TaxTMI 
TaxTMI 
2016 (10) TMI 1030
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....ties. 2.0 The brief facts are as under: 2.1 The respondent No.2 has filed a complaint on 15.6.2015 against the applicants and six others alleging that the applicants have committed offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the PML Act read with Section 120B of the Indian Penal Code, 1860, which is registered as PMLA Case No.8/2015. Learned designated Special Court, Ahmedabad, issued summons against all the accused persons for the above referred offences read with Section 120B of the Indian Penal Code, 1860, and directed the accused to deposit their passports before the learned designated Special Court, Ahmedabad, and to furnish security of Rs. 50,000/-. 2.2 It is the case of respondent No.2 that on receipt of intelligence information, the Enforcement Directorate raided a farm house at Vadodara on 19.3.2015 in connection with hawala transactions. It is alleged that during such raid, incriminating material of cricket betting was found, and therefore, on information supplied by the Enforcement Directorate to the Police Department, a First Information Report being C.R.No.II-222/2015, under Sections 4 and 5 of the Gambling Act and....
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....nt No.2 seeking further remand was rejected by the learned designated Special Court, Ahmedabad, and the applicants were sent to judicial custody, and since then, they are in judicial custody in connection with ECIR/03/AMZ0/15 and PMLA Complaint No.8/2015. 3.0 Learned Senior Counsel Mr. Vikram Chaudhary with learned advocate Mr. Chetan K. Pandya appearing for the applicants makes the following submissions: 3.1 That the charge sheets in connection with F.I.R. being C.R.No.II-222/2015 were filed against as many as 16 accused, including the applicants for the offences punishable under Sections 4 and 5 of the Gambling Act and under Sections 65, 66 and 66C of the Information Technology Act. However, neither of the Sections for which charge sheets were filed are part of the scheduled offences under the PML Act. Learned Senior Advocate submits that it is pertinent to note that the above allegations were being levelled on the basis of the statements of the applicants recorded on 20.3.2015 under Foreign Exchange Management Act, 1999 (for short `the FEMA') and PML Act, and also recorded after the applicants' arrest on 18.4.2015, 21.4.2015, 22.4.2015 and 23.4.2015. However, there....
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....one year and six months, and the maximum punishment envisaged for the offence punishable under Section 3 and 4 of the PML Act is seven years. All the co-accused, total 8 in number, have been released on regular bail. One common observation made by the designated Special Judge while granting bail to the said accused is that the income derived from cricket betting would not be covered under the definition of `proceeds of crime'. Even two of the co-accused viz. Chirag Parikh and Dharmendra Chauhan, who were also accused of scheduled offences, have been released on regular bail. The said two co-accused are the alleged partners of the present applicants in the firm M/s. Maruti, Ahmedabad having 27% and 5% share respectively. The respondents have acquiesced into the bail orders of the other coaccused, and the orders granting regular bail have never been challenged before the higher forum. The movable and immovable properties of all the four partners of M/s. Maruti, Ahmedabad, including the present applicants, are provisionally attached under Section 5 of the PML Act. 3.5. That this High Court was pleased to release the co-accused No. 6 and 9 by order dated 20.10.2015 passed in ....
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....ces and PML Act are tried together, and therefore, it is uncertain when the investigation would be complete and when the trial would commence, and as such, the very basis of rejection of applicants' bail applications by the trial court on 10.2.2016 on the basis that the trial could be concluded within four to six months stands negated. 3.8 That the offences under the PML Act are non-cognizable and even if they are cognizable, then in both the eventualities, procedure under Chapter XII, Criminal Procedure Code, is necessary to be followed. It is submitted that prima facie the offence under the PML Act is non-cognizable in view of specific omission of Section 45(1) on 21.5.2005, i.e. prior to coming of the Act into force with effect from 1.7.2005, which provided that every offence under the Act would be cognizable. Further, there are no criminal antecedents as to PMLA cases against the applicants. 3.9 That in Rakesh Manekchand Kothari vs. Union of India and others in Special Criminal Application No.4247 of 2015 it was held prima facie that the offences under PML Act are non-cognizable. In the case of Om Prakash Vs. Union of India reported in (2011) 14 SCC 1 Hon'ble S....
