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TaxTMI 
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2019 (11) TMI 794
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....s made out in the present petition that on 15.05.2017, the Central Bureau of Investigation (hereinafter referred to as the "CBI") registered the First Information Report (hereinafter referred to as the "FIR") bearing no. RC-2202017-E-0011 (hereinafter referred to as the "subject FIR"), under Sections 120-B read with 420 of the Indian Penal Code, 1860 (hereinafter referred to as the "IPC") and Section 8 and Section 13(2) read with Section 13(l)(d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as the "PC Act"). The allegations in the subject FIR pertain to the grant of an FIPB approval in 2007-08, for which the subject FIR came to be registered after a period of almost 10 years based on alleged 'oral source' information. M/s INX Media, the Petitioner's son Sh. Karti P. Chidambaram, "unknown officials of the Ministry of Finance, Government of India" and others were named as accused persons in the subject FIR, whereas, Petitioner is neither named as an accused nor as a suspect. On 18.05.2017, solely based on the subject FIR registered by the CBI, Respondent ED registered the captioned ECIR under Section 3 of the PMLA punishable under Section 4 of PMLA. The said ECI....
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....hereafter, would wish to custodial interrogate the Petitioner so as to make the maximum permissible period of15 days of police custody remand more effective and meaningful. Vide Order dated 13.09.2019, the Trial Court dismissed the Petitioner's Surrender Application. Thereafter, the Petitioner was not even once interrogated by the ED while he continued to be in judicial custody in the FIR registered by CBI. 4. It is further submitted in the present petition that on 11.10.2019, the Respondent ED preferred an application dated 09.10.2019 under Section 267 Cr.P.C.(hereinafter referred to as the "Production Warrants Application") before the Trial Court seeking issuance of production warrants against the Petitioner for the purpose of "arrest and remand" in relation to the investigation in the captioned ECIR. On the same day i.e. 11.10.2019, even without issuing any notice to the Petitioner or his counsels, the Trial Court, in ignorance of the well settled law in the case of Harshad S. Mehta vs. CBI: ILR 1993 1 Delhi, allowed the Respondent ED's Application dated 11.10.2019 and directed issuance of production warrants against the Petitioner for production on 14.10.2019 at 3 PM. Accordin....
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....y and the Petitioner is not a flight risk and is willing to abide by all such conditions as may be imposed by this Court while granting bail to the Petitioner. The instant case is a documentary case and the Petitioner is a respectable citizen and former Union Minister of Finance and Union Minister of Home Affairs and he cannot and will not tamper with the documentary record, which is currently in the safe and secure possession of the incumbent Government or the Trial Court. The Petitioner merely accorded approval to the unanimous recommendation made by the FIPB who chaired by the Secretary, Economic Affairs and included four other secretaries (Industry, Commerce, External Affairs and overseas Indian affairs) and the Secretary of the Administrative Ministry concerned. Five of them were among the senior most IAS officers and the sixth was a senior IFS officer of the Ministry of External Affairs. Each one of them had a long and distinguished record of service. The Secretary, Economic Affairs at the relevant time was Dr. D. Subba Rao, who later became the Governor of the Reserve Bank of India. As per the normal procedure, several officers in FIPB unit processed the file and thereafter,....
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....y can be granted. Therefore, the Trial Court erred in rejecting the argument of the Petitioner that the offences alleged by the CBI and the ED are part of the same transaction and therefore, there cannot be a separate remand. While rejecting this argument, the Trial Court has proceeded on the basis that the offence under the PMLA is a distinct and altogether different offence. 9. Learned senior counsels argued that upon dismissal of SLP (Crl.) No. 7523/2019 by the Hon'ble Supreme Court (i.e. the Petitioner's challenge to the Judgment dated 20.08.2019 of this Court whereby the Petitioner's anticipatory bail application was rejected), the Petitioner had preferred an Application dated 05.09.2019 praying to surrender before the Trial Court in the captioned ECIR. However, the Respondent ED opposed the prayer on the specious and mala fide ground that in order to effectively utilize the maximum permissible period of 15 days, the Respondent ED wishes to first interrogate certain other persons and shall seek the custody of the Petitioner only thereafter. The captioned ECIR had been registered on 18.05.2019 (i.e. almost 2 years ago) and while the Respondent ED had been vehemently opposing t....
