TaxTMI 
TaxTMI 
2022 (8) TMI 1410
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.... of the funds of the Bank and cheating the Bank to a tune of Rs.74.83 Crores. The basis for the present investigation is the case registered by CBI. 3. According to the complainant-bank, RECC availed loan facility by opening Letter of Credits in the name of shell entities. According to the investigation these shell entities were operated by the petitioner and LCs were provided without any indent of purchase of materials or supply of materials. The petitioner and another person by name Mr.Varanasi Dileef provided these bogus entries to various companies under the guise of financial consultancy business and short term finance. The modus operandi adopted by the petitioner and another was providing LC's to various companies including RECC who in turn siphoned off public funds from bank. To provide such Letter of Credits, the petitioner was charging commission. In the case of RECC, the petitioner channeled the funds diverted from loan amount obtained from various banks by RECC and carried out multiple transactions and again paid such amounts to RECC as short term finances. Thereafter, RECC has diverted the said funds. According to the Enforcement Directorate, such modus operandi was ad....
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....ated shell entitles without there being any business activity and provided bogus entries to RECC and other companies without there being any genuine business transactions. In the said process, the petitioner has charged commission as part of his business. 7. Learned counsel for the petitioner further submits that the petitioner is into the business of money lending and any money that was lent to the companies, he charged his commission, for the said reason, it cannot be said that any offence is made out under Section 3 of the Act of 2002. The petitioner was given police custody for a period of 8 days and no further detention is warranted. 8. Learned counsel for the petitioner has referred to section 19(1) of the Act of 2002 which reads as follows: "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 of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inf....
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....neither arrayed the petitioner as an accused or witness in the matter of investigation of RECC pertaining to bogus LCs. iii) Learned counsel for the petitioner while placing reliance on the judgment in the case of Satender Kumar Antil v. Central Bureau of Investigation 2022 SCC OnLine SC 825 submits that the Courts have to satisfy that there is a compliance of Section 41-A of Cr.P.C and any non compliance entitles the accused for grant of bail. 10. Learned counsel for the petitioner further relied upon the judgment in the case of Vijay Madanlal Choudhary v. Union of India Special Leave Petition (Criminal) No.4634 of 2014 referring to para 187(d), argued that since the Petitioner was not arrayed as an accused in the CBI case as such there cannot be any offence under section 3 of PMLA. 11. On the other hand, learned special Public Prosecutor submits that this Court in Criminal Petition No.9825 of 2021 & batch held that Section 41-A of Cr.PC is not applicable to the proceedings under the Act of 2002, as Section 19 of the Act prescribes the procedure of arrest. By virtue of Section 65 of the Act of 2002, Cr.P.C provisions are applicable only if they are not inconsistent with the pro....
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.... more than three years under Part A of the 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 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. 28 [(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....
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....s that the arresting authority on the basis of material in his possession has reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under the Act, he may arrest such person. The restrictions under section 45 for the Court while granting bail are that reasons should be recorded 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. 20. The intention of the legislature in introducing the criteria of 'reasonable grounds for believing' that a person is 'guilty' or 'not guilty' of such an offence has to be construed with the attending facts and circumstances of a particular case. Since the bail is normally urged during the course of investigation, the Court has to come to a prima facie conclusion whether or not to grant bail on the basis of the material provided by the investigating agency. Reasonable grounds for belief cannot be under the realm of 'suspicion' or 'may be'. The evidence collected and available at the time of arrest should suggest high probability of culpability and need not be beyond reasonable doubt. T....
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.... 41A of the Code while taking note of the order of the High Court of Delhi dated 07.02.2018 in Writ Petition (C) No. 7608 of 2018 and the standing order issued by the Delhi Police i.e. Standing Order No. 109 of 2020, to comply with the mandate of Section 41A of the Code. e) There need not be any insistence of a bail application while considering the application under Section 88, 170, 204 and 209 of the Code. f) There needs to be a strict compliance of the mandate laid down in the judgment of this court in Siddharth (supra). g) The State and Central Governments will have to comply with the directions issued by this Court from time to time with respect to constitution of special courts. The High Court in consultation with the State Governments will have to undertake an exercise on the need for the special courts. The vacancies in the position of Presiding Officers of the special courts will have to be filled up expeditiously. h) The High Courts are directed to undertake the exercise of finding out the undertrial prisoners who are not able to comply with the bail conditions. After doing so, appropriate action will have to be taken in light of Section 440 of the Code, facil....
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....n accused in the said charge sheet filed, which is not disputed by the learned Special Counsel. The alleged modus operandi adopted by the accused in respect of all the companies is the same. 25. The Hon'ble Supreme Court in the case of P.Chidambaram v. Directorate of Enforcement Criminal Appeal No.1831/2019 held that grant of bail has to be considered depending upon the alleged offence, the nature of accusation and the apprehension of the accused tampering with the witnesses and the consideration of bail would also be to securing presence of an accused during proceedings and that he would not flee from justice. 26. In Arnab Manoranjan Goswami vs The State Of Maharashtra in Criminal Appeal No. 742 of 2020 arising out of SLP (Crl) No. 5598 of 2020, the Hon'ble Supreme Court held- "63. More than four decades ago, in a celebrated judgment in State of Rajasthan, Jaipur vs Balchand, Justice Krishna Iyer pithily reminded us that the basic rule of our criminal justice system is _bail, not jail. The High Courts and Courts in the district judiciary of India must enforce this principle in practice, and not forego that duty, leaving this Court to intervene at all times." 27. In view of t....