TaxTMI 
TaxTMI 
2024 (7) TMI 1318
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.... I. EVIDENCE AGAINST THE PRESENT APPLICANT ..................18 Statement of Approver Dinesh Arora ..................18 Statement of Witness Raman Chawla ..................20 Statements of Harinder Singh Narula and Earla Chandan Reddy ..................20 Call Detail Location Chart Analysis ..................21 Role of Applicant in 2020-21 Delhi Liquor Policy ..................22 II. WHETHER THE APPLICANT IS ENTITLED TO BAIL ON THE GROUND THAT HE IS NOT AN ACCUSED IN THE SCHEDULED OFFENCE? ..................24 III. ADMISSIBILITY AND AN EVIDENTIARY VALUE OF STATEMENTS RECORDED UNDER SECTION 50 OF PMLA ..................28 IV. FINDING REGARDING ARGUMENT OF DISREGARDING APPROVER‟S STATEMENT AT THIS STAGE ..................30 Law on the Evidence of Approver ..................31 Consideration of Approver‟s Statement In This Case ..................33 V. THE COURT IS BOUND BY LAW, AND CANNOT BE INFLUENCED BY THE POSITION OF ANY PETITIONER ..................38 CONCLUSION ..................39 SWARANA KANTA SHARMA, J. 1. By way of present application under Section ....
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....ng L-l licenses and also through the credit notes issued by the L-l licensees to the retail zone licensees (L-7Z) related to the South liquor lobby. It is further alleged that as a result of criminal conspiracy, a cartel was formed between three components of the said policy, i.e. liquor manufacturers, wholesalers and retailers, by violating provisions and the spirit of liquor policy, and all the conspirators had played an active role to achieve the illegal objectives of the said criminal conspiracy, result in huge losses to the Government exchequer and undue pecuniary benefits to the public servants and other accused involved in the said conspiracy. 3. The present ECIR No. ECIR/HIU-II/14/2022 was registered, as offences under Section 120B and Section 7 of the PC Act are scheduled offences under PMLA. The first prosecution complaint by the Directorate of Enforcement was filed on 26.11.2022 and the cognizance was taken by the learned Trial Court on 20.12.2022. Thereafter, Directorate of Enforcement had filed four supplementary prosecution complaints on 06.01.2023, 06.04.2023, 27.04.2023, and 04.05.2023 before the learned Trial Court. 4. However, the present applicant was arres....
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....s, and placing sole reliance for the arrest of the present applicant on the statements of co-accused turned approver Sh. Dinesh Arora is unjust, unfair and arbitrary. It is stated that it was in his tenth and eleventh statement that the approver Dinesh Arora had levelled such allegations, which were also recorded after he had been arrested by the Directorate of Enforcement. Thus, it is clear that the present applicant has been implicated only after Dinesh Arora was arrested in July, 2023 and such statements have been made under an arrangement with the Directorate of Enforcement. 8. It is further argued that the false and frivolous allegation levelled regarding Rs. 2 crores being handed over to the applicant or „his persons‟ has not been mentioned in the predicate offence and in absence of the same in the predicate offence, it cannot be said that the said amount is proceeds of crime. Further, it is argued that the story of prosecution even to this effect does not find any corroboration from the statements of concerned co--accused Sameer Mahandru and Abhishek Boinpally, from whom the above amounts of Rs. 1 crore each are being alleged to have been originated or were pa....
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....h. Mohit Mathur, learned Senior Counsel appearing on behalf of the applicant that the present applicant is neither named nor charge-sheeted in the case involving predicate registered by the CBI. There is no recovery from the applicant of any proceeds of crime or other incriminating article or substance that has been effected from his possession or his residence by the respondent. Therefore, it is prayed that the applicant be granted regular bail. SUBMISSIONS ON BEHALF OF RESPONDENT 12. On the other hand, Sh. S.V. Raju, learned Additional Solicitor General (ASG), appearing on behalf of the Directorate of Enforcement, vehemently opposes the present bail application and argues that grant of bail to an accused in case of money laundering is subject to the bar and rigors in the form of twin conditions laid down in Section 45 of PMLA. If the applicant fails to satisfy the Court that the applicant is not guilty of the offence or that he is not likely to commit any offence while on bail, his application is liable to be dismissed. It is argued that the present applicant is one of the key conspirators in the Delhi Liquor Scam. It is further argued that the applicant herein is closely a....
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....ates his claims. 14. Learned ASG further argues that the applicant has also been involved in the conspiracy of extending favours to private persons in the formulation of earlier Excise Policy 2020-21 as during the investigation, it has been revealed that the present applicant had assured to affect changes through Sh. Manish Sisodia in the proposed Excise Policy of 2020-21 to increase the brand registration criterion for IMFL brands at the behest of Amit Arora and Dinesh Arora. In exchange for this, an associate of the present applicant i.e. Vivek Tyagi had been given stakes in the business concern of Amit Arora i.e. M/s Aralias Hospitality Pvt. Ltd. It is stated that Vivek Tyagi has been a close associate of the applicant for the last 10 years. It is further argued by the learned ASG that as per the disclosure made by the approver Dinesh Arora, one Memorandum of Understanding dated 18.06.2020 was also prepared to this effect by the applicant. The said MoU concerned the previous excise policy, but the same had been prepared and sought to be executed to influence the subsequent excise liquor policy of the year 2021-22 also, which is under investigation and is the subject matter....
