TaxTMI 
TaxTMI 
2017 (3) TMI 1483
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....ry and others, including the petitioner, ED also registered a case in No. ECIR/BGZO/13/2016 for offences punishable under the provisions of the PML Act. ii) Petitioner was taken into custody on 3.12.2016 and granted bail on 8.12.2016 by the Special Court. However, on the following day, petitioner and other accused were remanded to judicial custody till 22.12.2016 to facilitate a Special Public Prosecutor to file objections. Upon an application made by the petitioner, the learned Special Judge granted an Interim Bail to the petitioner and the same was challenged by the ED in Crl.P.No.9737/2016 before this Court and the same was disposed of with a direction to the Special Judge to hear the Regular Bail application on 4.1.2 017 and to pass orders within 3 days there from. In pursuance thereof, the learned Special Judge heard the bail petition and by his Order dated 7.1.2017 dismissed the same. iii) The Anti Corruption Bureau (ACB) have also registered another FIR in Crime No.25/2016 alleging commission of offences under Sections 13(1)(e), 13(1)(d) and 13(2) of Prevention of Corruption Act, 1988 ('PC Act' for short). The petitioner has challenged the same before this Cou....
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....eeds of crime'. Item No.1 namely, Site No.260 was allotted to petitioner's mother-in-law by a House Building Co-operative Society and acquired under a registered Sale Deed dated 4.6.1999. Subsequently, she has gifted the same to her daughter (petitioner's wife) under a Gift Deed dated 29.4.2009, who has in turn gifted it to her brother under a Gift Deed dated 15.5.2009; (b) Item No.2 - namely, Site & House built on property No.191/8 was purchased (as per Sale Deed produced as Document No.33 of compilation) by petitioner's wife, who was an employee with Nationalised Bank. Petitioner has also declared the same in his Annual Property Returns (Document No.36); (c) Item No.3 was acquired by petitioner's mother i n the year 1999 as per Document No.1 and gifted to the petitioner's wife under a Gift Deed dated 28.6.2004 as per Document No.4 after obtaining permission from the Government of Karnataka vide permission dated 18.12.2003; (d) Items No.4 & 5 were purchased by petitioner's mother-in-law (as per Document No.27) and gifted to her daughter as per Document No.28, a Gift Deed dated 8.7.2004. The Government of Karnataka has accorded permission to receive the said gift vide communi....
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.... the Government of Karnataka informed with regard to every acquisition and continued to file Annual Property Returns in which all the properties owned and possessed by the family are disclosed. Once the employer, Government of Karnataka have accorded permission to acquire properties and the same are reflecting in the Annual Property Returns, such properties cannot be described as having been acquired from out of 'proceeds of crime'. 6. On the question of law, the learned Senior Counsel has advanced two principal contentions. Firstly, that the rigor of Section 45 of PML Act is not applicable to the facts of this case and secondly that even if it is held to be applicable, the petitioner's case deserves consideration on merits. 7. Amplifying his submission, learned Senior Counsel submitted that in CRWP No.595/2016 (O & M) [ Gorav Kathuria v. Union of India and others ], the Hon'ble High Court of Punjab & Haryana has held that the limitation for grant of bail under Section 45(1) of PML Act is not applicable to those persons accused of offences which were earlier listed in Part-B of the schedule prior to amendment in the year 2013 and admittedly, Section 13 of the PC Act was i n P....
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.... the apprehension of ED with regard to attendance before the Investigating Authority and the Court is also not well founded. 9. With these submissions, Shri C.V. Nagesh, prayed that this petition may be allowed and petitioner be enlarged on bail. 10. Shri S. Mahesh, learned standing Counsel for the respondent - ED strongly opposed the petition. He submitted that the offences alleged against the petitioner are predicate offences mentioned in Part - A of the schedule. Countering the argument with regard to registration of FIR, he submitted that Section 19(1) of PML Act empowers an authorize d officer to arrest any person, if he has reason to believe that such person is guilty of an offence punishable under the said Act and soon thereafter inform him of the grounds for such arrest. Therefore, the arrest of petitioner under the Act is strictly in consonance with Section 19 and therefor e, the rulings in the case of Lalita Kumari and Patai @ Krishna Kumar, supra are not applicable to the facts of this case. 11. In response to the principal argument that the limitations contained in Section 45 are not applicable to the case on hand in view of the judgment of Hon'ble Pun jab & Ha....
