TaxTMI 
TaxTMI 
TaxTMI 
2022 (3) TMI 594
X X X X Extracts X X X X
X X X X Extracts X X X X
....td. (hereinafter, referred to as 'AWIL')], Italian authorities began investigation in the year 2011 regarding payment of bribes through middlemen Guido Ralph Haschke and the present applicant, in relation to supply of 12 VVIP helicopters by AWIL to the Government of India. The Office of Public Prosecutors (Naples and Rome) began telephonic/technical surveillance of Guido Ralph Haschke and others, including then CEO of M/s Finmeccanica. The surveillance revealed that AWIL had paid bribes disguised as payment to various firms for engineering jobs. During search proceedings conducted at the house of mother of Guido Ralph Haschke, various incriminating documents including a payment/balance sheet were recovered by the Swiss Police. Subsequently, Director General (Acq.), Ministry of Defence, Government of India lodged a complaint dated 12.02.2013 with CBI seeking inquiry/investigation into the aforesaid allegations. A preliminary inquiry was conducted, wherefore an FIR/RC bearing No.217-2013-A-0003 came to be registered on 12.03.2013. During investigation in the case, it was revealed that a Request for Proposal (RFP) was issued in March, 2002 on behalf of Indian Air Force (IAF) for proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ultant of M/s AgustaWestland, had acted as a middleman/agent on behalf of the company in securing confidential information regarding the procurement of 12 VVIP helicopters by the Government of India. It was further alleged that he was roped in post-2006 for liaison work, in furtherance of which he and Guido Haschke combined received more than Euro 70 million in the companies beneficially owned and controlled by them, of which Euro 30 million were transferred to the applicant's companies, namely M/s Global Services FZE, UAE and M/s Global Trade & Commerce Ltd. Reportedly, to bye-pass the integrity pact signed between the Government of India and AWIL and to facilitate payment of kickbacks, several service contracts were executed between the applicant's companies and AWIL, even though no service was rendered by said companies in exchange or if rendered, the payments were not commensurate with the work done. In this way, a smoke screen was created between the bogus agreements/contracts and the main contract of AWIL with the Government of India, while prima facie legitimizing the payment of kickbacks by showcasing them as service charges. 5. It was further alleged that the applicant ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Trial Court, as the supplementary charge sheet had been filed. Accordingly, the bail application was dismissed as withdrawn with grant of the liberty prayed for. On 18.06.2021, the application filed on behalf of the applicant seeking bail again came to be dismissed by the Special Court, considering inter-alia the serious nature of the allegations, the gravity of the offence, the stage of investigation and the conduct of the applicant. 9. I have heard learned counsels for the parties and have also gone through the material placed on record as well as the written submissions filed in support of the contentions. 10. During the course of arguments, Mr. Aljo K. Joseph, learned counsel for the applicant, made a preliminary submission that the Italian Court has already tried and acquitted the applicant and other accused persons after considering all materials and documents. Reference was made by him to the proceedings dated 19.06.2013 before the Italian Court to submit that the Indian Ministry of Defence was a party to the proceedings, where it was held that no money has flown out of the accounts of the applicant's company to bribe any officials. Thus, the continuation of proceedings b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....kes, (77 CLR at pp 518-519), which was extracted as under:- "6. ...Speaking on the principle of estoppel Dixon, J., said in King v. Wilkes: "Whilst there is not a great deal of authority upon the subject, it appears to me that there is nothing wrong in the view that there is an issue-estoppel, if it appears by record of itself as explained by proper evidence, that the same point was determined in favour of a prisoner in a previous criminal trial which is brought in view on a second criminal trial of the same prisoner. That seems to be implied in the language used by Wrigt, J., in R. v. Ollis, which in effect I have adopted in the foregoing statement .... There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner. The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding. But if such a condition of affairs arises I see no reason why the ordinary rules of issue-estoppel should not apply. Such rules are not to be confused with those of res judicata, which in criminal proceedin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich was not available with the Italian Courts. Notably, the Ministry of Defence participated in the Italian proceedings only as a civil party. It may be expedient to also allude to the judgment dated 02.09.2018 passed by the Dubai Supreme Court in extradition proceedings where the applicant took the same defence, i.e. of having already been tried by the Italian Court. Learned ASG has pointed out that the Dubai Supreme Court disbelieved the applicant's contention and opined that the proceedings before the Italian Court were in respect of other accused persons and not the applicant. In light of the foregoing and on a prima facie view, this Court finds no merit in the submission made on behalf of the applicant. 14. The second preliminary submission made by the learned counsel for the applicant was that in view of Section 21 of the Extradition Act, which adopts the 'Doctrine of Specialty', the applicant cannot be tried for offences other than for which he was extradited. In this regard, attention of this Court was drawn to the judgment passed by the Dubai Supreme Court and the decision of the Supreme Court of India in Daya Singh Lahoria v. Union of India and Others reported as (2001)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... extradite Christian James Michael, British citizen, on charge of misuse of position or job, money laundering, collusion, fraud, misappropriation and offering illegal gratification within the territory of the requesting country. An arrest warrant was issued by the court in the requesting state." xxx As such, and as there is extradition treaty between the UAE and the Republic of India in respect of the reciprocal legal assistance in criminal matters and extradition of criminals, the said treaty shall apply. Whereas Article 2 of the said treaty states the following: (The following persons shall be extradited): a. Persons accused of an offence punishable under the laws of both the signatory States by imprisonment for a period of at least one year or more. b. Persons sentenced by the Courts of the requesting State with imprisonment for at least six months in respect of an offence mentioned in the Extradition Treaty. Whereas the offences for which the above concerned person is wanted are of deceit and criminal conspiracy punishable by the laws of both the States. In India, the said offences are punishable by imprisonment or fine, or with both, by the provisions of articles 120....
