TMI Blog2023 (5) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of a query raised by the investigating agency, the petitioner herein gave response to each and every question that has been asked for. Prosecution complaint was also filed on 01.05.2023. The petitioner was arrested on 04.03.2023 and since then he is in judicial custody. Time and again, petitioner is continuously attending before the investigating agency and co-operating with the investigation. This Court is of the opinion that it is not necessary to detain the petitioner in jail further. In view of the aforesaid facts and circumstances, this Court feels that request of the petitioner for grant of bail can be considered, however, on certain conditions. The petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs. 50,000/- with two sureties each for the like sum to the satisfaction of the I Additional Sessions Judge-cum- Metropolitan Sessions Judge, Visakhapatnam - petition allowed. - CRIMINAL PETITION NO. 2904 OF 2023 - - - Dated:- 12-5-2023 - HON BLE SRI JUSTICE K. SREENIVASA REDDY For the Petitioner : A. Vijaybhaskar Reddy For the Respondent : Josyula Bhaskara Rao (SC For ED) ORDER : This Criminal Petition, under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, collected documents/information from agencies, banks, entities, etc. and analyzed bank accounts, and it revealed many discrepancies including diversion of APSSDC funds through various shell companies; the vendors from whom purchases were shown to have been made were pre-decided in advance; major portion of funds were transferred to Skillar Enterprise India Private Limited (SEPL) which was incorporated post tri party agreement signed among M/s. DTSPL, SISW and APSSDC for implementation of SIEMENS project; major portion of the funds received from the government in the account of Execution Partner M/s. DTSPL was diverted to this newly opened entity SEPL, which has no past experience to execute the scope of work, and SEPL was used for diversion of Government funds which was meant for SIEMENS project. It has been further revealed that major portion of funds were diverted by SEPL to suspicious entities under the guise of supply of software/hardware/materials/ services, which, in reality, was not done. The purpose of diversion of funds was to generate cash and thereby siphon off money from the system without utilizing the same for the SIEMENS project for which the Government sancti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of DSIPL and Mukul Agarwal was its CFO/Director (Admn. Finance), and he is their Tax Consultant. Petitioner is close friend of Mukul Agarwal and through him, the petitioner associated with DSIPL for tax compliance. Petitioner was approached by Mukul Agarwal for arrangement of cash in lieu of the diverted Government funds released for SIEMENS project, and on the instructions of petitioner, arrangement of cash in lieu of transfer of funds to shell companies was done. Petitioner arranged bogus entries with the help of entry providers to divert the government funds which were transferred from DTSPL to SEPL and further to ACI and other entitles. Petitioner floated several companies without any actual business activities where the petitioner and his wife Smt.Anju Goyal are Directors/ share holders, and that she is one of the Directors and shareholders in M/s. SM Professional Services Private Limited (SMPS), which received funds from DTSPL, SEPL and ETA Greens Buildtech Private Limited, the original of which can be traced to the funds received from APSSDC. The purpose of transfer of funds could not be explained by the petitioner. 4. Learned senior counsel Sri Vinod Kumar Deshpande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Solicitor General of India, appearing on behalf of the respondent, relied heavily upon Section 45 of the PMLA. He contended that there is an embargo imposed under Section 45 (1) of the PMLA for grant of bail, and these limitations are in addition to those imposed under the CrPC and have an over-riding effect over the provisions of the Code in case there occurred any inconsistency between the provisions of the two in view of the provisions of Section 65 of the PMLA. The learned DSG submitted that investigation conducted so far revealed many discrepancies including diversion of APSSDC funds through various shell companies, and the vendors from whom purchases were shown to have been made were pre-decided in advance, and major portion of funds were transferred to SEPL which was incorporated post tri party agreement signed among M/s. DTSPL, SISW and APSSDC, and that major portion of funds received from the Government were diverted to newly opened entity SEPL which has no past experience to execute the scope of work in the subject project. The learned D.S.G. further submitted that during the course of investigation, certain entrepreneurs were examined under Section 50 of the PMLA an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the PMLA. Documents collected from APSSDC and the Forensic Auditor, who provided copy of show cause notice issued by the office of the Director General of GST Intelligence, Pune (DGGI), along with forensic audit report reports, were examined under the purview of PMLA. It is alleged that there are many discrepancies including diversion of APSSDC funds through various shell companies. It is alleged that major portion of funds were transferred to SEPL, which was incorporated post tri party agreement signed among M/s. DTSPL, SISW and APSSDC for implementation of SIEMENS project, and major portion of the funds received from the Government in the account of Execution Partner M/s. DTSPL, was diverted to the newly opened entity SEPL, which does not have any past experience to execute the subject work. During investigation, it has been revealed about diversion of major funds to suspicious entities done by SEPL under the pretext of supply of software/ hardware/materials/services. It is alleged that in reality, the supply of such goods and services was not done. On examination of data and analysis of bank account statements shows that about Rs.56.00 crores, out of the funds received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll exclude the time necessary for the journey from the place of arrest to the Special Court or Magistrate s Court. 