TaxTMI 
TaxTMI 
2021 (4) TMI 279
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....d 13(2) read with Section 13(1) (d) of Prevention of Corruption Act, 1988. FIR was registered against the following accused for causing loss to ICICI Bank by sanctioning loans to Videocon Group of Companies in contravention of the Rules and Policies of ICICI Bank. (i) M/s. Videocon International Electronic limited (VIEL) (ii) M/s. Videocon Industries Limited (VIL) (iii) Mr. V. N. Dhoot, M.D. Videocon Group (iv) Ms. Chanda Kochhar then M.D. & CEO of ICICI Bank. (v) Mr. Deepak Kochhar M.D. of M/s. NuPower Renewables Limited (NRL) which is now known as M/s. NuPower Renewables Pvt. Ltd (NRPL) (vii) M/s. Supreme Energy Pvt. Ltd. (SEPL). It was alleged that during June-2009 to October-2011, ICICI Bank had sanctioned 6 high value loans to various Videocon Group of Companies. On 26th August 2009, Rupee Term Loan (RTL) of 300 Crores was sanctioned to M/s. Videocon International Electronics Ltd and others (hereinafter referred to as "VIEL"). In contravention of Rules and Policy by Sanctioning Committee. Ms. Chanda Kochhar was one of the member of the Sanctioning Committee. She conspired with others to cheat ICICI Bank and abusing her official position sanctioned loan in favour of M/s. VIEL. ....
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....of Preliminary Inquiry reveals the commission of offence under Section 120-B read with Section 420 of IPC and read with Section 7 & 13(2) read with Section 13 (1) (d) of Prevention of Corruption Act, 1988 by M/s. VIEL, M/s. VIL, its Directors Mr. V. N. Dhoot, MD of Videocon Group, Ms. Chanda Kochhar, the then M.D. & CEO of ICICI Bank, Mr. Deepak Kochhar (Applicant), M.D. of M/s. NuPower Renewables Ltd (NRL), M/s. SEPL and others. 3. On the basis of the aforesaid FIR, respondent No.1 recorded ECIR/02/HIU/2019 on 31st January 2019 against same accused. It was alleged that FIR has been registered by CBI New Delhi in respect of criminal conspiracy, cheating, misconduct by public servant. The alleged offences were committed during the period from 2009 to 2012. In the FIR it is alleged that, during the period from June-2009 to October-2011, ICICI Bank sanctioned 6 high value loan to Videocon Group of Companies. On 26th August 2009, Rupee Term Loan (RTL) of Rs. 300 Crores was sanctioned by the Sanctioning Committee to M/s VIEL in contravention of rules and policy of the Bank. Loan was disbursed to VIEL on 7th September 2009. On 8th September 2009, Mr. V. N. Dhoot transferred amount of ....
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....nded co-operation with Enforcement Directorate. He was issued summons and in pursuant to that, he appeared before the Respondents from March 2019 till his arrest. He appeared on 2nd March 2019 at Mumbai and on 13th May 2019 to 17th May 2019 at Delhi. On 28th June 2019, 18th July 2019, 19th July 2019, 14th October 2019, 19th July 2020 and 7th September 2020 over the period of 18 months, the applicant submitted voluminous documents/information vide letters, e-mails dated 14th March 2019, 23rd April 2019, 13th May 2019, 29th May 2019, 8th June 2019, 28th June 2019, 10th October 2019, 14th October 2019, 14th January 2020, 18th January 2020, 28th January 2020, 29th January 2020, 6th February 2020, 17th July 2020, 19th July 2020 and 7th September 2020. 6. Statement of applicant and others were recorded under Section 50 of PML Act. 7. Applicant was arrested on 07.09.2020. Applicant was remanded to custody on 8th September 2020. His custody was obtained on 31st October 2020 till 11th November 2020. In the application dated 31st October 2020 filed by the respondent No.1 for extension of remand, it was stated that the investigation in the case of Money Laundering is still continuing an....
