TMI Blog2023 (8) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... f Money Laundering (Amendment) Bill, 2011 and the amendment incorporated in 2013 in Section 45(1) in respect of limitation in grant of bail to a person accused of schedule offences earlier falling under part B of the schedule but now existing in part A thereof, held the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the schedule existing prior to 2013 amendment. The constitutional validity of Section 45(1) of PMLA, 2002 was challenged before the Hon'ble Supreme Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [ 2017 (11) TMI 1336 - SUPREME COURT] . The Hon'ble Supreme Court after detailed discussion about the statutory history of Section 45 of PMLA and adverting to various judgments cited by the respective parties and considering the similar provisions under Section 37 of NDPS Act and Section 20(8) of the TADA has struck down the pre-trial bail provisions under Section 45 imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted by ED at the residence of applicant P.C. Singh and office of Board of Education, Church of North India, Jabalpur Diocese, wherein more than 1.65 crores of cash, foreign currency USD 18352, British Pound 1180, gold jewellery of 1934.300 grams, FDR of Rs. 2,02,95,190/- in the name of present applicant P.C. Singh and his family members were seized. 4. As per the prosecution, during the course of investigation under Prevention of Money Laundering Act, 232 Bank Accounts related to the Institutions/Trusts/Societies under the Diocese of Jabalpur and Bishop P.C. Singh and his family members were obtained from various banks. The scrutiny of the said bank accounts reveals that an amount of Rs. 7.15 crores was diverted/transferred from various educational institutions to the bank account of Jabalpur Diocese and associated institutions/societies and from the account of Jabalpur Diocese to the family members of present applicant in the guise of salary, honorarium, gift and other allowances. 5. The scrutiny further revealed that in the joint account of present applicant and his wife, an amount of Rs. 50 lakhs was received from one Jayant Agarwal during the period from 05.11.2019 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax violations but cannot be regarded as proceed of crime unless is constitutes an offence which is included in the schedule. Learned Senior Counsel further argued that applicant is not a public servant and therefore the provisions of Prevention of Corruption Act cannot be put into service, moreover, scheduled offences under Sections 120-B, 420 and 467 of I.P.C. are not made out, based on which the ED has assumed jurisdiction. It is next submitted that all the allegations made herein are part and parcel of earlier Crime No.80/2022 and with regard to predicate offences, in which the applicant has already been enlarged on bail. It is submitted that applicant has co-operated in the investigation. He is an old and infirm person suffering from various ailments and needs continuous medical attendance and treatment. 8. The learned Senior Counsel further contends that ED has not stated his custodial interrogation is necessary. This is a documentary case and the investigating agency has already collected documentary evidence such as bank statement, sale deeds and other correspondence and also recorded the statement of material witnesses, in such fact situation there is no possibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the application; (ii) satisfaction of the Court that the accused has not committed the offence of money laundering and there is no apprehension that he would do so in future. It is further pointed out that though the charge sheet has been filed in the present matter but investigation is going on with regard to 21 other FIRs recorded in over six states, wherein applicant is named as a co-accused. There is an apprehension that the applicant may influence and pressurize the witnesses and tamper with the evidence. It is stated that looking to the huge magnitude of transactions and the involvement of various beneficiaries/persons with the applicant, steps are being taken by the ED to complete the investigation at the earliest. 11. Heard the learned counsel for the respective parties and perused the record. 12. Prevention of Money Laundering Act provides for a two pronged approach, one dealing with the proceed of crime and the other dealing with the persons guilty of the offence of money laundering. 