TMI Blog2023 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... l companies under the guise of supply of software/ hardeware/materials/services - government funds were diverted by DTSPL, belonging to Vikas Khanvelkar, through SEPL and a web of shell companies, and in lieu of transfer of funds, cash was provided by entry operators who were managing the shell companies, and the said cash was moved from entry operators to Suresh Goyal. In the said diversion of government funds, the petitioner, Suman Bose and Vikas Khanvelkar played pivotal roles. Hence, the petitioner committed the offence of money laundering under Section 3 of the PMLA punishable under Section 4 of the PMLA. In the aforesaid identical case in SANJAY RAGHUNATH AGARWAL VERSUS THE DIRECTORATE OF ENFORCEMENT [ 2023 (4) TMI 874 - SUPREME COURT] , 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 filed in the predicate offence for the last more than 15 months. The petitioner herein has been in jail from 04.03.2023. It is the first offence insofar as the petitioner is concerned. There are no other complaints registered as against him. The said arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Industry Software India Private Limited (SISW), M/s. Design Tech Systems Private Limited (DTSPL) and others for allegedly swindling of money invested by the Government in a dubious manner. According to the said FIR, APSSDC entered into a Memorandum of Association (MoA) with SIEMENS (combination of SISW and DTSPL), to impart Hi-end technology training to the trainers of APSSDC, pursuant to which DTSPL had to provide training software development including various sub-modules designed for the high-end software for advanced manufacturing CAD/CAM, and the MoA does not contemplate any sub-contract. As a part of the SIEMENS project, 6 clusters at a cost of Rs. 546.84 crores (per cluster) were to be formed in which 90% of the total project cost i.e. Rs. 2951.00 crores was supposed to be borne by M/s. SISW and M/s. DTSPL, and the remaining 10% i.e. Rs. 330.00 crores was supposed to be borne by the Government. The total project cost for establishing 6 SIEMENS clusters amounts to Rs. 3281.40 crores. 3. Since Sections 120B, 418, 420, 471 IPC and Section 13 of the Prevention of Corruption Act, 1988 are scheduled offences under the Prevention of Money Laundering Act, 2002 (for short, PMLA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Funds transferred from PVSP/SEPL to ACI was with an intention to generate cash without genuine business, and whatever cash that had been generated in this chain was handed over either to Yogesh Gupta or the petitioner herein Mukul Agarwal (A. 3), who approached Suresh Goyal for generation of cash. SEPL diverted some funds to company of petitioner herein Mukul Agarwal (A. 3) viz. Knowledge Podium Systems Private Limited (KPSPL) and from there, the funds were diverted to personal account of the petitioner herein Mukul Agarwal (A. 3). The companies/entities which provided cash in lieu of receiving accommodated entries were identified. The allegation against the petitioner herein is that most of the funds were circulated among the entities either floated by the petitioner or the entities which are in some way connected to the petitioner, and as per the requirement of Suman Bose, the petitioner floated several entities, and though the petitioner was not associated with some of such entities, he was the one in control of these entities. For instance, SEPL was incorporated by the petitioner on the directions of Suman Bose, and one Saurau Garg was made Director of the said company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement under Section 50 of the PMLA, which is devoid of any corroboration/tangible evidence, and the investigation has been carried on, for more than 15 months, in addition to the investigation already been conducted by multiple other agencies in the said issue. He contended that in a predicate offence/FIR which has been registered by CBCID in crime No. 29 of 2021 of C.I.D. p.s., A.P., Amarvathi, Mangalagiri, the petitioner has been shown as A. 10, and by an Order dated 17.01.2022, in Criminal Petition No.7265 of 2022, this Court granted bail to the petitioner in the said crime, and the petitioner is co-operating with the investigating agency and there is absolutely no accusation as against the petitioner that he is interfering with the investigation or tampering with the prosecution evidence, and further the conditions imposed while granting the bail, have been modified. The learned senior counsel further contended that Section 45 of the PMLA contemplates grant of regular bail when the petitioner satisfies the twin conditions prescribed therein viz. one is that he is not guilty of any offence punishable under the PMLA and the other is that is he not likely to commit any other o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 50 of the PMLA and they admitted that they provided cash against the funds received in their bank accounts. Basing on the aforesaid contentions, the learned D.S.G. prayed to dismiss the bail application since investigation is still pending. 6. Heard and perused the record. 7. Based on a report lodged by the Chairman of APSSDC, a case in crime No. 29 of 2021 of C.I.D. p.s., A.P., Amarvathi, Mangalagiri was registered on 09.12.2021 against one Ghanta Subba Rao, the then Special Secretary to Government, Skill Development, Entrepreneurship and Innovation Department, M/s. SISW, M/s. DTSPL and others for allegedly swindling of money invested by the Government in a dubious manner. The case was registered for the offences punishable under Sections 166, 167, 418, 420, 465, 468, 471, 409, 201, 109 read with 120B IPC and 13 (2) read with 13 (1) (c) and (d) of the Prevention of Corruption Act, 1988. As per the report, APSSDC entered into an MoA with SIEMENS (combination of SISW and DTSPL), to impart Hi-end technology training to the trainers of APSSDC, pursuant to which DTSPL had to provide training software development including various sub-modules designed for the high-end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated several entities, and though the petitioner was not associated with some of such entities, he was the one in control of these entities. SEPL was incorporated by the petitioner on the directions of Suman Bose, and one Saurau Garg was made Director of the said company, however, cheque drawing powers were with the petitioner as he was the financial advisor and authorized signatory, and payments were made from SEPL to various entities after confirmation from DTSPL of receipt of goods. SEPL was never a supplier of goods or services and it was only a conduit created for the purpose of layering of funds originating from APSSDC with an intention to divert and siphon off money and the generation of proceeds of crime. The petitioner had knowledge that no goods or services were being provided by the shell companies to DTSPL. An amount of Rs. 241.00 crores was received by SEPL from DTSPL and a significant part of the said government funds were diverted through SEPL and complex web of shell companies under the guise of supply of software/ hardeware/materials/services. The petitioner, Sumon Bose and Suresh Goyal were known to each other and had earlier associated with Dassault Systems In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Special Court or Magistrate s Court. 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 yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable grounds for believing that the person accused is not guilty of such offence and the second condition is that he is not likely to commit any offence while on bail. With the aforesaid provisions, I now proceed to verify whether the accusations that have been made as against the petitioner herein would come within the purview of Section 45 of the PMLA. 12. The allegation is that most of the funds were circulated among the entities either floated by the petitioner or the entities which are in some way connected to the petitioner. 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 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. It is also borne out of the record that the petitioner remained present ever since investigation started, irrespective of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial 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. 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 proceeds of crime are not involved in money-laundering, by producing evidence which is within his personal knowledge. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cases as to why the applicant has been granted or denied the privilege of bail. 46. The duty of the court at this stage is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 de- facto 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 filed in the predicate offence for the last more than 15 months. The petitioner herein has been in jail from 04.03.2023. It is the first offence ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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