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.... (ii) The wife of the applicant was interrogated and her statement was recorded. Mr. V. N. Dhoot was interrogated and his statement was recorded. On 12th February 2021, accused Ms. Chanda Kochhar had appeared before the Special Court. She has been released on bail on executing PR Bond in the sum of Rs. 5 lacs. (iii) The apprehension of the respondents is that the applicant may tamper with the evidence is without any basis. The applicant is permanent resident of Mumbai and there are no chances of his absconding. (iv) Complaint in accordance with Section 8 of the PML Act was filed. Adjudicating Authority has declined to confirm the provisional attachment. Original complaint has been dismissed. The observations of the Adjudicating Authority make it clear that the amount of Rs. 64 Crores or the subject flat are not proceeds of crime. (v) The loan of Rs. 300 Crores which was disbursed to Videocon Group of Companies has been repaid to ICICI Bank in 2012. There is no explanation initiating action under PMLA belatedly. (vi) The offence under Section 3 of PML Act is punishable with imprisonment upto 7 years. The applicant need not be kept in custody u....
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....f applicant is not warranted. (xix) The Adjudicating Authority has given finding that there is no material to connect act of illegal gratification and allegation that, Mr. V. N. Dhoot transferred Rs. 64 Crores to NRL as undue benefit. (xx) Statements recorded under Section 50 of PML Act are to be tested during trial. There is no tangible evidence against applicant to connect him with offence under Section 3 of Act. 11. Learned Additional Solicitor General Mr. S. V. Raju opposed application for bail. He submits as follows: - (a) There is voluminous evidence against the applicant. The offence is of serious nature. The applicant is involved in economic offence. Investigation is still in progress. (b) The Enforcement Directorate has initiated investigation under the PML Act to investigate the offence of Money Laundering on the basis of FIR registered by CBI. The FIR and the ECIR would indicate that during 2009 to 2011 ICICI Bank had sanctioned 6 high value loan to Videocon Group Companies. RTL of Rs. 300 Crores was sanctioned to VIEL. The wife of the applicant was one of the members of Sanctioning Committee. Amount of Rs. 64 Crores was transferred....
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....a part of plan and design it was ensured that the applicant remains beneficial owner and controller of NRPL where proceeds of crime were received in the Company of the applicant from Videocon Group which was laundered by the accused and Company beneficially owned by him. (h) On 6th September 1995, Board of CFL authorized its Directors, applicant and brother of the applicant to negotiate and hold 5 fully paid shares of CCI Chamber Premises for consideration of Rs. 5.25 lacs to purchase of property on behalf of company in their individual names in view of the inability and unwillingness of the society to recognize any corporate entity as members thereof and to transfer the shares. The applicant and Rajiv Kochhar entered into the agreement for sale with owner of the property (flat) located at 45, CCI Chambers, CCI Club Churchgate for purchase price of Rs. 5,25,00,000/-. Earnest money of Rs. 75 lacs was paid by cheque dated 7th September 1995. Vide Deed of Conveyance dated 19th February 1996, CFL purchased flat from Bilquis Begum. The remaining amount of Rs. 4.5 Crore was paid by CFL (pre-merger). Vide cheque drawn from account of CFL. The applicant submitted letter dated 4th ....
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....everity of punishment. (t) As per Section 24 of PML Act, in any proceeding relating to proceeds of crime, unless contrary is proved, it would be presumed that such proceeds of crime are involved in money-laundering. (u) Learned Additional Solicitor General has relied upon the reply filed by Respondent No.1 opposing the application for bail. 12. Mr. Desai, Learned Counsel for applicant submitted in rejoinder that, submissions of respondents are contrary to record. Statement of Mr. Dhoot is contrary to what is asserted by respondents. The twin condition does not stand revived. The question of handing over sealed envelope allegedly with regards to tampering evidence does not arise. The applicant had appeared before respondent on several occasions before his arrest. He is in custody from date of his arrest, since last six months. When the applicant was produced for remand after arrest, allegations of tampering evidence were not made in the remand applications. The investigation proceeded. At this stage handing over sealed envelope, without affording opportunity to peruse the contents is violative of Article 21 of Constitution of India. 13. The ECIR was registere....
