AI Drafter 
TaxTMI 
TaxTMI 
2020 (12) TMI 1129
X X X X Extracts X X X X
X X X X Extracts X X X X
....Secretary (Planning), Government of Manipur made a complaint before the Imphal Police Station on 1.19.2016 for registering FIR against the petitioner and others and accordingly, the Officer-in-Charge of Imphal Police Station registered a case in FIR No.244(9)2017 under Sections 420, 406, 120B IPC and Section 13(2) of the Prevention of Corruption Act, 1988. Later the case was transferred to the CBI, New Delhi and re- numbered as RC-DST-2019-A/011. (ii) The petitioner filed pre-arrest bail being Anticipatory Bail No.21 of 2017 before the High Court and during the pendency of the anticipatory bail petition, on 22.11.2019, a team of CBI seized a sum of Rs. 6 lakhs from the official quarters of the petitioner situate at Babupura, Imphal West. The CBI also found demonetized currency (old) notes for a sum of Rs. 61,100/-, however, the same were not seized by the CBI. On the same day, another sum of Rs. 4,92,000/- and Rs. 10,160/- and demonized currency notes for a sum of Rs. 49,000/- were seized from the house of the petitioner situate at Thoubal Athokpam. On 27.2.2020, this Court granted pre-arrest bail in favour of the petitioner. (iii) It is also alleged that on 12.11....
X X X X Extracts X X X X
X X X X Extracts X X X X
....next submitted that in case the petitioner is arrested for no fault of him in connection with the alleged false allegation/complaint, there will be a political vacuum in the State of Manipur and an irreparable loss and injury will be caused to the opposition political parties and to the people of Manipur and also to the petitioner in person as his reputation will be maligned all over the country. In support of his submissions, the learned counsel relied upon the following decisions: 1) Barun Chandra Thakur v. Central Bureau of Investigation and others, (2018) 2 SCC 119. 2) Sushila Agarwal v. State (NCT of Delhi), (2020) 5 SCC 1. 3) Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC 1. 7. Per contra, Mr. S. Suresh, the learned A.S.G. for the respondent submitted that the respondent Enforcement of Directorate recorded ECIR No.1/GWZO/2019 for initiating investigation under the PML Act for the offence of money laundering committed in relation to the scheduled offences under Sections 420 and 120B of IPC and Section 13(2) of Prevention of Corruption Act, 1988. He would submit that the Government of Manipur, vide notification dated 6.5.2019, accorded sanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent, (2019) 9 SCC 24. (6) Nikesh Tarachand Shah v. Union of India and others, (2018) 11 SCC 1. (7) Mohd. Arif v. Government of India, 2020 SCC OnLine Ori 544. 12. In reply, Mr. Salman Khurshid, the learned senior counsel for the petitioner submitted that the relief of anticipatory bail sought by the petitioner is not premature and that the petitioner's reliance on a news article of a reputed news agency for apprehension of arrest by the respondent cannot tantamount to being speculative. 13. As far as filing of the anticipatory bail before the High Court, the learned counsel for the petitioner reiterated the established principles of concurrent jurisdiction in the matter of anticipatory bail and submitted that it is only a rule of prudence and judicial discipline that High Courts point to exhaust remedy before the Sessions Court. In this regard, by referring to the order passed in A.B.No.21 of 2017, dated 27.2.2020, the learned counsel for the petitioner submitted that this Court on an earlier occasion granted anticipatory bail in respect of the CBI FIR referred and that the present petition is in relation to the same matter and thus, there is sufficient ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r be recognised to be moved only in exceptional situations it would again amount to fettering and constricting the discretion otherwise conferred by Section 438 Cr.P.C. Such a construction would be in clear conflict of the statutory mandate. The ratio of Harendra Singh must be recognised to be the requirement of establishing the existence of special, weighty and compelling reasons and circumstances justifying the invocation of the jurisdiction of this Court even though a wholesome avenue of redress was available before the Court of Sessions." 18. In Kwmta Swra (supra), the Gauhati High Court held as under: "17. It is therefore necessary that normally a person/accused should file an anticipatory bail application u/s 438 of the CrPC or a bail application u/s 439 of the CrPC before the Sessions Court and thereafter he can approach the High Court. However, this is not an inviolable rule. In exceptional circumstances a person/accused can directly approach the High Court..." 19. On a plain reading of the provision, it is crystal clear that it confers concurrent jurisdiction on the High Court as well as the Court of Sessions. Wide discretion has been entrusted on the Court ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court are concurrently empowered to grant bail under Section 438 of Cr.P.C. The object is that the party who is residing in the remote area can directly approach the Sessions Court which is easily accessible. In order to obviate the very object and purpose, the party has to explain why he did not go to that Court. Otherwise, it amounts to making that provision redundant, so far as the Sessions Courts are concerned. Even once again re-looking into structure of Section 438 of Cr.P.C., it is purely the discretionary power given to the Court to entertain the petition. It is the discretion given to the Courts to exercise that power. When discretion vests with Court, the party has to explain why he has come to the High Court directly, for the discretionary relief under the said provision. 