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TMI Blog2022 (3) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... Coastal Energen Private Limited (hereinafter referred as "CEPL"), Chennai. He has established a power plant under the name and style M/s.Mutiara Thermal Power Plant, Tuticorin with 1200 MW capacity based on conversion of coal into thermal energy. The energy generated from the plant is sold to TANGEDCO. For operation of the power plant, the entity (CEPL) imports coal from overseas especially from South East Asian countries like Indonesia etc. During the period 2011-2015, (CEPL) imported coal from Indonesia under several consignments. The said goods were duly assessed by respective customs authorities and cleared for home consumption after due examination/scrutiny of import documents including test certificate, certificate of origin, invoice, contracts etc. 4. While so, the Directorate of Revenue Intelligence, Mumbai Zonal Unit, commenced investigations into the imports of coal with artificial inflation of values by certain Indian traders and actual users. It was suspected that the traders supply such coal to public sector coal based thermal generation companies at artificially inflated import price and the inflated price is remitted from India to the intermediary firms abroad which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and the allegationagainst him is that, he and other named persons appear to be in possession of an amount of Rs.487 crores being suspected proceeds of crime requiring investigation for alleged offences under Section 3 of PMLA, 2002 punishable under Section 4 of the said Act. 10. The petitioner was summoned by the respondent on 23.10.2019, 24.10.2019, 25.10.2019, 07.11.2019, 06.1.2020, 10.2.2020 and 11.2.2020. The statements of the petitioners were recorded in terms of Section 50 of PMLA, 2002. Further, the petitioner has also produced the documents which have been sought for by the investigation at the time of recording of the statement. 11. After initiating investigations and identifying the alleged proceeds of crime as also the properties said to have been acquired from the alleged proceeds of crime they passed a provisional attachment order No.01/2020 in F.No.ECIR/CEZO/I/01/2018 dated 28.2.2020 and under the provisional attachment order for the alleged possession of proceeds of crime as movable and immovable properties to the extent of Rs.557.25 crores properties quantified at Rs.6,730.68 crores being the plant, machinery, buildings, land of the power plant at Mutiara Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t his arrival to the respondent. Due to further necessity to travel abroad especially to Singapore, Malaysia and UK moved the petitioner filed a writ petition bearing No. W.P.No.7302 of 2021 before this Hon'ble High Court seeking permission to travel abroad and for lifting LOC from 24.3.2021 till 30.6.2021. On the strength of the earlier orders passed by this Hon'ble High Court, is writ petition was disposed of by suspending the LOC till 30.6.2021 on certain conditions which were also complied. 15. However, due to the raging pandemic in the second wave and closure of international borders. On petition extension of time of suspension of LOC till 30.9.2021 was ordered. The respondent had no serious objections and same was recorded in the order. The petitioner having returned to India, filed further writ petition in W.P.No.27972 of 2021 to lift the LOC from 7.2.2022 till 7.9.2022 to travel abroad. The High Court disposed of the writ petition with a direction that the petitioner would be entitled to travel abroad between the period 20.01.2022 till 07.09.2022 subject to certain conditions. One of the conditions imposed in the said writ petition was that he should appear before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to keep the petitioner in judicial custody. The respondent has filed counter opposing grant of bail in which it is stated that based on the case registered by Central Bureau of Investigation (CBI), New Delhi against the petitioner as promoter of the Indian Company M/s.Coastal Energyen Private Limited (CEPL) and others investigation under the provisions of Prevention of Money Laundering Act, 2002 was taken up by the respondent. An Enforcement Case Information Report No.ECIR/CEZO-I/01/2018 dated 31.01.2018 was registered and so far, from the investigation conducted under PMLA 2002, it is revealed that there was an overvaluation of consignments of coal supplied to PSUs imported from Indonesia to India by CNO Group entities. The CNO Group entities comprise the Indian Company CEPL, viz., Coastal Energy Private Limited, Chennai which is engaged in trade of imported coal, Coastal Energen Private Limited, Chennai which is having a Coal Fired Power Plant in the name of Mutiara Thermal Power Plant, Coal & Oil Group Company DMCC, Dubai (CNO DMCC) and Coal & Oil Group Company LLC, Dubai (CNO LLC). All these companies are controlled and run by its promoter, shareholder/owner Mr.Ahmed A.R. Buhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AE through Precious Energy Holdings Ltd, BVI and Mutiara Energy Holdings Ltd, Mauritius to invest in Coastal Energen, India. The petitioner is the beneficial owner of Precious Energy Holdings Ltd, BVI and Mutiara Energy Holdings Ltd, Mauritius. The Proceeds of Crime to the extent of Rs.557.25 Crores in the possession of M/s.Coastal Energen Pvt. Ltd has been provisionally attached vide PAO No.01/2020 in OC No.1286 of 2020 pending before the Hon'ble Adjudicating Authority (PMLA) New Delhi. 