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....o indicate source of income, earning or assets out of which he has acquired the property attached under Section 5 (1) or seized under Section 17 or 18, the evidence on which he relies and to show cause why properties should not be declared as property involved in money-laundering. 16. On the basis of material, Provisional Attachment Order No.1/2020 dated 10.01.2020 was issued in respect to movable and immovable properties. In accordance with Section 5 (5) of PML Act, complaint was filed before Adjudicating Authority, vide order dated 06.11.2020. The complaint under Section 5 (5) was dismissed by Adjudicating Authority. 17. The order of Adjudicating Authority was challenged by preferring appeal under Section 26 of PML Act. Interim order was passed by Appellate Authority on 03.12.2020. The order records that, learned counsel representing respondents before the Authority made statement that, the respondents therein could not part with properties involved in the appeal till next date of hearing. The Appellate Authority directed that; all parties to maintain status quo with respect to properties involved in appeal till the next date of hearing. During this period neither parties t....
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....The facilities were sanctioned in ordinary course of business. Loans were repaid to ICICI Bank. In her various statement's recorded under PMLA, she has explained on various allegations against her. Applicant replied that, he had not influenced any decision making by his spouse Chanda Kochhar. The Provisional Attachment Order does not satisfy requirement of second proviso of Section 5 (1) PMLA. It cannot be presumed that CBI after having recorded FIR based on allegations of commission of cognizable offences has found any prima facie substance in them, sufficient to file any charge-sheet against accused. No such charge-sheet is field. No cogent evidence of commission of scheduled offence. Investment of 64 Crores by Videocon group in its own group company NRL was neither an offence nor was the said amount any proceeds of crime. Videocon group owned 95% of NRL at the time when their equity investments of Rs. 64 Crore was made into NRL on 08.09.2009. Flat No.45 is not proceeds of crime. He is title holder and owner of flat since 1996. The transaction regarding Credential Finance Ltd., Quality Appliances Pvt. Ltd. and Quality Advisors Trust are wholly in consequential so far as title to ....
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....tioned Credit Facilities to M/s. Trend Electronics Ltd, M/s. Century compliance Ltd., KAIL Ltd., Value Industries Ltd. and M/s. EVANS Fraser and Company India Ltd. belonging to Videocon group promoted by Mr. V.N. Dhoot. The allegations were the officials of ICICI Bank sanctioned Credit Facilities to these companies in violation of Banking Regulation Act RBI, guidelines and credit policies of the bank. It was also alleged as a part of quid pro quo Mr. Dhoot made investment of Rs. 64 Crores in M/s. NuPower Renewables Ltd. (NRL) through M/s. Supreme Energy Pvt. Ltd. (SEPL) and also transferred M/s. SEPL to Pinnacle Energy Trust managed by Deepak Kochhar (Applicant) through Circuitous Route between 2010-2012. The basic premises for allegation was substantially altered and it is alleged that during June-2009 to October-2011, ICICI had Sanctioned 6 high value loans to various Videocon group companies. On 26.08.2009, RTL of Rs. 300 Crores was sanctioned to M/s. VIEL in contravention of rules and policy by Sanctioning Committee. Ms. Chanda Kochhar was one of the member of Sanctioning Committee, who in criminal conspiracy to cheat ICICI Bank and in pursuance of criminal conspiracy. On 26.08....
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.... for sanctioning RTL of Rs. 300 Crores to M/s. VIL, corresponding to which it is duly established by the defendants with the investment made by Mr. V. N. Dhoot of Rs. 64 Crores to M/s. NRL through SEPL was a genuine business investment contemplated much ahead in time of sanction of the loan. The Senior Officials namely Sandeep Bakshi, K. Ramkumar, Sanjoy Chatterjee, N.S. Kannan, Ms. Zarin Daruwala, Rashi Sabharwal, K.V. Kamath and Homi Khusrokhan though known and identified were neither interrogated for the alleged scheduled offences by CBI nor interrogation if any, reveal by CBI or the Enforcement Directorate. The FIR alleges that M/s. NRL was being managed by Mr. Deepak Kochhar (applicant) it does not allege that M/s. NRL was owned by him. The Deputy Director issued Provisional Attachment Order invoking the second proviso of Section 5 (1) without forming justifiable reasonable belief as statutorily required. The Deputy Director has not placed any intelligence on record as claimed. The possibility of trial taking long time cannot justify apprehension that the assets are being concealed or transferred. The revelation of modus would not lead to frittering of proceeds of crime during....
