TaxTMI 
TaxTMI 
2022 (11) TMI 755
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....r of Enforcement has come present with record. Close scrutiny of status report/ record reveals that Himachal Pradesh Police registered FIR No. 252 of 2021 under Sections 379, 406, 34 IPC and Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957. After having completed investigation in the aforesaid FIR, police has filed challan under Section 173 Cr.P.C., against Vishal @ Vicky and 15 other persons for their having allegedly committed offence punishable under Section 120-B, 379 of Indian Penal Code and under Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957. Petitioner herein was neither named in the FIR as detailed herein above nor was made accused in final report filed under Section 173 Cr.P.C. in the Court at Additional Chief Judicial Magistrate, Una. Besides above, police also shared information with regard to filing of aforesaid FIR No.252 of 2021 and registration of case under Section 120-B IPC with Directorate of Enforcement. 3. Having taken note of the fact that accused named in the aforesaid FIR were also charged with the offence punishable under Section 120-B, of IPC, which is a scheduled offence under PMLA, Directorate of E....
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....he present bail petitioner in the aforesaid FIR, he was not made an accused in the challan filed in the competent court of law, there was no occasion, if any, for Enforcement Directorate to record ECIR against bail petitioner, especially when in earlier FIR as detailed in above there was no evidence that the petitioner after having indulged in criminal activity, which in this case is illegal mining, used proceeds of the crime for procuring property/money, which is subsequently intended to be projected as untainted. Mr. Chandel, learned Senior Counsel, further submitted that otherwise also no offence much less scheduled in the PMLA ever came to be committed by the bail petitioner, as such, he could not be proceeded against under Sections 3 & 4 of the PMLA. 6. Lastly, Mr. Chandel, learned Senior Counsel, submitted that medical evidence adduced on record along with the petition clearly reveals that the petitioner is highly diabetic, overweight and has already undergone heart-surgery as a result of which, it is not safe to keep him behind bars because at any time, he may require immediate medical intervention. While inviting attention of this Court to the material placed on record wit....
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.... FIR recorded by the police was neither made basis to register case against the petitioner under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 nor evidence, if any, collected in that case is being used against the petitioner in the case at hand. Mr. Balram Sharma, learned Deputy Solicitor General further submitted that material collected on record at this stage cannot be shared with the accused because investigation is still pending but perusal of the same clearly reveals that bail petitioner after having indulged in criminal activity used the proceeds of the crime to procure/obtain property/wealth, which subsequently he attempted to project as untainted money and as such, he has been rightly booked Under Sections 3 and 4 of Prevention of Money Laundering Act. 8. While referring to Section 19 of the Prevention of Money Laundering Act, Mr. Balram Sharma, learned Deputy Solicitor General vehemently argued that on the basis of material collected during investigation, if investigating Officer has reasons to believe that any person is guilty of offence punishable under this Act, he can arrest such person and at that stage he is only required to be informed with regard to....
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....on 173, petitioner ever came to be named as an accused. It is only after sharing of information by the State Police with Enforcement Directorate, that the Enforcement Directorate with a view to investigate criminal conspiracy punishable under Section 120-B of IPC, which is otherwise scheduled offence under PMLA, interrogated accused named in the FIR and from there, found some lead with regard to involvement of petitioner in cases of illegal mining. Though, investigation conducted by Enforcement Directorate reveals that bail petitioner herein was granted mining leases by the Industries Department, Himachal Pradesh and same are valid till date and are being renewed from time to time but since during investigation, Directorate of Enforcement found evidence that the present bail petitioner has indulged in the indiscriminate mining in Swan River Una and earned huge money by illegal means and subsequently attempted to project the same as untainted property, it recorded ECIR against him and thereafter for investigation arrested him. As per Enforcement Department, ECIR as detailed herein above has been registered against petitioner under Sections 3 and 4 of Prevention of Money Laundering A....
