9911796707
TMI Blog2023 (6) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... 1860 ('IPC' for short). The FIR was registered on the complaint of one Mr. Vinod Rajagopalan in his capacity as the Authorised Signatory of M/s. Malav Holdings Private Limited ('MHL' for short), alleging that the accused persons had siphoned-off an amount of Rs. 18.88 crores from one M/s. Ligare Aviation Limited ('Ligare Aviation' for short) in 2014-15 on the basis of fake/fictitious invoices. 3. The complainant company is stated to be aggrieved since it is an indirect shareholder in Ligare Aviation, in that the complainant company statedly holds 50% shares in RHC Holding Pvt. Ltd., which in turn holds a 30% stake in Ligare Aviation. Further, RHC Holding Pvt. Ltd. also holds 67.27% in RHC Finance Pvt. Ltd., which in turn holds the rest 70% in Ligare Aviation. 4. The petitioner, who is admittedly a resident of Dubai, arrived in India on 02.04.2022, when he was intimated by the immigration authorities about a look-out-circular issued against him. The petitioner was summonsed by the ED on 05.04.2022 to join investigation. He joined investigation on 07.04.2022. The petitioner was subsequently arrested by the investigating agency on 03.08.2022 from his residence in Mumbai. 5. The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phoenix International FZE ('Phoenix FZE' for short). 6.7. Shorn of unnecessary detail, based on its investigation, the ED has alleged the following against Phoenix FZC; and it is alleged in the prosecution complaint that since the petitioner exercised ultimate control over Phoenix FZC, he is implicated in the offending transactions that are subject matter of the complaint: "21.6 Phoenix International FZC: It is established that M/s Phoenix International FZC had assisted and conduit for laundering USD 1.3 million. It transferred USD 1.3 million to Eximius Business Middle East FZC which ultimately vested with Sanjay Godhwani and Sandeep Bhatt. It siphoned off money to the tune of Rs. 1.85 million USD which was derived out of the criminal activities relating to scheduled offence and assisted in projecting it as untainted on the strength of fictitious invoices knowingly fully well that they neither had the capability nor did they supply such product/services. Therefore, M/s Phoenix International is involved in assisting and utilization of proceeds of crime generated out of criminal activity and its projection as untainted property, thereby has committed the offence of money launde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FZC Account no. 1102565580901 Bank name - Emirates NBD Bank PJSC, United Arab Emirates Phoenix International FZC Account no. 019100017356, Mashreq Bank, Dubai, UAE 13.01.2015 USD 299,995 Eximius Business Aviation Pvt Ltd Account no. 16652560000463, HDFC Bank, India Phoenix International FZC Account no. 019100017356, Mashreq Bank, Dubai, UAE 11.01.2015 USD 300,000 Phoenix International FZC Account no. 019100017356, Mashreq Bank, Dubai, UAE Eximius Business Middle East FZC AE520260001024956166102 Bank name - Emirates NBD Bank PJSC, Beniyas Street, Deira (SWIFT EBILAEAD) 14.01.2015 USD 500,000 19.01.2015 USD 500,000 Role Ascribed to the Petitioner 8. The role ascribed to the petitioner in the prosecution complaint is extracted below : "21.1. Ramesh Manglani: * Investigation so far has established that the accused Ramesh Manglani has complete control over Phoenix International FZC and was handling all the financial transactions and banking transactions as Power of Attorney. He was instrumental in executing the fraudulent transactions by way of fake and false invoices and submitting the same to banks. * Various transactions have taken place in the bank account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jure directors and shareholders, viz. Rajesh Bhatia, Kunal Desai and Sandeepkumar Vipinchandra Maniar, who (latter) are stated to have had prior connection with Sahil Mehta/Sovika Group. It is argued, that Sahil Mehta closely managed the affairs of Phoenix FZC. 12. It is further submitted that the petitioner's wife was appointed as the General Manager of Phoenix FZC at the time of establishing the company, since a 'resident' of the UAE is required for purposes of setting-up a company in that country. The petitioner was only appointed as the Authorised Signatory for managing the banking operations of Phoenix FZC as he was residing in the UAE. However, it is argued that the petitioner was never involved in the affairs of Phoenix FZC, other than executing banking transactions through its bank account on instructions of the persons mentioned above. 