X X X X Extracts X X X X
X X X X Extracts X X X X
....WGAD') in its 89th meeting. On the other hand, learned ASG submitted that though the Government of India had sent its reply to the UNHRC WGAD, the finding of the Group is not binding on the Courts in India as the Group is not a judicial body. It was also submitted that the findings have been negated by the Ministry of External Affairs, Government of India in an official statement on 26.02.2021. 19. In connection with the issue, this Court notes that even though the UNHRC WGAD opinion relates to the present applicant, it was predominantly based on allegations and limited information received from an unidentified source. A response dated 26.06.2020 was sent by the Government of India pursuant to the Group's call for comments, wherein the circumstances surrounding the applicant's extradition were laid out and it was categorically stated that no procedural deficiencies had taken place in his extradition. It was also stated that the applicant's arrest and subsequent custody were in accordance with the judicial process established by law, and the issue of his custody and a request for interim bail had been considered by various Courts, including the Supreme Court of India. Besides, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to life and personal liberty guaranteed under Article 21 of the Constitution of India, which is available to non-citizens also, and that it would hamper his chances to defend himself in the trial, as the documents concerning the case are available in different countries. (D) That the applicant, who is aged about 60 years, suffers from various medical ailments and has been in custody for more than 03 years and 02 months. It was also averred that the prosecution has cited a number of witnesses and the records are voluminous. The investigation has taken 9 years and is still stated to be continuing. In these facts, the commencement/conclusion of the trial is likely to take a long time. Besides, the ED had filed the first supplementary complaint in the case against the applicant on 10.06.2016. 21. In support of his submissions seeking bail, learned counsel cumulatively placed reliance on the decisions in Babba alias Shankar Raghuman Rohida v. State of Maharashtra reported as (2005) 11 SCC 569, Rakesh Kumar Paul v. State of Assam reported as (2017) 15 SCC 67, Sanjay Chandra v. Central Bureau of Investigation reported as (2012) 1 SCC 40, State of Kerala v. Raneef reported as (2011) 1 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... economic offence. He urged that since the applicant was not available during investigation, he had to be extradited. It was further submitted that despite being a British national, the applicant has not been residing in UK for the last 7-8 years, and he had also evaded investigation/trial in Italy. Thus, he is a flight risk, as also observed by a Co-ordinate Bench of this Court in the order dated 06.04.2020 passed in BAIL APPLN. 2716/2019. (E) Learned ASG further contended that in view of his powerful connections, the applicant, if enlarged on bail, may influence the witnesses. 23. On the issue of the present application being a successive bail application to an order of dismissal, it is apparent from the decisions in Kalyan Chandra Sarkar (Supra) and Virupakshappa Gouda (Supra) that a fresh bail application of an accused may be allowed, only in case a 'material change in circumstance' has occurred since an earlier dismissal order. In order to determine if such change has occurred, a Court shall look into the fresh grounds raised and/or material placed on record, and thereafter provide a reasoned finding as to what inclined it to take a view different from its predecessor Bench....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y matter, upon which, he has not been convicted or that in any circumstances, he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty, save in the most extraordinary circumstances. 23. Apart from the question of prevention being the object of refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson. 24. In the instant case, we have already noticed that the "pointing finger of accusation" against the appellants is "the seriousness of the charge". The offences alleged are economic offences which have resulted in loss to the State exchequer. Though, they contend that there is a possibility of the appellants tampering with the witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the relevant considerations while consid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail: (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; (iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; (iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused; (v) larger interest of the public or the State and similar other considerations. [Vide Prahlad Singh Bhati v. State (NCT of Delhi).] 