TaxTMI 
TaxTMI 
2019 (8) TMI 1032
X X X X Extracts X X X X
X X X X Extracts X X X X
....9;), whereas in the above captioned second application [Bail Appln. 1713/2018], petitioner seeks pre-arrest bail in ECIR/07/HIU/2017, registered under the provisions of The Prevention of Money-Laundering Act, 2002 (henceforth referred to as the 'PMLA'). 2. With the consent of learned counsel representing both the sides, these applications have been heard together and are being disposed of by this common order. 3. It is the case of petitioner that M/s INX Media Pvt. Ltd. sought approval for FDI in a proposed TV channel upto 46.216 percent of the issued equity capital. The policy allowed investment upto 74 percent of equity. Foreign Investment Promotion Board (FIPB) Unit examined the proposal, found it to be in order and submitted the case to the Finance Minister. FIPB consisted of six secretaries to the Government of India and was chaired by the Secretary, Economic Affairs. FIPB unanimously recommended the proposal and placed it before the Finance Minister for his approval, along with several other proposals. In May, 2007, the Finance Minister (i.e. the petitioner herein) granted his approval in the normal course of official business. 4. According to learned senior coun....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... there is no ground for ED to oppose the bail or to seek petitioner's custody. It is urged that since petitioner is cooperating in investigation, therefore, there is no ground to deny bail to petitioner. 7. Learned senior counsel for petitioner vehemently argued that there is no averment or allegation in the FIR that the petitioner accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, prima facie the accusation under Section 8 of PC Act does not apply to the case of petitioner. It is further submitted that since offence under Section 8 of PC Act is not made out, therefore, the ED cannot lodge money laundering case against petitioner. Learned senior counsel for petitioner vehemently submits that offences under Sections 420/120B IPC and under the PC Act were not Scheduled Offences under the PMLA and so, petitioner cannot be prosecuted under the provisions of PMLA. It is pointed out by learned senior counsel for petitioner that minimum threshold for ED to acquire jurisdiction at the relevant time was Rs. 30 Lakh and in the instant case, there is no averment of any payment apart from Rs. 10 Lakh approximately, which was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Computer Services Ltd. Vs. Directorate of Enforcement and decision of High Court of Mumbai in Bail Appl. No. 286/2018 titled as Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement & Ors. and decision of High Court of Madhya Pradesh in M.Cr.C.No.34201/2018, titled as Vinod Bhandari Vs. Assistant Director, Directorate of Enforcement. 10. On behalf of respondents, it is submitted that Section 19 of PMLA empowers the ED to arrest petitioner on the basis of material collected so far and respondents have reason to believe that petitioner is guilty of offences of money laundering, cheating etc. and some of the proceeds of crime have been already identified and have been attached vide provisional attachment order of 10th October, 2018 and that petitioner's custodial interrogation is necessary in order to trace out further proceeds of the crime. According to respondents, petitioner's son Karti Chidambaram is involved in INX Media case, which is being currently investigated by CBI and ED and that petitioner's son has committed offences under the IPC and PMLA at the behest of petitioner. According to learned Attorney General of India, material on record manifestly indicat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sides at length and on perusal of the FIR of this case, short reply of respondent-CBI, material on record and the decisions cited, I find that from the material collected by the Investigating Agency, it prima facie appears that Rs. 3 Crores approximately has come into the account of M/s Advantage Strategic Consulting Pvt. Ltd. (ASCPL) and other concerns during the tenure of the petitioner as the Finance Minister. The table below shows the payments made from Span Fibre and Satyam Fibres to ASCPL and associated entities:- BROKER NAME YEAR PERIOD TOTAL Amount in Rs. TDS DEDUCTED@ AMOUNT PAID in Rs. Paid by ASCPL 2007-08 Q1 3875077 439046 3436031 Span 2007-08 Q2 3462875 392344 3070531 Span 2007-08 Q3 2617386 296550 2320836 Span 2007-08 Q4 2573662 291596 2282066 Span TOTAL 12529000 1419536 11109464 KRIYA FMCG DI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vt. Ltd. Management Consultancy Fees towards professional services. 12,50,000/- (b) When GIC, a leading global investment firm headquartered in Singapore, wanted to invest in Vasan Healthcare, Karti P. Chidambaram had demanded Rs. 20 Crores in lieu of shares of ASCPL in Vasan Healthcare for smooth closure of the transaction. (c) One Shri R. Joseph Kennedy of Blue Bugs was given the task of designing the logo, stationery of M/s Castle Gordon Global Advisory Ltd., UK, development of its website, domain name registration, hosting and email facilities. An invoice of Rs. 46,175/- for the work was raised by Blue Bugs in the name of ASCPL. Shri Mike Nithavrianakis who had allegedly floated M/s Castle Gordon Global Advisory Ltd. is the Director and partner of Shri Karti P. Chidamdaram in M/s Totus Tennis Ltd. (d) Incorporation expenses of M/s Ausbridge Holding and Investments Pvt. Ltd. (in which Karti P. Chidambaram and Mohanan Rajesh were promoters, directors and shareholders ) were paid by ASCPL vide cheque no. 116868 dated 23.02.2006. Karti P. Chidambaram held 95% shares in Ausbridge in 2006. (e) Mohanan Rajesh, Director in ASCPL and a schoolmate of Karti P. Chidambara....