AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 978
X X X X Extracts X X X X
X X X X Extracts X X X X
....03/2018 dated 14.03.2018, thereby praying for cancellation of bail of the opposite party namely, Debabrata Halder. The genesis of the case relate to ECIR No. KLZO/03/2018 dated 14.03.2018 for alleged offence under the provisions of Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'PMLA, 2002'). The substance of the accusations in brief are as follows: (a) On a complaint made by the authorities of National Small Industries Corporation Limited, a Government of India undertaking organisation (hereinafter referred to as 'NSIC') relating to loss of public money to the tune of Rs.173.50/- crore by wrongful invocation of Bank Guarantees/invocation of fake Bank Guarantees issued by various branches of the then United Bank of India (hereinafter referred to as 'UBI'), FIR bearing no.161 dated 26.07.2016 was registered with Bidhannagar North Police Station, Kolkata against the opposite party Debabrata Halder, a middleman, having its office at 29C, Bentick Street, Ground Floor, Room No.-2, Kolkata-700069 and others. The case was thereafter investigated by Anti Cheating &Fraud Section, CID, West Bengal and charge-sheet no. 60/2018 dated 28.04.2018 was submitted b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or at the time of handing over the proceeds of Bank Guarantee in the form of pay order. • The proceeds of Bank Guarantee in the form of pay order was deposited in the account of other NSIC branch which was not the actual beneficiary of the invoked Bank Guarantee. • The depositors then confirmed over phone to the respective branch of NSIC, whether the amount deposited in its account was received or not. As the pay orders were deposited in the account of that branch of NSIC, the official of that respective branch used to confirm the same. • After having confirmation about credit of that amount into the account of that NSIC branch, the depositor then used to identify as proprietor of certain unit against whom payment was due and asked them to credit the said amount in their account to meet up the dues pending against particular unit. • In this way the proceeds of wrongful invocation of Bank Guarantees were used to repay the dues of units of other branch of NSIC. • Once the issue of one Bank Guarantee stopped the whole system of routing/movement of funds by issuance of Bank Guarantee, invocation of the same, deposit of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g for the petitioner that the learned Special Court by its order dated 12.04.2022 was of the view that as there is no prayer for further investigation and no purpose would be served by keeping the accused in custody for indefinite period, weighed with the Learned Special Court for granting bail to the accused Debabrata Halder. The said order also reflected that the accused was in custody since 17th November, 2021 and the Investigating Authorities on completion of investigation filed complaint under the relevant provisions of the PMLA. While considering the order dated 12.04.2022 this Court noticed the order dated 04.04.2022 wherein all accused persons namely, Sudhangshu Kumar Halder, Gopinath Bhattacharya, Manik Lal Das, Jayanta Das, Kedar Nath Pursty, Pradeep Kumar Gangopadhyay, Manik Mohan Mishra, Pappu Halder, Aloke Choudhury, Santosh Singh appeared/surrendered and prayed for bail. The learned Special Court was of the opinion that as the accused persons has appeared pursuant to the summons and surrendered before the Court thereon they are on a different position/situation than the accused who was arrested in connection with the instant case and as such released the accused perso....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... would reflect that the bail petition was filed on 24.03.2022 and the trial Court fixed hearing of such bail application on 12.04.2022, while the production of the accused/opposite party Debabrata Halder was fixed on 10.06.2022, thus on 12.04.2022 oral objection was raised on behalf of the Enforcement Directorate to the prayer for bail of the accused. The order dated 15.01.2022 primarily reflect that the learned trial Judge, after dealing with the submissions made on behalf of the Enforcement Directorate observed that the investigation revealed fake agency and there is sufficient material against the present accused and prima facie a case has been made out against him. The amount of money siphoned is to the tune of Rs.173.50/- Crore. In the subsequent order dated 14.02.2022 the learned trial Court held that in view of the order dated 15.01.2022 there is no further development in favour of the accused thus the bail petition is rejected, subsequently in the order dated 12.04.2022 the learned trial Court according to the applicant erroneously held that there is no prayer for further investigation so the Court can safely say that at this moment there is nothing for further investigatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Act. Mere filing of the complaint after a purported investigation conducted in a slip-shod manner to secure the custody of the accused after the expiry of the statutory period, should not suffice the pleadings in the application with regard to continuation of further investigation. The bail so granted on 12.04.2022 was in conformity with the statutory requirement and the approach of the applicant is to venture for a never ending investigation for an indefinite period of time. According to the learned Advocate the accused/opposite party was arrested on 17.11.2021 and was granted bail on 12.04.2022 while the complaint was filed on 15.01.2022. It has been reiterated that after five months the bail application was allowed by the learned Special Court and the very purpose of filing such an application for cancellation is that the Investigating Agency failed to unearth any admissible evidence in Course of their investigation prior to filing of the complaint and as such sought the prayer for cancellation under the garb of further investigation. Learned Advocate relied upon the judgment of the Hon'ble Supreme in Satender Kumar Antil -Vs. - Central Bureau of Investigation and Anr. rep....