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....p through their investment it. M/s. Supreme Energy had invested in fully convertible debentures of M/s. NuPower Renewables which has compulsorily to be converted into equity as per the terms of conversion, therefore, he purchased 9990 shares through his family trust from Mr. Punglia. The role of Mr. Punglia was that he was Director of NuPower Renewables. He was attending Board Meetings. In February 1996, Bilquis Begum transferred the flat to applicant and Rajiv Kochhar vide transfer Deed dated February 1996 and the share certificate for said flat was transferred in the name of applicant and Rajiv Kochhar. These shares were of CCI Chambers society. The Flat is in his name since April 1996. His brother's name was dropped in 2009. The flat was purchased out of funds of Credential Finance a company promoted by applicant and his mother. Purchase price was paid out of earnings of the company. Since the purchase price was paid out of Kochhar's family retained earnings in Credential Finance Ltd.(pre-merger). The said property has remained in books of corporate entities. The merged company (post-merger) went into financial crises and exposed to litigation. Further statement of applicant was....
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....to Kocchar family. He stated that flat was purchased by the applicant and his family from their own funds around 1994-95. In 199496 one of his Company i.e. Blue Mines Ltd. merged with M/s. Credential Finance Limited owned by Kochhar family and Videocon group acquired controlling stake in the Company. Applicant was Managing Director of M/s. Credential Finance Limited. M/s. CFL obtained loan from SBI Home Finance Ltd. and applicant on his personal guarantee, mortgaged property for availing loan. Subsequently, M/s. CFL incurred losses and the Company was liquidated in the year 1998. The flat was purchased by one of Group Company M/s. Quality Techno Advisors Pvt. Ltd. (QTPAL) and since Mr. Dhoot had given personal guarantee for the said property, the same continued in the name of applicant in society registration. It is utilized by the applicant and family. He also explained how and why M/s. Supreme Energy Pvt. Ltd. provided Rs. 64 Crores to NuPower Renewables Pvt. Ltd., a Company promoted by the applicant on 08.09.2019. He stated that on 07.09.2009 M/s. VIEL was disbursed loan of Rs. 283.45 Crore. Out of the said amount, Rs. 50 Crore was transferred by VIEL to SBI account of VIL. Out ....
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....L (through SEPL) on paper and not controlling decision making in NRL. NRPL/NRL was controlled by Mr. Deepak Kochhar. Thereafter his statements were recorded on 21.07.2020 and 22.07.2020. He further stated that he transferred funds to NRL. Rs. 64 Crores was transferred out of loan funds to NRL through SEPL. In January 2009, Mr. Deepak Kochhar met him to seeking funds which he wanted to invest in Renewables Energy Sector. In March 2009, he met Ms. Chanda Kochhar she told him that Mr. Deepak Kochhar is planning for a project in Wind Energy. The project is good. By Deed of transfer dated 04.08.2009 between M/s. Credential Finance Ltd and M/s. Quality Appliances Pvt. Ltd., the flat was transferred from CFL to QAPL. Document shows that Mr. Deepak Kochhar has paid Rs. 4.53 lakh of QAPL/QTAPL in January 2013 for obtaining 1% shareholding in the said flat. In the statement dated 12.09.2020, he stated that, I had diverted the loan funds obtained from ICICI Bank and gave money to company of M/s. NRPL. The proposal was initiated by Mr. Deepak Kochhar. He was about to start Wind Power Business. In January-February 2009, Mr. Deepak Kochhar approached him for financing his project. He was not int....
