TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 728
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.... December, 2016 pursuant to FIR No. 205/2016 registered for the offences punishable under Sections 406/409/420/468/471/188/120B IPC at PS Crime Branch on 25th December, 2016. 3. Brief conspectus of facts as recorded in the ECIR against Ashish Kumar, Manager, Kotak Mahindra Bank, Raj Kumar Goel and certain other unknown persons are that during the course of investigation in FIR No.242/2016 under Sections 420/467/468/471/120B IPC registered at PS CR Park, it was revealed that Raj Kumar Goel along with his associates was engaged in earning profits by routing money into various accounts by using forged documents and thereby receiving commission from the prospective clients. Raj Kumar Goel and few of his associates had opened multiple accounts in Kotak Mahindra Bank and ICICI Bank at Naya Bazar, Chandni Chowk, Delhi. On 8th November, 2016, when Government of India announced demonetization of one thousand and five hundred rupee currency notes, Raj Kumar Goel conspired with Ashish Kumar and one Chartered Accountant, whose name was not known at the time of recording of ECIR, to convert black money in the form of old currency notes into new currency notes and earn huge profits. Aforesaid c....
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....ry complaint was filed implicating Yogesh Mittal as the 6th accused and on 2nd August, 2017, second supplementary complaint was filed by the Directorate of Enforcement implicating Ramesh Chandra Sharma as an accused. 8. Learned counsels for the petitioners contend that against petitioner Rohit Tandon two FIRs were registered by PS C.R. Park and PS Crime Branch, that is, FIR No.197/2016 and 205/2016 resulting in recording of corresponding ECIR No.14/DZO-II/2016 and ECIR No.18/DLZO-II/2016. FIR No. 197/2016 related to the recovery of demonetized currency and the new currency whereas FIR No.205/2016 related to deposit of demonetized currency in various accounts of Yogesh Mittal and Raj Kumar Goel which was further transmitted to other accounts or bank drafts were made thereof in the first names of his employees to be encashed later on. In FIR No.205/2016 petitioner Rohit Tandon was not arrested by the Crime Branch and on filing of the charge sheet, he was granted regular bail however, the petitioner has been arrested in the consequential ECIR being ECIR No.18/DLZO-II/2016 recorded by the Enforcement Directorate. As per the notification issued by the Government of India on 8th Novembe....
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.... is supposed to write down his reasons to believe has to independently apply his mind. Further and more importantly, it cannot be mechanical reproduction of words in the statute. A bare reading of Section 19 of PMLA sets the standard very high for the authorized officers to form an opinion that the accused is guilty of offence punishable under Section 4 PMLA before any arrest is made out. However, as noted in ECIR itself in para-9 the satisfaction recorded is that the proceeds of the crime might have undergone process of laundering and thereby an offence defined under Section 3 PMLA and punishable under Section 4 PMLA is made out. 10. Learned counsels for the petitioners also contend that the money which was deposited in the bank and converted into the demand drafts is still lying with the bank as the demand drafts have not been encashed. There being no withdrawal of money the ingredients of Section 420 IPC are not satisfied. At best it can be said that there was preparation to commit an offence which is not punishable under the IPC or PMLA. There is no averment in the entire charge-sheet or the complaint that amount of Rs.38 crores deposited was the proceeds of the crime. Learned....
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....counts maintained with a bank by a person provided the account was KYC compliant. Thus as long as the demonetized currency was deposited in one's own account, it was not an offence much less a scheduled offence. Learned Additional Solicitor General further contends that when valueless currency was deposited in the account of other persons to create value it amounted to cheating and forgery. Further after deposit of the money in the accounts of Raj Kumar Goel and various accounts of Yogesh Mittal, demand drafts were prepared in the name of fictitious persons who did not exist. Thus, ingredients of offence of forgery are made out. Moreover the offence punishable under Section 120B IPC is a standalone offence. The petitioners were preparing demand drafts with the object to get the demand drafts cancelled later on and get the new currency. After FIR No.205/2016 was registered by the Crime Branch, on 25th December, 2016 ECIR was recorded by respondent on 26th December, 2016. On 27th December, 2016 the authorized officers recorded statements of Kamal Jain and Dinesh Bhola, CA and employee of Rohit Tandon, Ashish Kumar, the Bank Manager and Rohit Tandon himself. Corroborative material in ....
