TaxTMI 
TaxTMI 
2024 (5) TMI 1414
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....tions 186, 204, 353 & 120B of IPC against one Suryakant Tiwari & other persons on the basis of complaint filed by Deputy Director of Income Tax, Foreign Assets Investigation Unit-I Bengaluru alleging that as part of conspiracy, during course of search by Income Tax department on 30.06.2022, Suryakant Tiwari had obstructed the officials from carrying their official duties and destroyed crucial incriminating documents and digital evidence about the alleged illegal extortion on Coal Transportation, payments collected by Suryakant Tiwari and his associates. 3. It is also case of the prosecution that on 13.09.2022, OM in F. No. 22-IT was forwarded by Central Board of Direct Taxes (for short "CBDT") to the Directorate of Enforcement containing the FIR No. 1292022 Police Station-Kadugodi along with a report on the investigation conducted by the Income Tax Department on M/s Jay Ambey Group of Raipur (Suryakant Tiwari Group). In the report, it has been mentioned that during search operations on 30.06.2023 by Income Tax Department on the premises of Suryakant Tiwari and his associates, evidence was gathered related to a syndicated being operated and coordinated by Suryakant Tiwari whereby a....
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....he real ownership of these tainted properties. Despite being a man of means and business standing, he knowingly acted as a benami for Suryakant Tiwari and has assisted in the money laundering process. Apart from the above two washeries, after the income tax raids on Surykant Tiwari and his associates, Indermani Group purchased all the benami properties of Suryakant Tiwari to safeguard the ill-gotten proceeds of crime and to frustrate the efforts of Enforcement Directorate to attach the proceeds of crime in future. All these transactions are sham transactions and in effect applicant's Indermani Group is holding these assets for Suryakant Tiwari and his benamis. It is clear that although the applicant is a wealthy businessman, Enforcement Directorate investigation has established that for getting personal benefits in terms of share in washery business and for his larger business ambitions in getting close to the Government of the day, he has acted as a benami and is holding these assets for the benefit of Suryakant Tiwari. He has only blocked his capital in these assets and the remaining entire cash transactions were still done by Suryakant Tiwari only. He has also been evasive i....
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....sheries from the firms belonging to Suryakant Tiwari, all establishes the nexus between the applicant and Suryakant Tiwari and their involvement in the predict offence. Further, going into the entire materials available in the case records, there seems to be a serious nature of racket involving huge generation of hard cash illegally being collected. Thereafter, the applicant has filed second bail application before this Court on 12.01.2024 contending that there are changed circumstances as certain germane facts have been transpired after rejection of first bail application approximately ten months ago. 6. Learned Senior counsel for the applicant would submit that the present applicant is a victim of extortion syndicate who has been projected as an accused in fact the applicant was not a part of the extortion syndicate. He would further submit that the applicant tried to erase the evidences related to proceeds of crime and the properties connected by removing all computers and other digital devices from his office and by hiding his mobile phone in an attempt to escape the clutches of law and to frustrate further investigation under the PMLA, 2002 whereas the applicant has always co....
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....e sold to Maa Madwarani for Rs. 96 Crores whereas the ground of arrest provides that the coal washeries were sold by them to Maa Madwarani for Rs. 50 crores. He would further submit that from the documents relied upon by the prosecution complaint is that two coal washeries were sold for Rs. 31,50,00,000. Hence, any value attributed to the two coal washeries over an amount of Rs. 31.59 crores approx, is a pure figment of imagination. He would further submit that these two coal washeries were sold by them as per the independent valuation report dated 14.05.2022 and 16.05.2022 which is based upto the value declared by the directors and certified the independent Chartered Accountants. As such, he would submit that the allegation is without any foundation. 8. He would further submit that out of 70 properties attached by the Enforcement Directorate only 9 properties were directly purchased from Suryakant Tiwari. He would further submit that it is not a case of the Enforcement Directorate that the applicant purchased the property using the proceeds of crime or under valued amount prize below the circle rate. He would further submit that the applicant has not purchased these properties in....
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....agreed price was paid by the applicant using its own funds. No loan or external aid was sought to purchase these properties. Hence, all these properties were acquired by legal means. The applicant had paid the purchase consideration for all these properties by cheques and all these properties are registered with the appropriate authorities. The applicant had acquired these properties for its own use as such it cannot be said that it benami property. 10. He would further submit that the allegation made by the Enforcement Directorate that Suryakant Tiwari and other persons liquidated all properties in their names and in the names of their family members to willing associates like the applicant to project the same as untainted assets, though these assets continue to remain in the syndicate's control for all practical purposes, is incorrect fact as there is nothing on record to substantiate this. He would further submit that these properties were purchased by the applicant to fulfill the purpose of acquiring these properties, as mentioned in the board resolutions passed in this regard. He would further submit that the applicant owned seven coal washeries and is in the business of ....