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....identified power generation and trading and dealing in various mineral including coal required for Electricity of Power Generation. He also explained why he decided to invest in M/s. NuPower Renewals Ltd. He stated that VIL invested Rs. 64 Crores in FCD's of NuPower Renewables Ltd. through SEPL against investment of Rs. 64 Crores NuPower Renewables through SEPL, Real Cleantech was allotted optionally convertible debentures. The said debentures are convertible, at the option of debenture holder, on completion terms of 10 years during the date of issue of debentures or any other date (which date can be earlier date prior to completion of the term) mutually agreed between SEPL and debenture holder. He also stated that loan outstanding from VIEL in the books of VIL as on 6th September 2009 was Rs. 740.16 Crores. Out of which, Rs. 283.45 Crores was repaid by VIEL on 7th September 2009. Loan of Rs. 300 Crores was sanctioned to VIEL by ICICI Bank on 29th August 2009. Amount of Rs. 16.55 Crores deducted by ICICI Bank while disbursing loan. The net disbursed amount of Rs. 283.45 was utilized towards repayment of unsecured loan given by Videocon Industries Limited to Videocon International E....
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....on. He also gave details about process followed for sanction. Normal process was not followed. Statement of Malu Sudhakar is recorded on 16.10.2020. He stated about conflict of interest of Ms. Chanda Kochhar. 27. From the tenor of the statements, it is apparent that statements were recorded in detail in the form of interrogation. Statements of Mr. V. N. Dhoot, applicant and Ms. Chanda Kochhar are in the nature of explanation to the charges levelled against them. The statements of applicant and co-accused are not in the nature of admission of guilt. The statements of some of the witnesses corroborates versions of applicant. 28. Provisional Attachment order was issued on 10.01.2020 in respect to properties on the ground that, applicant and others were in possession of proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating proceedings relating to confiscation of proceeds of crime. The schedule of property under attachment is Flat No.45, CCI Chambers, Churchgate, Mumbai. The respondent in the impugned proceedings has alleged that the aforesaid flat is acquired by family trust of applicant fr....
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....ith investigation and submitted documents. Hence, even if further investigation is going on, his presence can be secured before Enforcement Directorate for investigation purpose. In such circumstances keeping the applicant need not be kept in custody. The trial Court concluded that, considering the fact that Enforcement Directorate had not arrested the accused under Section 19 of PMLA and the accused is 70-year-old having ailments, he can be released on bail. Hence by order dated 12.03.2021, accused No.3 Mr. V.N. Dhoot was granted bail. While denying bail to the applicant vide order dated 01.12.2020, it was observed that, charge against applicant is serious in nature. Enforcement Directorate has contended that relatives of applicant are witnesses and further investigation is in progress. The applicant may tamper with prosecution evidence. There are allegations of siphoning money. It is pertinent to note that, loan was obtained by accused No.3. Amount of Rs. 64 Crores was allegedly diverted by accused No.3. 30. During the course of investigation the respondents had submitted that the applicant had tampered evidence. Sealed envelope was tendered in Court. Although the material was....
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....1973 (a) every offence punishable under section shall be cognizable (b) no person accused of an offence punishable for term of imprisonment of more than three years under part A of schedule 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 infirm, may be released on bail, if the Special Court so directs." "Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) The Director; or (ii) Any officer of the Central Government or State of Maharashtra authorities order in writing in this behalf by that Government." (1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or not any oth....
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....nder challenge, the Court will have to proceed on the basis that the provision is intra vires and interpret the same as such. Learned ASG submitted that this Court is dealing with bail and cannot decide constitutional validity of amendment. He relied upon the decision in the case of Nagaland Gone Vs. State of Nagaland 2010 7 SCC 643. The Apex Court has observed that there is always a presumption in favour of constitutionality of enactment that the burden is upon the person who attacks it. Learned ASG also relied upon the decision in the case of Municipal Committee Amritsar & Anr. Vs. State of Punjab & Ors. 1969 1 SCC 475. In the said case, the Court considered whether the expression 'cattle fair' incorporated under the Punjab Cattle Fairs (Regulation) Act is unconstitutional. The Act provided for vesting exclusively, the right to hold a cattle fair at any place in the State of Punjab, declared it unlawful for any person or local authority to hold, control, or regulate a cattle fair at any place in the state and required local authorities in whose jurisdiction the fair is to be held, to deposit a prescribed amount to cover initial expenses. The High Court held the Act ultra-vires on....
