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TMI Blog2023 (5) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... Police Station, Pune, against the Applicant and the other co-accused for offences under Section 13(1)(d), r/w. 13(2) and 15 of Prevention of Corruption Act, (hereinafter referred to as the P.C.Act) and Section 109 of the Indian Penal Code (IPC). 3. The allegations in the FIR are that the accused No. 1 -Eknath Khadse misused his official position as State Revenue Minister to purchase and claim compensation in respect of the land under survey No.52/2A/2 of Village Bhosari, Taluka Haveli, District Pune. The said land which was owned by Ukani family. The State Government had acquired the said land for the purpose of development of Industrial area. Notification under Section 32(1) of MID Act was published in the official gazette dated 26.10.1972. The said land vested in MIDC by virtue of Section 32(4) of the MID Act. The MIDC took possession, developed the land and allotted it to several allottees, who have set up various industries. 4. The Applicant and the co-accused Mandakini, the wife of the Accused No. 1-Eknath Khadse, entered into an agreement for sale and subsequently purchased the said land by Deed of Sale dated 28.04.2016, at a price much below the prevailing market rate. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the bank account of Mr. Girish Choudhari and Mandakini Khadse from the account of M/s. Benchmark Buildcon Pvt. Ltd., whereas the co-accused Eknath Khadse mobilized cash of Rs.50 lakhs from his own account and routed to his wife's bank account. It is further alleged that the Applicant and the co-accused forged backdated loan agreement to project that this amount of Rs. 4 Crores was received as loan from M/s. Benchmark Buildcon Pvt. Ltd. The laundered fund of Rs. 5.53 Crores was utilized to purchase the said land and to pay the stamp duty and for registration of the land. 8. The Applicant filed an application for bail before the learned Special Judge for PMLA, which came to be dismissed vide order dated 18.02.2022. Hence, the present application. The bail is sought mainly on the ground that there is no valid predicate offence for the reason that the Anti Corruption Bureau has filed C Summary Report. It is further stated that the ingredients of Section 3 of the PMLA, 2002 are not made out. 9. Shri Shirish Gupte, learned Senior Counsel for the Applicant submits that there is no material on record to indicate that the Applicant and the co-accused had entered into any criminal con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantiate his contention that the scheme of PMLA Act does not obviate the compliance of Sections 41 and 41A of the Cr.P.C. 13. Learned Counsel for the Applicant submits that the Respondent has failed to make out a case of dishonest intention or fraudulent transaction. The Applicant is a victim of political vendata. He has no criminal antecedents and that the bail cannot be declined solely on the ground that the Applicant is facing charge of financial irregularities or economic offence. He submits that the Applicant is in custody since long and has co-operated with investigation. The case of the Respondent is based on documentary evidence which are already seized, and hence there is no possibility of the Applicant tampering with the evidence. 14. Learned Sr. Counsel Mr. Gupte has relied upon the decision of the Apex Court in Ranjitsingh Brahmajeetsingh Sharma vs. State of Maharashtra, (2005) 5 SCC 294 to emphasize that the findings as contemplated in Section 45 of PMLA 2002 are required to be recorded only for the purpose of arriving at an objective finding only for grant of bail and for no other purpose. He submits that allegations made in the FIR as well as ECIR do not consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e coaccused Mandakini Khadse. He submits that the flow chart/ material on record shows that the Applicant had arranged 4 Crores, received from unknown sources and given the same to Omprakash Sharda, Director of M/s. Benchmark Buildcon Pvt. Ltd. and obtained RTGS entries in the form of loan of 4 Crores to conceal the source of fund. 17. He submits that on 28.4.2016, the Applicant and Mandakini Khadse entered into a sale deed with Ukani family and purchased the said land for sale consideration of Rs.3,75,00,000/-. He submits that though the land was purchased for Rs.3,75,00,000/-, the Applicant has paid stamp duty on Rs.22.83 Crores, which as per the ready reckoner, was the prevailing market value of the land. He therefore submits that, the land was purchased at a price which was much below the prevailing market rate. He submits that the whole sequence of events between March and April 2017 clearly indicate that the Accused No. 1 had abused his position as public servant and acquired in the name of his family public property and obtained pecuniary advantage by corrupt or illegal means, which is an offence punishable under Section 13(1)(d) of the P.C. Act. He submits that the Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is stated to be the delicate fruit of a mature civilization. It is the very quintessence of civilized exist and the essential requirement of a modern man." The nature of offence and the material in support thereof, possibility of the accused fleeing justice, reasonable apprehension of tampering the evidence or influencing the witnesses are the circumstances which normally weigh with the Court while exercising discretion under Section 439 of Cr.P.C. 21. In P. Chidambaram (supra) the Apex Court upon considering the previous decisions has reiterated that "the basic jurisprudence relating to bail remains the same in as much as the 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, however, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences, that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering." 