime, derived or obtained, directly or indirectly by the applicant as a result of criminal activity relating to a scheduled offence? 35. In this case, the applicant was found involved in illegal acquisition as well as accumulation of food grains from FCI godowns. 10 Trucks filled with food grains amounting to Rs.1.83 Crores were confiscated from the premises of the company IMAAL and thereupon Crime No.109/2018, dated 19/07/2018 came to be registered for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. M/s. Balaji Traders Rs.1,84,72,000/ 4. M/s Sumeet Traders Rs.48,59,000/ 5. M/s. Sanjay Traders Rs.2,41,85,000/ 6. M/s. Shri Laxmi Trading co. Rs.3,00,76,000/ 7. M/s. Dayanand Trading co. Rs.27,70,03,000/- 8. M/s. Vijay Kumar Ganeshlal Pokarna Rs.15,99,66,000/- TOTAL Rs.55,27,43,000/- 41. In the Forensic Audit Report observations made as regard the above referred eight firms, are as under: 19. In his statement dated 25.06.2021, the accused, Shri Ajay Chandraprakash Baheti has mentioned that he has business relations with M/s Om Shri Satyasai Traders and they used to supply food grains to M/s India Mega Agro Anaj Ltd. However, the forensic audit report clearly mentions that M/s Om Shri Satyasai Traders received amounts from M/s India Mega Agro Anaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Traders did not carry any business relations with M/s India Mega Agro Anaj Ltd. and the reasons for such receipts and payments are unidentified. The total amount received from M/s India Mega Agro Anaj Ltd as per the forensic audit report is Rupees forty eight lakhs fifty nine thousand (Rs. 48,59,000/-). 23. In his statement dated 25.06.2021, the accused has mentioned that he has business relations with M/s Sanjay Traders and they used to supply food grains to M/s India Mega Agro Anaj Ltd. However, the forensic audit report clearly mentions that M/s Sanjay Traders is a general merchant and commission agent and M/s Sanjay Traders has received amounts from M/s India Mega Agro Anaj Ltd with some unidentified receipts. These amounts received have been withdrawn in cash. M/s Sanjay Traders did not carry any business relations with M/s India Mega Agro Anaj Ltd. and the reasons for such receipts and payments are unidentified. The total amount received from M/s India Mega Agro Anaj Ltd. as per the forensic audit report is Rupees Two Crores forty one lakhs and eighty five thousand ( Rs.2,41,85,000/-). 24. In his statement dated 25.06.2021, the accused has mentioned that he has bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith some unidentified receipts and the amount received have been withdrawn in cash and further, these firms did not carry any business relations with IMAAL. 43. In this case, the scheduled offence was registered on 19/07/2018, whereas, the Forensic Audit Report is for the period January 2018 to July 2018. The findings of the Forensic Audit Report, as referred above, only mention that all the said firms received amount from IMAAL with some unidentified receipts and they did not carry any business relations with IMAAL. 44. However, there is nothing to show that the proceeds of crime, in this case, is connected with the scheduled offence. All the above transactions appear to have taken place prior to registration of scheduled offence and there are no findings recorded by the Enforcement Directorate that the proceeds of crime are connected with the scheduled offence. 45. The expression proceeds of crime is defined under clause (u) of Section 2(1) of the PMLA which makes it clear that 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 offence or the value of any such property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rol over the accounts of those eight firms or the applicant was operating the bank accounts of the said firms. 54. As per the case of the prosecution, the above referred eight companies are the fake companies because out of eight companies address of six companies is as of the company of the applicant, namely IMAAL. However, prima-facie there is no material except showing that the addresses of some of the companies are same, that the applicant has any control over the said companies or he was operating the bank accounts of the said companies, to connect the proceeds of crime with the predicate offence. 55. It is the case of the prosecution in the predicate offence that the co-accused in the said case Kapil Bajrang Gupta of Shri Lambodhar Trading Company handed over to truck driver some forged documents pretending to be his own Lambodhar Trading Companies food grains. The said accused Kapil Bajrang Gupta in accomplish of the Government food grains transport contractors namely Lalit Raj Brijlal Khurana and Raju Pralhad Arshewar had supplied food grains to the company of the applicant, pretending that the food grains were his own goods. 56. It is the further case of the prose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence charged. 8. The word reasonable has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. It is difficult to give an exact definition of the word reasonable . 7. In Stroud's Judicial Dictionary, 4th Edn., p. 2258 states that it would be unreasonable to expect an exact definition of the word reasonable . Reason varies in its conclusions according to the idiosyncrasy of the individual, and the times and circumstances in which he thinks. The reasoning which built up the old scholastic logic sounds now like the jingling of a child's toy. (See MCD v. Jagan Nath Ashok Kumar SCC p. 504, para 7 and Gujarat Water Supply Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. * * * 10. The word reasonable signifies in accordance with reason . In the ultimate analysis it is a question of fact, whether a particular act is reasonable or not depends on the circumstances in a given situation. (See Municipal Corpn. of Greater Mumbai v. Kamla Mills Ltd. 11. The court while considering the application for bail with reference to Section 37 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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