24. In the instant case, it is stated on behalf of the petitioner that since this Court granted anticipatory bail in A.B.No.21 of 2017, which is a related matter and keeping in view the observations made in the order dated 27.2.2020, the petitioner has filed the present petition for anticipatory bail before the High Court. Since this Court granted anticipatory bail in A.B.No.21 of 2017 on 27.2.2020,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....up during his Chairmanship and the transaction done by MDS for various project works of line departments during his tenure needs to be verified and study that no procedural lapses are found and that the prescribed procedures, established norms and extant Rules for implementation of various projects by MDS and other line department are scrupulously observed in public interest. The Chairman of MDS by virtue of his post is the Joint account holder and Joint signatory. The Project Director, MDS alone is not competent to make any transaction, without the knowledge and consent of the Chairman, therefore it is assumed that the Chairman is bound to have knowledge of all transactions of MDS during his tenure of Chairmanship." 26. It is stated that during the pendency of the said A.B.No.21 of 2017, on 22.11.2019, the personnel of Central Bureau of Investigation conducted searches in the house and the official quarters of the petitioner and seized money, including the demonetized currency notes. 27. According to the petitioner, on 12.11.2020, a news item appeared in the online news website https:///www.timesnownews.com that the respondent will soon register a case under the Pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Quamarul Islam v. S.K.Kanta and others, 1994 Supp (3) SCC 5. 30. It is argued by the learned counsel for the respondent that the fear of the petitioner that he will be arrested by the respondent based merely on news article is absolutely baseless and a vague apprehension at best and deserves to be rejected. He submits that since the petition for anticipatory bail fails to make out any reasonable belief that the petitioner is likely to be arrested, the same is liable to be dismissed. To fortify his submissions, the learned counsel placed reliance upon the decision in the case of Sh. Gurbaksh Singh Sibbia and others v. State of Punjab, (1980) 2 SCC 565. 31. The learned counsel for the respondent further submitted that the provision pertaining to anticipatory bail is not applicable to offences under the PML Act and that there is absolutely no warrant in law to interfere with the statutory powers of arrest of the Directorate of Enforcement under Section 19 of the Act at this stage. As and when the Directorate of Enforcement forms a reason to believe on the basis of material in its possession that any person has been guilty of an offence punishable under the Act, it may arrest suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntaining the confidentiality; and (v) every person arrested under PMLA to be produced before the Judicial Magistrate or Metropolitan Magistrate within 24 hours. 35. Section 19 of PML Act provides for the power to arrest to the specified officer on the basis of material in his possession and has reason to believe and the reasons for such belief to be recorded in writing that any person has been guilty of an offence punishable under PML Act. The statutory power has been vested upon the specified officers of higher rank to arrest the person whom the officer has reason to believe that such person has been guilty of an offence punishable under PML Act. In cases of PML Act, in exercising the power to grant anticipatory bail would be to scuttle the statutory power of the specified officers to arrest which is enshrined in the statute with sufficient safeguards. 36. Insofar as the issue of grant of bail is concerned, Section 45 of PML Act starts with non-obstante clause. Section 45 imposes two conditions for grant of bail to any person accused of any offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule of the PML Act viz., (i) that the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he issue which has arisen in the present matter, reads thus:- "For the words 'punishable for a term of imprisonment of more than three years under Part A of the Schedule', the words 'under this Act' shall be substituted." 40. Evidently, consequent upon the aforesaid amendment through Finance Act, 2018, Section 45 of the PML Act, as it now stands, reads thus:- "Section 45.- Offences to be cognizable and non- bailable.