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....for the check period 1.2.1985 to 18.12.2 008 for possession of disproportionate assets worth Rs. 1,72 ,73,000/- during the said check period. He further submitted that the petitioner has again indulged in illegal acts and got demonetized currency worth Rs. 6,12,50,000/- exchanged. In sum and substance, his argument is that the petitioner, who was alleged of possessing assets disproportionate t o his known source of income by the Lokayukta in the year 2008 and has again indulged in converting demonetized currency of Rs. 6,12,50,000/- by using his aids. He placed reliance on the judgment of the Hon'ble Supreme Court in the ca se of Union of India v. Hassan Ali Khan and another reported in (2011) 10 SCC 235 and prayed for dismissal of this petition. 13. Replying to the submissions of Shri S. Mahesh, Shri C.V. Nagesh, argued that the ruling in the case of Hassan Ali, supra, is not applicable to the facts of this case. The ramifications involved in the said case are very serious in nature. It was alleged against the first respondent therein that he had not accounted for astronomical sums of foreign exchange dealt by him, which was Rs. 11,04,12,68,85, 303/-. In contra distinction, ....
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....nance Act, 2015; 18. The prayers contained in the said writ petition have been extracted in the judgment of the Hon'ble Punjab & Haryana High Court, which reads as follows: "8. A compilation of judgments has been submitted by the petitioner in support of his submissions. The following prayers are made by him in the instant petition:- i) Issue appropriate writ, order or direction in the Petitioner's challenge to the vires qua criminal cases, of firstly the sub-clause (ii) of clause (y) of section 2 of PMLA, and secondly, the insertion of Part-B in the Schedule in PMLA, as amended vide section 145(ii) and section 151 of the Finance Act, 2015, with effect from 14.05.2015, for declaring these provisions of PMLA as unconstitutional and ultra vires as the same are contrary to the objects of PMLA warranting 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....
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....uld apply in relation to a person arrested under PMLA an accusation of commission of such scheduled offences , which were earlier listed under Part B of the Schedule." ............ 19. Ultimately, the Hon'ble Punjab & Haryana High Court has dismissed the writ petition filed by Gorav Kathuria. Upon an oral prayer seeking leave to appeal to Hon'ble Supreme Court made by the petitioner therein, the Hon'ble Punjab & Haryana High Court recording that it had not come across any precedent in respect of two issues concerning fundamental rights guaranteed under the Constitution under Articles 14 and 21 by the Hon'ble Supreme Court, is sued a Certificate on the following two substantial questions of law: "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 PML A would be applied even to those persons arrested under PMLA o n accusation of commission of only 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-Laund....
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....nsidering the application for bail under Section 439 of the Code of Criminal Procedure . There is no doubt that PMLA deals with the offence of money- laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PML A is a special statute enacted by the Parliament for dealing with money- laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or an y local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29. Section 45 of the PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail to any person accused of an offence punishable for a term of imprisonment of more than three years under Part - A....
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.... to any person accused of committing offence punishable under Section 4 of the PMLA, eve n when the application for bail is considered under Section 4 39 of the Code of Criminal Procedure". (emphasis supplied) 23. Thus, Hon'ble Supreme Court has held in clear and unambiguous terms that the provisions of Section 45 applies to all offences enumerated in Part-A of the Schedule. It is relevant to note that the judgment of the Gautam Kundu's case is delivered on 16.12.2015. The offences under the provisions of Prevention of Corruption Act, 198 8 and Sections 120-B, 420, 406,409, 468, 471, 477-A of IP C have been brought in Schedule-A with effect from 15.2.20 13. Thus, the offences alleged against the petitioner herein were already in Part-A of the schedule as on the date on which Hon'ble Supreme Court was considering Gautam Kundu's case. Similarly, offences under the SEBI Act, 1992 which were under consideration in the Gautam Kundu's case were also in Part-B of the schedule prior to the amendment in 2013 but, as on the date of consideration of Gautam Kundu's case by the Hon'ble Supreme Court they were in Part A of the schedule. Thus, offences alleged against the petitioner here....
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....irming the order appealed against. It would also not make any difference if the order is a speaking or non- speaking one. Whenever this Court has felt inclined to apply its mind to the merits of the order put in issue before it though it may be inclined to affirm the same, it is customary with this Court to grant leave to appeal and thereafter dismiss the appeal itself (an d not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this Court". 25. Learned Senior Counsel pointed out that as the Hon'ble Supreme Court has held that the judgment of the High Court is correct. He stressed on the sentence that 'it would also not make any difference, if the order is a speaking or a non-speaking one' contained in paragraph - 41, extracted above. Thus, he submitted that all findings recorded and law declared d by the Hon'ble Punjab & Haryana High Court in the case of Gorav Kathuria are deemed to b....
