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2024 (9) TMI 1602
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....ecial Court, PMLA, Ambala on the basis of unlawful and illegal arrest of the petitioner in case ECIR/GNZO/19/2023 dated 23.09.2023 (for short "ECIR No. 19") under Section 3 and punishable under Section 4 of PMLA. (iii) to issue an order or direction as this Court deems appropriate to release the petitioner forthwith and/or also on interim bail during the pendency of the petition in the exigency of forthcoming State Legislative Assembly elections in the State of Haryana. (iv) further issue any appropriate order, relief or direction which this Court may deem fit and proper under the facts and circumstances of the present case. BRIEF FACTS:- 2. In the intervening night of 19/20.07.2024 at 01.40 a.m, petitioner was arrested in the Zonal Office, Enforcement Directorate (for short "E.D"), Gurugram. For reference, the allegations of E.D, as contained in the "Grounds of Arrest" dated 20.07.2024 (R-2 colly.), are recapitulated as under:- "1. On the basis of 8 FIRs bearing nos. 226 dated 14.10.2022, 116 dated 23.03.2023, 111 dated 01.06.2023, 206 dated 19.09.2022, 216 dated 30.09.2022, 204 dated 14.09.2022, 33 dated 10.02.2023 and 54 dated 16.02.2023 register....
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....rs are part of the syndicate which is engaged in illegal mining in District Yamuna Nagar. 6. Further, it was found that Hon'ble NGT vide its order dated 18.11.2022 had observed that these three entities namely M/s Development Strategies India Private Limited (Respondent no. 11), Delhi Royalty Company (Respondent no. 12) and Mubarikpur Royalty Company (Respondent no. 13) are indulged in violating the environmental norms such as violating the requirement of undertaking replenishment study, not developing green belt, not implementing progressive mine closure plan, not installing CCTV cameras and not having GPS system, diversion of river flow, illegal instream mining, etc.: ".... We find it appropriate to accept the report as there is no meaningful objection against the same. Thus, it is clear that as far as Respondent No. 11 is concerned, apart from violating the requirement of undertaking replenishment study, not developing green belt, not implementing progressive mine closure plan, not installing CCTV cameras and not having GPS system, diversion of river flow, illegal instream mining, not providing weigh bridge at the entry of the mining lease area are clear vi....
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....nga Yamuna Mining Co., Delhi Royalty Company, JSM Foods Pvt. Ltd., Routes and Journeys, Paramjeet Singh & Yamuna Infradevelopers Pvt. Ltd. etc., were part of the syndicate and to maintain the account of these firms altogether, a new firm namely G.M. Co. was created; that this accounting was done as per the instructions of Dilbag Singh; • G.M. Co. was accounting the total sale of all the firms of the syndicate altogether. 9. On perusal of the books of account of G.M. Co. and Income Tax Assessment orders filed by the member firms of the syndicate including M/s Development Strategies India Private Limited, it is evident that a syndicate of illegal mining was functioning under the umbrella of G.M. Co and accounting of the syndicate was maintained in the name of G.M. Co. wherein cash generated from illegal mining activities were recorded. It also maintains the name of the persons/firm and their shares in the illegal mining activities. 10. Further, during investigation it is revealed that you and your family members has 32% shareholding in Development Strategies India Pvt. Ltd. which is part of the mining syndicate and on perusal of the books of accounts of....
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....egies India Pvt. Ltd. was involved in illegal mining in Yamuna Nagar and it was "concealing" its actual turnovers gained out of illegal mining activities, which falls within the offence of money-laundering, as defined under section 3 of the PMLA, 2002 and the same is corroborated by the NGT order dated 18.11.2022 and the revised return of income filed by the subject company wherein it has accepted the additional turnover which is the part of proceeds of crime. 14. On perusal of the mining Contract dated 23.08.2016, between Director General, Mines and Geology, Haryana, and M/s. Development Strategies India Pvt. Ltd., it is revealed that the contractor M/s. Development Strategies (India) Pvt. Ltd. Is authorized to excavate sand from "All the tract of land situated at village 'Pobari' in District Yamuna Nagar bearing Khasra Nos. 14//5. 15//1 min, 2 min, 3 min, 6 min, 7/1,7/2,8,9,10,12,13,14,15,16,17,18,25. 16//6/2 min, 7 min, 8 min, 9 min, 10 min, 11/1, 11/2, 12, 13, 14, 15, 16, 17, 18, 19, 20/1, 20/2, 21 min. 22 min, 23, 24, 25. 17//3 min, 8, 9, 10 min, 11, 12, 13, 18, 19, 20/1, 20/2, 21, 22, 23 AND village 'Nakom' in District Yamuna Nagar bearing Khasra Nos.....
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.... On the basis of the study conducted, details of mineral mined within the leased site and outside the leased site for 09.12.2016 to 26.08.2022 (5 years 8 months) period are as follows: Mining contractor Mined Miner al/S and/BG.S. Quantity Inside mining Limit (cum) Quantity Outside mining Limit (cum) Quantity Inside mining Limit (Metric Ton) Quantity outside mining Limit (Metric Ton) M/s Development Strategies (1) Pvt. Ltd. Sand 4576666 16030144 7734569 27090939 Block Village Khasra No. (Lease Area) Pobari Block YNR B11 Village Pobari 14//5, 15//1 min, 2min, 3 min, 6 min, 7/1, 7/2, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 25, 16//6/2 min, 7 min, 8 min, 9 min, 10 min, 11/1, 11/2, 12, 13, 14, 15, 16, 17, 18, 19, 20/1, 20/2, 21 min, 22 min, 23, 24, 25, 17//3 min, 8, 9, 10 min, 11, 12, 13, 18, 19, 20/1, 20/2, 21, 22 Pobari Block YNR B11 Village Nakom 2//15, 16 min, 3//11, 19, 20, 21 min, 22, 23, 6//2 min, 3 min, 4 min, 5 min, 6, 7, 8 min, 14 min, 15 min, 5//10, 11, 12, 18, 19, 20 min, 22 min, 23, 24, 25, 14//4 min, 5 min, 15//1 min, 2 min. So far, the investigation findings confirm that the land w....
