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TMI Blog2024 (9) TMI 1602X X X X Extracts X X X X X X X X Extracts X X X X ..... legal arrest of the petitioner in case ECIR/GNZO/19/2023 dated 23.09.2023 (for short "ECIR No. 19") under Section 3 and punishable under Section 4 of PMLA. (iii) to issue an order or direction as this Court deems appropriate to release the petitioner forthwith and/or also on interim bail during the pendency of the petition in the exigency of forthcoming State Legislative Assembly elections in the State of Haryana. (iv) further issue any appropriate order, relief or direction which this Court may deem fit and proper under the facts and circumstances of the present case. BRIEF FACTS:- 2. In the intervening night of 19/20.07.2024 at 01.40 a.m, petitioner was arrested in the Zonal Office, Enforcement Directorate (for short "E.D"), Gurugram. For reference, the allegations of E.D, as contained in the "Grounds of Arrest" dated 20.07.2024 (R-2 colly.), are recapitulated as under:- "1. On the basis of 8 FIRs bearing nos. 226 dated 14.10.2022, 116 dated 23.03.2023, 111 dated 01.06.2023, 206 dated 19.09.2022, 216 dated 30.09.2022, 204 dated 14.09.2022, 33 dated 10.02.2023 and 54 dated 16.02.2023 registered at police station of Yamuna Nagar District, an ECIR no. ECIR/GNZO/19/2023 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that Hon'ble NGT vide its order dated 18.11.2022 had observed that these three entities namely M/s Development Strategies India Private Limited (Respondent no. 11), Delhi Royalty Company (Respondent no. 12) and Mubarikpur Royalty Company (Respondent no. 13) are indulged in violating the environmental norms such as violating the requirement of undertaking replenishment study, not developing green belt, not implementing progressive mine closure plan, not installing CCTV cameras and not having GPS system, diversion of river flow, illegal instream mining, etc.: ".... We find it appropriate to accept the report as there is no meaningful objection against the same. Thus, it is clear that as far as Respondent No. 11 is concerned, apart from violating the requirement of undertaking replenishment study, not developing green belt, not implementing progressive mine closure plan, not installing CCTV cameras and not having GPS system, diversion of river flow, illegal instream mining, not providing weigh bridge at the entry of the mining lease area are clear violations. With regard to Respondent No. 12, apart from violations found in the case of Respondent No. 11, further violations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether, a new firm namely G.M. Co. was created; that this accounting was done as per the instructions of Dilbag Singh; * G.M. Co. was accounting the total sale of all the firms of the syndicate altogether. 9. On perusal of the books of account of G.M. Co. and Income Tax Assessment orders filed by the member firms of the syndicate including M/s Development Strategies India Private Limited, it is evident that a syndicate of illegal mining was functioning under the umbrella of G.M. Co and accounting of the syndicate was maintained in the name of G.M. Co. wherein cash generated from illegal mining activities were recorded. It also maintains the name of the persons/firm and their shares in the illegal mining activities. 10. Further, during investigation it is revealed that you and your family members has 32% shareholding in Development Strategies India Pvt. Ltd. which is part of the mining syndicate and on perusal of the books of accounts of G.M. Co., it is evident that you, in the name of Panwar Ji & S. Panwar (W), are one of beneficiaries of the Proceeds of Crime. 11. M/s Development Strategies India Pvt. Ltd. was allotted 23.05 hectares at Pobari village in Yamuna Nagar's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 and the revised return of income filed by the subject company wherein it has accepted the additional turnover which is the part of proceeds of crime. 14. On perusal of the mining Contract dated 23.08.2016, between Director General, Mines and Geology, Haryana, and M/s. Development Strategies India Pvt. Ltd., it is revealed that the contractor M/s. Development Strategies (India) Pvt. Ltd. Is authorized to excavate sand from "All the tract of land situated at village 'Pobari' in District Yamuna Nagar bearing Khasra Nos. 14//5. 15//1 min, 2 min, 3 min, 6 min, 7/1,7/2,8,9,10,12,13,14,15,16,17,18,25. 16//6/2 min, 7 min, 8 min, 9 min, 10 min, 11/1, 11/2, 12, 13, 14, 15, 16, 17, 18, 19, 20/1, 20/2, 21 min. 22 min, 23, 24, 25. 17//3 min, 8, 9, 10 min, 11, 12, 13, 18, 19, 20/1, 20/2, 21, 22, 23 AND village 'Nakom' in District Yamuna Nagar bearing Khasra Nos. 2//15, 16 min. 3//11, 19, 20, 21 min, 22, 23. 6//2min, 3 min, 4 min, 5 min, 6, 7, 8 min, 14 min, 15 min. 5//10, 11, 12, 18, 19, 20 min, 22 min, 23, 24, 25. 