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so that he may act on behalf of Artevea, UK for raising capital and requested Manoj to allot the above shares amounting to Rs. 60 Lakhs approximately (60 Thousand Pounds). In compliance to the request M/s Artevea Digital Ltd. allotted 6 Lakhs shares without any payment and Karti P. Chidambaram failed to raise funds for Artevea but he did not return these 60 Lakhs shares or compensate any money for them. (l)The recovery of paintings purchased by ASCPL from the premises of Karti P. Chidambaram during searches conducted on 13.01.2018, the statements of Shri S. Bhaskararaman recorded under Section 50 of PMLA, the extracts of books of accounts of ASCPL as recovered from the hard disks of Shri S. Bhaskararaman seized from the premises of Shri Karti P. Chidambaram on 1.12.2015, banks statements of ASCPL, statements of people dealing with ASCPL recorded under section 50 of PMLA, emails of Shri Karti P. Chidambaram, Shri S. Bhaskararaman etc. recovered from the aforesaid hard disks seized on 1.12.2015 all show that every aspect of the business affairs of ASCPL was controlled by Karti P. Chidamabram, every expense incurred by ASCPL no matter how small was approved by Karti P. Chidambaram,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m and that money was received by three entities acting together i.e. CBN Placement and Management Centre, Kriya FMCG and ASCPL. He also stated that no separate work was done by CBN Placement and Management Centre and M/s. Kriya FMCG. The Debit Notes were raised through CBN Placement and Management Centre. These Debit Notes bear the signature of Sh. CBN Reddy. 17. The investigation conducted further revealed that no brokerage services were actually rendered by ASCPL or associate entities (CBN Placement and Management Centre and Kriya FMCG). The investigation conducted with the buyers of PSF shows that they had never interacted with ASCPL or associate entities. This fact was also admitted by the directors of ASCPL, including Sh. CBN Reddy who is also the proprietor of CBN Placement and Management Centre and the director and shareholder of Kriya FMCG. Sh. Bhaskararaman, the main person behind the laundering of these funds also stated that these debit notes were raised on the directions of Sh. Karti P. Chidambaram to show some transaction which in-fact did not occur. It is further revealed that fake invoices were raised to the companies by ASCPL and other concerns in order to show a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cies that ASCPL received Rs. 22,50,00,600/- from Sequoia for sale of Vasan shares and this money is tainted money as it arises out of sale of shares of Vasan Healthcare that are themselves acquired from tainted funds and is property involved in money laundering. It is further projected that the remaining shares of Vasan Health Care held by ASCPL is properly involved in money laundering and thereafter, ASCPL sold further 36245 share of Vasan to Vasan Medical Hall @ Rs. 5242/- per share at a total value of Rs. 19 Crores. Therefore, it is projected that the amount of Rs. 19 Crores is also property involved in money laundering as it is arising from sale of shares of Vasan i.e. property involved in money laundering. 20. The investigation conducted further reveals as follows:- Out of the above property involved in money laundering i.e. amount received by ASCPL from sale of shares of Vasan Healthcare, further property was purchased including that of AGS Healthcare acquired for Rs. 11 Crores. These shares are also property involved in money laundering as they were bought from tainted money. They were further sold by ASCPL for a sum of Rs. 29,49,25,885/- i.e. at benefit of Rs. 18.49 C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....high profile cases. Tendering of charge-sheet after obtaining sanction for prosecution of petitioner cannot dilute the gravity of the offence in question. Both the sides have cited legal precedents but the facts of instant case prima facie reveal that petitioner is the king pin i.e. the key conspirator in this case. Law enforcing agencies cannot be made ineffective by putting legal obstacles of offences in question being Scheduled or not Scheduled, as these legal pleas are sub-judice before Supreme Court and cannot persuade this Court to grant pre-arrest bail, as the gravity of offence committed by petitioner is quite evident from case diaries etc. produced by the Investigating Agencies. The gravity of offence committed by petitioner demands denial of pre-arrest bail to him. 22. Economic offences constitute a class part and need to be visited with a different approach in matters of bail. Taking note of huge magnitude of conspiracy angle qua petitioner, it would be premature to jump to a conclusion that provisions of PMLA would not apply to the instant case, as it cannot be said that the amount involved is below Rs. 30 Lakhs. Rather, money laundering involved in this INX Media Sc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vity of offence. It would be preposterous to say that prosecution of petitioner is baseless, politically motivated and act of vendetta as on the basis of material collected so far, it can be safely said that prima facie case is made out against petitioner, thereby, justifying denial of pre-arrest bail to him. The magnitude of this case dissuades this Court to grant pre-arrest bail to petitioner. 26. The pertinent observations of Supreme Court in CBI Vs. Anil Sharma (Supra) which aptly apply to the instant case, are as follows:- "6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of a suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ri....