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....ground, the present application seeking appeal is required to be dismissed. 4.2 That in pursuance of specific intelligence information regarding operation of large scale on-line hawala racket in international cricket betting through UK based website `Betfair. Com' by one Shri Girish Parshottam Patel @ Tommy Patel and his associate Shri Kiran Jayantilal Mala, the premises identified as a farm house in village Sikandarpur, near Ajwa Chowkdee, Vadodara was searched under Section 37 of the Foreign Exchange Management Act, 1999, which resulted into recovery and seizure of incriminating documents, digital records, etc., and therefore, F.I.R. being C.R.III-222/2015 for the offences of betting was registered on 21.3.2015. Thereafter, on 25.3.2015, F.I.R. being C.R.No.I-85/2015 was registered by Kishanwadi Police Station, Vadodara, against one Girish Parshottam Patel @ Tommy Patel, Kiran Jayantilal Mala, Dharmendrasinh Vishwanath Chauhan @ Dharmin Chauhan and Chirag Parikh for commission of offences under Sections 120B read with Sections 418, 419, 420, 467 and 471 of the Indian Penal Code which are scheduled offences of PML Act. 4.3 That in pursuance to the aforementioned F.I.R. i....
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....Parikh and Mahendra Chauhan. Learned counsel further submits that panchnama was drawn in respect of recovery and seizure of incriminating documents, digital records, etc., in pursuance to the search under Section 37 of the FEMA, 1999 as well as the search carried out under Section 17(1) of the PML Act. Learned counsel further submits that the scope of appeal under Section 45 of the PML Act is very limited and required to be considered in addition to the conditions prescribed under Section 439 of the Cr.P.C. and for grant of bail, two more conditions are required to be fulfilled, i.e. (i) the public prosecutor be afforded an opportunity to oppose and (ii) where the public prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that the applicant is not guilty of such offences and that he is not likely to commit offence while on bail. According to learned counsel for the respondent No.2 while considering the bail application, the Court is required to satisfy itself about the two conditions enumerated under Section 45 of the PML Act, and if the Court is not satisfied with those conditions, even if there is any procedural lapse in init....
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....ognizable and non-bailable. The punishment provided under Section 4 of the PML Act is minimum 3 years which can be extended till 7 years and it can be further extended to 10 years in certain cases along with fine. The compliance of provisions of Section 155 Cr.P.C. is applicable to non-cognizable offences under the provisions of Indian Penal Code, and therefore, the contention with regard to non-compliance of Section 155 of Cr.P.C. is not sustainable, as the same is against the proceedings of Special enactment, i.e. the PML Act. It is also submitted that from the investigation carried out so far, there is a strong prima facie case made out against the applicants-accused, and therefore, no benefit can be extended to the applicants-accused by way of any relief looking to the role of the accused and the gravity of the offence. 4.7. In support of above submissions, following case laws have been cited: Afroz Hassan Fatta case (M.Cr.A No.17000 of 2014), Hasan Ali Khan case (2011) 10 SCC 235, Rakesh Kothari case (Cr.M.A. No.3637 of 2015 - Gujarat High Court), Rakesh Manekchand Kothari vs. Union of India (W.P. Cr. No.61 of 2015 - Supreme Court), Gautam Khaitan Vs. Enforcement Directorat....
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....s or knowingly is a party or is actually involved in nay process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering" "4. Punishment for money-laundering - Whosoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine: Provided that where the proceeds of crime involved in money laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this Section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted. The definition of "proceeds of crime" provided in Section 2(u) reads as under: "2(u) "Proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property; or where such property is taken or held outside th....
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....punishment prescribed under law in the event of the conviction of the applicants, and (vi) sixthly, whether the co-accused having similar allegations is enlarged on bail, in other words, ground of parity is available in the instant case to the applicants or not. 6.3 In view of the above aspects for the purpose of deciding the present bail application following issues are required to be discussed: 6.4 With respect to proceeds of crime: The learned advocate for the applicant seeks to apply the ground of parity with two co-accused, namely, Chirag Parikh and Dharmendra Chauhan, a coordinate bench of this Court in Cr.M.A. No.17326/2015, observed that - "since in the present case the scheduled offence is cheating, forgery and criminal conspiracy for the procurement of SIM Cards on the basis of false and forged documents hence there is no proceeds of the crime in the present case which is related to the commission of these scheduled offences. That even Section 17 of PMLA differentiates between 'proceeds of crime' and 'property related to crime'." The Bench further observed that, "it is an admitted position that cricket betting is not a scheduled offence....