13. The Supreme Court in the case of Rana Ayyub Vs. Directorate Of Enforcement (2023) 4 SCC 357 has observed thus :- 19. The word money-laundering is defined in Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y utilizing for creating various FDRs. iii) Applicant has earned illegal gratification in cash and laundered the same cash amount to the tune of Rs 3.75 Crore by depositing in 14 bank accounts for the repayment of loan. iv) Applicant was found involved in fraudulent renting out/sale of properties cat Pachmarhi and Ujjain in connivance with the Property Registrar, late M Singh and Prem Masih, Ex Managing Director of UCNITA at the prices much lesser than the market rate and deliberately caused loss to the Diocese/UCNITA and wrongful gain to themselves. The said illegal proceeds were revealed during investigation by EOW, Bhopal and ED,Bhopal Zonal Office. v) Applicant had deliberately hidden some expenses made during the check period, detailed in the complaint etc. 15. In the present case, as per the respondent/ED, the applicant is found to be an accessory to money-laundering and unless the twin conditions prescribed under Section 45(1) of PMLA is fulfilled, applicant is not entitled to bail. 16. Section 45 of the PMLA Act, 2022 provides that :- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands today, are not applicable qua a person accused of such offences which were earlier listed in part B. 37. We, therefore, in light of the Statement of Objects and Reasons as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011 and the above discussion and findings, have no hesitation in holding that the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the schedule existing prior to 2013 amendment. In other words, the limitations in grant of bail under Section 45(1) of PMLA are not applicable to those persons who are arrested under PMLA on accusation of commission of such scheduled offences which were earlier listed under part B of the Schedule. 18. This matter went to Supreme Court by a certificate of fitness granted by the High Court, the Supreme Court vide order dated 12.08.2016 reported in 2016 SCC OnLine SC 1971 opined that impugned judgment of High Court is correct and dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt A of the Schedule, a person prosecuted for these offences would be able to obtain bail under Section 439 of the Code of Criminal Procedure, without any further conditions attached. On the other hand, if a person is charged with extortion under Sections 386 or 388, (such sections being included in Part A of the Schedule) and Section 4 of the 2002 Act, the person prosecuted under these sections would only be able to obtain bail after meeting the stringent conditions specified in Section 45. This is yet another circumstance which makes the application of Section 45 to the offence of money laundering and the predicate offence manifestly arbitrary. 39. When we come to paragraph 2 of Part A of the Schedule, this becomes even more apparent. Sections 19, 24, 27A and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 are all sections which deal with narcotic drugs and psychotropic substances where a person is found with, what is defined as, commercial quantity of such substances. In each of these cases, under Section 37 of the NDPS Act, a person prosecuted for these offences has to meet the same twin conditions which are contained in Section 45 of the 2002 Act. Inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Siddharam Satlingappa Mhetre v. State of Maharashtra, (2011) 1 SCC 694 (See paragraphs 109, 112 and 117). Thus, anticipatory bail may be granted to a person who is prosecuted for the offence of money laundering together with an offence under Part A of the Schedule, which may last throughout the trial. Obviously for grant of such bail, Section 45 does not need to be satisfied, as only a person arrested under Section 19 of the Act can only be released on bail after satisfying the conditions of Section 45. But insofar as pre-arrest bail is concerned, Section 45 does not apply on its own terms. This, again, would lead to an extremely anomalous situation. If prearrest bail is granted to Mr. X, which enures throughout the trial, for an offence under Part A of the Schedule and Section 4 of the 2002 Act, such person will be out on bail without his having satisfied the twin conditions of Section 45. However, if in an identical situation, Mr. Y is prosecuted for the same offences, but happens to be arrested, and then applies for bail, the twin conditions of Section 45 will have first to be met. This again leads to an extremely anomalous situation showing that Section 45 leads to manifestly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and investigation under the PML Act are different and distinct, but in the present case also the charge sheet had been filed. In the case of Aditya Tripathi (supra) relied upon by ED, the charge sheet was only filed. In the case of predicate offence and investigation with regard to PMLA is going on. However, in the instant case, in predicate offence as well as in PMLA, investigation is over and charge sheet has been filed in both the cases. The applicant/accused has not evaded the investigation, custody of applicant is also not needed by the respondent/ED looking to his co-operation during the investigation. The applicant is divested of all his powers and does not hold any post now, he has remained under custody for more than four months. As evident from the charge sheet, the investigating agency has already collected all the documentary evidence and recorded the statement of material witnesses, under such circumstances there is no possibility of tampering with the evidence or influencing the witnesses. The only apprehension of ED is with regard to co-operation in the pending FIR registered in various states, wherein he is named as a co-accused, for that stringent conditions m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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