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....that amending Act purported to amend the earlier Section 5 which was not in existence. It was held that as the Act applies to sales or purchases of different commodities it had become necessary to give some discretion to Government in fixing rate. It is pertinent to note that in this decision, the original Act was held valid. Learned ASG then relied upon the judgment in the case of Radheshyam Kejriwal Vs. State of West Bengal (2011) 3 SCC 581. In the said decision, it was held that in case of exoneration on merits in adjudication proceedings where the allegation is found to be not sustainable at all and the person concerned is innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue. The Court interpreted Sections 50, 51 and 56 Foreign Exchange Regulation Act, 1973 it was observed that proceeding cannot be set aside on the ground that the Adjudicating Authority had exonerated the accused. Learned ASG submitted that the Delhi High Court in the case of Upendra Rai Vs. Enforcement Directorate (2019) SCC OnLine Del 9086 had observed that the amendment to Section 45 does not revive the twin conditions. The said decision has been challenged....
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....ferring to several decisions has held that the Supreme Court has taken into consideration the illustrations while arriving at a conclusion that the twin conditions is unconstitutional. It was observed that the Hon'ble Supreme Court has clearly held that indiscriminate application of the provisions of Section 45 will certainly violate Article 21 of the Constitution of India. In the background, it is to be seen as to whether the amendment introduced in Section 45 of the Act shall amount to reframing the entire Section 45 and thereby reviving and resurrecting the requirement of twin-conditions under sub-Section (1) of Section 45 of the PML Act for grant of bail. In view of clear language used in paragraph 46 of the Supreme Court's decision in case of Nikesh Tarachand Shah (supra), the Court has no hesitation in reaching a definite conclusion that the amendment in sub-Section (1) of Section 45 of the PML Act introduced after the Supreme Court's decision in case of Nikesh Tarachand Shah (supra) does not have the effect of reviving the twin-conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of the Constitution of India. Mr. Desai submitted that ....
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.... Provided that a person who is under the age of sixteen years or is a woman or is sick or infirm [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees], may be released on bail, if the special court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government. [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in [***] sub-section 91) is in addition to the limitations under the code of Criminal Procedure, 1973 (2 of 1974)....
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....d into Part A). In this illustration again, Mr. X would be liable to be enlarged on bail under Section 439 of the Code of Criminal Procedure by Special Court/High Court, with or without conditions, as Section 45 of the 2002 Act would have no application. The fourth illustration would be an illustration in which Mr. X is prosecuted for an offence under the 2002 Act and an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule. In this illustration, the Special Court/High Court would enlarge Mr. X on bail only if the conditions specified in Section 45(1) are satisfied and not otherwise. In the fourth illustration, Section 45 would apply in a joint trial of offences under the Act and under Part A of the Schedule because the only thing that is to be seen for the purpose of granting bail, under this Section, is the alleged occurrence of a Part A scheduled offence, which has imprisonment for over three years. The likelihood of Mr. X being enlarged on bail in the first three illustrations is far greater than in this fourth illustration, dependent only upon the circumstance, that Mr. X is being prosecuted for a Schedule A offence which has impri....
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....and 21, inasmuch as the procedure for bail would become harsh, burdensome, wrongful and discriminatory depending upon whether a person is being tried for an offence which also happens to be an offence under Part A of the Schedule, or an offence under Part A of the Schedule together with an offence under the 2002 Act. Obviously, the grant of bail would depend upon a circumstance which has nothing to do with the offence of money laundering. On this ground alone, Section 45 would have to be struck down as being manifestly arbitrary and providing a procedure which is not fair or just and would, thus, violate both Articles 14 and 21 of the Constitution. 42. Another conundrum that arises is that, unlike the Terrorist and Disruptive Activities (Prevention) Act, 1987, there is no provision in the 2002 Act which excludes grant of anticipatory bail. Anticipatory bail can be granted in circumstances set out in Siddharam Satlingappa Mhetre v. State of Maharashtra (see paras 109, 112 and 117). Thus, anticipatory bail may be granted to a person who is prosecuted for the offence of money laundering together with an offence under Part A of the Schedule, which may last throughout the trial....