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....crutinising the correctness of the decision in exercise of its appellate jurisdiction. 27. He argued that the three pre-conditions attracting the applicability of doctrine of merger include the third and an important condition that the matter is heard in full in the presence of both parties. He pointed out that the respondent- Union of India was not heard before the Hon'ble Supreme Court. He also pointed out that though the High Court had granted the certificate, the substantial questions framed by the High Court were not answered by the Hon'ble Supreme Court and the Criminal Appeal has been dismissed. He thus contended that the judgment of the Hon'ble Punjab & Haryana High Court is not applicable. 28. The binding effect of a judgment of Hon'ble Supreme Court under Article 141 of the constitution has been considered in various judgments. It may be profitable to extract the following passage contained in the case of Rajput Ruda Meha and others v. State of Gujarat reported in (1980)1 SCC 677 wherein it is held as follows: "6.........Neither was it pleaded during the arguments that Section 384 of the Code of Criminal Procedure is ultra vires of the constitution. As t....
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....English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on Jurisprudence 12 th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. [(1941) 1 KB 675, 677 : (1941) 2 All ER 11] the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference t o the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur. [(1989) 1 SCC 101] The bench held that, 'precedents sub- silentio and without argument are of no moment'. The courts thus have been taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a bin ding effect as is contemplated by Article 141. Uniform....
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.... Mr.Devanand 10,00,000/- Flat No.S-3, Second Floor, Shakya Elite, Site No.1335, 1 st Block, 1 st Stage, Nagarbhavi, Bengaluru. Mrs.Ratho 7,00,000/- Flat No.303, Shakya Enclave, No.12, 2 nd Main, KPA Layout, Chandra Layout, Bengaluru. From the above narrative it can be concluded that the amount of cash found in the premises of Petitioner in fact be long to the partnership concern and not to the Petitioner herein and that there are satisfactory explanations provided as above that are available with the Respondent. Hence, the amount by no stretch of imagination be termed as 'proceeds of the crime' so as to constitute an offence under section 3 of the PML Act, 2002. Therefore, there are reasonable grounds before this Court to hold that Petitioner is not guilty of the offence under the PML Act, 2002 and hence entitled for bail." (emphasis supplied) 33. Petitioner has filed three affidavits all dated 1.2.2017 by three persons namely, H. Nischal Ananth a Purshotham, Devanand and Anil Rathod. In his affidavit, Purshotham has stated as follows:- "4. I state that I am a genuine person and not a fictitious one as is being contented by the Enforcement D....
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.... lakhs, my husband had got some amount exchanged by Shri Prashanth . For the purpose, the old notes were also in the house. Rest of the new note s were got exchanged by my husband only. I do not know how an d with the help of whom he got it exchanged. Sir, I am a house wif e. I do not interfere in the day to day activities of my husban d. He does not consult me and he does not ask my advice. Wherever and whenever I am told to.. I put my signatures on the documents shown to me . As for the amount found in Pebble Bay the amount of Rs. 1 lakh must have been given by my husband to Thrijesh . My son is very, very close to Shri Hardik Gowda who is a contractor and owns many costly cars like Lamborghini etc. He gives my son to drive them." (emphasis supplied) 36. With regard to the statements recorded by the E D authorities, it was argued by Shri C.V. Nagesh that any statement recorded by the said authority is inadmissible as the same is not recorded after administering oath. This argument was countered by the learned Standing Counsel for the ED that Section 50 of the PML Act is in parimateria with Section 108 of the Customs Act and therefore statement made before ED Authority is ad....
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....r or anybody acting under their instruction. Statements of petitioner's wife before the ED Authorities read with the affidavits of the prospective purchasers s how that the explanation with regard to possession of currency notes is not satisfactory. Therefore, it is difficult to countenance the claim of petitioner that money seized during the ra id prima facie belonged to the construction Company. 40. Thus, facts enumerated herein, lead to a logical inference that the currency worth Rs. 27 Lakhs both in the form of new and demonetized notes found in the premises of the petitioner do not appear to legitimately belonging to the construction company or the family of petitioner. The petitioner is a high ranking official with the Stat e Government. He has held various important positions as noted above. In the instant complaint by the ED, it is alleged that the disproportionate assets found during the earlier check period between 1.2.1985 and 18.12.2008 is 102 .69%. It is also stated that the Lokayukta Authority is a waiting approval from the Government of Karnataka for prosecution. 41. Thus, on the heel of an earlier raid conducted in the year 2008 for the check period between 1.....