TaxTMI 
TaxTMI 
2023 (11) TMI 904
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Prevention of Corruption Act, 1988 and under Section 120B read with sections 420, 465, 467, 468 and 471 of IPC. The appellant was arrested on 22.06.2022 on the fourth supplementary complaint having been filed by the respondent under Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the 'PML Act'), in continuation of the complaint dated 01.09.2021, 11.10.2021 and 18.11.2021 in Case No. 20/2021, for the commission of the offence of money laundering as defined under Section 3 punishable under Section 4 of PML Act. 3. The broad facts and events as discernible from the record may be stated as under: (i) M/s. Shakti Bhog Foods Ltd. (SBFL) was engaged in manufacturing and selling food items under the brand name of "Shakti Bhog". The company was managed through its Directors/Guarantors - Sh. Kewal Krishan Kumar, Sh. Siddharth Kumar and Smt. Sunanda Kumar. The appellant is the nephew of Sh. Kewal Krishan Kumar, and was shown as one of the employees in SBFL. (ii) The consortium of banks led by the State Bank of India vide the Letter of Engagement dated 18.05.2018 engaged the services of a Forensic Auditor - BDO India LLP for conducting the F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Court of Delhi also came to be rejected vide the impugned order dated 18.07.2023. 4. The allegations against the appellant have been detailed in paragraph nos. 7, 7.1,7.2, & 7.11 and the summary thereof is stated in para 10 of the fourth Supplementary Complaint filed by the respondent. The role of the appellant in the commission of the alleged offence of money laundering in terms of Section 3 of PML Act reads as under: "Tarun Kumar was Vice President (Purchases) in Shakti Bhog Limited and was also a director in various Shakti Bhog Group companies. He was actively involved in the bank fraud committed by Shakti Bhog Foods Ltd. Tarun Kumar was directly involved in procuring fake invoices from shell companies operated by Devki Nandan Garg and Ashok Kumar Goel, Entry Operators. Investigation revealed that emails from and related to the shell entities supplying fake invoices to Shakti Bhog Foods Ltd. were also marked to Tarun Kumar. Further, Tarun Kumar used to transfer proceeds of crime to the shell companies for procuring fake invoices without any genuine business transactions and collected part thereof in cash from Vivek Prasad, Entry Operator. Besides, he used to verify the fake....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nforcement (2023) SCC Online SC 455. (iv) Bail cannot be denied merely on account of the crime being an economic offence. In this regard, Mr. Luthra has relied upon the decision in case of Satender Kumar Antil vs. Central Bureau of Investigation and Another (2022) 10 SCC 51. (v) ED failed to establish the rationale behind discriminating between the appellant and the individuals with similar roles who have not been taken as accused. In this regard, learned Senior Counsel has relied upon the observations made in State of Madhya Pradesh vs. Sheetla Sahai and Others (2009) 8 SCC 617. (vi) Taking the Court to the allegations made against the appellant, the learned Senior Counsel submitted that the allegations and the roles attributed to the appellant in the commission of the alleged offences are baseless. (vii) Lastly, Mr. Luthra submitted that the parameters of bail under Section 45 of the PML Act having been made out, and the custodial detention of the appellant being not necessary, the appellant should be released on bail. 6. The learned Additional Solicitor General, Mr. S.V. Raju for the respondent however, made the following submissions: (i) The appellant was the Vice Pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely: - (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever." 9. Section 45 of the said Act being relevant for the purpose of the instant appeal is reproduced hereunder for ready reference: - "45. Offences to be cognizable and non-bailable. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless - (i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jay Madanlal Choudhary and Others vs. Union of India and Others 2022 SCC Online SC 929, a three Judge Bench had considered the said provisions of the Act in detail. After considering the submissions of the learned counsels for the parties with regard to the interpretation of Section 3 of the said Act, it was held therein as under: - "269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form - be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence - except the proceeds of crime derived or obtained as a result of that crime. 270. Needless to me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process." 11. As regards the twin conditions for the grant of bail contained in Section 45(1) of the said Act, it has been held in the said decision of Vijay Madanlal (supra) as under: - "412. As a result, we have no hesitation in observing that in whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering." 12. In Gautam Kundu vs. Directorate of Enforcement (Prevention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was not named in the FIR nor in first three prosecution/ supplementary complaints and has been implicated only on the basis of the statements of witnesses recorded pursuant to the summons issued under Section 50 of the PML Act, without there being any material in support thereof. 15. In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement (2018) 11 SCC 46, a three Judge Bench has categorically observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering. Further, as held in Vijay Madanlal (supra), the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ttached to the accused whose application is under consideration. It is not disputed in that the main accused Sh. Kewal Krishan Kumar, Managing Director of SBFL, and KMP of group companies and the other accused Devki Nandan Garg, owner/ operator/ controller of various shell companies were granted bail on the ground of infirmity and medical grounds. The co-accused Raman Bhuraria, who was the internal auditor of SBFL has been granted bail by the High Court, however the said order of High Court has been challenged by the respondent before this Court by filing being SLP (Crl.) No. 9047 of 2023 and the same is pending under consideration. In the instant case, the High Court in the impugned order while repelling the said submission made on behalf of the appellant, had distinguished the case of Raman Bhuraria and had observed that unlike Raman Bhuraria who was an internal auditor of SBFL (for a brief period statutory auditor of SBFL), the applicant was the Vice President of Purchases and as a Vice President, he was responsible for the day-to-day operations of the company. It was also observed that the appellant's role was made out from the financials, where direct loan funds have been siph....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant would be incarcerated for indefinite period, is also not well founded in view of the observations made by this Court in case of Vijay Madanlal (supra). On the application of Section 436A of the Code of Criminal Procedure, 1973, it has been categorically held therein that: - "419. Section 436A of the 1973 Code, is a wholesome beneficial provision, which is for effectuating the right of speedy trial guaranteed by Article 21 of the Constitution and which merely specifies the outer limits within which the trial is expected to be concluded, failing which, the accused ought not to be detained further. Indeed, Section 436A of the 1973 Code also contemplates that the relief under this provision cannot be granted mechanically. It is still within the discretion of the Court, unlike the default bail under Section 167 of the 1973 Code. Under Section 436A of the 1973 Code, however, the Court is required to consider the relief on case-to-case basis. As the proviso therein itself recognises that, in a given case, the detention can be continued by the Court even longer than one-half of the period, for which, reasons are to be recorded by it in writing and also by imposing such terms a....