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....urther held that even if the offences are taken as cognizable, respondents were bound to follow the procedure contemplated under Chapter XII, Cr.P.C., i.e. Sections 154, 156, 157, 167, 172, Cr.P.C., etc. It contemplated registration of F.I.R., sending copy thereof to the concerned court within 24 hours, maintenance of case diary, etc. which was mandatory. It appears that the Enforcement Directorate approached the Honourable Supreme Court vide S.L.P.(Cr.) No.9727 of 2015 assailing the order of Division Bench of this Court, i.e. Rakesh Kothari case, the Honourable Supreme Court dismissed the said S.L.P. in limine and thereby clearly upheld the order dated 3.8.2015 passed by the Division Bench. It also appears that similar view has recently been taken by a Division Bench of Honourable Delhi High Court vide order dated 27.4.2016 in Gurucharan Singh (supra). Thus, in both Rakesh Manekchand Kothari (supra) and Gurucharan Singh (supra), the Division Bench of Gujarat and Delhi High Courts have directed the respective detenues to be released on bail. 6.10 Reliance has been placed by the respondents on Rakesh Manekchand Kothari (supra), which prima facie, appears to be untenable and misco....
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....979/2015 Dismissed. However, we grant liberty to the petitioner, if he so desires, to make an appropriate application/petition as envisaged under the provisions of Coded of Criminal Procedure, 1973, after six months." (vi) However, in the writ petition and the other S.L.P. challenging the order dated 16.1.2015(supra), the Hon'ble Supreme Court granted permission for withdrawal with specific liberty to the petitioner to file any other writ petition. Relevant extract of the order dated 7.7.2015 passed by the Hon'ble Supreme Court reads as under:- "W.P.(Cri.) No.61/2015: Learned counsel for the petitioner, on instructions, seeks permission of this Court to withdraw the Writ petition. Permission sought for is granted. The writ petition is disposed of as withdrawn. It is clarified that the withdrawal of the present writ petition will not come in the way of any other writ petition that is already pending or that may be filed by the petitioner. SLP (Cri.) CRL.MP.No.7277/2015: Delay condoned. Learned counsel for the petitioner, on instructions, seeks permission of this Court to withdraw the Sp....
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....he matters, the Hon'ble Supreme Court has taken cognizance and the said Afroz Mohmad Hasanfatta has been granted interim bail. Vide the order dated 26.7.2016 passed in W.P. (Cri.) 189 of 2015, the Hon'ble Supreme Court clearly observed that issue raised in the petitions is as to whether the offence under PMLA is cognizable or non-cognizable. Thus, the issue regarding compliance with the procedure is live, germane and open and the view taken by the Division Bench in its order dated 3.8.2015 passed in S.Cr.A (Habeas Corpus) 4247 of 2015 Rakesh Manekchand Kothari (supra) prevails so far. The Hon'ble Single Judge in a batch matter has taken the view that the offences under PMLA are cognizable and no procedure under Cr.P.C. is required to be followed. This view is based primarily on the judgment passed by a Division Bench of Hon'ble Punjab and Haryana High Court in its judgment dated 22.12.2015 titled as Karam Singh Vs. Union of India CWP No. 3317 of 2015 and Vinod Kumar Garg vs. Union of India CWP No.314 of 2015. It is a matter of record that review application bearing R.A. No.83 of 2016 in Karam Singh (supra) case is already pending before the Division Bench of Hon&....