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....that he sold his entire share (13%) of M/s Maa Madwarani to M/s Indermani in the month of July 2022 at Rs. 14 crore, is entirely false and baseless as no such records exist with the Registrar of Companies, Chhattisgarh. Lastly he would submit that Rajnikant Tiwari's anticipatory bail bearing MCRCA No. 816 of 2023 was dismissed by this Court vide order dated 02.11.2023, but till date he is not arrested by the Enforcement Directorate. He would further submit that the applicant is remained in jail for more than one year and five months whereas maximum sentence which can be imposed upon him is seven years. 12. The applicant has also filed additional documents on record i.e. the remand order dated 13.10.2022 passed by the learned Special Court, Raipur, copy of remand order dated 05.06.2023 passed by the learned Special Judge (PMLA) Panchkula in case of Pankaj Bansal, copy of extract of financial statements of KJSL Coal and Power Private Ltd. as well as Indermani Mineral India Private Ltd. and statement made by Nikhil Chandrakar before Police Station-Telibandha, Raipur to substantiate that applicant was illegally kept under custody as summon was issued only for 12.10.2022 and he was....
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....C 40, Manish Sisodia Vs. Central Bureau of Investigation, reported in (2023) SCC OnLine SC 1393, State of Rajasthan Vs. Balchand, reported in (1977) 4 SCC 308, Dataram Singh Vs. State of Uttar Pradesh, reported in (2018) 3 SCC 133, Arnab Manoranjan Goswami Vs. State of Maharashtra & others, reported in (2021) 2 SCC 427, Y.S. Jagan Mohan Reddy Vs. CBI, reported in (2013) 7 SCC 439, DK Shivkumar Vs. Directorate of Enforcement, reported in (2019) SCC Online Del 10691, Union of India Vs. K.A. Najeeb, reported in (2021) 3 SCC 713, Preeti Chandra Vs. Enforcement Directorate (Bail Application No. 3494/2022) (decided on 14.06.2023) reported in 2023 SCC OnLine Del 3622, Anil Kumar Aggarwal Vs. Enforcement Directorate through its Assistant Director, Jammu [WP(Crl.) No. 09/2024, decided on 15.03.2024], Vijay Narendra Kumar Kothari Vs. Directorate of Enforcement & another reported in (2021) SCC OnLine SC 561, Raj Kumar Goel Vs. Directorate of Enforcement, reported in (2018) SCC OnLine Del 8873, Ramchand Karunakaran Vs. Directorate of Enforcement & another [Criminal Appeal No. 1650 of 2022, decided on 23.09.2022], Sujit Tiwari Vs. State of Gujarat, reporte....
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....xtortion cartel led by Mr. Suryakant Tiwari, modified the pre-existing transparent online process of getting e-permits for transporting coal from mines to users, into a system which made it prone to massive corruption. He would further submit that FIR No. 129/2022 dated 12.07.2022 was registered by Kadugodi Police Station, Whitefield, Bengaluru under Sections 186, 204, 353 & 120 (B) of IPC against Suryakant Tiwari and others on the basis of complaint filed by the Deputy Director of Income Tax, Foreign Assets Investigation Unit-1, Bengaluru, stating that as part of a conspiracy, during the course of search by Income Tax Department on 30.06.2022 at Room No. 664, Hotel Sheraton Grand, Whitefield, Bengaluru, Suryakant Tiwari had obstructed the officials from carrying their official duties and had destroyed crucial incriminating documents and digital evidences which supposedly contained important information about the illegal extortion, payments collected and persons involved. The said FIR is under investigation. Thereafter, vide O.M in F.No. 289/ED/36/2022-IT (Inv.II) dated 13.09.2022, CBDT has forwarded the copy of the above FIR No. 129/2022 dated 12.07.2022 under Sections 186, 204, 3....