26. As far as the cause for the arrest on 03.03.2022, the respondent has stated that the Petitioner/Accused vide letter dated 01.02.2022 intimated his intent to go out of India next week implying after 07.02.2022. As his examination was required to move further in the investigation he was summoned vide summon dated 03.02.2022 for his appearance on 04.02.2022. However, he informed vide his letter and email dated 04.02.2022 that he would not be in a position to appear in view of short duration of time and his prior engagement. However, he chose not to appear even on the adjourned date for appearance i.e. 05.02.2022 Instead of appearing in compliance of summons under Section 50 of PMLA, 2002 peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the proceeds of crime projecting it as untainted money or claiming as untainted money. In the absence of such finding prosecution under PMLA is without base. b). The import of coal from Indonesia through Dubai and the allegation of over valuation first came under scanner of DRI. A show cause notice dated 14/02/2017 under the provisions of Customs Act, 1962 in F.No.DRI/MZU/F/Int.160/2014 was issued and it was proposed to re-determine the import value of the coal in terms of section 14 of the Customs Act, to confiscate the coal in terms of Section 112 (iii) of the Customs Act and to impose penalty in terms of Section 112(a) and (b) r/w 112 (iii) of the said Act. After reply to this show cause notice, DRI has not proceeded with the adjudication and it is still pending. After DRI thought fit not to proceed further, CBI registered FIR in R.C.221/2018/E0003 on 22/01/2018 under Sections 120B r/w 420 I.P.C and Sections 13(2) r/w Section 13(1)(d) of Prevention of Corruption Act 1988. In this case also the petitioner appeared before CBI and gave all the documents sought during investigation by CBI. Till date CBI has not filed final report. While so, when the First Information Report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said amendment to PMLA, is under challenge before the Supreme Court and same is pending. Therefore, for grant of bail the rigor of Section 45 as amended need not be applied only the triple test laid in section 437 of Cr.P.C to be applied. 29. In this contest, the Learned Senior Counsel for the petitioner also read out Section 19 of PMLA 2002, which confers power to arrest and Section 45 which speaks about granting bail to the person arrested and submitted that, for arrest under PMLA, the person authorised to arrest must prima facie satisfy himself that the accused is guilty of offence under PMLA. Whereas to grant bail, the Court must satisfy itself that the accused is not guilty of offence under PMLA. When the predicate offence itself not made out and no final report filed so far, the prima facie satisfaction of guilt to arrest does not arise. Unlike, Section 41 of Cr.P.C., "when police may arrest without warrant", the threshold to arrest under PMLA 2002, is high and in this case, the respondent has failed to ensure the mandate laid in Section 19 of the PMLA 2002. 30. Per contra, the Learned Additional Solicitor General Mr.R.Sankarnarayanan for the respondent submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding, application of Section 45 (1) of the PMLA, 2002 for considering the bail petition, the Learned Additional Solicitor General submitted that, when a similar plea was raised before the Hon'ble Division Bench of this Court in N.Umashankar & others -vs- The Assistant Director, Directorate of Enforcement, Government of India, Chennai reported in MANU/TN/0007/2022, questioning the constitutional validity of post amended Section 45 of PMLA, Division Bench of this Court has held that, as long as Section 45 of PML Act as amended is not struck down by the Constitutional Court, legislation duly passed by the Parliament is presumed to be valid and in force. Therefore, judicial propriety and discipline warrants the Bench of lesser strength to follow the dictum laid by the larger Bench of the same High Court. Any judgment of other Hon'ble High Courts contrary to the Division of Bench judgment of this Court may not have even persuasive value and certainly not binding. 34. Heard the arguments of the Learned Senior Counsels representing the petitioner and the respondent. 35. As far as the case in hand is concern, this Court is now called upon to decide whether the arrest of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon the persons involved in the scheduled offence to ensure whether there is any act of money-laundering involved. For the said purpose, the summons under Section 50 (2) and (3) of the PMLA has been issued. In such circumstances, the petitioners are expected to produce documents sought by the authorities and satisfy them that they are not involved in any act of moneylaundering. Instead, under false pretext that the properties are likely to be provisionally attached before filing of final report in the predicate offence, the writ petitions are filed." 37. The above logic squarely applies to the facts of the case in hand and this answers the first limb of the petitioners submission. 38. This Court has no second view on the Principle of Law on precedent, as put forth by the Learned Additional Solicitor General, Section 45(1) of PMLA as it stands today after amendment ought to be applied when bail petition is considered in case of offences involving "Proceeds of Crime" above Rs.1 crore. This section which impose additional condition for grant of bail apart from the condition contain in the Code of Criminal Procedure or any other law in force. 39. Adverting to the other limb of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money to his offshore entities in UAE, British Virgin Islands (BVI) and Mauritius. The proceeds of crime so laundered was brought back to India as equity investment in one of his entity viz., M/s.Coastal Energen Pvt Ltd. 42. During the investigation, the respondent/complainant has asked the petitioner to furnish bank account statements of the offshore Companies involved in this transaction, original invoices raised by the Indonesian Coal Miners to his Dubai based entities, Books of Accounts of his foreign entities located in Mauritius and British Virgin Islands (BVI). The petitioner reluctant to part away those crucial documents and had given evasive reply. Having refused and reluctant to handover these documents which are essential to ascertain whether the money laundered the manner in which the investigation so far reveals, mere physical presence at Respondent Office will not tantamount to cooperation to investigation. Further, having declared to maintain silence, the investigating agency needs time to collect the documents required, by other means as the petitioner himself have put it in his petition, (i.e.,) Letter of Request (LOR) under Section 57 of PMLA, 2002 or Section 166 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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