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....ll not be less than three years but may extend to seven years has been provided. 12. Careful, perusal of aforesaid provisions contained under Section 3, reveals that to book a person under section 3 of PMLA, it is incumbent upon investigating Agency i.e Enforcement Directorate to establish that person accused of Section 3 of PMLA Act, have firstly indulged in criminal activity as scheduled in the Act and thereafter possessed/acquired the proceeds of crime and thereafter the case used for acquiring property /wealth, which is subsequently tried to be projected as untainted property. No doubt if the provisions of section 3 of PMLA are read in entirety, it not only talks about procurement but also of concealment, possession and acquisition or use. So to attract aforesaid provision, Investigating Agency either is required to establish that proceeds from the crime were concealed or they were possessed or with the help of the and aid of the same, some property was acquired and same was used for some other purposes. At this stage, it would be apt to take note of definition of 'proceeds of crime' as given under Section 2 (u)which reads as under:- 2(u) "Proceeds of crime" means an....
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....t C of the Schedule." Scheduled offence is a sine qua non for the offence of money laundering which would generate the money that is being laundered. PMLA contains schedules which originally contained three parts, namely, Part A, Part B and C. Part A contains various paragraphs which enumerate offences under the Penal Code. 1860, Narcotic Drugs and Physhoitropic Substances Act, 1985, offences under the Explosives Substances Act, 1908 and the offences under the Prevention of Corruption Act, 1988 (Para 8) etc. The Schedule was amended by Act 21 of 2009 (w.e.f. 1-6-2009). Section 13 of the Prevention of Corruption Act was inserted in Part A of the Schedule to PMLA by Amendment Act 16 of 2018 (w.e.f. 26-7-2018). 26. Section 3 of PMLA stipulates "money-launderig" to be an offence. Section 3 of PMLA states that whosoever directly or indirectly attempts to indulge or knowingly assist or knowingly is a party or is actually involved in any process or activity connected with the proceeds of the crime and projecting it as untained property shall be guilty of the offences of money-laundering. The provisions of PMLA including Section 3 have undergone various amendments. The words in Section....
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.... of the 2002 Act does not travel beyond the main provision predicating tracking and reaching upto the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. (v)(a) Section 3 of the 2002 Act has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy. The Explanation inserted to Section 3 by way of amendment of 2019 does not expand the purport of Section 3 but is only clarificatory in nature. It clarifies the word "and" preceding the expression projecting or claiming as "or"; and being a clarificatory amendment, it would make no difference even if it is introduced by way of Finance Act or otherwise.. (b) Independent of the above, we are clearly of the view that the expression "and" occurring in Section 3 has to be construed as "or", to give full play to the said provision so as to include "every" process or activity indulged into by anyone. Projecting or claiming the property as untainted property would constitute an offence of money-laundering on its o....
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....scribed as a standalone offense, all that is sought to be conveyed is that it represents an independent offense and is to be tried separately in accordance with the procedure prescribed under the Act. The objective of the Act is to try charges of money laundering which entails proceeds of crime being acquired, possessed or used and/or projected as untainted property. Undisputedly, the offense of money laundering rests on the commission of a predicate offense which in turn may have resulted in a pecuniary benefit being obtained and derived. It fundamentally aims at confiscation of benefits that may be derived as a result of criminal activity and the commission of a scheduled offense. It is aimed at countering and penalising the malaise of wealth and assets acquired as a result of criminal activity. B. It is evident from a reading of the Act that while the commission of a predicate offense is the precipitate step for initiation of proceedings under the Act, the offense of money laundering must be tried and established separately. It is also pertinent to observe that the predicate offense constitutes the very foundation of a charge of money laundering. The entire edifice of a charge....
