TMI Blog2022 (11) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... the thrust of the accusations against the Applicant is that he in connivance with the co- accused Bhavna Gawali cheated and misappropriated the funds of the Trust, for his personal use. The Applicant credited cash of Rs. 3.58 crores into the account of Deepak Prajapati, who transferred the money into the account of M/s. Master Plan Finance Ltd, of which he is one of the Directors. Said Deepak Prajapati aided money laundering by effecting a loan entry to give legitimacy to the proceeds of crime and/or to disguise the illicit nature of criminal proceeds. The said payment was then utilized by the applicant to purchase office No.16 on the first floor of Nariman Bhavan at Nariman Point. The only incriminating material against the Applicant is in the form of the statements of Upendra Mule, Ashok Gandole, Uddhav Gandole, Vinod Pandhare, Santosh Somani, Bharat Devgire and others, who are the accused in crime No.389 of 2020 registered at Risod Police Station, pursuant to the complaint lodged by Bhavna Gawali for cheating and misappropriating the money of the Trust. Said Ashok Gandole and others had filed applications before the Division Bench of this Court at Nagpur Bench for quashing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the co-accused converted the Trust into Section 8 Company on the basis of forged and fabricated documents. The Applicant diverted an amount of Rs.3.75 crores in the account of Deepak Prajapati and his family members in various tranches. The said amount was later transferred in the account of M/s. Master Plan Finance Ltd., of which Deepak Prajapati is the director. 3. It is alleged that Deepak Prajapati, who is engaged in providing accommodation entries and bogus loans, provided a transaction entry of 3.58 crore to the Applicant under the garb of loan. The said amount, which was provided as loan was utilised by the Applicant for purchase of a property i.e. office No.16, Nariman Bhavan, Nariman Point, Mumbai. It is alleged that the Applicant was an active participant in the generation of proceeds of crime and that he was actually involved in the laundering of said proceeds of crime as defined under Section 3 of the PMLA. 4. Mr. Satish Maneshinde, learned counsel for the Applicant submits that the Applicant had no direct relationship with the Trust, except for heading the Fraud Detection Committee. He was not a signatory to the bank account of the Trust. In fact, the signator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is included in his income for the Assessment Year-2020-2021 and is also reflected in his income tax returns. The amount of Rs.1,00,00,000/- was withdrawn by cheque by Bhavna Gawali and is reflected in the audited account of the Company. 9. Learned counsel for the Applicant submits that the Applicant is not involved in committing offence under PMLA. That the charge-sheet has been filed and the co-accused are either on bail or are not arrested. He submits that the Applicant, who is in custody since 27/09/2021 is entitled for bail. 10. Per contra, Mr. Hiten Venegaonkar, learned counsel for Respondent No.1 submits that the Applicant in connivance with Bhavna Gawali has taken over control of the Trust by converting the Trust into Section 8 Company on the basis of forged and fabricated documents. He submits that the amount from the Trust is withdrawn in cash and that the said amount has been utilised for personal use. He submits that an amount of Rs.20,00,000/- from the account of the Trust was transferred to the account of the Applicant on 20/12/2019. Similarly, on 16/11/2019 an amount of Rs.14,00,000/- from the account of one of the institutions of the Trust was transferred in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of this Court after considering the relevant provisions and the decisions has observed that :- 49 Unless the amended provision is struck down by the Courts, it cannot be watered down. Since after the amendment the entire complexion of section 45 has been changed, we are not in agreement with the contention that the entire section has to be re-enacted by way of amendment after decision in the case of Nikesh Shah(supra). Therefore, in our opinion, the twin condition would revive and operate by virtue of Amendment Act, which is on date in force. In view of that, we answer the reference by stating that the twin conditions in section 45(1) of the 2002 Act, which was declared unconstitutional by the judgment of the Apex Court in Nikesh T. Shah vs. Union of India (2018) 11 SCC 1, stand revived in view of the Legislative intervention vide Amendment Act 13 of 2018. 