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....ormerly Union Minister of Finance (1996-1998, 2004-2008 and 2012-2014) and Union Minister of Home Affairs (2008-2012). He is a member of the Indian National Congress, which is the principal Opposition Party in Parliament, and has been in public life for over 40 years. The Petitioner is also a senior Spokesperson of the Congress Party as well as a prominent and widely-read columnist. As such, the petitioner has deep roots in the society. Moreover, from the information available in the public domain, it appears that the Investigating Agencies, including the Respondent ED, have already issued a Look Out Circular (LOC) against the Petitioner and in view of the same, it is preposterous to even allege that the Petitioner can evade the further process of law. The Hon'ble Supreme Court, in its Order dated 22.10.2019 in SLP (Crl.) No. 9269/2019, while granting regular bail to the Petitioner in the subject FIR, has already held that the Petitioner is not a flight risk. It is already submitted that there is not even an allegation that the petitioner has or will tamper with evidence or influence witnesses. 12. In State of Maharashtra vs. Animal Punjaji Shah: (1969) 3 SCC 904, it has been held....
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....in judicial custody in the CBI FIR, the Petitioner has already suffered 2 [two] bouts of illness and was put on antibiotics for 5 [five] days and 7 [seven] days respectively. The onset of cold weather and the incidents of dengue etc., the petitioner's health is likely to become more vulnerable. The Petitioner has lost weight from73.5 Kgs. to 68.5 Kgs. Even during remand of the Petitioner in the custody of the Respondent ED, the Petitioner's health has continued to deteriorate. The petitioner has been advised to take steroids for a maximum quantity which is above the danger, therefore, on merit as well as on medical grounds, the petitioner deserves bail in the present petition. 16. On the other hand, Mr. Tushar Mehta, learned Solicitor General of India submits that the investigation conducted so far revealed a strong prima facie case to reach to "reasons to believe" as contemplated under section 19 of the Prevention of Money Laundering Act [hereinafter referred to as "PMLA"] to arrest the petitioner and also his custodial investigation will be discussed interalia, the complaint in the present case is yet to be filed and, therefore, as an investigating agency, it is neither proper, ....
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....erial to satisfy this Court about existence of the evidence to show the facts narrated in detail hereinabove, to justify the arrest of the petitioner and his interrogation, it is only after the custodial interrogation of the petitioner that the investigation was capable of being fully complete and the truth being unravelled. This exercise is not only the duty of the Enforcement Directorate towards the nation but considering the menace of black money and its laundering by / on behalf of persons in public life, it is in national interest to do so. 18. Mr.Mehta submitted, Investigating Agency has found out several such shell companies, 17 benami foreign bank accounts [directly referable to the petitioner and his co-conspirators] through which money is laundered and are invested in several properties out of which 10 expensive properties situated outside India have been identified so far. Several other shell companies, many more bank accounts and properties abroad have been identified on the basis of intelligence inputs which are received by the investigators working abroad under the PMLA and the investigation is still continuing which can be completed only after the arrest and interro....
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....affects the very fabric of democratic governance and probity in public life. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. See State of Gujarat y. Mohanlal Jitamalji Porwal (1987) 2 see 364]" 21. Learned Solicitor has relied upon the judgments in the case of P.Chidambaram Vs. Enforcement of Directorate passed in Criminal Appeal No. 1340 of 2019 dated 05.09.2019, Y. S. Jagan Mohan Reddy Vs. Central: (2013) 7 SCC 439, State of Gujarat Vs. Mohanlal Jitamalji Porwal: (1987) 2 SCC 364, State of Bihar & Anr. Vs Amit Kumar alias Bacccha Rai: (2017) 13 SCC 751, Gautam Kundu Vs. Directorate of Enforcement: (2015) 16 SCC 1. 22. He submits that in ....
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....ting Singapore Pvt. Ltd. However, when statement of Director of Advantage Strategic Consulting Singapore Pvt. Ltd. was recorded he clarified that he had not signed any invoice as authorized signatory of said company and the said invoice bore his fabricated signature. Thus, from his statement it is evident that not only the company had not rendered any services but had created fake invoices to camouflage proceeds of crime as receipt of payment in lieu of services. 26. On creation of false evidence Mr. Tushar Mehta, learned Solicitor General of India submitted that in order to justify that Advantage Strategic Consulting Pvt. Ltd. is not a shell company but a professional organization run by management professional, certain mails were generated and exchanged by the co-conspirators. During the investigation it has been revealed that the purpose, as per content of the email was to create evidence behind transfer of equity of Vasan to Advantage. The said mails and the statement of the generator of the mail forms part of the investigation papers of the present case are placed before this Court in a sealed cover to demonstrate and satisfy the conscience of this Court that petitioner and h....