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....nd M/s Satya Power and Ispat Ltd. These coal washeries were acquired for an amount of Rs. 96 Crore, out of which Rs. 34 Crore was the registered value and was paid through banking channel and rest of the amount was to be paid in cash. Thus, large amount of illegally acquired cash was layered in these transactions. After the Income Tax raids, he made sham paper transactions to show that he was the owner of these two washeries. These transactions were nothing but a futile attempt to alienate the ill-gotten proceeds of crime and take them far away from the arms of Income Tax & Enforcement Department and to prevent their attachment and to claim them as untainted assets. The applicant knowingly and willingly participated in these transactions to layer and obfuscate the real ownership of these tainted properties despite being a man of means and business standing, be knowingly acted as a benami for Suryakant Tiwari and has assisted in the money laundering process. He would further submit that apart from the above two washeries, after the income tax raids on Surykant Tiwari and his associates, Indermani Group purchased all the benami properties of Suryakant Tiwari to safeguard the ill-gott....
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.... Court in case of Vijay Madanlal Choudhary (supra). He would further submit that the applicant with proceed of crime and having deep roots in the society, is in a position to influence witnesses. To substantiate this submission, he has mentioned certain privilege granted to him by the medical hospitals which normally provided to the prisoners. To substantiate this submission, he has referred to the judgment of Hon'ble Allahabad High Court in case of Pankaj Grover v. ED [Criminal Misc. Anticipatory Bail Application U/S 438 Cr.P.C. No. 7661 of 2021] wherein Hon'ble the High Court has held that the accused in economic offences/ PMLA cases are in possession of huge proceeds of crime and may use those to influence witnesses. Further the Court also held that since such offences are committed mostly by influential persons, there is a high likelihood of their using influence to tamper with evidence and influence witnesses. 18. He would further submit that economic offence constitute a separate class of offence and in the present case, the amount involved in the offence of money laundering is Rs. 540 crores approximately and in view of well settled position of law that economic offence....
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....r, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a [Special Court or] [Inserted by Finance Act, 2018 (Act No. 13 of 2018) dated 29.3.2018.] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the [Special Court or] Magistrate's Court." 23. From bare perusal of the Section 19 of the PMLA, 2002, it is quite vivid that for arresting any person, any officer authorized has on the basis of material on his possession and through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002....
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....stated that he has known Shri Suryakant Tiwari for the last 15 to 20 years and that he had no business transactions with him. However, in the same statement, he has admitted to the acquisition of two coal washeries from the company of Shri Suryakant Twari, M/s MCBPL, When asked he stated that he did not know that M/s. MCBPL belonged to Shri Suryakant Tiwari, a person he has known for the last 20 years Furthermore, the Directors of M/s SPIL and M/s IUIPL, Shri Shikhar Agarwal and Shri Shailesh Agarwal respectively, in their statements given under Section 17 (1) (f) of PMLA, 2002 have stated that they were forced to sell the washeries to M/s MCBPL and that M/s MCBPL was represented by Shri Suryakant Tiwari and Shri Sunil Kumar Agarwal at the time of sale. When pointed and asked about it, Shri Sunil Kumar Agarwal has denied it and gave evasive replies 19. It was also found that M/s MCBPL was incorporated in February 2022 and within one month of its incorporation, it had acquired two washeries, one each from M/s SPIL and M/s IUIPL, and sold them again to M/s KJSL Coal & Power Ltd. within two months. The very act of acquisition of two washeries for a whopping amount of Rs. 50 Crores a....
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....ossible, therefore, the custodial remand was ordered. Thus, the learned Special Judge has given some reason. Whereas the order cited by learned Senior counsel for the applicant of the Panchkula Court, it is quite clear that in case of Pankaj Bansal (supra), learned Special Judge has not assigned any reason merely sent them on custodial remand. The judgment of Hon'ble Supreme Court in case of Pankaj Bansal (supra) at paragraph 19 has categorically held that the learned Judge has not recorded its satisfaction. Paragraph 19 of the judgment reads as under:- "19. Viewed in this context, the remand order dated 15.06.2023 passed by the learned Vacation Judge/ Additional Sessions Judge, Panchkula, reflects total failure on his part in discharging his duty as per the expected standard. The learned Judge did not even record a finding that he perused the grounds of arrest to ascertain whether the ED had recorded reasons to believe that the appellants were guilty of an offence under the Act of 2002 and that there was proper compliance with the mandate of Section 19 of the Act of 2002. He merely stated that, keeping in view the seriousness of the offences and the stage of the investigation, h....
