TMI Blog2023 (11) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic offences. So far as facts of the present case are concerned, as transpiring from the supplementary complaint filed against the appellant, apart from the statements of witnesses recorded under Section 50 of the PML Act, there has been sufficient material collected in the form of documents which prima facie show as to how the appellant was knowingly a party and actually involved in the process and in the activities connected with the proceeds of crime, and how he was projecting/ claiming such proceeds of crime as untainted and how he was the beneficiary of the proceeds of crime acquired through the criminal activities relating to the scheduled offences. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail - Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2021, for the commission of the offence of money laundering as defined under Section 3 punishable under Section 4 of PML Act. 3. The broad facts and events as discernible from the record may be stated as under: (i) M/s. Shakti Bhog Foods Ltd. (SBFL) was engaged in manufacturing and selling food items under the brand name of Shakti Bhog . The company was managed through its Directors/Guarantors Sh. Kewal Krishan Kumar, Sh. Siddharth Kumar and Smt. Sunanda Kumar. The appellant is the nephew of Sh. Kewal Krishan Kumar, and was shown as one of the employees in SBFL. (ii) The consortium of banks led by the State Bank of India vide the Letter of Engagement dated 18.05.2018 engaged the services of a Forensic Auditor BDO India LLP for conducting the Forensic Audit of SBFL. (iii) The Forensic Auditor conducted audit review for the period 01.04.2013 to 31.03.2017 and submitted the report on 25.06.2019, disclosing several financial irregularities and discrepancies in the functioning of SBFL, and alleged that SBFL had failed to discharge its loan liability and caused loss to the consortium member banks to the tune of Rs.3269.42 crores. (iv) An FIR being NO. RC0742020E0014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Tarun Kumar was Vice President (Purchases) in Shakti Bhog Limited and was also a director in various Shakti Bhog Group companies. He was actively involved in the bank fraud committed by Shakti Bhog Foods Ltd. Tarun Kumar was directly involved in procuring fake invoices from shell companies operated by Devki Nandan Garg and Ashok Kumar Goel, Entry Operators. Investigation revealed that emails from and related to the shell entities supplying fake invoices to Shakti Bhog Foods Ltd. were also marked to Tarun Kumar. Further, Tarun Kumar used to transfer proceeds of crime to the shell companies for procuring fake invoices without any genuine business transactions and collected part thereof in cash from Vivek Prasad, Entry Operator. Besides, he used to verify the fake bills for LC settlement with the lending banks. He also was involved in the criminal conspiracy of stock manipulation and inflation of the financial results of Shakti Bhog Foods Ltd. Tarun Kumar also used the platform of group companies under his directorship and control for diversion, rotation and siphoning of the proceeds of crime. Further, he played active role in the export activities of Shakti Bhog Foods Ltd. an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es who have not been taken as accused. In this regard, learned Senior Counsel has relied upon the observations made in State of Madhya Pradesh vs. Sheetla Sahai and Others (2009) 8 SCC 617 . (vi) Taking the Court to the allegations made against the appellant, the learned Senior Counsel submitted that the allegations and the roles attributed to the appellant in the commission of the alleged offences are baseless. (vii) Lastly, Mr. Luthra submitted that the parameters of bail under Section 45 of the PML Act having been made out, and the custodial detention of the appellant being not necessary, the appellant should be released on bail. 6. The learned Additional Solicitor General, Mr. S.V. Raju for the respondent however, made the following submissions: (i) The appellant was the Vice President (Purchases) in Shakti Bhog Limited and was also a Director in various Shakti Bhog Group Companies and was actively involved in the bank fraud committed by the SBFL. (ii) The appellant along with other accused who were the Directors, promoters and shareholders were directly involved in diversion, rotation and siphoning of proceeds of crime. During the period 2007-08 to 2016-17, und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 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 concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. 9. Section 45 of the said Act being relevant for the purpose of the instant appeal is reproduced hereunder for ready reference: - 45. Offences to be cognizable and non-bailable. (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 an 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld therein as under: - 269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence except the proceeds of crime derived or obtained as a result of that crime. 270. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d until vesting thereof in the Central Government, such process initiated would be a standalone process. 11. As regards the twin conditions for the grant of bail contained in Section 45(1) of the said Act, it has been held in the said decision of Vijay Madanlal (supra) as under: - 412. As a result, we have no hesitation in observing that in whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering. 12. In Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India Through Manoj Kumar, Assistant Director, Eastern Region (2015) 16 SCC 1 , it was observed as under: - 30. The conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement (2018) 11 SCC 46 , a three Judge Bench has categorically observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering. Further, as held in Vijay Madanlal (supra), the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like concealment, possession, acquisition, use of proceeds of crime as much as projecting it as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies were granted bail on the ground of infirmity and medical grounds. The co-accused Raman Bhuraria, who was the internal auditor of SBFL has been granted bail by the High Court, however the said order of High Court has been challenged by the respondent before this Court by filing being SLP (Crl.) No. 9047 of 2023 and the same is pending under consideration. In the instant case, the High Court in the impugned order while repelling the said submission made on behalf of the appellant, had distinguished the case of Raman Bhuraria and had observed that unlike Raman Bhuraria who was an internal auditor of SBFL (for a brief period statutory auditor of SBFL), the applicant was the Vice President of Purchases and as a Vice President, he was responsible for the day-to-day operations of the company. It was also observed that the appellant s role was made out from the financials, where direct loan funds have been siphoned off to the sister concerns of SBFL, where the appellant was either a shareholder or director. In any case, the order granting bail to Raman Bhuraria being under consideration before the coordinate bench of this Court, it would not be appropriate for us to make any observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein that: - 419. Section 436A of the 1973 Code, is a wholesome beneficial provision, which is for effectuating the right of speedy trial guaranteed by Article 21 of the Constitution and which merely specifies the outer limits within which the trial is expected to be concluded, failing which, the accused ought not to be detained further. Indeed, Section 436A of the 1973 Code also contemplates that the relief under this provision cannot be granted mechanically. It is still within the discretion of the Court, unlike the default bail under Section 167 of the 1973 Code. Under Section 436A of the 1973 Code, however, the Court is required to consider the relief on case-to-case basis. As the proviso therein itself recognises that, in a given case, the detention can be continued by the Court even longer than one-half of the period, for which, reasons are to be recorded by it in writing and also by imposing such terms and conditions so as to ensure that after release, the accused makes himself/herself available for expeditious completion of the trial. 22. Lastly, it may be noted that as held in catena of decisions, the economic offences constitute a class apart and need to be vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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