TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1269
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....0-B of Indian Penal Code as well as for the offences punishable under Sections 7 and 13 of the Prevention of Corruption Act, 1988. 2. The case put forward by the prosecution is as under :- 2.1 That the applicant, an IAS Officer (now Retired), when was working as Collector at Bhuj of Dist. Kutch, taking undue advantage of his position as District Collector and Chairman of District Land Pricing Committee (DLPC), granted certain Government land by manipulative acts in gross violation of the norms / guidelines and instructions of State Government to one group of Company, namely, M/s. Welspun India Limited. In the said group of Companies, the wife of the present applicant, namely, Smt. Shyamal P. Sharma was made partner to the extent of 30% in one of the Companies, namely, M/s. Value Packaging Company which was supplying Cardboards to M/s. Welspun. By using his position as Collector, and making his wife partner in such Company, got Crores of rupees transferred into the account of his wife, son or daughter who are in USA, has committed offences punishable under Section 3 of the PML Act. For granting such land and using his position as a Collector and getting profits in which his wife w....
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....iled a complaint before the Designated Special Court under PML Act on 27.9.2016. Summons was issued to the applicant and hearing was fixed on 29.9.2016. All the papers were supplied to the applicant on 29.9.2016 before the concerned Court. 2.4 Thereafter, the applicant filed an application under Section 439 being Criminal Misc. Application No.1991 of 2016 before the Designated Court and prayed to release him on bail during the pendency of the trial on several grounds. The said application came to be dismissed vide order dated 15.11.2016 bey the learned Sessions Judge and Designated Judge (PMLA) at Ahmedabad (Rural). Hence, this application. 3. Pursuant to the notice issued by this Court, the respondent No.1 has appeared through Mr. Devang Vyas, learned Assistant Solicitor General of India and filed an affidavit dated 9.1.2017 and opposed grant of any relief. Additional affidavit has been filed on behalf of the applicant on 10.1.2017. 4. Mr. Y. S. Lakhani, learned Senior Counsel assisted by Mr. R.J. Goswami appearing for the applicant has vehemently submitted that the applicant has wrongly been arraigned as an accused allegedly having committed offence under Section 3 of PML Act ....
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....efore, would submit that no offence as alleged to have been committed by the applicant. He would submit that in absence of any material, the Agency has miserably failed to establish that he was involved in process or actively connected with proceeds of crime and has projected the transaction taken place in the account of his wife as an untented property. The transactions which have been relied upon by the Agency are of his wife and applicant is not connected with the transactions which have taken place in USA. Therefore, he cannot be said to have committed any offence under the PML Act. Mr. Lakhani would further submitted that the applicant is, therefore, required to be ordered to be released on bail only on the ground that he is able to establish even at this stage that the transactions, whichever have taken place in the account of his wife and children are untainted property and the applicant is not connected at all. He would submit that applicant has established his innocence and, therefore, he may be released on bail. 4.2 Mr. Lakhani would further submit that if the Court is not satisfied with regard to the innocence of the applicant, he may be released by considering as if th....
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....so that the provisions of monetary threshold does not apply to the offences. However, all the offences which were listed in Part B were included in Part A without clarifying the same and, therefore, the Courts are treating all the cases of accused having committed an offence of Part A with applicability of Section 45 of the PML Act, when applicants request for bail. He would submit that the said issue was raised before the Hon'ble Punjab and Haryana High Court about the above aspect. The Division Bench of the Hon'ble Punjab and Haryana High Court by a decision dated 11.5.2016 rendered in the case of Gorav Kathuria v. Union of India and others, Criminal Writ Petition No.595 of 2016 held that though an accused is charged with the offences alleged to have been committed under Part A, his case is required to be dealt with as per the unamended provisions which were introduced in the year 2002. He would submit that by elaborate judgment, two substantial questions of law for general importance were raised by the Division Bench for decision of the Hon'ble Supreme Court. The Hon'ble Supreme Court confirmed the decision of the Division Bench by passing an order on 8.12.2016 i....