14//4 min, 5 min. 15//1 min, 2 min containing total area 23.05 hectares or thereabouts delineated on the plan hereto annexed as annexed and bounded as......." D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Ton) M/s Development Strategies (1) Pvt. Ltd. Sand 4576666 16030144 7734569 27090939 Block Village Khasra No. (Lease Area) Pobari Block YNR B11 Village Pobari 14//5, 15//1 min, 2min, 3 min, 6 min, 7/1, 7/2, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 25, 16//6/2 min, 7 min, 8 min, 9 min, 10 min, 11/1, 11/2, 12, 13, 14, 15, 16, 17, 18, 19, 20/1, 20/2, 21 min, 22 min, 23, 24, 25, 17//3 min, 8, 9, 10 min, 11, 12, 13, 18, 19, 20/1, 20/2, 21, 22 Pobari Block YNR B11 Village Nakom 2//15, 16 min, 3//11, 19, 20, 21 min, 22, 23, 6//2 min, 3 min, 4 min, 5 min, 6, 7, 8 min, 14 min, 15 min, 5//10, 11, 12, 18, 19, 20 min, 22 min, 23, 24, 25, 14//4 min, 5 min, 15//1 min, 2 min. So far, the investigation findings confirm that the land with certain Khasra numbers at Block Pobari Block YNR B11 situated at village Pobari and Nakom have been illegally mined as these lands were not allotted by the mining department for excavation of minerals. Further, the quantity of mined minerals reported by the company to the mining department is 5226540 metric ton for the period 2016-2022 whereas the survey findings reveal that the quantity of minerals mined within the leased area allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements of account number 1952012100000173 held with Punjab National Bank in the name of Hanuman Infrastructure Private Limited (hereinafter referred to as HIPL), it is found that HIPL has many transactions with entities/firms which are part of the syndicate involved in illegal mining in Yamuna Nagar. The details of the banking transactions with entities of the Syndicate in the bank account statement of HIPL, are tabulated as below: Details of Account statement of HIPL (Account no. 1952012100000173) showing transactions with multiple mining entities which are also part of G.M. Co. & Mining Syndicate: Name of the Entity & date of transaction Details Credit Debit 7/13/2017 Delhi Royalty Company 25,00,000 5/17/2018 Delhi Royalty Company 25,00,000 3/22/2019 Development Strategies India Pvt. Ltd. 65,00,000 3/22/2019 Development Strategies India Pvt. Ltd. 50,00,000 7/27/2017 JSM Foods Pvt. Ltd. 30,00,000 5/18/2018 JSM Foods Pvt. Ltd. 30,00,000 7/13/2017 Mubarikpur Royalty Company 25,00,000 5/31/2018 Mubarikpur R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings out that the above specified offence is being perpetually committed with full disregard to the process of law with an intention to launder proceeds of crime. You have actively involved yourself in acquiring Proceeds of Crime as submitted above. 27. You have evidence in your exclusive possession and can very well tamper with the same by abusing your power and influence. 28. You, Surender Panwarare likely to abuse your influence on the other key members who have made disclosure of your criminal conspiracy. 29. That the investigation about other properties generated out of proceeds of crime is going on and if let free, you can very well tamper with evidence regarding proceeds of crime at this crucial juncture. 30. That the continuous evasive replies on your part in an ongoing investigation under provisions of the Prevention of Money Laundering Act, 2002 in this Directorate has made the process of investigation arduous and time-consuming. 31. In view of the above and material placed on record, I have reasons to believe that you, Surender Panwarare guilty of the offence of money laundering as defined under Section 3 and punishable under Section 4 of PMLA, 2002. You are di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a very high pedestal and it has to be treated as a last resort and not at the whims and fancies of E.D. In the present case, there was no occasion for arrest of the petitioner as he was fully cooperating and appearing on each and every occasion pursuant to the summons issued under Section 50 of PMLA. 3.5 That the satisfaction of the officer, arresting the person, alleged to be guilty of an offence under Section 3, punishable under Section 4 of PMLA, should not be merely on a suspicion; rather there should be concrete evidence in the form of "reasons to believe" to justify the standard that arrestee is guilty of the offence. 3.6 Further contends that a search under Section 17 of PMLA was conducted at the residence of petitioner from 04.01.2024 to 08.01.2024 and no incriminating material was found at that time, but after 07 months, petitioner has been arrested at the very nick of Haryana Legislative Assembly elections just to restrain him from contesting the same. 3.7 Also contends that nothing incriminating has been obtained from the remand, so it shows that arrest is for some extraneous reasons. Specifically contended that petitioner ceased to be a Director of Development St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds of crime. 