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....ther officer authorized by the Central Government. So, what would happen to an arrest made by any police officer in the case of a cognizable offence? Which is the court that will try the offence? Clearly, there were inconsistencies in these provisions. They have been removed. We have now enabled only the Director or an officer authorized by him to investigate offences. Of course, we would, by rule set up a threshold: and, xx xx xx The second anomaly that we found was that the expression "investigation officer" and the "investigation" occur in number of sections, but they were not defined in the Act. Consequently, one has to go to the definition in the criminal procedure code and that code provides only "investigation by a police officer or by an officer authorized by a magistrate". So clearly there was a lacuna in not enabling the director or the assistant director under this Act to investigate offences. That has been cured now. xx xx xx What we are doing is, we are inserting a new section 2(n)(a) defining the term `investigation'; making an amendment to Sections 28, 29 and 30, dealing with tribunals; amending Section 44 and 45 of the Act to make the ....
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....rated in the Prevention of Money- Laundering (Amendment Bill, 2011 to apply such stringent limitations in grant of bail to person accused of Scheduled offences earlier falling under Part B of the Schedule, but now existing in Part A thereof. On the contrary, the only object sought to be achieved by the said 2013 amendment in Schedule 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 falling under Part B of the Schedule, there is no embargo of minimum value of Rs. 30 lacs. This 2013 amendment in Schedule carried out as proposed vide the Prevention of Money Laundering (Amendment) Bill 2011 was not intended to introduce a substantive amendment for creating an embargo on grant of bail to a person arrested under PMLA in respect of offences earlier falling under Part B of the Schedule. After having perused the "Statement of Objects and Reasons" as incorporated in the Prevention of Money Laundering Amendment Bill 2011, which led to 2013 amendment in Schedule, we are unable to agree with the petitioner that by necessary corollary of the aforesaid 2013 amendment, the ....
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.... 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." 6.13 The Honourable Division Bench while disposing of Gorav Kathuria (supra) framed the following questions of law while granting a Certificate of Appeal in terms of Article 134-A of the Constitution of India:- "a) Whether it would be unreasonable and in violation of Article 14 and 21 of the Constitution of India, if the twin limitations in grant of bail stipulated under Section 45(1) of PMLA would be applied even to those persons arrested under PMLA on accusation of commission of any such scheduled offences, which were listed under Part B of the Schedule omitted in 2013 but only for the limited purpose as specified in the "Statement of Objects and Reasons" in the Prevention of Money-Laundering (Amendment) Bill 2011. b) Whether as per the provisions of the Code of Criminal Procedure, 1973 read with the provisions of the PMLA and Rules made thereunder, a private individual can set the criminal law into motion by either seeking registration of case for investigation by the authority under PMLA or by directly approachin....
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....f M/s. Maruti, Ahmedabad, including the present applicants, are provisionally attached under Section 5 of the PML Act. It appears from the material on record that the trial has not even begun as the investigation is yet to be completed and still continues, according to respondent No.2. Moreover, the case and the case papers of the scheduled offences are yet not transferred from Vadodara to Ahmedabad to the designated Special Court as in view of the provisions contained in Section 44(1)(a) of PML Act, both the trials of scheduled offences and PML Act are required to be tried together. Thus, prima facie there is a reason to believe that commencement of trial and its conclusion is likely to take some more time. Both the applicants are in custody since 17.4.2015, i.e. since last about one year and six months. The learned designated Special Court rejected the applicants' bail applications vide order dated 10.2.2016 by assigning a reason that the trial could be concluded within four to six months, but till date, the trial has not even commenced and likely to take some more time. The applicants are permanent residents of Ahmedabad and Unjha and are having responsibilities towards t....
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.... the satisfaction of the learned Trial Court and the applicants without prejudice to their rights and contentions shall deposit a sum of Rs. 25,00,000/- each separately before the designated Special Court within one month from the date of their release, and the release of the applicants shall be subject to the following conditions that the applicants shall; [a] not take undue advantage of liberty or misuse liberty; [b] not act in a manner injurious to the interest of the prosecution; [c] surrender passport, if any, to the lower court forthwith, if not already deposited; [d] shall not enter into Vadodara, Mehsana, Kheda and Gandhinagar Districts. [e] not leave the State of Gujarat without prior permission of the Designated Special Court concerned; [f] mark presence before the Deputy Director, Enforcement Directorate, Ahmedabad, on every Monday of each English calendar month for a period of six months and thereafter, every alternate Monday till the charge is framed between 11:00 a.m. and 2:00 p.m.; [g] furnish present/latest and permanent address of residence to the Investigating Officer and also to the Court at the time ....