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....ions taken place at USA in Bank of America wherein the name of the applicant, with his family which were opened and operated by the applicant, his wife or his children. The Principal District and Sessions Judge, Ahmedabad (Rural) by communication dated 10.10.2014 and 9.12.2014, requested the concerned authorities of USA and UAE respectively to supply details about the monetary transactions which have taken place in USA or in Dubai. He would submit that reminders were sent by Principal District Judge for supply of the information. However, the Investigating Agency received information from USA only and is awaiting further details from UAE. He, therefore, would submit that only after receiving sufficient material having come to conclusion that the petitioner has laundered money by different modes, a complaint came to be filed in the year 2016. He would further submit that Investigating Agency was not sitting idle or was waiting for release of the applicant from other offences as alleged by the applicant. He, however, would submit that the manner and method adopted by the applicant for transferring Crores of rupees through different countries that too after committing scheduled offenc....
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....s would submit that the decision rendered by the Division Bench of the Punjab and Haryana High Court is not applicable in the present case since the observations made in the said judgment are in connection with the prayers made by the applicant of that petition and with regard to the constitutional validity of Section 45 or compounding of the offences in Part A. He would submit that a writ petition was filed before this Court raising similar contentions with regard to the object of a Bill for amendment as well as validity of Section 45 was challenged. However, the Division Bench of this Court has dismissed the petition by upholding the validity of the rigors of Section 45 of the PML Act. He would further submit that one Rakesh M. Kothari and others, accused charged for the offences punishable under the provisions of PML Act and offences related to earlier part B of the Schedule challenged the validity of Section 45 by way of filing Special Criminal Application No.4496 of 2014 with Special Criminal Application No.4672 of 2014. By decision dated 16.1.2015, the Division Bench has upheld the validity of the provisions of Section 45 dealing with the submissions of learned advocate abou....
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....s proved or assumed to be proved, but governed and qualified by the particular facts of the case which was dealt by the Trial Court. He would submit that when the Criminal Appeal was disposed of by the Hon'ble Apex Court in connection with the judgment of the Division Bench of Punjab and Haryana High Court, the Union of India was not heard and, therefore, as held by the Hon'ble Supreme Court in the case of Kunhayammed and others v. State of Kerala, (2000) 6 SCC 539, the question of merger of the judgment would apply only when the matter is disposed of, if the Hon'ble Supreme Court has considered a case in exercise of its jurisdiction as an Appellate or Revisional jurisdiction, have exercised jurisdiction after issuance of notice and after full hearing in presence of all the parties. In the present case, when the appeal was disposed of by the Punjab and Haryana High Court in the case of Gorav Kathuria, Union of India was not heard. In none of the decisions, either the Punjab and Haryana High Court or any other High Courts or the Hon'ble Supreme Court, it has been held that the provisions of Section 45 of the PML Act and inclusion of the offences of Part B into Part A....
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....5 of the PML Act would be applicable in view of the decision dated 11.5.2016 of the Punjab and Haryana High Court in the case of Gorav Kathuria v. Union of India and others, rendered in CRWP No.595 of 2016. Section 45 of the PML Act as on today, reads as under :- "45. Offences to be cognizable and nonbailable :- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule 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; Provided that a person, who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 e....
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....stringent conditions for grant of bail vide Section 45(1) in criminal cases under PMLA, and are unconstitutional and/or ii) to issue appropriate writ, order or directions while reading down these provisions for criminal cases, so as to make them constitutional by construing criminal offence under Part B of the Schedule inserted in PMLA w.e.f. 14.5.2015, to be amongst the offiences listed in Part-A of the Schedule, so as to apply the stringent pre-conditions for grant of bail vide Section 45(1) in the matters of money laundering irrespective of the magnitude of gravity of the said scheduled offences; iii) to hold that a private criminal complaint by the petitioner would be maintainable for setting the criminal law into motion and to seek any direction for investigation of offence under Section 3 r/w 4 of PMLA along with the offence under Part B of the Schedule inserted in PMLA w.e.f. 14.05.2015, either under Section 156(3) or under Section 155 (2) of the Code of Criminal Procedure, as the case may be, pending grant of sanction requisite for taking 'cognizance' in said Scheduled Offence or under PMLA, (iv) Issue any other writ, order or directions, which this Hon'....