14. It would also be relevant to refer to the decision in Ranjitsingh Brahmajeetsingh Sharma vs. State of Maharashtra and Anr. (2005) 5 SCC 294 wherein the Hon ble Supreme Court, while interpreting the embargo under Section 21 (4) of MCOC Act, which is pari materia with Section 45 of PMLA, has observed thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te mens rea. Every little omission or commission, negligence or dereliction may not lead to a possibility of his having culpability in the matter which is not the sine qua non for attracting the provisions of MCOCA. A person in a given situation may not do that which he ought to have done. The Court may in a situation of this nature keep in mind the broad principles of law that some acts of omission and commission on the part of a public servant may attract disciplinary proceedings but may not attract a penal provision. xxx 44. The wording of Section 21(4), in our opinion, does not lead to the conclusion that the Court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the Legislature. Section 21(4) of MCOCA, therefore, must be construed reasonably. It must be so construed that the Court is able to maintain a delicate balance betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Ashok Gandole were the authorized signatories of the accounts of the Trust. The records indicate that Bhavna Gawali had constituted Fraud Detection Committee, headed by the Applicant herein, suspecting financial discrepancies in the accounts of the Trust. The Fraud Detection Committee had allegedly scrutinized and identified the cash vouchers, which were allegedly issued on bogus names or in the names of the relatives of Ashok Gandole and the other trustees. Bhavna Gawali appointed Hakeem Shaikh, a Chartered Accountant to prepare a detailed report on the financial dealings of the Trust. Based on the report submitted by Hakim Shaikh, Bhavna Gawali lodged FIR dated 12.05.2020, pursuant to which crime No.0389 of 2020 came to be registered against Ashok Gandole and other trustees for committing offences of fraud, cheating and misappropriation of an amount of Rs.18,18,40,867/- from the account of the said Trust. 17. While the said crime was being investigated, suspecting it to be the case of money laundering, the Enforcement Directorate registered ECIR/MBZO-1/78/21 and arrested the Applicant on 27/09/2021. It is alleged that on 16.11.2019, an amount of Rs.14 lakhs was transferred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pak Prajapati and his family members. The withdrawal from the account of the Trust as well as deposit of the money in the account of Prajapati was of the year 2019. The Applicant was neither a trustee nor an authorized signatory of the Trust during this period. He became the Director of the Company only on 03.01.2020 whereas the transaction regarding purchase of the office premises was completed in August 2019. During this period the Applicant was not authorized to withdraw any money from the account of the Trust and was not in any manner connected or involved with the Trust, save and except heading the Fraud Detection Committee constituted in September-2019. Hence, prima facie the Applicant cannot be foisted with financial misconduct in respect of the Trust during this period. 22. The averments in the complaint as well as the statement of the Applicant does not indicate that he was questioned on either withdrawal of cash from the account of the Trust or deposit of cash of Rs.3,46,75,500/- in the account of Deepak Prajapati and his family members from 08/05/2019 till 10/12/2019. When questioned about huge cash deposits in the Bank account, Deepak Prajapati in his statement recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material as regards criminal antecedents of the Applicant, it can be held that there is no possibility of the Applicant committing such crime in future. Most of the co-accused are either on bail or are not arrested. The Applicant is in custody since September, 2021. The charge sheet has been filed and considering the large pendency, the trial is not likely to commence and conclude in the immediate future. The Applicant is a permanent resident of the State and there is no likelihood of the Applicant absconding or tampering with the evidence. Considering the above facts and circumstances, it is not necessary to detain the Applicant any further. Hence, case is made out for grant of bail. 25. The bail application is allowed on the following terms and conditions:- (i) The Applicant, who is arrested in C.R. No.ECIR/MBZO-1/78/2021 is ordered to be released on cash bail in the sum of Rs.1,00,000/- for a period of four weeks; (ii) The Applicant shall, within the said period of four weeks furnish PR bonds in the sum of Rs.1,00,000/- with one or more sureties in the like amount; (iii). The Applicant shall surrender his passport before the Trial Court; (iv). The Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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