13. It is also submitted that the petitioner's wife was not the owner of the company - Phoenix FZC - at the time when the allegedly offending transactions took place, and she only became the owner on 17.02.2015, whereupon the company became Phoenix FZE. 14. It is further pointed-out that it is not the ED's case that the petitioner was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was not involved in issuing the same. 19. In this regard, attention is drawn to e-mail dated 01.12.2014, by which Sahil Mehta had asked one Iqlaque Khan to get M/s. Metal and Steel Solutions FZC to transfer USD 300,000.00 to one M/s. Tumas Group Finance Company Limited and USD 960,000.00 to Phoenix FZC on an urgent basis. Attention is further drawn to statements dated 15.06.2022, 16.06.2022 and 13.09.2022 made by Sunil Mangelal Aggarwal (who was a director of M/s. Metal and Steel Solutions FZC), wherein he has unequivocally confirmed that he transferred the sum of USD 960,000.00 to Phoenix FZC on instructions of Iqlaque Khan and against an invoice received from him; which was the invoice earlier received from Sahil Mehta. It is argued that this shows that the petitioner had no role to play in the issuance of that invoice. Moreover, it is submitted, that the said transaction was a local transaction within the UAE, as both the entities involved are based in Dubai. Also, it is contended that the transaction has no relevance to the amounts received by Phoenix FZC from Ligare Aviation, since it is between M/s. Metal and Steel Solutions and Phoenix FZC. 20. It is also pointed-out tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n instructions of the same persons viz. Sandeep Bhatt and Sanjay Godhwani. 26. Senior counsel submits that even before the questioned transactions were carried-out by the petitioner on instructions of other persons, ever since the institution of Phoenix FZC, from November 2013 till November 2014, regular instructions were issued to the petitioner inter-alia by the erstwhile directors and by Sahil Mehta to make transfers to various third parties on the basis of invoices shared by them. 27. Importantly, it is pointed-out that as per statements dated 04.08.2022 and 21.09.2022 made by Sahil Mehta, he has clearly stated that he had no knowledge as regards the real intentions and motives behind the incriminating transactions; and therefore, knowledge of the true nature of the transactions cannot possibly be imputed to the petitioner. 28. It is submitted that Sahil Mehta's statements dated 28.06.2022 and 27.06.2022 bear-out the fact that the co-accused persons did not even know who the petitioner was, since in those statements Sahil Mehta admits that the petitioner was never in contact with Ligare Aviation and all communications were always facilitated through him i.e. through Sahil Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit that the investigating agency cannot arbitrarily choose persons against whom it wishes to proceed. It is stated that such exercise of power amounts to the investigating agency arrogating to itself the court's powers under sections 306 and 307 CrPC. Attention has specifically been drawn to the following observations in this judgment : "49. It is also interesting to notice that the prosecution had proceeded against the officials in a pick-and-choose manner. We may notice the following statements made in the counter-affidavit which had not been denied or disputed to show that not only those accused who were in office for a very short time but also those who had retired long back before the file was moved for the purpose of obtaining clearance for payment of additional amount from the Government viz. M.N. Nadkarni who worked as Chief Engineer till 24-3-1987 and S.W. Mohogaonkar, Superintending Engineer who worked till 19-6-1989 have been made accused but, on the other hand, those who were one way or the other connected with the decision viz. Shri J.R. Malhotra and Mr R.D. Nanhoria have not been proceeded at all. We fail to understand on what basis such a discrimination was made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l James vs. Directorate of Enforcement 2022 SCC OnLine Del 731, Sajjan Kumar vs. Directorate of Enforcement 2022 SCC OnLine Del 1769 and Raj Singh Gehlot vs. Directorate of Enforcement 2022 SCC OnLine Del 643. 36. In particular, Mr. Hossain relies on Vijay Madanlal 2022 SCC OnLine SC 929 (para 263) (supra) to argue that the scope of section 3 of the PMLA is wide and far-reaching such that "... every process and activity in dealing with the proceeds of crime, directly or indirectly, and not limited to the happening of the final act of integration of tainted property in formal economy ..." would constitute the act of money laundering. It is thus submitted that there are reasonable grounds to believe that the petitioner is guilty of the offence under section 3 for the reasons stated hereunder. 37. It is argued that though Phoenix FZC was incorporated in the UAE with Rajesh Bhatia, Kunal Desai and Sandeepkumar Vipinchandra Maniar as its Directors and Shareholders, the petitioner was given the mandate to run banking operations of Phoenix FZC; and his wife, Darshana Manglani, was the General Manager of the company. It is submitted that thereby, the petitioner exercised ultimate control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. 43. It is the ED's submission that since the petitioner was given the mandate to manage the bank account of Phoenix FZC, he was involved in the day-to-day operations of the company, and was aware that money was being transferred to third parties (companies) for the benefit of co-accused Sanjay Godhwani and Sandeep Bhatt. 