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....2013 in the Schedule to PMLA was to overcome this monetary threshold limit of Rs. 30 Lakhs so that for invocation of PMLA in respect of the laundering of proceeds of crime involved in offences earlier listed under Part B of the Schedule, there is no embargo of minimum value of Rs. 30 Lacs. 12.16 In our opinion the presumption of the petitioner that rigors in grant of Bail contained in Section 45(1) of PMLA extends to all the offences mentioned in such amended Part A is neither logical nor intended by the legislation. The offences which were in the earlier Part A of the Schedule (prior to 2013 Amendment) are evidently henious offences such as waging war against the country, offences under NDPS Act and Terrorist activities etc. Other scheduled offences, which prior to 2013 amendment were under Part B of the Schedule, cannot be equated with such heinous offences in the context of Section 45(1) of PMLA. 12.17 Despite the above substantive amendment in the Schedule, we find no corresponding amendment simultaneously carried out in 2013, in Section 45(1), in respect of application of the limitations in grant of bail to person accused of Schedule offences earlier falling under Part B....
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....er Part A of the Schedule in the context of Section 45 (1) requires to read down to apply only to those scheduled offences, which existed under the Part A of the Schedule prior to the said 2013 amendment in Schedule. Having arrived at the said opinion, we have also given our anxious consideration to the issue whether we can simply fold our hands and blame the draftsman, or whether we are duty bound to work on the constructive task of finding the intention of Parliament and to iron out the creases to harmonise the law with the prevailing objects sought to be achieved, reasons and concepts and to make it an effective instrument for delivery of justice eschewing the construction which will lead to absurdity. The Hon'ble Constitution Bench in S.P. Gupta v. Union of India, 1981 Supp SCC 87 had observed as follows:- "63.............The interpretation of every statutory provision must keep pace with changing concepts and values and it must, to the extent to which its language permits or rather does not prohibit, suffer adjustments through judicial interpretation so as to accord with the requirements of the fast changing society which is undergoing rapid social and economic transfor....
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....contained in Section 45(1) in respect of persons accused of such offences which were earlier listed in Part B. Therefore, twin limitations in grant of bail contained in Section 45(1) as it stands today, are not applicable qua a person accused of such offences which were earlier listed in Part B. 12.21 .............................. 12.22 Vide Section 145(ii) and Section 151 of the Finance Act,2015 with effect from 14.05.2015, in sub-clause (ii) of section 2(y) of PMLA, for the words "thirty lakh rupees",the words "one crore rupees" were substituted. Moreover, in the Schedule of PMLA after Part-A, Section 132 of the Customs Act, 1962 was inserted in Part-B. The amendment of 2015, increasing the monetary threshold from Rs.Thirty Lakhs to Rs. One Crore for invocation of PMLA, now shows further shift and liberalisation in the earlier legislative intent of removing the monetary threshold for invoking PMLA. If it is construed that the limitation imposed by Section 45(1) on granting bail would apply to the persons arrested on accusation of offences which were earlier listed under Part B, but not to a person arrested on accusation of offence punishable under Section 132 of the Custom....
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....t in Schedule as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011. 12.23 We, therefore, in light of the "Statement of Objects and Reasons" as incorporated in the Prevention of Money- Laundering(Amendment) Bill, 2011 and the above discussion and findings, have no hesitation in holding that the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the Schedule existing prior to 2013 amendment. In other words, the limitations in grant of bail under Section 45(1) of PMLA are not applicable to those persons who are arrested under PMLA on accusation of commission of such scheduled offences which were earlier listed under Part B of the Schedule (prior to amendment in Schedule carried out in 2013). 12.24. Consequently, the provisions containing twin limitations in grant of bail under Section 45(1) would override the normal principles governing bail under Sections 438 and 439 qua the persons arrested o....