10. Section 45 of the PMLA reads thus: 45. Offences to be cognizable and non-bailable. (1) 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 a opportunity to oppose the application for such release; and (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, or is accused either on his own or along with other coaccused of money-laundering a sum of less than one crore rupees 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner is a Chartered Accountant by profession. The allegation is that he was approached by A.3 for transfer of funds to shell companies. Though a case has been registered as against the petitioner in crime No. 29 of 2021 of C.I.D. p.s., A.P., Amarvathi, Mangalagiri, dated 09.12.2021, CBCID has not filed any charge sheet in the said crime till today in the predicate offence. It is pertinent to mention here that the petitioner was granted anticipatory bail in the predicate offence. The investigating agency has been investigating into the case for the last more than 14 months. But, it has not filed any charge sheet to that extent showing complicity of the petitioner herein. In respect of the investigation which has been carried on, in crime No.29 of 2021, till today, it has not come to light that any money has been flown to the account of the petitioner herein to show the complicity of the petitioner. Absolutely, no date or nothing has been averred as against the petitioner except stating that he was approached by A.3 for transfer of funds to shell companies. It is also borne out of the record that the petitioner remained present ever since investigation started, irrespecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid companies and the receipts on purchase of material relied upon by the petitioners has not been looked into by the agencies. A Sweeping accusation has been made to the extent that receipts of the purchase orders are vague and same have been fabricated. No amounts have been transferred to the account of the petitioner. 15. In Vijay Madanlal Choudhary others v. Union of India (1 supra), relied on by the learned senior counsel appearing for the petitioner, it is held thus: (paragraphs 345, 346, 400, 401 and 406). 345. Be it noted that the legal presumption under Section 24(a) of the 2002 Act, would apply when the person is charged with the offence of money-laundering and his direct or indirect involvement in any process or activity connected with the proceeds of crime, is established. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of money-laundering to rebut the legal presumption that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and an order granting bail much before commencement of trial. Similarly, the Court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in futuro must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. 45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctly, attempts 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. The fact that the proceeds of crime have been generated as a result of criminal activity relating to a scheduled offence, which incidentally happens to be a non-cognizable offence, would make no difference. The person is not prosecuted for the scheduled offence by invoking provisions of the 2002 Act, but only when he has derived or obtained property as a result of criminal activity relating to or in relation to a scheduled offence and then indulges in process or activity connected with such proceeds of crime. Suffice it to observe that the argument under consideration is completely misplaced and needs to be rejected. In P. Chidambaram v. Directorate of Enforcement (2 supra), relied on by the learned senior counsel appearing for the petitioner, it is held thus: (paragraph 23). 23. Thus, from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance of one M. Srinivas Reddy, Managing Director, Farmax and also a sequel to the order passed by SEBI in the year 2020; (ii) that no final report has been filed in the FIR for the predicate offence, for the past nine years; (iii) that even M. Srinivas Reddy, the defacto complainant in the FIR for the predicate offence, was sought to be arrested as an accused in connection with the ECIR, but the application of the Enforcement Directorate for remand was rejected; (iv) that the appellant is a Chartered Accountant by profession and has been in jail from 26.09.2022; and (v) that the relevant portion of paragraph 8 of the prosecution complaint filed by the Enforcement Directorate, which we have extracted in the preceding paragraph, gives room for a valid argument that the second condition found in Clause (ii) of sub-section (1) of Section 45 of PMLA is satisfied qua the appellant. 16. In the aforesaid identical case in Sanjay Raghunath Agarwal s case (3 supra), lodging of the prosecution complaint is sequel to the registration of the FIR in the predicate offence way back in the year 2021. In the present case on hand also, no charge sheet has been fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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