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail; Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or in infirm, or is accused either on his own or along with other co-accused of money laun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(ii) of Sub-section (1) of Section 45 of the Act ultra vires and, therefore, Clause (ii) of sub-Section (1) of Section 45 of the PML Act is in present form should be treated to be valid, despite Hon'ble Supreme Court's decision in case of Nikesh Tarachand Shah (supra) is the question to be gone into. 44. This petition has been filed under Section 438 of Cr.P.C. for grant of anticipatory bail in connection with ECIR No.1/GWZO/2019 initiated by the respondent which was arising out of RC-DST-2019- A/0011 registered by the CBI, New Delhi for the offences under Sections 420, 406, 120B IPC and Section 13(2) of the Prevention of Corruption Act. 45. As stated supra, the CBI is investigating the case being RC- DST-2019-A/0011, wherein the petitioner was granted anticipatory bail on 27.2.2020 in A.B.No.21 of 2017. While so, on 12.11.2020, a news item published to the effect that the respondent Directorate of Enforcement will soon register a case under the Prevention of Money Laundering Act against the petitioner. The cause for registering the case under the PML Act against the petitioner is pursuant to the alleged searches conducted by the CBI in the house and the official quar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the recent decision in the case of P. Chidambaram (supra). The learned counsel contended that the twin conditions, mentioned in Section 45(1) of the PML Act, imperative for grant of bail have been declared ultra vires by the Hon'ble Supreme Court in case of Nikesh Tarachand Shah (supra) not because of any inherent defect in these two conditions in itself, but because of its dependence on the applicability, relatable only to the offences in Part A of the Schedule; for the reason that the offences under Part A of the Schedule are not offences of money laundering rather different predicate offences. 51. The learned counsel for the respondent submitted that the amendment has been introduced with effect from 19.04.2018 after taking note of the decision of the Hon'ble Supreme Court in case of Nikesh Tarachand Shah (supra) and the defects, which were pointed out in the judgment, have thus been rectified i.e., in place of the term "punishable for a term of imprisonment of more than three years of Part A of the Schedule", "under this Act" has been substituted. He thus submits that the twin-conditions have now become referable and relatable to the offence under the PML Act. 52....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 45 does or does not apply. The first would be cases where the charge would only be of money laundering and nothing else, as would be the case where the scheduled offence in Part A has already been tried, and persons charged under the scheduled offence have or have not been enlarged on bail under the Code of Criminal Procedure and thereafter convicted or acquitted. The proceeds of crime from such scheduled offence may well be discovered much later in the hands of Mr. X, who now becomes charged with the crime of money laundering under the 2002 Act. The predicate or scheduled offence has already been tried and the accused persons convicted/acquitted in this illustration, and Mr. X now applies for bail to the Special Court/High Court. The Special Court/High Court, in this illustration, would grant him bail under Section 439 of the Code of Criminal Procedure the Special Court is deemed to be a Sessions Court and can, thus, enlarge Mr. X on bail, with or without conditions, under Section 439. It is important to note that Mr. X would not have to satisfy the twin conditions mentioned in Section 45 of the 2002 Act in order to be enlarged on bail, pending trial for an offence under....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is far greater than in the fourth illustration, dependant only upon the circumstance that Mr. X is being prosecuted for a Schedule A offence which has imprisonment for over 3 years, a circumstance which has no nexus with the grant of bail for the offence of money laundering. The mere circumstance that the offence of money laundering is being tried with the Schedule A offence without more cannot naturally lead to the grant or denial of bail (by applying Section 45(1)) for the offence of money laundering and the predicate offence." 58. The Hon'ble Supreme Court thus noticed anomalies in prescribing conditions for entertaining petition for grant of bail under Section 45(1) of the Act with reference to the Scheduled offences. The Hon'ble Supreme Court, in paragraph 46 of the judgment in case of Nikesh Tarachand Shah (supra), has held that Section 45 of the PML Act is a drastic provision which makes drastic inroads into the fundamental right of personal liberty guaranteed under Article 21 of the Constitution of India. It was observed that before application of such provision, one must be doubly sure that it furthers a compelling State interest in tackling serious crimes. Abs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssion made by the learned counsel for the respondent that a different view has been taken in case of P.Chidambaram (supra) by the Hon'ble Supreme Court than the view taken in case of Nikesh Tarachand Shah (supra) on the question of constitutional validity of sub-Section (1) of Section 45 of the PML Act. There is no discussion in this regard in P.Chidambaram (supra). The application for anticipatory bail in the case of P.Chidambaram (supra) was rejected on merits of the allegation and other materials. Keeping in view the aforesaid decision and the ratio laid down and also on going through the decision of the Hon'ble Supreme Court in the case of P.Chidambaram (supra), this Court is of the opinion that this Court is not having any difference of opinion with regard to the ratio laid down in the said decision. 62. It is trite law that in case of economic offences, which is having an impact on the society, the Court must be very slow in exercising the discretion under Section 438 of Cr.P.C. But on perusal of the factual matrix of the case on hand, prima facie, there is no material to come to the conclusion that the act of the petitioner is having impact on the financial status....