4.2 There is sufficient compliance of Section 19 of the PMLA as there was material in possession of the E.D along with "reasons to believe" as well as "grounds of arrest". The arrest order along with "grounds of arrest" were duly supplied to the petitioner at the time of his arrest. The material in possession was duly sent to the Adjudicating Authority within the stipulated time. The petitioner was produced before the Special Judge within 24 hours from his arrest; thus, the provisions of Section 19 of the PMLA were meticulously complied with. 4.3 Also submits that though, searches were made in January, 2024 at various places of petitioner as well as other co-accused; investigation was being carried out and when incriminating material was collected by the E.D, petitioner was arrested in the intervening night of 19/20.07.2024. 4.4 Vehemently submits that remand order cannot be interfered with unless there is violation of Section 19 of PMLA; or Article 22 of the Constitution. 4.5 While justifying the timing of arrest, it is submitted that petitioner was arrested on 20.07.2024; notification for Assembly elections in the State of Haryana was made on 01.08.2024 and pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectorate of Enforcement (SLP(Crl.) No. 9431 of 2023); (x) Serious Fraud Investigation Office Versus Rahul Modi (2019) 5 SCC 266; (xi) State of Maharashtra Versus Tasneem Rizwan Siddiquee (2018) 9 SCC 745; (xii) Directorate of Enforcement Versus Sunil Godhwani 2019 SCC Online Del 11386; (xiii) State of Bihar Versus J.A.C. Saldanha (1980) 1 SCC 554; (xiv) State of Bihar Versus P.P. Sharma 1992 Supp (1) SCC 222; (xv) Prakash Singh Badal Versus State of Punjab (2007) 1 SCC 1; (xvi) Monica Kumar (Dr.) Versus state of U.P. (2008) 8 SCC 781; (xvii) Umesh Kumar Versus State of A.P. (2013) 10 SCC 591; (xviii) Daxaben Versus State of Gujarat 2022 SCC Online SC 936; (xix) Ramveer Upadhayay Versus State of U.P. 2022 SCC Online SC 484; (xx) Amanatullah Khan Versus Directorate of Enforcement (Bail Appl. 795/2024); (xxi) Pavana Dibbur Versus Directorate of Enforcement 2023 LiveLaw (SC) 1021; (xxii) Directorate of Enforcement Versus Aditya Tripathi 2023 SCC Online SC 619; (xxiii) P. Rajendran Versus Directorate of Enforcement (Criminal Original Petition No. 19880/2022) Madras; (xiv) H.N.Rishbud Versus State of Delhi (1955) 1 SCR 1150; (xxv) P. Chidambaram Ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modes, including dasti. Tag with Civil Appeal No.319 of 2023 titled "M/s Delhi Royalty Company Vs. Union of India and ors." Notice is accepted on behalf of respondent No.13, who is at liberty to file a counter affidavit/reply within a period of six weeks. In the meanwhile, subject to the appellant-M/s Development Strategies India P. Ltd. depositing 60% of the penalty amount of Rs.2.5 Crores, and M/s Mubarikpur Royalty Company depositing Rs.4 crores with the authorities within a period of six weeks' from today, there would be a stay on the recovery of the further amount." iii. Still further, Hon'ble the Supreme Court vide subsequent order dated 04.12.2023 specifically directed that no mining activities are being carried out on the site; the matter is still pending and the order reads as under:- "As there is no appearance on behalf of the State of Haryana, Court notice be issued to the Standing/nominated counsel for the State, who will obtain instructions and enter appearance. Rejoinder affidavit to the counter affidavit/reply already filed, may be filed within three weeks from today. Steps for service of the unserved respondents will be taken within seven days from toda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectorate of Enforcement shall take remedial measures and sensitize the officers to follow some reasonable time limit for investigation in one go against the suspect(s) in such like cases. To be precise, , it would be appreciated if some necessary mechanism is put in place for fair investigation of the accused as per basic human rights laid down by the United Nations Organization (UNO), instead of meting out unnecessary harassment, for such a longer duration at one stretch for a given day. 11. Also noteworthy that two co-accused (Dilbag Singh and Kulwinder Singh), who were specifically named in FIR No.21 dated 19.01.2024, challenged their order of arrest in the High Court and a Coordinate Bench of this Court quashed the same, vide order dated 08.02.2024 passed in CRM-M2191 of 2024, being in violation of the provisions of Section 19 of the PMLA. Aggrieved against the above order, E.D approached Hon'ble the Supreme Court, but remained unsuccessful as the SLP was withdrawn by them on 01.08.2024. 