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....f trial before the special court. In the above context, section 24 of PML Act cast burden of proof upon an accused person to prove that proceeds of crime are untainted property." 31. The same conclusion has been arrived by the Division Bench of the High Court of Karnataka at Bangalore in Smt. K. Sowbaghya v. Union of India: 2016 SCC OnLine Kar 282, "wherein the case of the petitioners was that Section 8 (5) as it stood under the Amended Act of 2009, contemplated that if a person was acquitted of the scheduled offence, the attachment of the property ceased to have effect. The same was in consonance with the logic that if no crime under the scheduled offence could be established there could be no 'proceeds of crime'. But under the Amendment Act 2013, it is now contemplated that if the case instituted in respect of a scheduled offence results in acquittal of the accused, a person could still be prosecuted under Sections 3 & 4 of the PML Act. If the genesis of the proceedings relatable only to the scheduled offence as no action and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money-laundering, could be initiated under the ....
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....e accounts of 'group of companies'. It gives details of demand draft issued from 15.11.2016 to 19.11.2016 from eight bank accounts in the name of Sunil Kumar, Dinesh Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai on various dates. Most of the Demand Drafts issued have since been recovered. 36. The statements recorded during investigation have evidentiary value under Section 50 PMLA. Prima facie, the version given by them is in consonance with the prosecution case. The prosecution has further relied upon call data records, CCTV footage. Account Trend Analysis. 37. Under Section 2(1)(v) "property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. 38. The expression 'scheduled offence' has been defined in Section 2(l)(y) of the Act of 2002. 39. Undisputedly, the predicate offence is included in Part A in paragraph 1 of the Schedule in the Act of 2002 in particular Sections 420, 471 and 120B of IPC. Indeed, the expression "criminal activity" has not been ....
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....cted vide judgement dated 05.09.2019 passed in Criminal Appeal No 1340 of 2019 in the case of anticipatory bail of the petitioner in Directorate of Enforcement case. 44. The Respondent ED is not investigating the Scheduled offences but the offence of Money Laundering which is a distinct/separate offence committed after the commission of scheduled offence and is continuing to be committed even now. FIR registered by the CBI (predicate offence), inter-alia, is also under Section 8 of the PC Act, which had always been scheduled offence i.e. even prior to 01.06.2009. The actions of money laundering as a matter of fact have occurred after 2009 and, therefore, also the question of retrospectively is academic in the present facts and circumstances. 45. The offence of money laundering is a continuing offence, inasmuch as, by its very definition, the offence continues as long as accused is in possession, acquisition of the ill gotten wealth since the projection is not one time offence and continues till such time person is in possession of ill gotten wealth. Thus the time of its generation is of no consequence but the possession, acquisition and its projection as untainted is as long as t....
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....eral of India is that proceeds of crime were generated due to the act of petitioner in granting permissions illegally for gratification collected by Karti P. Chidambaram at the behest of the petitioner (P. Chidambaram). 50. While considering grant of regular bail under Section 439 Cr.P.C. the relevant three (3) factors have been considered by this Court (i) flight risk; (ii) tampering of evidence and (iii) influencing of witnesses in D. K. Shivakumar Vs. Directorate of Enforcement 2019 SCC online Del. 1096 decided on 23.10.2019 and in C.B.I. case registered against the petitioner herein. 51. It has not even been alleged by the respondent/ED in counter affidavit that the petitioner is a flight right. The investigation agencies including respondent/ED have already issued a Look Out Circular (LOC) against the petitioner. In view of the same, it is preposterous to even allege that the petitioner can evade the further process of law. 52. Regarding tampering with the evidence, neither it is argued nor any material available on record, moreover, there is no chance to tamper the material on record since the same is before the Investigating Agencies, Central Government or the Co....
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....re is cogent evidence collected so far that these shell companies are incorporated by persons who can be shown to be closed and connected with the petitioner and his coconspirators/co-accused all of whom are acting in tandem with each other. The proceeds of crime are thereafter routed through the web of shell companies so incorporated for the purpose of laundering of proceeds of crime and the movement of such proceeds of crime from one company to another company (all of which are not doing any business and exist only on paper), just to make tracing of money trail difficult. The said companies are incorporated and located in different countries so that it become difficult for the law enforcing agencies to follow the trail of money laundering. 58. The investing agency has found out several such shell companies, 17 benami foreign bank accounts through which money is laundered and are invested in several properties out of which, 10 expensive properties situated outside India have been identified so far. Several other shell companies, many more bank accounts and properties abroad have been identified on the basis of intelligence inputs which are received by the investigators working ab....