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TMI Blog2024 (10) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... lminated into filing of complaint case being Complaint No. 770 of 2019 under Section 447 of Companies Act, 2013 and Sections 409, 467, 468, 471, 120B IPC. On the complaint filed by SFIO, cognizance stands taken. As the said offences are also scheduled offences under PMLA, 2002, the subject ECIR was registered on 29.08.2019 and after investigation, the prosecution complaint came to be filed on 08.08.2023. A supplementary prosecution complaint was filed on 07.03.2024. 3. In the prosecution complaint filed by ED, the allegations in nutshell are that as per the SFIO investigation report, ex-promoters of M/s Bhushan Steel Ltd. (hereafter, the BSL) i.e., Brij Bhushan Singhal and Neeraj Singhal had obtained loan of Rs. 56,000 Crores from various banks and financial institutions before BSL went into insolvency and CIRP were initiated. The aforesaid accused needed to infuse capital in BSL in order to avail credit facilities from the lender banks for its teel plant in Orissa; and to do so as well as to maintain the required level of debt equity, the said accused persons assisted by their employees and close associates siphoned off funds from BSL and Bhushan Energy Ltd (hereafter, the BEL) b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies, it is stated that the co-accused Neeraj Singhal in his statement did not attribute any role the applicant. The applicant is not a Director in any company Insofar as allegation of the applicant being involved in the diversion and sale of 'Zinc Ingots' is concerned, it is submitted that the erstwhile BSL has entered in statutory settlement with the Excise Department before the Custom and Excise Settlement Commission and the same is reflected in the final order dated 27.05.2015 issued by the Additional Director General of DGCEI settling Central Excise duty at Rs. 24,01,19,291 alongwith interest amounting to Rs. 2,84,82,857 and penalty to the tune of Rs. 1,00,00,000 /-. Once the matter is settled, then the same cannot be reagitated by the respondent to punish the applicant. Moreover, there is no allegation of money coming to applicant's account. 6. Learned Senior Counsel submits that ED to substantiate its allegations has only cited applicant's own statement recorded under Section 50 as well as those of Shri Rajat Kumar Jain (PW-15), Shri Kumud Kumar Gupta (PW-17) and Shri Rajesh Kumar Sharma (PW-18) etc, who were employees of BSL and despite being arrayed as an accused i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrumental in making the employees of BSL to act as nominal Directors for associated companies, it is argued that the same does not hold any water and the emphasis which the respondent has put on statements of witnesses is negated by the fact that these witnesses are people who are deeply connected to the erstwhile promoters of BSL and themselves are implicated in the predicate offence investigated by SFIO. These witnesses, many of whom continue as Directors in associated companies, are clearly interested parties, and their testimonies must be viewed with caution due to their vested interests in the outcome of the case. Attention is drawn to the fact that one Ruchin Maheshwari (PW5), arrayed as an accused in SFIO complaint, is made as a witness in the present complaint. He is stated to be the direct employee of the main accused and even today continues to be the Director in 20 companies associated with the ex-promoters of BSL. Sunil Saxena (PW9) has been arrayed as the Accused No 251 in SFIO complaint and as per the MCA records, even today, he continues to be a Director in 20 companies associated with ex-promoters of BSL. Rohit Sinha (PW10) is arrayed as the Accused No. 218 in SFI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is applicant, it is submitted that the same were documents which were received by the applicant in the SFIO proceedings. Lastly, it is submitted that the applicant has deep roots in the society, does not have any criminal antecedents, the trial has been severely delayed, infringing the applicant's right to speedy trial. Moreover, the applicant is suffering from severe Obstructive Sleep Apnoea and multiple other co-morbidities including hypertension, Asthma, diabetes mellitus, and cardiac issues which cannot be adequately managed in custody. The applicant had joined investigation on multiple occasions prior to his arrest. It is further submitted that there are 156 accused persons including 82 witnesses and 2.5 lac pages of documents which need to be analysed and the trial which has not even commenced naturally has no possibility of concluding in the near future. Submissions on behalf of respondent 12. Mr. Manish Jain, learned Special Counsel submitted that the present applicants have played an integral part in the commission of the offence of money laundering at a large scale and are a flight risk and thus not entitled to bail. The banks have been duped of a humongous amount of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assistance of learned Senior Counsels and the Special counsel, this Court has gone through the entire material placed on record. 16. Pertinently, as noted above, the SFIO filed Complaint No.770/2019 dated 16.08.2019 under various provisions of Companies Act, 2013 including Section 447 and Sections 409, 467, 468, 471 and 120B of Indian Penal Code, 1860 against the accused persons without arrest. It has investigated allegations of obtainment of loans worth Rs. 46,646 Crores by the accused from various banks and financial institutions. The cognizance of the complaint was taken by Special Judge (Companies Act) Dwarka District Court on 16.08.2019. Indisputably, the complaint against the applicants was filed without arrest and they were granted bail. It is stated that the trial is yet to begin. 17. The investigation under PMLA was initiated vide F. No. ECIR/06/DLZO-II/2019 in Enforcement Directorate, Delhi Zone-I in respect of the scheduled offence. The main prosecution complaint was filed on 08.08.2023 against a total of 76 accused persons. The cognizance was taken against 72 accused persons vide order dated 07.11.2023. Later, a supplementary Prosecution Complaint was filed on 07.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 228 of the Penal Code, 1860 and is admissible in evidence. The said statements are to be meticulously appreciated only by the Trial Court during the course of the trial and there cannot be a mini-trial at the stage of bail. However, when the statements recorded under Section 50 of PMLA are part of the material collected during investigation, such statements can certainly be looked into at the stage of considering bail application albeit for the limited purpose of ascertaining whether there are broad probabilities, or reasons to believe, that the bail applicant is not guilty. Meaning thereby, the statements under Section 50 of the PMLA have to be taken at their face value, but in case any such statement is patently self-contradictory or two separate statements of the same witness are inconsistent with each other on material aspects, then such contradictions and inconsistencies will be one of the factors that will enure to the benefit of the bail applicant whilst ascertaining the broad probabilities, though undoubtedly the probative value of the statement(s) of the witnesses and their credibility or reliability, will be analyzed by the trial court only at the stage of trial fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending at the stage of charge [Ramkripal Meena v. Directorate of enforcement SLP (Crl) No. 3205 of 2024 dated 30.07.2024]. The Court also deems it apposite to refer to some recent decisions where the above-noted issue has been categorically addressed. 