12. As far as the allegation for violation of the provisions of Sections 15 and 16 of the Act, 1986 is concerned, the same would also be not sustainable for the reasons that Paragraph No.25 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quences of anything already done or suffered, or any right, title, obligation or liability already acquired, accrued or incurred or any remedy or proceeding in respect thereof, or any release or discharge of, or from any debt, penalty, obligation, liability, claim or demand, or any indemnity already granted, or the proof of any past act or thing; nor shall this Act affect any principle or rule of law, or established jurisdiction, form or course of pleading, practice or procedure, or existing usage, custom, privilege, restriction, exemption, office or appointment, notwithstanding that the same respectively may have been in any manner affirmed, or recognized or derived by, in or from any enactment hereby amended or repealed; nor shall the amendment or repeal by this Act of any enactment revive or restore any jurisdiction, office, custom, liability, right, title, privilege, restriction, exemption, usage, practice, procedure or other matter or thing not now existing or in force. THE SCHEDULE (See section 2) Sr.No. Year No. Short title Amendments 1 to 33 ------------- -------- ----------------- ------------------------- 34 2003 15 The Prevention of Money Laundering Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctify the same. In such a fact situation, the legal maxim sublato fundamento cadit opus is applicable, meaning thereby, in case a foundation is removed, the superstructure falls. 33. In Badrinath vs. Govt. of T.N this Court observed that once the basis of a proceedings is gone, all consequential acts, actions, orders would fall to the ground automatically and this principle of consequential order which is applicable to judicial and quasi-judicial proceedings is equally applicable to administrative orders." 15.1 In such a scenario, the argument raised on behalf of the E.D is not convincing; hence rejected. 16. Although, aftermath of the irresistible conclusion recorded here-inabove, judicial precedents cited by both sides would be of not much relevance; but for their satisfaction, the same are discussed as under:- JUDICIAL PRONOUNCEMENTS FROM PETITIONER SIDE:- 17. Learned Senior counsel referred to Senthil Balaji; Pankaj Bansal; Ram Kishore; Arvind Kejriwal and Vijay Madanlal Chouhdary's cases (supra) in which it was held that, (i) there must be material in possession with the Authority before arresting a person; (ii) there should be reason to believe that the person bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to adjudicating authority. (v) In Ram Kishore (supra); while relying upon Pankaj Bansal and Vijay Madanlal Choudhary's cases (supra), it was held that "as soon as may be" contained in Section 19 of PMLA is required to be construed as "as early as possible without avoidable delay" or "within reasonably convenient or "reasonably requisite" period of time. (vi) In Y. Balaji's case (ibid), the term "money laundering" occurring in Section 3 of PMLA was explained. However, in the instant case, E.D has not produced any material to show that petitioner was Director or associated with either DSPL or G.M. Co. in any manner. (vii) In Pragyna Singh Thakur's case (supra), it was held that an accused may be entitled to be set at liberty if it is shown that at relevant point of time, he was illegally detained by the Police, but such a right is not available after the Magistrate remands the accused to custody. Right under Article 22(2) of the Constitution is available only against illegal detention by the police. It is not available against custody in jail of a person pursuant to a judicial order. Article 22 (2) does not operate against the judicial order. (viii) In Pranab Chatterjee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble the Supreme Court in Arvind Kejriwal's case (supra). (xvii) In Anil Sharma's case (supra), Hon'ble the Supreme Court agreed with the submission of CBI that custodial interrogation is qualitatively more elucidation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. However, in the present case, despite custodial interrogation of the petitioner, no incriminating material has been recovered, much less to say "the qualitative material". As already observed, these judicial precedents are distinguishable on facts; hence, not applicable; as prima facie, the petitioner has not been found involved in any illegal activity, in any manner whatsoever, attracting the offence of money laundering under PMLA. 18. In view of the above, there is no option, except to allow the petition. 19. Ordered accordingly. 20. Consequently, arrest order as well as "grounds of arrest" dated 20.07.2024 issued by E.D; remand orders dated 20.07.2024; & 29.07.2024 (P-2 & P-4, respectively), passed by learned Special Judge, Ambala against the petitioner, are hereby quashed and set aside being indefensible in law. 21. Resultantly, the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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