44. Furthermore, counsel argues that to test whether the accused was possessed of the requisite mens rea for commission of the offence under section 3 of the PMLA, the court may consider the following bundle of facts of the present case, which establish mens rea: 44.1. The petitioner is not an employee of Phoenix FZC. There exists no Board Resolution appointing him as an Authorized Signatory of Phoenix FZC or to authorize the payments made from, or received by him, into the bank account that company; 44.2. Since the inception of Phoenix FZC on 08.04.2013, Darshana Manglani has been the 'Person-in-Charge' of the company being its 'General Manager'; 44.3. The petitioner's close involvement with Phoenix FZC is evident from the fact that on 19.12.2014 he was made the power of attorney holder on behalf of the three directors to transfer shares in Phoeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. It is thus argued, that it is the prerogative of the investigating agency to file an additional complaint against any person who may not have been made an 'accused' in the 'complaint' previously filed. 47. The ED also seeks to draw attention to the petitioner's conduct, alleging that the petitioner has attempted to mislead and derail the investigation firstly, by not cooperating and making false medical excuses so as not to be available for investigation; secondly, by feigning ignorance as regards Phoenix FZC and its affairs; and thirdly, by asking his son to delete e-mails concerning transactions with Phoenix FZC from his e-mail ID [email protected] and forwarding the same to another e-mail ID [email protected]. It is submitted that this shows the petitioner's guilty mind and also that the petitioner is likely to tamper with the evidence if granted bail. Rejoinder Submissions on behalf of the Petitioner 48. In rejoinder to the submissions, the petitioner has offered the following responses : 48.1. As regards the allegation that the petitioner was taking instructions from Sahil Mehta who was an 'alien' to Phoenix FZC, the petitioner submits that this is factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which provision is reproduced below for ease of reference: 3. Offence of money-laundering.-Whosoever directly or indirectly 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 including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Explanation.-For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to why the applicant has been granted or denied the privilege of bail. "46. 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 broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby." (emphasis supplied) 51.2. Vijay Madanlal Choudhary and Ors. vs. Union of India and Ors. 2022 SCC OnLine SC 929 "388. ... Notably, there are several other legislations where such twin conditions have been provided for. Such twin conditions in the concerned provisions have been tested from time to ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a prima facie determination. That places the court's discretion within a very narrow margin. Given the mandate of the general law on bails (Sections 436, 437 and 439, CrPC) which classify offences based on their gravity, and instruct that certain serious crimes have to be dealt with differently while considering bail applications, the additional condition that the court should be satisfied that the accused (who is in law presumed to be innocent) is not guilty, has to be interpreted reasonably. Further the classification of offences under Special Acts (NDPS Act, etc.), which apply over and above the ordinary bail conditions required to be assessed by courts, require that the court records its satisfaction that the accused might not be guilty of the offence and that upon release, they are not likely to commit any offence. These two conditions have the effect of overshadowing other conditions. In cases where bail is sought, the court assesses the material on record such as the nature of the offence, likelihood of the accused co- operating with the investigation, not fleeing from justice : even in serious offences like murder, kidnapping, rape, etc. On the other hand, the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. According to the Union Home Ministry's response to Parliament, the National Crime Records Bureau had recorded that as on 31st December 2021, over 5,54,034 prisoners were lodged in jails against total capacity of 4,25,069 lakhs in the country. Of these 122,852 were convicts; the rest 4,27,165 were undertrials." (emphasis supplied) 52. Furthermore, in its recent decision in Ashish Mittal vs. Serious Fraud Investigation Office 2023 SCC OnLine Del 2484, in the context of section 212(6) of the Companies Act, 2013 which contains a provision in pari materia to section 45(1)(i) and (ii) of the PMLA, this court has held as under : "28. The above enunciation of the law clearly mandates that where additional conditions are stipulated in a statute for grant of bail relating to specified offences, it cannot be that the prosecution need only recite from its complaint, or simply say that it has material against the accused in respect of such offences. The prosecution must show how the material collected during investigation supports the allegations in the complaint, and most importantly, how the allegations apply against the accused. To reiterate, the opposition by the public prosec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate balance7 i.e. a clear distance between a judgment of acquittal or conviction and an order granting or denying bail; and v. That since the assessment at the stage of granting or denying bail would be tentative in nature, such assessment may not have any bearing on the merits of the case8; and the trial court would be free to decide the case on the basis of evidence adduced during trial, without in any manner being influenced by the decision of the court granting or denying bail. 54. Needless to add, that the twin-conditions under section 45 (1) of the PMLA are to be applied in addition to the usual and ordinary principles required to be considered for grant or denial of bail9. These may very briefly be summarised in the words of the Supreme Court in P. Chidambaram vs. CBI (2020) 13 SCC 337: "21. The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail: (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions, 03 were inward remittances, and there were 03 outward remittances to the same company. These transactions are summarised in a table appearing at page 84 of the prosecution complaint, as extracted hereinbefore. 