TMI Blog2024 (4) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... f charge. Such issue may also arise when there are counter cases against each other. Both these cases also need to be tried separately even though it may be by the same Judge. By inserting this provision, the Legislatures want to suggest that the trial of scheduled offences and trial of PMLA offences will have to be conducted independently though by the same Judge. As per Section 3 of the PML Act, anyone involved in the process of proceeds of crime, it is an offence. The scheduled offences are the offences laid down as per the schedules. The scheme of the Act does not suggest that there can be an investigation for PMLA offences only when there is a conviction in a trial involving the scheduled offences . A person accused of PMLA offence may contend that unless it is proved that the proceeds alleged by the Enforcement Directorate were derived from the criminal activity is proved, they cannot be convicted. When the trial of PMLA offences in this case will be started? - HELD THAT:- A draft charge is already filed on behalf of the E.D. It is true that yet the Special Court has not proceeded further after framing of charge, that is to say, hearing the Prosecution and hearing the respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsels have also a role to play. On one hand, they have got every right to protect the interest of their clients and at the same time, they have to come forward for early disposal of the case. Because, they are also part and parcel of the system. And the system must work. Defence Counsels are also part of the same Society for betterment of which system is created. Bail application allowed. - S.M. MODAK, J. For the Applicant in Criminal Bail Application No. 3377 of 2023. : Mr. Aabad Ponda Senior Advocate a/w Mr. Chandansingh Shekhawat, Mr. Subhash Jadhav, Mr. Yashovardhan Deshmukh i/b. Parinam Law Associates:- For the Respondent Directorate of Enforcement. : Mr. Hitesh S. Venegavkar a/w Mr. Ayush Kedia. For the Applicant in Criminal Bail Application No. 3867 of 2023. : Mr. Harshad Nimbalkar a/w Mr. Hrishikesh Chitaley, Mr. Ashish Verma, Mr. Sagar Shetty, Mr. Satyam Nimbalkar, Mr. Abhishek Arote, Ms. Sonia Redkar, Ms. Shraddha Nagaonkar, Mr. Akshay Naik, Mr. R. Chhabra i/b.Mr. Sagar Shetty. For the Respondent No. 2 State. : Mr. S.V. Gavand: P.C. :- 1. There is an Enforcement Case Information Report (hereinafter, the ECI Report ) lodged by Enforcement Directorate (hereinafter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling Bail Application / other Applications do not amount to delaying the conduct of trial and as such, the disqualification mentioned in that Section cannot be used against the Applicants, And (c) There is no death penalty prescribed for this offence. 5. Whereas, learned Advocate Shri. Venegavkar for E.D., opposed the bail on following grounds :- (a) There is no absolute right recognized as per Section 436-A of Cr. P.C. (b) The seriousness of the allegations and severity of punishment need to be considered prior to exercising discretion as per Section 436-A of the Code. (c) There is difference in between right to default bail under Section 167 of the Code on one hand and under Section 436-A of the Code on the other hand. (d) The order refusing bail passed by the trial Court records all the circumstances which have resulted into delaying the conduct of the trial. Punishment prescribed 6. These Applicants are accused of committing the offence under Section 3 of PML Act. The punishment prescribed under Section 4 is as follows:- (i) There will be minimum sentence for 3 (three) years, (ii) Maximum sentence will be 7 (seven) years And (iii) Fine which may extend to five lakh rupees. Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the issues and given findings as follows :- (a) The date of arrest for both the Applicants is 17th October 2019. Accused No. 1 Rakesh Kumar Wadhawan filed Application on 30th March 2023. It means, the Applicant was behind bar for 3 years, 5 months and 13 days on the date of Application. On the basis of said Application, the Applicant was held not entitled to the benefit. (Para 10). (b) Accused No. 2 Sarang Wadhawan filed Application on 4th May 2023. At that time, the period undergone was 3 years, 6 months and 17 days. (Para No. 11). Admittedly, when these Applications are filed before this Court, both the Applicants are behind bar for more than half of the punishment. (c) In Para No. 12:- The trial Court has noted filing of the main complaint and filing of two subsequent complaints and still, the investigation is going on. The trial Court observed:- As per explanation (ii) to Section 44 of PML Act, yet total proceeds of crime are to be ascertained finally. (Subsequent complaint by way of legal fiction is included in the first complaint as per the said explanation). The trial Court also noted that:- Investigation into an offence with EOW is still going on. In Para No. 13, the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). (In Para No. 15 of the order and reiterated them in Para No. 20). That is why, learned Special Judge observed:- Proceeds of crime of Rs. 6,117.93 Crores are generated by the criminal activity relating to scheduled offence. The trial Court noted, both these Applicants have failed before this Court on merits. (B) The materials collected dissuaded the trial Court to grant the benefit under Section 436-A of the Code of Criminal Procedure. 