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....rious sections in the Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom in a much better position to look after his case and to properly defend himself than if he were in custody. .............. 30. In AMERICAN JURISPRUDENCE (2nd,Volume 8, p. 806, para 39), it is stated :- "Where the granting of bail lies within the discretion of the Court, the granting or denial is regulated, to a large extent, by the facts and circumstances of each particular case. Since the object of the detention or imprisonment of the accused is to secure his appearance and submission to the jurisdiction and the judgment of the court, the primary inquiry is whether a recognizance or bond would effect that end." 9. It is important to note that after dealing with the said object, the prayer made by the petitioner challenging the vires of 2015 Amendments have been rejected which reflects in paragraph 12.25 of the said judgment, which reads as under :- "12.25 Consequently, we find that the basis on which vires of the 2015 amendments has been challenged do not have any merit and the first two prayers in this regard are accordingly....
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....reasonable and ultra vires, and consequently unconstitutional, illegal, arbitrary, discriminatory, and thus being violative of Articles 14, 19 and 21 of the Constitution of India, and this Hon'ble Court may read down, lay down, expound, interpret and deliberate upon the scope and perspective of Section 45 of PMLA so as to harmonize the same in juxtaposition with various scheduled offences [under amended Part A of the Schedule], [b] To read down, expound, deliberate and interpret the scope and perspective of Section 19 of PMLA in light of section 49(3) read with Rules notified by GSR 446[E] dated 1.7.2005, in consonance and harmony with settled constitutional mandate of Articles 14, 21 and 22 of Constitution of India as also in the context of various provisions under the Code of Criminal Procedure, 1973, as amended from to time and the Guidelines laid down by the Hon'ble Apex Court in D.K.Basu vs State of West Bengal 1997(1) SCC 416, [c] For issuance of an appropriate writ of quo warranto, calling upon Respondent No.3, who being an Assistant Director, Enforcement Directorate, appointed under Foreign Exchange Management Act, 1999, can under Section 54 of PMLA only assis....
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.... The Petitioner may please be released on regular bail in the above case in ECIR/01/SRT/2014, [ii] The Petitioner may please be released on regular bail in the above case in ECIR/01/SRT/2014, [f] Dispense with filing of affidavit in support to this Petition as the Petitioner is in judicial custody; [g] For such other or further order/s in the peculiar facts of the case." 12. Having considered similar arguments advanced by learned advocate appearing for the petitioner and various decisions of the Hon'ble Supreme Court, the Division Bench of this Court has dismissed the said petition in the case of Rakesh Kothari upholding the validity of vires of Section 45 of the PML Act. 13. It is true that the decision rendered by the Division Bench of the Punjab and Haryana High Court in the case of Gorav Kathuria was challenged by the petitioner himself before the Hon'ble Supreme Court by preferring Criminal Appeal No.737 of 2016 and the Hon'ble Supreme Court has dismissed the appeal vide order dated 12.8.2016. The order of the Hon'ble Supreme Court reads as under :- "Though the High Court has granted certificate to appeal, we have heard the learned counsel for som....
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....t must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law but govern and are qualified by the particular facts of the case in which such expressions are to be found." 41. A three-Judge Bench in Union of India and others v. Dhanwanti Devi and others (1996) 6 SCC 44 while discussing about the precedent under Article 141 of the Constitution, held that :- "9. Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Krishan Khosla case[39] is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well- settled theory of precedents, every decision con....