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....stitutional by Apex Court in the case of Nikesh Shah (supra) stands revived in view of Amendment as stated above to Section 45 of the Act. This Court in the case of Sameer Bhujbal (supra) has turned down the submission of respondents therein that Government has brought an amendment to Finance Act, 2018 which has come into effect from 19.04.2018 to Section 45 (1) of PMLA thereby inserting words "under this Act" in Section 45 (1) of the Act. In view of amendment, the original sub-Section (ii) of Section 45 (1) which imposes the said twin conditions automatically stands revived and the said condition therefore remain on statute book. The original Section 45 (1) (ii) has to be inferred and treated as it still exists on the statute book and holds the field even as of today for deciding application for bail by an accused under PMLA. It was further argued that by inserting words "under this Act", the Judgment delivered by Supreme Court in Nikesh Shah (supra) has become in effective. The Court held that the Apex Court in Nikesh Shah (supra) has declared Section 45 (1) of PMLA in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Articles 1....
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....considered similar issue. Similar argument was advanced by respondents. The Court referred to decisions of this Court and Madhya Pradesh High Court, referred to hereinabove. The Court held that there is no reason to disagree with the two views expressed. Learned counsel for respondents had contended that the decision in the case of Upendra Rai has been challenged before the Apex Court and the order has been stayed. The order dated 03.06.2020 passed in the said case indicate that, Notice was issued and until further orders, the operation of impugned order passed by High Court of Delhi is stayed if the respondent has not already been released on bail. It is not clear whether the respondent therein was released on bail before passing the said order. From the order it appears that operation of order was stayed if accused is not released on bail. The High Court of Manipur at Imphal in the case of Okram Singh Vs. Directorate of Enforcement (supra) considered similar argument of prosecution. The contention of respondents was not accepted. The respondents in support of submissions had relied on Supreme Court decision in the case of P. Chidambaram Vs. Directorate of Enforcement (2018) 11 SC....
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....has been echoed by Apex Court in P. Chidambaram Vs. Directorate of Enforcement. It is submitted that, the said decision was challenged before Apex Court. The order dated 24.11.2020 passed by Hon'ble Supreme Court in the appeal mentions that, petitioners counsel prayed for withdrawal of petition with liberty to file fresh petition before Supreme Court after six months. Accordingly, the Special leave petition is dismissed as withdrawn with liberty aforesaid. Thus, there was no adjudication on merits before Apex Court. In P. Chidambaram's case (supra) referred above, the petitioner was seeking anticipatory bail. The Court had decided case on merits and not dealt with issue relating to effect of amendment to Section 45 (1) of PMLA and whether the twin conditions stands revived. 42. In the case of Nikesh Tarachand Shah (supra) as stated above the Hon'ble Supreme Court has declared Clause (ii) of sub-Section 1 of Section 45 of PML Act ultra vires Articles 14 and 21 of the Constitution. Sub-Section 2 the said decision the amendment referred to hereinabove was carried out. Clause (ii) of sub-Section 1 of Section 45 of PML Act places two conditions for release of a person accused of an o....
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....18 is silent about its retrospective effect. The original sub-Section 45 (1) (ii) is neither revived nor resurrected by the amending Act. Learned ASG has relied upon several decisions and contended that there is always presumption of constitutionality/constitutional validity of statute. The burden of proof is upon the person who attacks it. It was also contended that it is permissible to grant the provision, even after the provision is set aside by the Court to rectify the discrepancies. It was also contended that this Court cannot decide issue relating to constitutional validity of the amendment. There cannot be debate about the submissions on law as evident from the judgment relied upon by the learned ASG. This Court is certainly not dealing with the constitutional validity of the amendment. However, on plain reading of amendment it cannot be interpreted that the twin conditions which were stuck down by the Apex Court being unconstitutional would stand revive. 43. Learned counsel Mr. Desai further submitted that even assuming that the twin conditions are applicable, the restrictions on the power of the Court to grant bail should not be pushed too far. If the Court, having rega....
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....hermore of the opinion that the restrictions on the power of the Court to grant bail should not be pushed too far. If the Court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the Court as regards his likelihood of not committing an offence while on bail must be construed to mean an offence under the Act and not any offence whatsoever be it a minor or major offence. If such an expansive meaning is given, even likelihood of commission of an offence under Section 279 of the Indian Penal Code may debar the Court from releasing the accused on bail. A statute, it is trite, should not be interpreted in such a manner as would lead to absurdity. What would further be necessary on the part of the Court is to see the culpability of the accused and his involvement in the commission of an organised crime either directly or indirectly. The Court at the time of considering the application for grant of bail shall consider the question from the angle as to whether he was possessed of the requisite mens rea. Every little omission or commission, negligence or derelict....