11. As learned Advocate Shri. Venegavkar emphasized on going through the reasons given by the trial Court, I have narrated them in detail. I will give my findings about the conduct of the Applicants in filing separate Applications and its effect on right to bail under Section 436-A of the Code later on. Nature of other orders brought to my notice 12. Learned Senior Advocate Shri. Ponda and learned Advocate Shri. Nimbalkar as well as Mr. Venegavkar have placed before me few of the orders passed by the learned Special Judge. They want to show how the Applicants have indulged into dilatory tactics and as to how the Prosecution was vigilant to go on with the trial of the case. The orders placed before me are as follows:- (a) Order dated 20th July 2023: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2020). (f) The grievances were made on account of health. Hence, directions were given to the Jail Authorities and to J.J. Hospital. Even, on some occasion, the doctors from G.T. Hospital are present. A request was made also by Applicant Rakesh Kumar for shifting him to a private hospital (28th July, 2020). (g) Even, a direction was given to Jail Authorities for recording the statements of these Applicants by the Officer of Serious Fraud Investigation Officer Ministry of Corporate Affairs. (25th January, 2021). (h) On 23rd July, 2021, the Applications by Applicant Rakesh Kumar and Sarang were dismissed. Whereas, Application by Sarang was withdrawn. The permission was sought to record the statements of all these Applicants and Co-accused Waryam Singh under Section 50(2) and (3) of PML Act. (4th February 2022). (i) The permission was partly allowed on 8th February 2022 to record the statement of Applicant Sarang and Co-accused Waryam Singh. The Application for transfer of the Accused in another C.R. (11th July 2022). (j) Co-accused Joy Thomas was granted bail on 7th September, 2022. Co-accused Waryam Singh was released under Section 88 of Cr. P.C., on executing personal bond a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumed for filing of bail application, reply, hearing and order. Apart from these two Applicants, there are also other Accused persons. Some of them are arrested and some of them are not arrested. However, they were granted bail after they were taken into custody. (g) Certain time was consumed for transferring the Accused for investigation of other offences and for recording the statement by SFIO, Investigation Officer. Findings 16. The Learned Special Judge has held the Applicants are responsible for delaying the hearing for almost three (3) years. No doubt, all the happenings in the case are before the learned Special Judge only. But, he has not elaborated how the three (3) years has elapsed . It is also difficult to inquire the actual reasons, adjournment and by whom, adjournments are sought. Even, it is also difficult for the trial Court to make observation even though the happenings are before him. That is why, before blaming the Applicants for laches, learned Special Judge has not elaborated the reasons while giving that finding in the order refusing bail. 17. When a person is arrested and liberty is curtailed as per the procedure established by the law, he has got every rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate and construction and slum rehabilitation. He could not repay the loan and fresh loans were obtained from the Bank. Even the overdraft facility was increased. 21. Whereas, the summary of statement of Applicant Sarang Wadhawan is also reproduced in the complaint. The loans were given in his personal name and in the name of the Company. His statement is on the similar lines about the non payment of the loan and again fresh loan. Whereas, HDIL was holding the lands and there is a statement of Darshan Majmudar Chief Financial Officer - HDIL. 22. The first complaint also refers to summary of facts stated by various witnesses. The Chief Financial Officer of HDIL Darshan Majmudar has also explained how the loans are obtained by parent Company HDIL and its subsidiaries and they have been utilized to purchase of the lands. Such companies are 23 in numbers. Even, the business of few of the companies was sold. The statement of close relatives of Applicants are also recorded. The statements of Directors of subsidiaries Companies were also recorded. Mrs. Rebecca Solomon is DGM (Audit) of PMC Bank. She was mainly involved in the audit and correspondence with Reserve Bank of India (hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance. According to them, a case involving scheduled offence is also committed to the Special Court and the Special Court will conduct the trial of case involving scheduled offence and then will proceed with the trial for the present offence. 26. Whereas, Mr. Venegavkar also referred to the judgment in case of Vijay Madanlal Choudhary (supra) and he submitted that the Special Court is established as per the provisions of PML Act and hence, priority has to be given to this case earlier to the case involving the scheduled offence . He referred to the following provisions of the Act:- (a) Section 44(1)(c):- It talks about the power of Special Court to deal with case involving scheduled offence from the stage at which it was committed. (b) The provisions of Cr. P.C., will be applicable toward trial for scheduled offence (clause-d) And (c) As per the explanation jurisdiction of Special Court, does not depend upon any order passed in respect of scheduled offence and trial of both the offences by the same Court shall not be construed as joint trial. The judgments dealing with the provisions of Section 436-A of the Code of Criminal Procedure, 1973 27. Tarun Kumar v/s. Assistant Director D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idity. The following observations are relied upon by Mr. Ponda and Mr. Nimbalkar. (i) In the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering .. (Para No. 253). (B) Mr. Ponda and Mr. Nimbalkar invited my attention to the observations in Para No. 413. While dealing with the applicability of Section 436-A of the Code to the offences under PML Act, it was observed:- (ii) There is, however, an exception carved out to the strict compliance of the twin conditions in the form of Section 436A of the 1973 Code, which has come into being on 23.6.2006 vide Act 25 of 2005. This, being the subsequent law enacted by the Parliament, must prevail (C) Mr. Venegavkar invited my attention to observations in Para No. 272 wherein, Hon ble Supreme Court has dealt with a threat of money-laundering to the financial system and observed:- (iii) ...Thus, the onus on the Government and the people to identify and seize such money is heavy. If there are any pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be recorded by it in writing and also by imposing such terms and conditions to ensure the