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.... of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents......" 15. In another decision of the Hon'ble Supreme Court in the case of Official Liquidator v. Dayanand and others, (2008) 10 SCC 1, it has been held in paragraph 78 as under :- "78. There have been several instances of different Benches of the High Courts not following the judgments/orders of coordinate and even larger Benches. In some cases, the High Courts have gone to the extent of ignoring the law laid down by this Court without any tangible reason. Likewise, there have been instances in which smaller Benches of this Court have either ignored or bypassed the ratio of the judgments of the larger Benches including the Constitution Benches. These cases are illustrative of nonadherence to the rule of judicial discipline which is sine qua non for sustaining the system. In Mahadeolal Kanodia vs. Administrator General of W.B . [1960 (3) SCR 578], this Court observed :- "If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if Judges of coordinate jurisdiction in a High Cou....
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....i Devi and Ors. (1996 (6) SCC 44). A case is a precedent and binding for what it explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are words in Act of Parliament. In Quinn v. Leathem (1901) AC 495 (H.L.), Earl of Halsbury LC observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and a case is only an authority for what it actually decides. 10. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may b....
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....ee is to vacate a decree passed. The decree that is subsequently passed on review whether it modifies, reverses or confirms the decree originally passed, is a new decree superseding the original one. The distinction is clear. Entertaining an application for review does not vacate the decree sought to be reviewed. It is only when the application for review has been allowed that the decree under review is vacated. Thereafter the matter is heard afresh and the decree passed therein, whatever be the nature of the new decree, would be a decree superseding the earlier one. The principle or logic flowing from the above said decisions can usefully be utilised for resolving the issue at hand. Mere pendency of an application seeking leave to appeal does not put in jeopardy the finality of the decree or order sought to be subjected to exercise of appellate jurisdiction by the Supreme Court. It is only if the application is allowed and leave to appeal granted then the finality of the decree or order under challenge is jeopardised as the pendency of appeal reopens the issues decided and this Court is then scrutinising the correctness of the decision in exercise of its appellate jurisdiction." ....
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.... bail. 30. The conditions specified under Section 45 of the PMLA are mandatory and needs to be complied with which is further strengthened by the provisions of Section 65 and also Section 71 of the PMLA. Section 65 requires that the provisions of Cr.P.C. shall apply in so far as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr.P.C. would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 of Cr.P.C. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the Authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant. 31. It was submitted on behalf of the appellant that Section 12A read with Sectio....
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....t provision to Section 67(3) of the Companies Act, 1956. Rose Valley by making public issue of debentures during the period between 2001-2002 to 2007-2008, without complying with the public issue norms, violated the provisions of erstwhile SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the provisions of Section 117(A) of the Companies Act, 1956 and other provisions of SEBI Act which is a Scheduled Offence under PMLA. 32. We have heard the learned counsel for the parties. At this stage we refrained ourselves from deciding the questions tried to be raised at this stage since it is nothing but a bail application. We cannot forget that this case is relating to "Money Laundering" which we feel is a serious threat to the national economy and national interest. We cannot brush aside the fact that the schemes have been prepared in a calculative manner with a deliberative design and motive of personal gain, regardless of the consequence to the members of the society. 33. With regard to the questions raised by Mr. Gopal Subramanium, learned senior counsel appearing on behalf of the appellant, at this stage, we do not think that we should answer or deal with the same in ....
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....ions of the Constitution of India, in my opinion, the Court is required to read the provisions of law which are applicable on the day. When the Court is dealing with an application of an accused under Section 439 read with Section 45 of the PML Act, the provisions of the PML Act are required to be scrupulously followed. The applicant is facing charges for several offences punishable under the provisions of Indian Penal Code and also under the provisions of Prevention of Corruption Act, which are of Part A to the Schedule of PML Act and, therefore, rigor of Section 45 would be applicable. Therefore, the Court cannot presume that certain offences which were in part B in past shall be treated in the same Part even though they have been amended in the year 2013. Hence, I hereby hold that the rigors of Section 45 would be applicable in the present case. Further, it is pertinent to note that the validity of the provisions as well as amended provisions of Section 45 of the PML Act is under consideration before the Hon'ble Supreme Court since Rakesh Kothari, petitioner before the Division Bench of this Court in Special Criminal Application No.4496 of 2014 has challenged the said decis....