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....etween criminal activity and the acquisition of property and assets as a result thereof. If the charge of criminal activity ceases to exist in law, a charge of money laundering would neither sustain nor survive. The Court thus reiterates the conclusions as drawn and recorded in Rajeev Chanana and Gagandeep Singh. Consequently it must be held that once it is found by a competent court, authority or tribunal that a predicate offence is either not evidenced or on facts it is held that no offence at all was committed, proceedings under the Act would necessarily have to fall or be brought to a close. H. Turning then to Section 3 of the Act, the Court finds that the said provision would come into play only if proceeds of crime are found to have been generated. As this Court reads Section 3 it finds that the offence of money laundering has an enduring and ineffaceable link to proceeds of crime. Absent the commission of a criminal offence, the foundation of proceedings initiated under the Act would undoubtedly fall and self-destruct"......... 16. In the instant case, it is pertinent to take note of fact that though ECIR, which is subject matter of present case, is claimed to be not made o....
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....ment Directorate shared information with the police Under Section 66(2) of the prevention of Money Laundering Act, 2002, with the State Police but at the same time arrested bail petitioner on the basis of ECIR as detailed hereinafter. Now question which needs determination is, "whether without there being any evidence of en-massing/procurement of 'proceeds of crime' if any by bail petitioner, Enforcement Agency could proceed to register the case under Section 3 and 4 of Prevention of Money Laundering Act, 2002 or not? No doubt, had some material emerged in the earlier FIR 252 of 2021 against the petitioner suggestive the fact that he after having indulged in criminal activity possessed/ acquired or procured wealth/property with the help and aid of the proceeds of crime, Enforcement Department would have been justified to proceed against bail petitioner under Section 3 and 4 of Prevention of Money Laundering Act, 2002. 17. As per Enforcement Department, petitioner approximately earned Rs.35 crore on account of illegal mining, but interestingly at no point of time Mining Department ever came to be associated nor area was got demarcated by Joint Inspection Committee as has be....
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....o-day basis in the Jail but keeping in view his serious health condition coupled with the fact that nothing is required to be recovered from him, this court finds expedient in the interest of justice to enlarge him on bail so that in the event of any medical emergency he is taken to some good hospital. 19. Learned counsel representing the petitioner has invited the attention of this Court to judgment passed by Punjab and Haryana High Court in case titled as Paranjil Batra versus Directorate of Enforcement, in CRM-M-23705-2022(O&M) decided on 04.11.2022, wherein, in similar facts and circumstances, court having taken note of medical condition of the petitioner, who was stated to be obese having 153 Kg.wWeight, having erratic hypertension and diabetes was ordered to be enlarged on bail. It would be apt to take note of para-20 and 21 of the aforesaid judgment: "20. A perusal of above reproduced medical report shows that the petitioner is an obese person weighing 153 kilograms having erratic hypertension and diabetes issues. Additionally he is found to be having Coronary Artery Disease(CAD). Though, it appears that he was taken to Civil Hospital, Ambala and was provided treatment, w....
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....ment department, bail petitioner cannot be allowed to suffer. Moreover, apprehension expressed by the learned Deputy Solicitor General of India that in the event of petitioner being enlarged on bail, he may flee from justice and tamper with the prosecution evidence can be best met by putting him to stringent conditions:- 21. By now, it is well settled that gravity alone cannot be a decisive ground to deny bail, rather competing factors are required to be balanced by the court while exercising its discretion. It has been repeatedly held by the Hon'ble Apex Court that object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. The Hon'ble Apex Court in Sanjay Chandra versus Central Bureau of Investigation (2012)1 Supreme Court Cases 49; has been held as under:- "The object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it can be required to ensure that an accused person will stand his trial when called upo....
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.... than verbal respect to the principle that punishment begins after conviction and that every man is deemed to be innocent until duly tried and found guilty. It was underlined that the object of bail is neither punitive nor preventive. This Court sounded a caveat 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 a conduct whether an 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. It was enunciated that since the jurisdiction to grant bail to an accused pending trial or in appeal against conviction is discretionary in nature, it has to be exercised with care and caution by balancing the valuable right of liberty of an individual and the interest of the society in general. It was elucidated that the seriousness of the charge, is no doubt one of the relevant considerations while examining the application of bail but it was not only the test or the factor and that grant or denial of such privilege, is regulated to a large extent by the facts and circumstances of each particular ca....