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....od from 12 a.m. to 5.30 a.m. of 13.10.2022 as such, arrest is nonest and illegal order. This submission has already been repelled by the learned Special Judge by rejecting the same. Even otherwise the submission made by learned Senior counsel for the applicant that he was remained in custody of the Enforcement Directorate from 12.00 a.m. to 5.30 a.m. is a matter of evidence which can be examined when the trial is begun. Even otherwise, law has been well settled by Hon'ble the Supreme Court that while considering the bail application, the Court is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the Court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, the circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the time of trial, reasonable apprehension of the witness being tempered with, the large interest of the public/ state etc. Hon'ble the Supreme Court in case of Saumya Chourasiya Vs. Directorate of Enforcement [Criminal A....
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....t the summon was issued for appearance of the applicant on 12.10.2022 which expired on 12.10.2022 at 12 p.m. thereafter arrest was made on 13.10.2022 upto 5.30 a.m., it was illegal custody, as such, the subsequent order of remand on illegal custody, is void ab initio in the light of judgment passed by Hon'ble the Supreme Court in case of V. Senthil Balaji (supra), and deserves to be rejected as in the present facts of the case, while arresting the applicant, reasons have been assigned by the Enforcement Directorate and in the remand order also, the learned trial Court has applied its mind and has also considered the fact that the present applicant has purchased two coal washeries at the cost of Rs. 35 crores and the accused have been arrest on a solid grounds and the investigation is not possible within 24 hours. The objection raised by the applicant that he has not been produced before the learned trial court has also been rejected by it. The submission of the learned counsel for the applicant that his summon for 12.10.2022 and he remained in custody upto 5.30 a.m. cannot be considered as it is a matter of evidence which can be very well taken during the trial. Even the trial Cour....
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....hem declaring alleged undisclosed income of Rs.8.26 crores in order to protect Satyendar Kumar Jain. Though it was sought to be submitted by the learned counsel for the appellants that the said declarations under IDS having been held to be "void" in terms of Section 193 of FA, 2016 by the income tax authorities, the same could not be looked into in the present proceedings, the said submission cannot be accepted. The declarations made by the appellants-Ankush Jain and Vaibhav Jain under IDS have not been accepted by the Income Tax authorities on the ground that they had misrepresented the fact that the investments in the said companies belonged to the said appellants, which in fact belonged to Mr. Satyendar Kumar Jain. The appellants could not be permitted to take advantage of their own wrongdoing of filing the false declarations to mislead the Income Tax authorities, and now to submit in the present proceedings under PMLA that the said declarations under the IDS were void. The declarations made by them under the IDS though were held to be void, the observations and proceedings recorded in the said orders passed by the Authorities and by the High Court cannot be brushed aside merely....
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....MLA, subject to the Provisos and the Explanation contained therein. 34. In that view of the matter, all the appeals are dismissed." Thus, Point No. 1 answered against the applicant. Point No. 2 34. Before adverting to the facts of the case, it is expedient for this Court to extract Section 45 of the PMLA, 2002, which reads as under:- "Section 45 of PMLA, 2002- Offences to be 31.05.2022 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) 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 [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees], may be released o....
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....ney laundering process. He would further submit that apart from the above two washeries, after the income tax raids on Surykant Tiwari and his associates, Indermani Group purchased all the benami properties of Suryakant Tiwari to safeguard the ill-gotten proceeds of crime and to frustrate the efforts of Enforcement Directorate to attach the proceeds of crime in future. The ECIR would further reflect that all these transactions are sham transactions. He has only blocked his capital in these assets and the remaining entire cash transactions were still done by Suryakant Tiwari only. The record would further reflect that several properties in the names of companies of the applicant herein viz., M/s Indermani Minerals Pvt. Ltd. & M/s KJSL Coal & Power Pvt. Ltd. which were acquired using proceeds of crime have been attached under Section 5(1) of the PMLA, 2002 on 09.12.2022 and 29.01.2023 and the same were subsequently confirmed by the learned Adjudicating Authority (PMLA), vide orders dated 01.06.2023 & 17.07.2023. Thus, the applicant is unable to fulfill the twin condition of Section 45 of the PMLA, 2002. 36. Considering the above stated factual legal matrix, it is quite vivid that th....
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....ithstanding 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 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." By the impugned judgment(s) and order(s) and while granting bail, the High Court has not considered the rigour of Section 45 of the PML Act, 2002. 6.1 Even otherwise, the High Court has not at all considered the nature of allegations and seriousness of the offences alleged of money laundering and the offences under the PML Act, 2002. Looking to the nature of allegations, it can be said that the same can be said to be very serious allegations of money laundering which are required to be investigated thoroughly. 6.2 Now so far as the submissions on behalf of the respective respondent No. 1 that respective respondent No. 1 w....