55.5. As is seen from the table, the 03 inward remittances happened on 04.12.2014, 24.12.2014 and 13.01.2015. Since for an inward remittance, no action is required on the part of the beneficiary/recipient company, the petitioner had no role to play in such transactions, even though he was the Authorised Signatory for the bank account of the company at that time. It is noteworthy that at the stage the inward remittances were received into Phoenix FZC, the petitioner was neither director/shareholder nor did he have any financial interest in the affairs of the company. Same was the position at the time when outward remittances were made from the company. 55.6. It is seen from the record that the petitioner was not involved in issuance of the invoice against which the inward remittance of USD 599,995.00 was received by Phoenix FZC, since when shown invoice dated 22.12.2014, in his statement dated 28.07.2022 Sahil Mehta categorically states that "...it is a copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any without any genuine services having been provided by Eximius Business Middle Ease FZC to Phoenix FZC. On the other hand, the petitioner contends that he was neither a director, nor a shareholder, nor did he have any financial interest in the company; and as such he had no reason or business to enquire as to whether any services had been rendered by Eximius Business Middle Ease FZC to Phoenix FZC towards which money was being remitted to it by the company. In one instance however, when he was instructed to remit USD 300,000.00 out of Phoenix FZC, vide e-mail dated 09.01.2015 the petitioner did inquire from Sahil Mehta as to the reason for the remittance; to which enquiry however, he received no response. The petitioner made the transaction nevertheless. Yet again, this would indicate, at least prima- facie, that the petitioner had no financial interest in the transaction that he was performing on instructions of Sahil Mehta; and therefore, it was not his business to insist that he be told what the transaction was for. 55.12. The petitioner accepts that he received a small commission, on an ad-hoc basis, from Sahil Mehta or his father Sohan Mehta for the transactions he conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused in the prosecution complaint, though these aspects would not be dispositive of a bail plea one way or the other, they are also not wholly irrelevant and the 'doctrine of parity' is not immaterial10. As held by this court in Ashish Mittal (supra) considering the nature of the offence, where the gravamen of the offence is that several persons acting in concert have siphoned-off and 'laundered' monies, it is manifestly arbitrary for the ED to have made selective arrests and arraignments. It has also been brought to the notice of this court that Sanjay Godhwani, who may be viewed as one of the main accused in this case, has been granted bail by the learned trial court vide order dated 09.05.2023 in Bail Application No. 688/2023 "... on merits as well as on medical grounds...". This circumstance must also weigh in favour of the petitioner being granted bail, considering that his role in the allegedly offending transactions is evidently far more peripheral than that of co- accused, Sanjay Godhwani. 57. Lastly, insofar as the allegation of the ED as regards the petitioner's conduct is concerned, it would appear that the petitioner has been forthcoming with the investigating agency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India as per records; and shall inform the Investigating Officer in writing at least 07 days in advance if he proposes to change his place of ordinary residence; 60.5. The petitioner shall co-operate in any further investigation or proceedings by the Investigating Officer, as and when required; 60.6. In addition to the above conditions, it is specifically directed that the petitioner shall also not, whether directly or indirectly, contact or visit or have any transaction with any of the officials/employees of the banks, financial institutions, companies, entities etc., who are concerned with the prosecution complaint in this case, whether in India or abroad; 60.7. The Investigating Officer is further directed to issue a request to the Bureau of Immigration, Ministry of Home Affairs of the Government of India or other appropriate authority to forthwith open a 'Look-out-Circular' in the petitioner's name, to prevent the petitioner from leaving the country, without the permission of the learned trial court; 60.8. The petitioner shall not contact, nor visit, nor offer any inducement, threat or promise to any of the prosecution witnesses or other persons acquainted with the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