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other accused persons. It was submitted that as the Investigating Agency in course of investigation did not invoke the provision of Section 19 of the PMLA or their powers to arrest, the accused no.5 as such, at this stage should not be sent to custody. Additionally it has been submitted that the complicity of the accused Jayanta Das could not be established by the investigating agency and he has been implicated only on the basis of charge-sheet submitted by the CID, West Bengal. The purpose for which the PMLA, 2002 was brought into force particularly, with regard to the assessment, scrutiny and recovery of proceeds of crime do not apply to the present accused and as such the rigors of Section 45 of the PMLA relating to bail do not apply to the present accused and the learned trial Court keeping in mind the aforesaid provisions of law, the conduct of the accused who appeared in response to the summons without evading the same, granted bail which should not be interfered with. Ms. Anita Kaunda, learned Advocate appearing for the accused no.6 namely, Kedar Nath Pursty submitted that he was Chief Manager of United Bank of India, Hazra Branch which was no way concerned for issuing f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch were available with him along with the source of funds were handed over to the investigating. Learned Advocate submitted that the Investigating Agency in course of investigation did not arrest the accused no.7 and as such his liberty should not be interfered, keeping in mind the fact that he never conducted himself in a manner which would be prejudicial to the investigation, inquiry or trial of the case. So far as the accused no.8 Manik Mohan Mishra is concerned, it has been submitted that the accused was employed with United Bank of India and was suspended due to internal disciplinary proceeding. In connection with Bidhannagar North Police Station case no. 161 dated 26.07.2016 which was initiated by the National Small Industries Corporation he was arrested and was granted bail after 93 days. Learned Advocate submitted that the accused no.8 has informed the petitioner his source of money and cooperated with the investigating agency. According to him by no stretch of imagination the rigors of Section 45 of the PMLA could be made applicable this accused. It has been prayed that having regard to the circumstances appearing in favour of the accused, liberty granted to accused no.8 s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pondent no.10 and 11 under Section 420/406/408/409/467/468/469 of the Indian Penal Code; pursuant to the summons issued in the ECIR respondent/accused no.10 and 11 appeared/surrendered before the learned Special Court on 4th of April, 2022. According to the learned Advocate the judgment of the Hon'ble Supreme Court in Vijay Madanlal Choudhury & Ors. (supra) cannot have a retrospective operation and the Amendment Act was effective from 19.04.2018 which is prospective in operation. Relying upon Pratap Singh -Vs. State of Jharkhand &Anr. reported in (2005) 3 SCC 551 (Para 88), the learned Advocate submitted that in case of Juvenile Justice (Care and Protection of Children) Act, 2020 it was held that it would come into force on such date by a notification in the official gazette as the Central Government may appoint on 1st April, 2021. The Central Government issued notification and it was held in the reported judgment that "the Act, thus, is prospective in its operation". Learned Advocate reiterated that every statute is presumed to be prospective in operation unless otherwise specified. It was further contended that the respondent/accusedno.10 and 11 surrendered before the Court im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of agricultural lands/fake bills regarding business of dry fish etc. His statement under Section 50 of the PMLA, 2002 is self explanatory in modus operandi of the offence and the conversion of money in collusion with others, which includes officials of NSIC and United Bank of India for diversion of funds. The accused was directly involved with the concealment, possession, acquisition, use of proceeds of agreement and projecting them as untainted, for which according to the provisions/Act he has committed the offence under Section 3 of PMLA which is punishable under Section 4 of the said Act. (2) Sudhangshu Kumar Halder (accused No.2): He was a NSIC Official at Kolkata Branch and was working in RMA section. He had association with accused no.1 Debabrata Halder since 2009-10 and was working as a consultant for processing of RMA proposal of various MSME units. He guided Debabrata Halder about procedure relating to processing, sanction, disbursement, financial assistance under RMA scheme. He was shown as an accused in the CID case for being involved in financial irregularities in NSIC due to wrongful invocation of Bank Guarantees/ invocation of fake Bank guarantees. He was als....