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in cases of large magnitude affecting a very large number of people; (vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because over implication in the cases is a matter of common knowledge and concern; (viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused; (ix) The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant; (x) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecutio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been upheld by the Hon'ble Supreme Court in the case of Bhadresh Bipinbhai Sheth v. State of Gujarat and another, (2016) 1 SCC 152, wherein it has been observed as under:- "21. Before we proceed further, we would like to discuss the law relating to grant of anticipatory bail as has been developed through judicial interpretative process. A judgment which needs to be pointed out is a Constitution Bench judgment of this Court in Gurbaksh Singh Sibbiav. State of Punjab [(1980) 2 SCC 565 : 1980 SCC (Cri) 465]. The Constitution Bench in this case emphasised that provision of anticipatory bail enshrined in Section 438 of the Code is conceptualised under Article 21 of the Constitution which relates to personal liberty. Therefore, such a provision calls for liberal interpretation of Section 438 of the Code in light of Article 21 of the Constitution. The Code explains that an anticipatory bail is a pre- arrest legal process which directs that if the person in whose favour it is issued is thereafter arrested on the accusation in respect of which the direction is issued, he shall be released on bail. The distinction between an ordinary order of bail and an order of antic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the form of document and evidence. If any further information is required, one of the conditions will be that the petitioner has to co-operate with the investigation and the Investigating Officer can investigate by questioning the petitioner in this behalf to extract whatever material which is required for the purpose of investigation. 69. Section 438 Cr.P.C. clearly stipulates in the beginning statement itself that when a person has a reasonable apprehension to believe that they can be arrested on an accusation for commitment of a non-bailable offence, they can move the High Court or the Court of Sessions for grant of an anticipatory bail. The approaching of the petitioner to the High Court has been discussed earlier and held that the petition for anticipatory bail filed before this Court is very well maintainable. 70. The power to grant anticipatory bail must be exercised by the Court in very exceptional cases. The Court must be satisfied that there is a reasonable cause and a reasonable ground for grant of anticipatory bail. Section 438 Cr.P.C. protects the right to life and personal liberty of such persons by providing them with a remedy against frivolous detention. In a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner that all the allegations are on mere assumption without any cogent material cannot be ignored. 76. The plea of the respondent Directorate of Enforcement that approximately 64% of the total fund was systematically siphoned off and they will also look into the fact that during search by the CBI last year, there was a huge recovery of cash including demonetized currency notes are all admittedly, requires appreciation of evidence and the same cannot be a ground for refusing to grant anticipatory bail to the petitioner. 77. No flexible guidelines or straitjacket formula can be provided for grant or refusal of the anticipatory bail because all circumstances and situations of future cannot be clearly visualised for the grant or refusal of anticipatory bail. In consonance with legislative intention, the grant or refusal of anticipatory bail should necessarily depend on the facts and circumstances of each case. 78. When a person apprehends arrest and approaches a Court for anticipatory bail, his/her apprehension has to be based on concrete facts relatable to a specific or particular offence. Petition seeking anticipatory bail should contain clear and essential facts relating t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gainst the petitioner under the Prevention of Money Laundering Act. Thus, this Court is of the opinion that the apprehension of arrest by the respondent Directorate Enforcement is well founded and reasonable as the petitioner is a public person. This Court cannot lost sight of the fact that the news article had received wide publication/coverage in the media, both electronic and print. In the aforesaid facts and circumstances of the case, the interest of justice warrants grant of anticipatory bail to the petitioner in the investigation being conducted by the respondent under the Prevention of Money Laundering Act. Further, the petitioner is duty bound to co-operate with the investigation by the respondent at all stages. 83. Before parting, it is apposite to note that the petitioner is the Ex-Chief Minister of the State and it is not as if he will run away from the prosecution, if any, initiated against him. The learned counsel for the petitioner, during the course of the arguments, explicitly stated that the petitioner would extend fullest cooperation if any prosecution is initiated. It is also nowhere the case of the respondent that the petitioner is likely to abscond or avoid ....