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.... that Rohit Tandon is an advocate and thus in a position to command and his release on bail is likely to influence the witnesses. Further Raj Kumar Goel is also a party to conspiracy as huge amount was deposited in his accounts. Statements of various parties were recorded which showed demand drafts were prepared and handed over to Kamal Jain, CA of Rohit Tandon and the commission was duly assured, hence no case for grant of bail is made out. 15. Rebutting the contention of learned Additional Solicitor General learned counsels for the petitioners contend that when the bail of Rohit Tandon was rejected by the Hon'ble Supreme Court, the twin conditions as required under Section 45 of PMLA had not been set aside as unconstitutional and applicability of the two conditions was the major reason for rejection of bail. In any case the Hon'ble Supreme Court rejecting the bail referred to recovery of huge amounts of demonetized and monetized currency which is neither the scope of FIR in question nor the consequential ECIR No.18/DLZO-II/2016 wherein the petitioners are in custody, for which separate FIR No.197/2016 was registered and ECIR No.14/DZO-II/2016 was recorded in which ECIR Rohit Tan....
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....h November, 2017 that since the offence punishable under Section 4 of PMLA provides for imprisonment for a terms which may extend to seven years but not less than three years, the learned Trial Court is well advised to proceed with trial on day-to-day basis expeditiously, till date arguments on charge have not begun thus, the petitioners are entitled to bail. 18. Before adverting to the facts of the case it would be appropriate to note the relevant extracts of Notification No. S.O. 3407(E) dated 8th November, 2016 of Ministry of Finance as under: S.O. 3407(E).─ Whereas, the Central Board of Directors of the Reserve Bank of India (hereinafter referred to as the Board) has recommended that bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees (hereinafter referred to as specified bank notes) shall be ceased to be legal tender; And whereas, it has been found that fake currency notes of the specified bank notes have been largely in circulation and it has been found to be difficult to easily identify genuine bank notes from the fake ones and that the use of fake currency notes is causing adverse effect to the economy of th....
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....rve Bank of India Act, 1934, shall cease to be liabilities of the Reserve Bank under section 34 and shall cease to have the guarantee of the Central Government under sub-section (1) of section 26 of the said Act. 4. ..... 5. Prohibition on holding, transferring or receiving specified bank notes.- On and from the appointed day, no person shall, knowingly or voluntarily, hold, transfer or receive any specified bank note: Provided that nothing contained in this section shall prohibit the holding of specified bank notes- (a) by any person- (i) up to the expiry of the grace period; or (ii) after the expiry of the grace period,- (A) not more than ten notes in total, irrespective of the denomination; or (B) not more than twenty-five notes for the purposes of study, research or numismatics; (b) by the Reserve Bank or its agencies, or any other person authorised by the Reserve Bank; (c) by any person on the direction of a court in relation to any case pending in the court. 6. Penalty for contravention of section 4.- Whoever knowingly and willfully makes any declaration or statement specified under sub-section (1) of section 4, which is false in material particulars, or omi....
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....rrency notes amounting to Rs.2.62 crores in new currency and Rs.11.02 crores in old currency. Further, neither in FIR No. 197/2016 nor in ECIR No.14/DZO-II/2016 Rohit Tandon was arrested and Raj Kumar Goel is not involved in the said FIR and the ECIR. Thus the facts required to be considered by this Court only relate to ECIR No.18/DLZO-II/2016 after registration of FIR No.205/2016 for the scheduled offences relating to deposit of demonetized currency in various accounts and thereafter transfer to other accounts and preparation of demand drafts. 21. FIR No.205/2016 was registered by the Crime Branch on 25th December, 2016 for offence punishable under Sections 420/109/406/467/ 468/471/188/120B IPC. The scheduled offence therein being punishable under Sections 420/471/120B IPC. In this FIR both the petitioners are on bail and charge-sheet was filed without arrest. The allegations in the present ECIR in nutshell are that the petitioners with other accused persons illegally converted the demonetized currency into monetized currency by depositing cash into the accounts of various firms, persons and subsequent issuance of demand drafts and also paying of commission to the conspirators wh....
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....mount to an offence of cheating or not lest it may prejudice the parties at the stage of arguments on charge. Further even as per the prosecution though the initial claim was that demand drafts were prepared in fictitious names however, it was on investigation revealed that they were prepared in the first names of the employees of Rohit Tandon. However, as held by the Supreme Court the manner in which the money was routed amounted to criminal activity connected with the proceeds of the crime including its concealment, possession, acquisition, use and projecting/claiming it as untainted property. 23. When the earlier bail application was filed by the petitioner Rohit Tandon, the same was dismissed by the learned Additional Sessions Judge followed by the dismissal by this Court which order was taken up in appeal before the Hon'ble Supreme Court which also dismissed the bail application on 10th November, 2017. The Hon'ble Supreme Court noting the decision reported as 2015 (16) SCC 1 Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India held that the scope of Section 45 PMLA was no more res-integra and that the Court at the stage of cons....