24. The offence of money laundering as defined under Section 3 is punishable with maximum sentence of 7 years. In Vijay Madanlal Choudhari (supra) the Hon'ble Supreme Court while upholding the constitutional validity of various provisions of the PMLA, has observed that the quantum of punishment provided for the offence is not the sole factor in deciding the severity of the offence. Money laundering affects social and economic fabric of the nation and such offence, which poses a serious threat to the financial health of the country and causes adverse consequences in multiple ways needs to be viewed seriously and considered to be grave offence. 25. The language of Section 3 clearly implies that the money involved in the offence of Money laundering is necessarily the proceeds of crime, arising out of criminal activity in relation to the scheduled offence. In Vijay Chaudhary (supra) the Apex Court has observed that the "proceeds of crime" being the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as untainted property or claiming it to be so. Thus involvement in any one of such cases or activity connected with the proceeds of crime would constitute offence of money laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence- except the proceeds of crime derived or obtained as a result of that crime. 27. The Hon'ble Apex Court has summarized that : "(v)(a) Section 3 of the 2002 Act has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy. The Explanation inserted to Section 3 by way of amendment of 2019 does not expand the purport of Section 3 but is only clarificatory in nature. It clarifies the word "and" preceding the expression projecting or claiming as "or"; and being a clarificatory amendment, it would make no difference even if it is introduced by way of Finance Act or otherwise. (b) Independent of the above, we are clearly of the view that the expression "and" occurring in Section 3 has to be construed as "or", to give full play to the said pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 45 of PMLA, has observed thus:- "35. Presumption of innocence is a human right. [See Narendra Singh and Another Vs. State of M.P., (2004) 10 SCC 699, para 31] Article 21 in view of its expansive meaning not only protects life and liberty but also envisages a fair procedure. Liberty of a person should not ordinarily be interfered with unless there exist cogent grounds therefor. Sub-Section (4) of Section 21 must be interpreted keeping in view the aforementioned salutary principles. Giving an opportunity to the public prosecutor to oppose an application for release of an accused appears to be reasonable restriction but Clause (b) of Sub-section (4) of Section must be given a proper meaning. 36. Does this statute require that before a person is released on bail, the court, albeit prima facie, must come to the conclusion that he is not guilty of such offence? Is it necessary for the Court to record such a finding? Would there be any machinery available to the Court to ascertain that once the accused is enlarged on bail, he would not commit any offence whatsoever? 37. Such findings are required to be recorded only for the purpose of arriving at an objective finding on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the 2002 Act. While dealing with a similar provision 633 Supra at Footnote No.3 prescribing twin conditions in MCOCA, this Court in Ranjitsing Brahmajeetsing Sharma 634, held as under: "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 between a judgment of acquittal and conviction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words Supra at Footnote No. 275 (also at Footnote No.53) Supra at Footnote No.256 used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. ..... 401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. (v) the amount of 4 Crores which was projected as repaid to M/s. Benchmark Buildcon was received by the Applicant in cash. 34. In this regard, the records indicate that Ukani family were the owners of the property under Survey No.52/2A/2 of Village Bhosari, Taluka Haveli, District Pune. The Applicant and the coaccused have purchased the said land from Ukani family by Deed of Sale dated 28.04.2016. The Applicant and the co-accused had filed Writ Petition No. 6027 of 2018 wherein it is stated that they were informed by their predecessors that the possession of the land was not taken by MIDC. Shri Gupte, ld. Sr. Counsel has also referred to the affidavit filed by the Collector in the said petition to substantiate his contention that the land was in possession of Ukani. 