22. There is no hard-and-fast rule regarding grant or refusal to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion of the court has to be exercised judiciously and not in an arbitrary manner. At this stage itself, it is necessary for us to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o have been for Euro 6,050,000 between M/s AgustaWestland Holdings Ltd. and M/s Global Services FZE, Dubai, and the second, for Euro 18.2 million between M/s Westland Helicopters and M/s Global Trade and Commerce Ltd., UK. 32. It has been alleged that the funds received by the applicant in his companies constituted proceeds of crime, out of which, money was diverted by the applicant to one M/s Media Exim Pvt. Ltd and later projected as untainted. In the investigation, it has come that M/s Media Exim Pvt. Ltd. was a shell company with no business transaction done at all, formed by Mr. R.K. Nanda on the instructions of the applicant and used only for the purpose of sale and purchase of properties and/or to launder money. Reportedly, Mr. R.K. Nanda and Mr. J.B. Subramanium were appointed Directors in the said company on the directions of the applicant and an amount of Rs. 6.33 crores (approx.) was transferred to the account of the said company by the applicant through his company M/s Global Services FZE (Dubai). This amount was then used to purchase immoveable properties, one Honda Civic Car, one Ford Endeavour, paintings, jewellery, etc. It has also been revealed that the applicant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding effect over the provisions of the Code, in case there occurs any inconsistency between the provisions of the two. Though stringent, they were earlier held by the Supreme Court to be mandatory [Refer: Gautam Kundu v. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India through Manoj Kumar, Assistant Director, Eastern Region reported as (2015) 16 SCC 1 and Rohit Tandon (Supra)]. 35. Be that as it may, in 2017, the constitutional validity of Section 45 PMLA came to be challenged before the Supreme Court in Nikesh Tarachand Shah (Supra), wherefore, by a judgment rendered in 2018, explicating the defects inherent in the provision and the challenges posed thereby, the Supreme Court held that the twin conditions imposed by Section 45(1) PMLA were manifestly arbitrary, discriminatory and violative of Articles 14 and 21 of the Constitution of India. Post the decision in Nikesh Tarachand Shah (Supra), an amendment was made to Section 45 PMLA vide the Finance Act, 2018 and brought into effect from 19.04.2018. 36. Learned counsels for the parties have informed that the issues raised in the present proceedings in connection with Section 45 PMLA have alrea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich in fact was vehemently opposed by him, as apparent from the judgment of the Dubai Supreme Court. For the said reasons, this Court does not find force in the submissions made on behalf of the applicant with respect to parity with co-accused foreign national who is stated to have been granted bail. 39. Besides, while dismissing the earlier interim bail application of the applicant, a Co-ordinate Bench of this Court made a categorical observation that he was a flight risk, having no roots in the society. At the time, it was also observed by the learned Judge that in the aforesaid facts, the applicant could not seek parity with co-accused persons. The said order was challenged before the Supreme Court, but the same also came to be dismissed. 40. At this stage, this Court deems it apposite to advert to the two recent decisions by the Supreme Court in The Directorate of Enforcement v. Parkash Gurbaxani etc., SLP(Crl.) 7666-7667/2021 and The Asst. Director Enforcement Directorate v. Dr. V.C. Mohan, Criminal Appeal No. 21/2022, which are briefly discussed hereunder. 41. By way of the impugned order in Parkash Gurbaxani (Supra), passed in the context of grant of regular bail, the Pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh the application is under Section 438 of Code of Criminal Procedure. As aforesaid, the High Court has not touched upon this aspect at all. It is urged before us by the respondent that this objection was never taken before the High Court as it is not reflected from the impugned judgment. It is not a question of taking objection but the duty of court to examine the jurisdictional facts including the mandate of Section 45 of the PMLA Act, which must be kept in mind. Accordingly, we deem it appropriate to set aside the impugned judgment and order and relegate the parties before the High Court for reconsideration of Criminal Petition No. 4134 of 2021 afresh for grant of anticipatory bail filed under Section 438 of the Code of Criminal Procedure in connection with stated PMLA offence." Notably, the above observations came to be made by the Supreme Court after granting leave in an SLP and conversion of the case into a Criminal Appeal. 43. Based on the categorical observations made by the Supreme Court in Dr. V.C. Mohan (Supra) and Parkash Gurbaxani (Supra), this Court reckons that the present bail application needs to be tested on the touchstone of the twin conditions set out in S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iling of the third supplementary complaint. He was taken into custody by the ED on 22.12.2018. The allegations levelled against the applicant are serious in nature, for having committed a grave economic offence. He is reported to have transferred confidential information regarding the VVIP helicopters deal to AWIL, in order to influence the deal in its favor. He is also accused of having facilitated the payment of kickbacks/bribe amounts by AWIL to Indian bureaucrats, politicians, etc. in connection with the deal. For his services, he is alleged to have received Euro 30 million from AWIL, which amount is stated to have been routed further through his companies to coaccused persons/entities and later projected as untainted. 46. Even though the applicant has spent considerable time in custody, on a consideration of the peculiar facts and circumstances of the case, including the factum of the applicant evading process/investigation in India/Italy and eventually having been extradited to India, this Court is of the opinion that the applicant, having no roots in the Indian society, is a flight risk. Further, keeping in view the parameters set out in Section 45(1) PMLA and the discussi....