TMI Blog2023 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... be proved against an accused. In Satender Kumar Antil v. Central Bureau of Investigation [ 2022 (8) TMI 152 - SUPREME COURT] , the Honourable Supreme Court held that arrest is not mandatory in every case. Before arrest is made, curtailing the personal liberty on the basis of the relevant facts should be considered. All the transactions are of the year 2011 and it appears that all the transactions are to the knowledge of the Investigating Agency. The transactions are borne by record and the evidence is circumstantial in nature. Complicity or otherwise of the petitioners can be inferred from the transactions during trial, which is unlikely in the near future. Detention cannot be by way of punishment at the stage of investigation. The apprehension of the learned Assistant Solicitor General that the petitioners are at flight risk can be dealt with by imposing conditions. This Court deems it appropriate to grant the relief of Regular Bail to the petitioners-A1 A3 subject to the fulfilment of conditions imposed - petition allowed. - HON BLE SRI JUSTICE K. SURENDER K. SURENDER, J For the Petitioner in Crl. P. No. 11332/2023: Ms. Lakshmi Aiswarya For the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled on 28.01.2016 under Section 12-A(a) to (c) r/w.24 of Securities Exchange Board of India Act, 1992 (Act 15 of 1992) (herein after referred to as SEBI Act ) against TSL company. 7. On the basis of the said complaint, Enforcement Directorate registered the ECIR for committing irregularities in respect of IPO. Since the TSL raised 82.50 crores through IPO by adopting fraudulent methods, the said amount was considered as proceeds of crime. 8. Pursuant to the ECIR registered by the Enforcement Directorate, the premises of A2 was searched on 22.09.2023 and various incriminating documents were found. In the statement of A2, the role of these petitioners was informed. The petitioners had inflated the market value and raised IPO by misleading the facts. Initially funds of Rs. 34.50 crores were arranged as Inter Corporate Deposits (for short ICD ) and the Initial Public Offer (IPO) proceeds to the extent of 53.50 crores received, was also siphoned off. 9. The officials of the Enforcement Directorate conducted search in the premises of these petitioners. Statements were recorded under Section 50 clause 2 3 of the PMLA Act, 2002, on 10.10.2023 and 11.10.2023. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egally taken into custody and served noticed under Section 50 of the PMLA Act, 2002. If the authorities have identified the petitioners as witnesses, summons should have been served. However, the Enforcement Directorate officials served summons under Section 50 of the PMLA Act, took him into custody and arrested him on 11.10.2023. The Special Court while ordering remand of the accused has not applied its mind which is evident from the docket order passed on 12/13.10.2023. 15. In the docket order dt. 12/13.10.2023 passed by the Special Court, it is stated that; Thus, A1, A2 and A3 were involved in the generation of proceeds of crime by commission of scheduled offence under Section 12A read with 24 of SEBI Act. Further, A1 and A2 were actually involved in the various processes and activities connected with the said proceeds of crime including its possession and acquisition in entities under their control, use of POC in the business activities of TSL and other entities, and projection of POC as untainted in the guise of proceeds from genuine business transactions. A3 also knowingly assisted A1 and A2 in the transfer of POC to entities within India and abroad. A3 also possessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reddy, learned Counsel appearing for petitioner (A3) in Crl. P. No. 11515 of 2023 would submit that the alleged offence was in October, 2011. Inquiry was conducted by SEBI and complaint was filed. However, the petitioner is not named in the said complaint. The only evidence connecting the petitioner is one E-Mail which was allegedly found during the course of investigation. The said E-Mail was in the month of March, 2011. If a person has to be prosecuted under PML Act, 2002 he should have dealt with criminal proceeds. Even according to the Enforcement Directorate, the transactions of petitioner pertaining to March, 2011, whereas the alleged IPO was in the month of October, 2011 which is six months after the alleged communication (E-Mail). Even assuming that this petitioner had asked for 2% as commission during the course of business, it does not amount to any criminal offence since an agent for his services can always raise bills for rendering his services. It is legitimate that 2% can be collected as his fee. 20. Learned counsel further submitted that no notice was given to the petitioner-A3 under Section 50 of PML Act. However, he was arrested. The documents shown to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection and there was no business dealings that were done with any of the entities to which the moneys transferred. 24. Learned Assistant Solicitor General submitted that the Honourable Supreme Court in Vijay Madanlal Choudhary and others v. Union of India and others 2022 SCC OnLine SC 929 held that the rigors of Section 45 of the PML Act are not arbitrary or unreasonable. The economic offences constitute a class apart and have to be approached differently. The Honourable Supreme Court in Y.S. Jaganmohan Reddy s case and P. Chidambaram s case further held that economic offences have deep rooted conspiracies involving huge loss of public funds and need to be viewed seriously and considered as grave offences affecting the economy and the country. 