TMI Blog2022 (8) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature in introducing the criteria of reasonable grounds for believing that a person is guilty or not guilty of such an offence has to be construed with the attending facts and circumstances of a particular case. Since the bail is normally urged during the course of investigation, the Court has to come to a prima facie conclusion whether or not to grant bail on the basis of the material provided by the investigating agency - The twin conditions under section 45 are regulatory and not to deny bail to an accused. No specific conditions can be laid down to apply for grant of bail and each case has to be determined based on its peculiar facts. In the present case petitioner was taken into police custody for 8 days and the agency has yet to collect some more information and evidence, before finalizing and filing the complaint as evident from the counter. CBI, though investigated the alleged shell companies of petitioner has not arrayed petitioner as accused. Apparently the agency does not have material to file a complaint against accused at this juncture and it depends upon the other evidence and facts yet to be collected. Section 19(1) requires reasonable satisfaction/bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of materials or supply of materials. The petitioner and another person by name Mr.Varanasi Dileef provided these bogus entries to various companies under the guise of financial consultancy business and short term finance. The modus operandi adopted by the petitioner and another was providing LC s to various companies including RECC who in turn siphoned off public funds from bank. To provide such Letter of Credits, the petitioner was charging commission. In the case of RECC, the petitioner channeled the funds diverted from loan amount obtained from various banks by RECC and carried out multiple transactions and again paid such amounts to RECC as short term finances. Thereafter, RECC has diverted the said funds. According to the Enforcement Directorate, such modus operandi was adopted to ensure that accounts of RECC do not become irregular or turn into NPA. The Enforcement Directorate during the course of investigation recorded the statement of the petitioner under Section 50 of the Prevention of Money-Laundering Act, 2002 (for short the Act of 2002 ) wherein the petitioner stated that he had taken commission of Rs.1.00 lakh per Rs.1.00 Crore per day. The transactions couple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the companies, he charged his commission, for the said reason, it cannot be said that any offence is made out under Section 3 of the Act of 2002. The petitioner was given police custody for a period of 8 days and no further detention is warranted. 8. Learned counsel for the petitioner has referred to section 19(1) of the Act of 2002 which reads as follows: 19. Power to arrest. (1) If the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. 9. He further submits that as seen from the grounds of arrest, there is no mention by the Enforcement Directorate stating that petitioner is guilty . Thereby the arrest is in violation of Section 19(1) of the Act. In support of his contentions, he relied on the following judgments- i) Ranjitsing Brahmajeetsing Sharma v. State of Maharasht ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 41-A of Cr.P.C and any non compliance entitles the accused for grant of bail. 10. Learned counsel for the petitioner further relied upon the judgment in the case of Vijay Madanlal Choudhary v. Union of India Special Leave Petition (Criminal) No.4634 of 2014 referring to para 187(d), argued that since the Petitioner was not arrayed as an accused in the CBI case as such there cannot be any offence under section 3 of PMLA. 11. On the other hand, learned special Public Prosecutor submits that this Court in Criminal Petition No.9825 of 2021 batch held that Section 41-A of Cr.PC is not applicable to the proceedings under the Act of 2002, as Section 19 of the Act prescribes the procedure of arrest. By virtue of Section 65 of the Act of 2002, Cr.P.C provisions are applicable only if they are not inconsistent with the provisions of the Act of 2002. Since Section 19 prescribes the procedure for arrest Section 41-A of Cr.PC has to be excluded while affecting arrest under the Act of 2002. 12. He further submits that an offence under Section 3 of the Act of 2002 is stand alone offence and not dependent on any investigation done by any other agency with respect to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 (i) the Director; or (ii) any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government. 28 [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in 29 [***] sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g bail are that reasons should be recorded 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. 20. The intention of the legislature in introducing the criteria of reasonable grounds for believing that a person is guilty or not guilty of such an offence has to be construed with the attending facts and circumstances of a particular case. Since the bail is normally urged during the course of investigation, the Court has to come to a prima facie conclusion whether or not to grant bail on the basis of the material provided by the investigating agency. Reasonable grounds for belief cannot be under the realm of suspicion or may be . The evidence collected and available at the time of arrest should suggest high probability of culpability and need not be beyond reasonable doubt. The twin conditions under section 45 are regulatory and not to deny bail to an accused. No specific conditions can be laid down to apply for grant of bail and each case has to be determined based on its peculiar facts. 21. In the present case petitioner was taken into police custody for 8 days and the agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be any insistence of a bail application while considering the application under Section 88, 170, 204 and 209 of the Code. f) There needs to be a strict compliance of the mandate laid down in the judgment of this court in Siddharth (supra). g) The State and Central Governments will have to comply with the directions issued by this Court from time to time with respect to constitution of special courts. The High Court in consultation with the State Governments will have to undertake an exercise on the need for the special courts. The vacancies in the position of Presiding Officers of the special courts will have to be filled up expeditiously. h) The High Courts are directed to undertake the exercise of finding out the undertrial prisoners who are not able to comply with the bail conditions. After doing so, appropriate action will have to be taken in light of Section 440 of the Code, facilitating the release. i) While insisting upon sureties the mandate of Section 440 of the Code has to be kept in mind. j) An exercise will have to be done in a similar manner to comply with the mandate of Section 436A of the Code both at the district judiciary level an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directorate of Enforcement Criminal Appeal No.1831/2019 held that grant of bail has to be considered depending upon the alleged offence, the nature of accusation and the apprehension of the accused tampering with the witnesses and the consideration of bail would also be to securing presence of an accused during proceedings and that he would not flee from justice. 26. In Arnab Manoranjan Goswami vs The State Of Maharashtra in Criminal Appeal No. 742 of 2020 arising out of SLP (Crl) No. 5598 of 2020, the Hon ble Supreme Court held- 63. More than four decades ago, in a celebrated judgment in State of Rajasthan, Jaipur vs Balchand, Justice Krishna Iyer pithily reminded us that the basic rule of our criminal justice system is _bail, not jail. The High Courts and Courts in the district judiciary of India must enforce this principle in practice, and not forego that duty, leaving this Court to intervene at all times. 27. In view of the foregoing discussions the petitioner is entitled to be released on bail for (i) arrest of the petitioner is not in compliance of the condition under section 19(1) of having material in possession to summarily conclude guilt (ii) Though role of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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