TaxTMI 
TaxTMI 
2024 (4) TMI 375
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....ctober, 2019 against 38 persons for investigation under the provisions of the Prevention of Money-Laundering Act, 2002 (hereinafter, "the PML Act"). These two Applicants are amongst them. It was lodged on the background of 'scheduled offence' registered at Bhandup Police Station on 30th September 2019 and subsequently, transferred to Economic Offences Wing (hereinafter, "EOW") involving these two Applicants along with others for the offences punishable under Sections 420, 467, 471, 120-B of Indian Penal Code, 1860 (hereinafter, "the IPC"). Both these Applicants came to be arrested on 17th October 2019. After carrying out the investigation, the Assistant Director filed complaint before the Special Court - PMLA - Greater Mumbai on 16th December, 2019 for the offence punishable under Section 3 read with Section 4 of the PML Act. Allegations 2. The sum and substance of the allegation against these two Applicants is, these two Applicants in their individual capacity and as promoters of the Housing Development and Infrastructure Limited (hereinafter, the "HDIL") and beneficial owner of the HDIL Group of Companies predominantly availed loan in Crores from the Punjab and Maharashtra ....
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....years, (ii) Maximum sentence will be 7 (seven) years And (iii) Fine which may extend to five lakh rupees. Indisputably, there is no punishment of death prescribed under Section 436-A of the Code. So, the first requirement is satisfied. Period undergone 7. The second requirement is there should be detention for a period of one-half of the maximum period of punishment. For Section 4, maximum punishment is seven (7) years. So, the Applicants asking for bail under this provision must be in a jail for a period upto three and half years. In this case, both the Applicants came to be arrested on 17th October 2019. Certainly, they are in detention for a period more than three and half years. This condition is also satisfied. Delay in conduct of trial 8. Now, the Court has to see whether the Applicants are responsible for delaying the proceedings as contemplated in Explanation to Section 436-A of the Code. There are rival contentions. The Applicants contend that if they have filed Interim Applications before the Special Court, it does not mean that they are delaying the proceeding. Because, they contend that they were filed in exercise of a 'Constitutional Ri....
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....laint by way of legal fiction is included in the first complaint as per the said explanation). The trial Court also noted that:- Investigation into an offence with EOW is still going on. In Para No. 13, the trial Court noted:- The amount of misappropriation involved in EOW comes to Rs. 4,435 Crore of the Punjab and Maharashtra Co-operative Bank Ltd. Whereas, proceeds of the crime are Rs. 6,117.93 Crore as per E.D. In Para No. 15, the trial Court noted:- The right under Section 436-A is not 'absolute right' but as per Explanation, the Accused has to make out a case. In Para No. 16:- The Special Judge considered the dates of filing of the 3 complaints. They are as follows:- (i) First complaint was filed on 16th December 2019, (ii) Subsequent complaint on 16th March 2022 And (iii) Next complaint on 26th May 2023. In Para No. 17, the trial Court considered:- The provisions of Section 44(1)(c) of PML Act and its interpretation given in case of Rana Ayub v/s. Directorate of Enforcement 2023 4 SCC 357. The Special Court also noted the commitment of EOW case as per the order dated 2nd August 2023. The Special Court was conscious of simu....
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....ll as Mr. Venegavkar have placed before me few of the orders passed by the learned Special Judge. They want to show how the Applicants have indulged into dilatory tactics and as to how the Prosecution was vigilant to go on with the trial of the case. The orders placed before me are as follows:- (a) Order dated 20th July 2023:- Passed by the Court of Additional Chief Metropolitan Magistrate thereby committing the case to Special Court on the Application of Assistant Director. For knowing the reasons for filing this Application, even I have granted liberty to Mr. Venegavkar to file copy of that Application. He has filed it. I have perused it. Predominantly, it is filed in exercise of powers under Section 44(1)(c) of the PMLA Act. (b) It is a matter of record of EOW case that:- Scrutiny of the papers by Registry of City Civil Court is pending and as submitted on 7th February 2024 by the Investigating Officer, the scrutiny will take eight (8) weeks. Till the time these matters are closed for orders, no one on behalf of the EOW has pointed out to me that scrutiny is over. It is uncertain when the scrutiny will be over and the case of 'scheduled offenc....
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....cused - Waryam Singh under Section 50(2) and (3) of PML Act. (4th February 2022). (i) The permission was partly allowed on 8th February 2022 to record the statement of Applicant-Sarang and Co-accused Waryam Singh. The Application for transfer of the Accused in another C.R. (11th July 2022). (j) Co-accused Joy Thomas was granted bail on 7th September, 2022. Co-accused Waryam Singh was released under Section 88 of Cr. P.C., on executing personal bond and sureties (13th October 2022). (k) An Application under Section 88 of Cr. P.C. by Co-accused (Accused No. 26) Romy Mehra - Director of Libra Hotels Pvt. Ltd., (Accused No. 28), they were released on bail (16th March 2023). (l) The Application filed by Accused No.31 for bail and he was taken into formal custody and granted bail under Section 88 of Cr. P.C. (10th July 2023). (m) The Application at Exhibit-147B and 193 (additional ground under Section 436-A by these Applicants was rejected and judicial custody was extended under Section 309(2) of the Cr. P.C. (25th September 2023). (n) The Applicant Rakesh Kumar was released on an Interim Bail for three (3) months as per the order of ....