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....the purpose of considering bail in case of money laundering, Section 45 of PMLA is relevant, which reads as under: "45. Offences to be cognisable 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 a 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 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; ....
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....Section 45) including twin conditions would apply to the offence(s) under the 2002 Act itself. The provision post 2018 amendment, is in the nature of no bail in relation to the offence of money-laundering unless the twin conditions are fulfilled. The twin conditions are that there are reasonable grounds for believing that the Accused is not guilty of offence of money-laundering and that he is not likely to commit any offence while on bail. Considering the purposes and objects of the legislation in the form of 2002 Act and the background in which it had been enacted owing to the commitment made to the international bodies and on their recommendations, it is plainly clear that it is a special legislation to deal with the subject of money-laundering activities having transnational impact on the financial systems including sovereignty and integrity of the countries. This is not an ordinary offence. To deal with such serious offence, stringent measures are provided in the 2002 Act for prevention of money-laundering and combating menace of money-laundering, including for attachment and confiscation of proceeds of crime and to prosecute persons involved in the process or activity connecte....
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.... be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act." (Emphasis Supplied) 21. Thus, at the stage of consideration of bail of a person who is accused of commission of offence of money laundering under PMLA, the Court is not required to conduct a mini trial for the purpose of returning a finding of guilt, rather the material on record is to be exa....
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....ishra, at the residence of present applicant Sh. Sanjay Singh, as noted above. 24. Similarly, Sh. Dinesh Arora has disclosed further that in March and April 2022, again under Vijay Nair's instructions, who was communication Incharge of Aam Aadmi Party, he had collected Rs. 4 crores from co-accused Abhishek Boinpally, intended for diversion to party funds. According to Dinesh Arora's statement, he had coordinated with one Chandan Reddy, who assisted Abhishek Boinpally in these transactions. Dinesh Arora had personally collected Rs. 2 crores from Abhishek Boinpally's office, while another Rs. 2 crores were collected by one Harinder Singh Narula on his behalf. Out of this sum, Harinder Narula had delivered Rs. 3 crores at Vijay Nair's residence, and an amount of Rs. 1 crore was given to Sarvesh Mishra, through Raman Chawla, for the present applicant Sh. Sanjay Singh. Statement of Witness Raman Chawla 25. The statement of the employee of Dinesh Arora i.e. Raman Chawla was recorded under Section 50 of PMLA on 16.08.2023 in which he had disclosed that he had collected Rs. 1 crore from the office of IndoSpirits in Okhla, Delhi, which is owned by co-accused Sameer ....
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.... tower to the official residence of the present applicant Sh. Sanjay Singh, on 17.08.2021, when one installment of Rs. 1 crore was allegedly delivered by Dinesh Arora, through his employee Raman Chawla, to the present applicant Sh. Sanjay Singh at his official residence, facilitated by his associate Sarvesh Mishra. Role of Applicant in 2020-21 Delhi Liquor Policy 29. Though the Directorate of Enforcement has mentioned at length, in its reply, the role of the present applicant in formulation of the earlier excise policy i.e. policy for the year 2020-2021, a detailed discussion on the same is not necessary while deciding the present bail application. Nevertheless, since the present case essentially revolves around hatching of conspiracy among the accused persons for generation of proceeds of crime through formulation of new excise policy, it will be relevant to take a brief overview of the allegations against the applicant qua the liquor policy of 2020-21. 30. In his statement recorded under section 50 PMLA as well as statement under Section 164 (5) of Cr.P.C., Dinesh Arora has given the background as to how he had met the present applicant Sh. Sanjay Singh in connection wit....
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....HE SCHEDULED OFFENCE? 33. One of the primary arguments raised on behalf of the present applicant/accused Sanjay Singh is that he was not named in the FIR of the scheduled offence case of CBI, and he has not been charge- sheeted in the said case. 34. In this regard, this Court notes that the same argument has already been dealt with, in detail, by the learned Sessions Court in the impugned order dated 22.12.2023 whereby the learned Sessions Court, after considering various judicial precedents on the issue, observed that it is not a prerequisite for an individual to be named as an accused in the scheduled offence case to establish his involvement in a money laundering case. Rather, what is essential is that a scheduled offence must have been committed, and proceeds of crime in connection to that offence must have been generated to invoke the applicability of Section 3 of PMLA. The Sessions Court also noted that while the registration of a case under PMLA necessitates the commission of a scheduled offence, it is not always mandatory for an individual accused of money laundering to also be an accused in the scheduled offence. This Court concurs with the findings of the learned Se....
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....to a scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence) if he is involved in any process or activity connected with the proceeds of crime. Such a person besides facing the consequence of provisional attachment order, may end up in being named as accused in the complaint to be filed by the authorised officer concerning offence under Section 3 of the 2002 Act." 36. While reiterating the aforesaid ratio, the Hon‟ble Apex Court in case of Tarun Kumar (supra) has also held as under: "15. ...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 relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the c....