35. The records reveal that the State Government had initiated acquisition proceedings in respect of the land in village Bhosari, including the subject land and issued notification dated 11.11.1971 under Section 32(1) of MID Act. By virtue of Section 31(4) when a notice under sub section (1) is published in the official gazette, the land vests absolutely in the State Government, free from all encumbranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t legal to allot the land to several persons for setting up industries without completing the land acquisition process and directed that the land be returned to the owner or that compensation be paid to them as per the new Land Acquisition Act and action in that regard needs to be taken in accordance with law and as per the legal advice. The accused No. 1 admits in his statement recorded under Section 50 that as a Revenue Minister he had no role in respect of acquisition of the said land. The accused No. 1 has stated that he had no knowledge about any complaint filed by anyone claiming compensation in respect of the said land. He claims that as a senior most Minister several persons used to come to visit his office with their grievances. 38. No doubt, as a Revenue Minister, Accused No. 1 was entrusted with powers to protect public interest, or to take any decision in public interest, but such powers could not have been exercised to gain financial or other undue advantage for himself or his family members. In the instant case, as noted above, the wife and son-in-law of the Accused No. 1 had already entered into an Agreement for Sale and paid the sale consideration in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accommodation entry, whereas, the Applicant has claimed that he had availed loan from Benchmark Buildcon Pvt. Ltd., which was repaid with interest. Undisputedly, the Applicant and the coaccused had not made any application for loan. The Applicant had not even visited the office premises of M/s. Benchmark Buildcon. The alleged loan of Rs. 4 Crores was provided at an oral request of the Applicant, without any security, and on an oral assurance that he had capacity to repay the loan. The statement of the Applicant as well as the statement of the Accused No. 1, who had also transferred Rs. 50 lakhs in the account of co-accused Mandaniki, does not indicate that she had any independent source of income or financial capacity to repay the loan of Rs. 2 Crores. 43. The records further reveal that M/s. Benchmark Buildcon Pvt. Ltd. had received Rs. 4 Crores from 5 different companies, which was transferred to the account of the Applicant and the co-accused on the same date. The Directors of most of these Companies were the same. 44. The flow chart of the source of the funds received by M/s. Benchmark Buildcon and transferred to the bank account of the Applicant and the co-accused is as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction was materialized. They claim that the loan agreement is a backdated agreement. Mr. Devashu Upadhyaye and Manjit Jhaju, the Directors of M/s. Benchmark Buildcon, who looked after the day to day business of the Company, have further stated that though it is projected that the loan amount of Rs. 4 Crores has been paid through banking channel, all the transactions were reversed and the equivalent amount of money was returned to the Applicant in cash. 47. The material on record prima facie reveals that the Applicant and the co-accused have acquired the property by means which are not legally approved, and the property acquired by criminal activity is relatable to scheduled offence. Prima facie, a case of criminal misconduct, which is a scheduled offence is made out. It is stated that the closure report has not been accepted and further investigation has been ordered. Hence, at this stage the predicate offence does not cease to exist. As regards the offence under Section 3 of the PMLA, 2002 the records prima facie reveal that the Applicant had placed, routed, layered the amount of Rs. 5.53 Crores through various shell companies and that he was involved in the activity connecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The Hon'ble Supreme Court, while upholding the validity of Section 19, rejected the grounds pressed into service to declare Section 19 as unconstitutional and held that such a provision has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act of Prevention of Money Laundering and Confiscation of proceeds of crime involved in money laundering, including to prosecute persons involved in the process or activity involved in the process of crime so as to ensure that the proceeds of crime are not dealt with in any manner which may result in frustrating any proceedings relating to confiscation thereof. In the instant case, it is not the case of the Applicant that the authorized officer has not adhered to the safeguards or the stringent conditions contained in Section 19 of the PMLA, 2002, and has thus failed to demonstrate violation of Article 21 of the Constitution as to entitle him for bail. 49. Having gone through the entire records, in my considered view the Applicant has failed to meet the test of twin condition under Section 45 of PMLA. Moreover, the Applicant is a British citizen and as such the possibility of the Applicant not being available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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