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....re before the learned Special Judge only. But, he has not elaborated how the three (3) years has elapsed. It is also difficult to inquire the actual reasons, adjournment and by whom, adjournments are sought. Even, it is also difficult for the trial Court to make observation even though the happenings are before him. That is why, before blaming the Applicants for laches, learned Special Judge has not elaborated the reasons while giving that finding in the order refusing bail. 17. When a person is arrested and liberty is curtailed as per the procedure established by the law, he has got every right to take appropriate steps for getting the facilities inside the jail premises. (That is discretionary). He has got every right to take care of his health. He has got every right to pray for bail. At the same time, the Investigation Agency has got every right to interrogate the Applicants in other offences and it is also the bounden duty of the Court to grant a liberty for investigation in other offences. All these steps and actions cannot be labelled as steps or actions taken for delaying the trial. The ultimate outcome may be delay of trial but unless some mala fide is shown by the Enfo....
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....aint also refers to summary of facts stated by various witnesses. The Chief Financial Officer of HDIL - Darshan Majmudar has also explained how the loans are obtained by parent Company - HDIL and its subsidiaries and they have been utilized to purchase of the lands. Such companies are 23 in numbers. Even, the business of few of the companies was sold. The statement of close relatives of Applicants are also recorded. The statements of Directors of subsidiaries Companies were also recorded. Mrs. Rebecca Solomon is DGM (Audit) of PMC Bank. She was mainly involved in the audit and correspondence with Reserve Bank of India (hereinafter "RBI") and making compliances. It discloses that few of the Accounts wherein loan was outstanding was hidden and not disclosed to RBI and it was on the instructions of the Managing Director - Joy Thomas. Similar are the statements of Chief Manager - Credit Monitoring Department of the Bank Shri. Sunil Dalvi. Then, statement of Chartered Accountant Mr. Ketan Lakdawala. Statement of DGM (Credit) of the Bank Mrs. Karmen Rebello. Even the statement of Co-accused Waryam Singh - Chairman of the PMC Bank was also recorded. 23. They have further revealed that ....
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....ce'. He referred to the following provisions of the Act:- (a) Section 44(1)(c):- It talks about the power of Special Court to deal with case involving 'scheduled offence' from the stage at which it was committed. (b) The provisions of Cr. P.C., will be applicable toward trial for 'scheduled offence' (clause-d) And (c) As per the explanation jurisdiction of Special Court, does not depend upon any order passed in respect of 'scheduled offence' and trial of both the offences by the same Court shall not be construed as joint trial. The judgments dealing with the provisions of Section 436-A of the Code of Criminal Procedure, 1973 27. Tarun Kumar v/s. Assistant Director Directorate of Enforcement 2023 SCC OnLine SC 1486 Bail was refused in an offence involving PMLA Act by the High Court of Delhi and it was also confirmed by Hon'ble Supreme Court. The observations in Para No. 419 in case of Vijay Madanlal Choudhary v/s. Union of India 2022 SCC OnLine SC 929 were reproduced. Giving a benefit under Section 436-A of the Code will depend upon the facts of that case and relief can be considered on a case to case basis. What we can gather is....
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....g....." (Para No. 253). (B) Mr. Ponda and Mr. Nimbalkar invited my attention to the observations in Para No. 413. While dealing with the applicability of Section 436-A of the Code to the offences under PML Act, it was observed:- (ii) "There is, however, an exception carved out to the strict compliance of the twin conditions in the form of Section 436A of the 1973 Code, which has come into being on 23.6.2006 vide Act 25 of 2005. This, being the subsequent law enacted by the Parliament, must prevail " (C) Mr. Venegavkar invited my attention to observations in Para No. 272 wherein, Hon'ble Supreme Court has dealt with a threat of money-laundering to the financial system and observed:- (iii) "......Thus, the onus on the Government and the people to identify and seize such money is heavy. If there are any proactive steps towards such a cause, we cannot but facilitate the good steps. However, passions aside we must first balance the law to be able to save the basic tenets of the fundamental rights and laws of this country ". (Para No. 272). (D) Further, Mr. Venegavkar invited my attention to observations in Para No.395. The contention raised t....