X X X X Extracts X X X X
X X X X Extracts X X X X
....: He was the main associate person who guided Debabrata Halder, about opening of accounts, issuance of Bank Guarantees and invocation of the same. He was known to Debabrata Halder since 2005 and developed close acquaintance with him, during sanctioning of his Cash Credit account at the branch. Later he decided to explore the possibility of issuance of Bank Guarantee for RMA proposal of NSIC and subsequently, invocation of the same during his posting in Kudghat Branch. The first Bank Guarantee which was issued is in the name of Arunabha Enterprise on 08.01.2010 for an amount of Rs.4 lacs, having validity of one year. Later two Bank Guarantees were also issued each in the name of Gupta Traders and Fashion Track. These Bank Guarantees were invoked within one week of their issuance as he was transferred from Kudghat branch to Jadavpur branch. Payments of Rs.15 lacs were made to him for issuance of Bank Guarantee valued Rs.3 crores favouring NSIC, generally for each unit. Apart from this he was paid Rs.5 lacs for each set of Bank Guarantees valued at Rs.3 crores issued by Pradip Kumar Gangopadhyay and Manik Mohan Mishra. Having assessed his role he was found to be involved in commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hury (Accused No.10): He was working as Chief Manager (credit) in Behala Regional Office of United Bank of India having administrative control over its Jadavpur Vidyapith Branch. He was associated with Debabrata Halder in confirmation of Bank Guarantees issued in favour of NSIC. He also worked as Head of Credit/Advance department in Behala Regional Office and was responsible to look after the activities relating to all credit facilities, extended by the branches under the administrative control of the then Behala Regional Office. Payment of Rs.20-25 lacs were paid to him regarding issuance/confirmation/invocation of Bank Guarantees for each set of Bank Guarantees valued Rs.3 crores issued in favour of NSIC. He has committed the offence under Section 3 of PMLA. (11) Santosh Singh (Accused No.11): He was successor of Aloke Chowdhury and was working as Credit Manager (Credit) in Behala Regional Office of United Bank of India, having administrative control over its Jadavpur Vidyapith Branch. He was actively associated with Debabrata Halder, in confirmation of Bank Guarantees issued in favour of NSIC, on request of NSIC authorities. He was also functioning as Head of Credit/Adv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Court was pleased to take cognizance of the offence as submitted by the Enforcement Directorate against the accused persons and issued summons against the accused persons bearing serial nos. 2 to 11 (as above). On receipt of the summons the accused nos.2 to 11 surrendered before the learned Special Court on 04.04.2022 and prayed for bail. The learned Special Court proceeded to record, that summons were sent to the accused persons and in response to the same they surrendered before the Court and as such the contention of the learned Advocate appearing for the complainant/Enforcement Directorate that they are similarly placed with accused no.1/ Debabrata Halder is not correct and accordingly released accused nos.2 to 11 on bail. It would be pertinent at this stage to quote Section 19 and 45 of PMLA, 2002 which are set out as follows: "S. 19. Power to arrest.-(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sion 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 (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail." Further Rule 6 of reference to the arrest order of the Prevention of Money-Laundering (the Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its period of Retention) Rules, 2005. "FORM III [See Rule 6] Arrest Order "Whereas, I ............................. Director/Deputy Director/ Assistant Director/Officer authorised in this behalf by the Central Government, have reason to believe that.............................(name of the person arrested) resident of..................... has been guilty of an offence punishable under the provisions of the Prevention of Money-laundering Act, 2002 (15 of 2003); Now, Therefor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icers, it will be presumed that the discretion vested in such highest authority will not be abused. Additionally, the Central Government has framed Rules under Section 73 in 2005, regarding the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the Adjudicating Authority and the period of its retention. In yet another decision in Ahmed Noormohmed Bhatti, this Court opined that the provision cannot be held to be unreasonable or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan). 326. Considering the above, we have no hesitation in upholding the validity of Section 19 of the 2002 Act. We reject the grounds pressed into service to declare Section 19 of the 2002 Act as unconstitutional. On the other hand, we hold that such a provision has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act of prevention of money-laundering and confiscation of proceeds of crime involved in money-laundering, including to prosecute persons involved in the process or activity connected with the proceeds of crime so as to e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail 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" (emphasis supplied) 401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rities invoking their powers under Section 19 of the Act. The accused nos. 2 to 11 appeared before the learned Special Court pursuant to the summons which were issued to them as such taking into account the provisions of Section 65 of the PMLA, 2002 it can be held that if the learned Special Court intended to exercise its option under Section 88 of the Code of Criminal Procedure the same cannot be interfered with until and unless supervening circumstances are brought on record. In view of the aforesaid the order dated 04.04.2022 wherein the learned Special Court granted bail to accused nos.2 to 11 and against whom, this Court was pleased to issue show cause by its order dated 28.07.2022 is not interfered with. The order of bail dated 04.04.2022 granted by the learned Special Court to accused nos. 2 to 11 is hereby affirmed. However, so far as the accused Debabrata Halder is concerned the learned Special Court by its order dated 12.04.2022 was pleased to release the said accused on bail which calls for interference in view of the reasons so assigned by the learned Special Court which is quoted below: "...It is submitted by the Ld. Advocates for the petitioner that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....blic or the State and other similar factors which may be relevant in the facts and circumstances of the case. In State of Gujarat -Vs. - Sandip Omprakash Gupta reported in 2022 SCC OnLine SC 1727 the Hon'ble Supreme Court while dealing with the provisions of bail under Section 20(4) of the Gujarat Control of Terrorism and Organised Crime Act, 2015 was pleased to observe as follows: "34. It is plain from a bare reading of the non-obstante clause in the sub-section that the power to grant bail by the High Court or Court of Sessions is not only subject to the limitations imposed by Section 439 of the Code but is also subject to the limitations placed by Section 20(4) of the 2015 Act. Apart from the grant of opportunity to the Public Prosecutor, the other twin conditions are : the satisfaction of the court that there are reasonable grounds for believing that the accused is not guilty of the alleged offence and that he is not likely to commit any offence while on bail. The conditions are cumulative and not alternative. The satisfaction contemplated regarding the accused being not guilty has to be based on reasonable grounds. The expression 'reasonable grounds' means somethin....