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....undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby." 45. Learned ASG has adverted to Section 24 of PMLA which relates to burden of proof. It is submitted that in the case of a person charged with the offence of money laundering under Section 3, the Court shall, unless contrary is proved, presume that such proceeds of crime are involved in money laundering. It is submitted that the burden is on the applicant/accused to prove contrary. Reliance is placed on the decision of the Supreme Court in the case of Union of India Vs. Hasan Ali Khan & Anr. decided on 30th September 2011 vide Criminal Appeal No. 1881 of 2011 arising out of SLP (CRL) No.6114 of 2011. In the said decision it was observed that burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifted to accused under Section 24 of the PML Act, 2002. The Apex Court referred to Section 24 of the Act. It is pertinent to note that Section 24 of PMLA has been substituted by Act of 2013 with ....
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....that Videocon Group owned 95% of NRL (through their Company SEPL), when the investment of Rs. 64 Crores was made in NRL on 08.09.2009. The date of investment was a result of sequence of complete due diligence events. Investment amount of Rs. 64 Crores was used by NRL for purchase of 33.15 MW of wind power assets from the Shriram Group. Videocon group continues to own the investment of Rs. 64 Crores by virtue of the optionally convertible debenture issued by SEPL to RCPL. In 2006-08 the applicant spent time in gaining insights into the upcoming Renewable Energy sector, including interacting with several owners and manufactures of wind power assets. According to applicant Videocon group was simultaneously diversifying and entering into power business from 2007-2010. On 03.07.2008 Videocon group incorporated Supreme Energy Pvt. Ltd. with an object to enter into electric power and energy segment. In December 2008, NRL was incorporated with Mr. V.N. Dhoot, Saurabh Dhoot and applicant as Directors. The said company had since grown many folds. NRL along with its subsidiaries has set up Wind Power Assets of 180 MW in four different States of India. In January 2009, applicant was allotted 1....
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....s executed and balance consideration of Rs. 4.50 Crores was paid. Various documents required by Housing Society signed between Bilquis Begum and purchasers were transferred of rights, title and interest in the flat to the names of applicant and his brother. Share Certificate pertaining to flat along with right, title and interest in the flat was transferred by society in the names of applicant and his brother. Applicant has been residing in the flat along with his family. In 18.03.1992 the applicant incorporated Credential Finance Ltd. the company had several clients who had deploying their surplus funds through CFL. In August 1996, the company was merged with Bloom Field Builders and Construction Company Ltd. with applicant holding 0.54 % of shares in the post-merger company. The merged entity, of which Videocon had become principal shareholders raised loan from SBI Home Finance for business purpose wherein Videocon corporate guarantee was the primary security for the loan. The applicant gave his flat of collateral security with assurance that his title to the flat would remain protected. Due to defaults by Credential Finance Ltd., SBI Home Finance file a suit against CFL, VIL, ap....
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....as recorded, none had pointed out alleged anomalies while sanctioning loan. The most relevant aspects which is required to be considered, is entire loan was repaid to ICICI Bank and no loss of cause to the bank. The loan was repaid before registration of the FIR by CBI and initiation of the proceedings under the PMLA Act. The statements will have to be tested in evidence during trial. 50. Mr. Desai has relied upon the decision of the High Court in the case of Sanjay Chandra Vs. CBI (2012) 1 SCC 40 wherein it was observed that the grant or refusal to grant bail lies within the discretion of the Court. The grant or denial is regulated, to large extent, by the facts and circumstances of each particular case. At the same time, right to bail is not to be denied merely because of sentiments of community against the accused. The primary purposes of bail in a criminal case is to relieve the accused of imprisonment. Mr. Desai submitted that the applicant is in custody for substantial period of time. Further detention is not necessary. He also relied upon the decision in the case of Dataram Singh Vs. State of Uttar Pradesh and another 2018 3 SCC page 22 in the said case it was observed th....