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.... (A) The Hon'ble Supreme Court has dealt with all the aspects of various provisions for bail in the Code of Criminal Procedure, and the obstacles and hurdles and mindset of stakeholders in recognizing such right. The relevant paragraphs in which the provisions of Section 436-A are referred are in paragraph Nos. 63 and 64. The word 'trial' has to be given expanded meaning and it also includes the appeal or admission. The word 'shall' denotes mandatory compliance of this provision. Even, Hon'ble Supreme Court went to the extent of dispensing with the necessity of filing a bail application. But, the delay should not be attributable to the accused. It is further observed:- "However, such an exercise of power is expected to be undertaken sparingly being an exception to the general rule. The only caveat as furnished by the Explanation being the delay in the proceeding caused on account of the accused to be excluded." The observations by Hon'ble Supreme Court in case of Bhim Singh v/s. Union of India (2015) 13 SCC 605, are also reproduced. Finally, depending upon the nature of punishment, directions are given to grant bail to Accused, if he is in jail for a particular per....
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....on following judgments:- (i) V. Vijay Sai Reddy v/s. Enforcement Directorate 2022 SCC OnLine TS 1606 (ii) Jagati Publication Ltd. v/s. Enforcement Directorate 2022 SCC OnLine TS 1607 (iii) Md. Naushad v/s. State of Bihar and Another 2019 SCC OnLine Pat 552 (iv) Anosh Ekka v/s. State of Jharkhand through Directorate of Enforcement Cr.Rev.No.699 of 2011 : 19th February 2013 : High Court of Jharkhand at Ranchi 34. Whereas, Mr. Venegavkar still insist that trial under PML Act will have to be given preference as the Court is established under the PML Act. He admits that there is no observations upholding his contention by any Court. It will be relevant to consider the observations in those judgments. 35. In all these judgments, though pronounced in different matters, the cases were instituted for 'scheduled offence' as well as offence under the PML Act. The parties are the same. There were discharge Applications filed. They were rejected and that is why, the matter went before the High Court. After considering the provisions of PML Act, it was observed in Para No.52 that even though the trial for both these offences may start, still the Special ....
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....think, the issue need not be far stretched, so that, this Court will give some observation about the interpretation of the provisions of PML Act. It can be done in an appropriate case. For these Bail Applications, the issue is only when the trial of PMLA offences is going to start. When we have read the provisions and even the observations by various High Courts, one can infer that the trial in PMLA offence can be simultaneously with trial of 'scheduled offences' . The first part of Explanation to Section 44 is clear. 40. Now, the question is when the trial of PMLA offences in this case will be started. A 'draft charge' is already filed on behalf of the E.D. It is true that yet the Special Court has not proceeded further after framing of charge, that is to say, hearing the Prosecution and hearing the respective Accused persons. If there are discharge Applications, the Special Court is required to decide them. There are in all 38 Accused persons. One does not know when this pre-charge formalities will be completed. It is true that all these complaints consist of thousands of pages and there will be number of witnesses. So, the trial will be going to take its own time. The issue i....
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....he responsibility of the Court starts later on. It is true that there is time limit fixed for completion of investigation. Even if the charge-sheet/complaint is filed, still depending upon the magnitude of the offence, the trial continues. There are two sides. One is prosecution and another is defence. Court has to hear both of them. And it is bound to take time. The availability of Judges is also important. Disposal also depends on co-operation of defence. But paramount consideration is number of Court dealing with such cases. If it is less, trial is going to take time. It has happened in both these cases also. It is but natural that it will take long time for completion of the cases considering the procedure required to be followed. One cannot deny the fact that considering the statistics received by me, it is uncertain when the trial will start. Hence in such a situation we cannot deprive a person of his personal liberty. 46. It is no doubt true that E.D., has filed 'draft charge'. Same time, it is also true that framing a charge is not an empty formality. The Special Judge has to satisfy himself that ingredients of an offence are prima facie satisfied. Both the parties need ....
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....egistrar General of this Court who is supposed to look into issues faced by the trial Court on administrative side in the State of Maharashtra. 52. This Court expects learned Registrar General to take stock of the situation particularly from the City Civil Court about total pendency, staff deputed in that process and number of judges assigned to scheduled offence alongwith PMLA offence. So if the City Civil Court administration is facing with some difficulties, learned Registrar General with all his experience and responsibility can try to solve the problems and he may also seek necessary directions from the Hon'ble Chief Justice. These observations are made only for mitigating problems faced by the prosecuting agency as well as by under trial prisoners. It may happen that due to intervention of learned Registrar General, the City Civil Court administration may be boosted to deal with huge pendency for scheduled and PMLA offence. 53. With these observations, I pass the following Order:- ORDER (i) Both Bail Applications i.e. Bail Application No. 3377 of 2023 and Bail Application No. 3867 of 2023 are allowed. (ii) Applicant-Sarang Wadhawan and Applicant-Rak....