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....are quashed in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accused in the PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the chargesheets filed in the scheduled offences deserves to be rejected." ( Emphasis Supplied ) 38. Furthermore, during the course of arguments, learned ASG representing the respondent had pointed out that the Directorate of Enforcement h....
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....pra) with following observations: "15. In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement, 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 " 44. At the present stage of deciding the bail application of the accused, when the trial has yet not commenced, this Court would be required to take into consideration the material collected by the investigating agency including statements of witnesses recorded under Section 50 of PMLA, and has held by the Hon‟ble Apex Court, statements under Section 50 of PMLA can make out a formidable case of money laundering against an accused. IV. FINDING REGARDING ARGUMENT OF DISREGARDING APPROVER'S STATEMENT AT THIS STAGE 45. The argument of learned counsel for the applicant that the statement of the approver is the only evidence available and rather created by Directorate of Enforcement to falsely implicate ....
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....other accomplice. The law in India, therefore, is substantially the same on the subject as the law in England, though the rule of prudence may be said to be based upon the interpretation placed by the Courts on the phrase "corroborated in material particulars" in Illustration B to S. 114. 48. This was also held by the Hon‟ble Apex Court in the case of Bhiva Doulu Patil v. State of Maharashtra (1963) 3 SCR 830, by way of following observations: "The combined effect of Sections 133 and Illustration (b) to Section 114, may be stated as follows: According to the former, which is a Rule of law, an accomplice is competent to give evidence and according to the latter, which is a Rule of practice it is almost always unsafe to convict upon his testimony alone. Therefore, though the conviction of an accused on the testimony of an accomplice cannot be said to be illegal yet the courts will, as a matter of practice, not accept the evidence of such a witness without corroboration in material particulars." 49. Further, Section 306 of Cr.P.C primarily deals with grant of pardon, with the view to obtaining evidence, by a magistrate at any stage of a trial on the condi....
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....nder Section 164 of Cr.P.C. as well as Section 50 of PMLA. The constitutional validity of Section 50 was challenged before the Hon‟ble Apex Court, however, the challenge was rejected as is mentioned in para no. 42 of this judgment. 53. The approver has also disclosed in his statement under Section 50 of PMLA that he had not disclosed the names of political leaders since he had been threatened by Sh. Vijay Nair, who is former communication incharge, Aam Aadmi Party in London in August, 2022 that going against Deputy CM or the present applicant Sh. Sanjay Singh or other big political leaders will give a lot of trouble to him and to his business. This Court notes that in the statements recorded under Section 164(5) of Cr.P.C. before the learned Additional Chief Metropolitan Magistrate on 19.07.2023 and 26.07.2023, approver Dinesh Arora he had also mentioned that he had been threatened by Vijay Nair not to name any political leader and therefore, he had not disclosed their specific names i.e. of the present applicant and the factum of cash transactions which he had disclosed in the statement recorded under Section 50 of PMLA on 14.08.2023. This Court notes that the approver al....
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....wn under the law and judicial precedents. 59. While shifting blame from oneself to another to avoid conviction may not be uncommon in a criminal justice system at this stage of consideration of bail. It is prima facie clear that the approver has not been compelled to testify against the present accused. The present accused will as per law have the right to challenge the truthfulness of the incriminating part of the statement of the approver to effectively nullify it qua himself by cross-examination. 60. The criminal justice system has stages of trial as well as the pre-trial proceedings. A Court of law has to conduct both within the confines of enacted law. Thus the argument of the learned counsel regarding the case being based solely on the testimony of the approver and therefore, being devoid of any merit or truth, is attractive at a first glance, however, not legally tenable at the stage of consideration of bail. 61. Whether the statement of the approver suffers from infirmity clearly demonstrable by virtue of bias, pressure, threat, coercion etc. will be clear and proved during trial and at this stage, no finding can be given to give benefit of its lack of evidentiary ....
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....y based on the merits of the case and the application of relevant laws, without favouritism or discrimination. CONCLUSION 68. At this stage, the evidence which is available against the present accused/applicant can be summarized as follows: i. Statement of approver Dinesh Arora, recorded under Section 164 of Cr.P.C. and Section 50 of PMLA, revealing that he had delivered a sum of Rs. 2 crores to the associate of the present applicant Sh. Sanjay Singh, namely Sarvesh Mishra, upon the directions of Vijay Nair, who is former communication in-charge, Aam Aadmi Party. These funds were delivered at the official residence of the present applicant and the applicant in his subsequent meeting with Dinesh Arora confirmed receipt of the cash amount. ii. Statement of Raman Chawla, who disclosed delivering two separate amounts of Rs. 1 crore each, in coordination with Sarvesh Mishra, at the official residence of present applicant Sh. Sanjay Singh on instructions from Dinesh Arora, thus, corroborating statement of Dinesh Arora. iii. Corroboration of Raman Chawla‟s statement through call detail records and phone location analysis, indicating alignment with Sa....