26. The Supreme Court in the case of Manish Sisodia v Directorate of Enforcement 2024 SCC OnLine SC 1920, reiterated the right of an accused for expeditious trial even in PMLA cases and held as under;- 37. Insofar as the contention of the learned ASG that since the conditions as provided under Section 45 of the PMLA are not satisfied, the appellant is not entitled to grant of bail is concerned, it will be apposite to refer to the first order of this Court. No doubt that this Court in its first order in paragraph 25, after recapitulating in paragraph 24 as to what was stated in the charge-sheet filed by the CBI against the appellant, observed that, in view of the aforesaid discussion, the Court was not inclined to accept the prayer for grant of bail at that stage. However, certain paragraphs of the said order cannot be read in isolation from the other paragraphs. The order will have to be read in its entirety. In paragraph 28 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied. 12. Independently and as has been emphatically reiterated in Manish Sisodia (II) (supra) relying on Ramkripal Meena v. Directorate of Enforcement (SLP (Crl.) No. 3205 of 2024 dated 30.07.2024) and Javed Gulam Nabi Shaikh v. State of Maharashtra, 2024 SCC OnLine SC 1693, where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of India and that prolonged incarceration before being pronounced guilty ought not to be permitted to become the punishment without trial. In fact, Manish Sisodia (II) (Supra) reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... win bar is provided and such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception. The cardinal principle of bail being the rule and jail being the exception will be entirely defeated if the petitioner is kept in custody as an under-trial for such a long duration. This is particularly glaring since in the event of conviction, the maximum sentence prescribed is only 7 years for the offence of money laundering. 29. Supreme Court, in the case of V. Senthil Balaji v. The Deputy Director, Directorate of Enforcement 2024 INSC 739, while underscoring the importance of Article 21 and the effect of delays in trial in PMLA cases held as under:- "21. Hence, the existence of a scheduled offence is sine qua non for alleging the existence of proceeds of crime. A property derived or obtained, directly or indirectly, by a person as a result of the criminal activity relating to a scheduled offence constitutes proceeds of crime. The existence of proceeds of crime at the time of the trial of the offence under Section 3 of PMLA can be proved only if the scheduled offence is established in the prosecution of the scheduled offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45 (1) (ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the accused, there is every possibility of the accused becoming a real threat to society if enlarged on bail. The jurisdiction to issue prerogative writs is always discretiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and fairness but also access to justice and a speedy trial. In Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) v. Union of India [Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) v. Union of India, (1994) 6 SCC 731, para 15 : 1995 SCC (Cri) 39], it was held that undertrials cannot indefinitely be detained pending trial. Ideally, no person ought to suffer adverse consequences of his acts unless the same is established before a neutral arbiter. However, owing to the practicalities of real life where to secure an effective trial and to ameliorate the risk to society in case a potential criminal is left at large pending trial, the courts are tasked with deciding whether an individual ought to be released pending trial or not. Once it is obvious that a timely trial would not be possible and the accused has suffered incarceration for a significant period of time, the courts would ordinarily be obligated to enlarge them on bail. 17. It is thus clear to us that the presence of statutory restrictions like Section 43-D (5) of the UAPA per se does not oust the ability of the constitutional courts to grant bail on grounds of violation of Part III ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g into account the prolonged custody and unlikelihood of completion of trial in immediate future, the accused was granted bail. 32. Examining the present case in the aforenoted backdrop, it is noted that the investigation was initiated in the year 2019 and the prosecution has named 156 accused persons and cited 82 witnesses. There are 2.5 lac pages of documents which need to be analysed. Learned Special Judge took cognizance of the supplementary chargesheet vide order dated 26.07.2024. It is also observed that in the supplementary complaint dated 08.03.2024, permission was taken by the ED under Section 173 (8) Cr.P.C. for further investigation into the matter. As such, the Trial is yet to commence. 33. When there are multiple accused persons, lacs of pages of evidence to assess, scores of witnesses to be examined, the trial is not expected to end anytime in the near future. Importantly, the delay being not attributable to accused, keeping the accused in custody by using Section 45 PMLA as a tool for incarceration is not permissible. Flow of liberty cannot be dammed by Section 45 without taking all other germane considerations into account. It is the duty of Constitutional Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that both the applicants be released on regular bail subject to them furnishing a personal bond in the sum of Rs. 1,00,000/- with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M. and subject to the following further conditions: - i) The applicants shall not leave Delhi/NCR without prior permission of the concerned Court and surrender their passports, if any. ii) The applicants shall provide their mobile numbers to the Investigating Officer on which they will remain available during the pendency of the trial. iii) In case of change of residential address or contact details, the applicants shall promptly inform the same to the concerned Investigating Officer as well as to the concerned Court. iv) The applicants shall not directly/indirectly try to get in touch with the prosecution witnesses or tamper with the evidence. v) The applicants shall regularly appear before the concerned Court during the pendency of the trial. 38. The bail applications are disposed of in the above terms. 39. Copy of the order be communicated to the concerned Jail Superintendent electronically for information and necessary co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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