availability of the accused during trial. (Emphasis supplied) 30. Satender Kumar Antil v/s. Central Bureau of Investigation and Another (2022) 10 Supreme Court Cases 51. (A) The Hon ble Supreme Court has dealt with all the aspects of various provisions for bail in the Code of Criminal Procedure, and the obstacles and hurdles and mindset of stakeholders in recognizing such right. The relevant paragraphs in which the provisions of Section 436-A are referred are in paragraph Nos. 63 and 64. The word trial has to be given expanded meaning and it also includes the appeal or admission. The word shall denotes mandatory compliance of this provision. Even, Hon ble Supreme Court went to the extent of dispensing with the necessity of filing a bail application. But, the delay should not be attributable to the accused. It is further observed:- However, such an exercise of power is expected to be undertaken sparingly being an exception to the general rule. The only caveat as furnished by the Explanation being the delay in the proceeding caused on account of the accused to be excluded. The observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct of trial 33. In order to buttress his submission, that the trial of scheduled offences will take first and then, trial of PMLA offences, Mr. Ponda relied upon following judgments:- (i) V. Vijay Sai Reddy v/s. Enforcement Directorate 2022 SCC OnLine TS 1606 (ii) Jagati Publication Ltd. v/s. Enforcement Directorate 2022 SCC OnLine TS 1607 (iii) Md. Naushad v/s. State of Bihar and Another 2019 SCC OnLine Pat 552 (iv) Anosh Ekka v/s. State of Jharkhand through Directorate of Enforcement Cr.Rev.No.699 of 2011 : 19th February 2013 : High Court of Jharkhand at Ranchi 34. Whereas, Mr. Venegavkar still insist that trial under PML Act will have to be given preference as the Court is established under the PML Act. He admits that there is no observations upholding his contention by any Court. It will be relevant to consider the observations in those judgments. 35. In all these judgments, though pronounced in different matters, the cases were instituted for scheduled offence as well as offence under the PML Act. The parties are the same. There were discharge Applications filed. They were rejected and that is why, the matter went before the High Court. After considering the provisions of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only about grant of bail and not about discharge or quashing. So, I think, the issue need not be far stretched, so that, this Court will give some observation about the interpretation of the provisions of PML Act. It can be done in an appropriate case. For these Bail Applications, the issue is only when the trial of PMLA offences is going to start. When we have read the provisions and even the observations by various High Courts, one can infer that the trial in PMLA offence can be simultaneously with trial of scheduled offences . The first part of Explanation to Section 44 is clear. 40. Now, the question is when the trial of PMLA offences in this case will be started. A draft charge is already filed on behalf of the E.D. It is true that yet the Special Court has not proceeded further after framing of charge, that is to say, hearing the Prosecution and hearing the respective Accused persons. If there are discharge Applications, the Special Court is required to decide them. There are in all 38 Accused persons. One does not know when this pre-charge formalities will be completed. It is true that all these complaints consist of thousands of pages and there will be number of witnesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials and to submit it in the Court. The responsibility of the Court starts later on. It is true that there is time limit fixed for completion of investigation. Even if the charge-sheet/complaint is filed, still depending upon the magnitude of the offence, the trial continues. There are two sides. One is prosecution and another is defence. Court has to hear both of them. And it is bound to take time. The availability of Judges is also important. Disposal also depends on co-operation of defence. But paramount consideration is number of Court dealing with such cases. If it is less, trial is going to take time. It has happened in both these cases also. It is but natural that it will take long time for completion of the cases considering the procedure required to be followed. One cannot deny the fact that considering the statistics received by me, it is uncertain when the trial will start. Hence in such a situation we cannot deprive a person of his personal liberty. 46. It is no doubt true that E.D., has filed draft charge . Same time, it is also true that framing a charge is not an empty formality. The Special Judge has to satisfy himself that ingredients of an offence are prima fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections to learned Registrar General of this Court who is supposed to look into issues faced by the trial Court on administrative side in the State of Maharashtra. 52. This Court expects learned Registrar General to take stock of the situation particularly from the City Civil Court about total pendency, staff deputed in that process and number of judges assigned to scheduled offence alongwith PMLA offence. So if the City Civil Court administration is facing with some difficulties, learned Registrar General with all his experience and responsibility can try to solve the problems and he may also seek necessary directions from the Hon ble Chief Justice. These observations are made only for mitigating problems faced by the prosecuting agency as well as by under trial prisoners. It may happen that due to intervention of learned Registrar General, the City Civil Court administration may be boosted to deal with huge pendency for scheduled and PMLA offence. 53. With these observations, I pass the following Order:- ORDER (i) Both Bail Applications i.e. Bail Application No. 3377 of 2023 and Bail Application No. 3867 of 2023 are allowed. (ii) Applicant Sarang Wadhawan and Applicant Rakesh Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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