25. Learned Assistant Solicitor General further submits that Accused No. 2 had floated 8 to 9 companies in the USA. When A2 was searched, incriminating material against A1 and A3 came to light. The said material seized, formed basis to make out the case against A1 and A3. In fact there was a tripartite agreement in between A1 to A3 and the monies were received by the company of A1. Further, there is no illegality committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transactions of rotating the money and generation of alleged crime proceeds are already mentioned and argued. The documents which cannot be supplied to the accused, the accused will not have an opportunity to explain or defend himself. Since there is no direction for production of any documents touching upon any factual aspects of the case or investigation, I deem it appropriate not to open the cover and return it to the Investigating Officer. 29. The events that transpired culminating in the arrest of the petitioners are that, on 10.10.2023, three officers of the Enforcement Directorate go to the residence of A1 around 7.30 a.m. and start search at around 9.30 a.m. The search continued till early hours of 11.10.2023 and at 4.20 a.m., the Officers informed the petitioner-A1 that he has to travel to Hyderabad. Flight tickets were arranged for A1, his brother and also the Officers at 4.20 a.m. At 5.00 a.m. summons dated 10.10.2023 was handed over on 11.10.2023. A1 was taken by the Officers to Hyderabad and was interrogated till late night of 11.10.2023. At 6.30 p.m. on 12.10.2023 A1 and A3 were produced before the Special Court and remanded to judicial custody. Both the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and his statements were recorded on three days in September. 32. The Enforcement Directorate officials having information about the petitioners went to Mumbai. From 7.30 a.m. on 10.10.2023 till they were produced before the Special Judge, the ED officials were with the petitioners all through in the house, while travelling from Mumbai to Hyderabad and taken to the ED office. 33. To effect arrest, it is not mandatory that a statement under Section 50 should be recorded. Section 50 of the PML Act, 2002 authorizes the officials to inspect, enforce attendance of person, compel production of records, receive evidence on affidavits and do all such other acts during investigation. Any person mentioned in Section 50 clause 2 of PML Act, 2002 would include an accused. 34. A reading of Section 50 of the PML Act, 2002 would clearly indicate that the purpose of Section 50 of PML Act, 2002 is to gather evidence in the process of investigation. Under Section 50(2) and (3) the person summoned has an opportunity to state the facts known to him, produce records as may be required in their support or the documents required and sought for by the authorities. The opportunity given to a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. 40. The petitioners have been complaining about the misuse of the powers of the Enforcement Directorate and the mode adopted was abuse of power and authority. Having the alleged information about the involvement of the petitioners, the ED authorities have resorted to keeping the petitioners under their control restricting the movements and statements allegedly recorded under Section 50 of the PML Act, 2002 and immediately arrested them. The Ed officials have acted arbitrarily. 41. As already discussed, there is nothing new which was found during the examination of these petitioners, which was not known earlier to the Agency through A2. The evidence collected is circumstantial. Even without a statement under section 50 of the Act, case can be proved against an accused. 42. The Honourable Supreme Court in Vijay Madanlal Choudhary s case (supra 1) held that though twin conditions restrict the right of the accused for grant of bail, it does not impose an absolute restraint on the grant of bail. 43. In Satender Kumar Antil v. Central Bureau of Investigation 2022 SCC OnLine SC 825, the Honourable Supreme Court held that arrest is not mandatory in every case. Befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge of the Investigating Agency. The transactions are borne by record and the evidence is circumstantial in nature. Complicity or otherwise of the petitioners can be inferred from the transactions during trial, which is unlikely in the near future. Detention cannot be by way of punishment at the stage of investigation. The apprehension of the learned Assistant Solicitor General that the petitioners are at flight risk can be dealt with by imposing conditions. 46. In the said background of arbitrariness and also that the petitioners being taken into Enforcement Directorate custody for the purpose of investigation and having investigated the case, taking the petitioners into custody, this Court deems it appropriate to grant the relief of Regular Bail to the petitioners-A1 A3, on the following conditions. i) The petitioners/A1 A3 shall execute personal bonds for a sum of Rs. 2,00,000/- (rupees Two Lakhs only) each with two sureties for a like sum each to the satisfaction of the Metropolitan Sessions Judge-cum-Spl. Court constituted under PML Act, 2002, at Hyderabad. ii) Passports of the petitioners/A1 A3 shall be surrendered before the Special Court. They shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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