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....or in M/s Hanuman Infrastructure Pvt. Ltd. on 12.10.2019. 19. Also, you had 49% shareholding in M/s Hanuman Infrastructure Pvt. Ltd. till 31.03.2019. 20. The Shareholding pattern of Hanuman Infrastructure Pvt. Ltd. is as follows: S.No. Name of the Shareholder Upto 31.03.2019 From 31.03.2020 1. Surender Panwar 2,03,335 2. Rahul Panwar 3,332 3,332 3. Lalit Panwar 2,03,335 4. Surender Chikara 2,03,333 2,03,333 21. On analysis of bank statements of account number 1952012100000173 held with Punjab National Bank in the name of Hanuman Infrastructure Private Limited (hereinafter referred to as HIPL), it is found that HIPL has many transactions with entities/firms which are part of the syndicate involved in illegal mining in Yamuna Nagar. The details of the banking transactions with entities of the Syndicate in the bank account statement of HIPL, are tabulated as below: Details of Account statement of HIPL (Account no. 1952012100000173) showing transactions with multiple mining entities which are also part of G.M. Co. & Mining Syndicate: Name of the Entity & date of transaction Details ....
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....elopers and Routes & Journeys etc. were functioning. It also shows that you were associated with these firms and were actively involved in their business activities in the guise of unsecured loans. Further, you could not produce any documentary proof to substantiate your claim that these amounts were given as loan and not as an investment. Further, you tried to mislead the investigation by giving false and evasive answers. 25. Thus, you have been given ample opportunities to reveal the truth and to assist the investigation to unravel the complete modus and unearth proceeds of crime which you have generated from illegal mining activities. 26. There is sufficient evidence on record which clearly brings out that the above specified offence is being perpetually committed with full disregard to the process of law with an intention to launder proceeds of crime. You have actively involved yourself in acquiring Proceeds of Crime as submitted above. 27. You have evidence in your exclusive possession and can very well tamper with the same by abusing your power and influence. 28. You, Surender Panwarare likely to abuse your influence on the other key member....
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.... elections for the same are forthcoming; therefore the timing of arrest is nothing, but an outcome of political vendetta. 3.4 While emphasizing on the word "may" occurring in Section 19 (1) of the PMLA, learned Senior counsel contends that the officer authorized under the PMLA, on the basis of "material in his possession" and "reasons to believe" (recorded in writing) that any person is guilty of an offence punishable under PMLA, "may" arrest such person and shall as soon as may be, inform him the grounds for such arrest. In other words, the arrest under the PMLA is not mandatory; the word 'may" includes may not also. So, it should not be interpreted as "shall"; therefore, under the PMLA, arrest is not mandatory in every case. The arrest under the PMLA has been kept at a very high pedestal and it has to be treated as a last resort and not at the whims and fancies of E.D. In the present case, there was no occasion for arrest of the petitioner as he was fully cooperating and appearing on each and every occasion pursuant to the summons issued under Section 50 of PMLA. 3.5 That the satisfaction of the officer, arresting the person, alleged to be guilty of an offence under Section....
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....rvind Kejriwal Versus Directorate of Enforcement, 2024 INSC 512 and; (v) Vijay Madanlal Choudhary and others Versus Union of India and others, 2022 SCC Online SC 929. ON BEHALF OF RESPONDENT 4. Per contra, learned counsel for E.D submits that present petition is not a bail application under Section 45 of the PMLA; rather petitioner lays challenge to his arrest as well as the remand orders passed by the Special Court; therefore, this Court has very limited power of judicial review to quash arrest and remand order. 4.1 Further submits that there is sufficient material in the form of documents and statements recorded under Section 50 of the PMLA which shows the reasonable nexus between the petitioner and other co-accused companies making a syndicate, being indulged in the "illegal mining" leading to proceeds of crime. 4.2 There is sufficient compliance of Section 19 of the PMLA as there was material in possession of the E.D along with "reasons to believe" as well as "grounds of arrest". The arrest order along with "grounds of arrest" were duly supplied to the petitioner at the time of his arrest. The material in possession was duly sent to the Adjudicating Authori....
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....tioner was perpetually committing the offence of "illegal mining" in the disguise of his company DSPL and there were high chances of tampering with the evidence by the petitioner being the member of Legislative Assembly; thus, his arrest is fully justified. 4.10 In support of his contentions, learned counsel for the respondent has relied upon various judicial pronouncements and which are as under:- (i) Arvind Kejriwal's case (supra); (ii) Pankaj Bansal 's case (supra); (iii) Vijay Madanlal Choudhary's case (supra); (iv) Senthil Balaji's case (supra); (v) Ram Kishore (supra); (vi) Y. Balaji Versus Karthik Desari (2023) SCC Online SC 645; (vii) Pragyna Singh Thakur Versus State of Maharashtra, (2011) 10 SCC 445; (viii) Pranab Chatterjee Versus State of Bihar (1970) 3 SCC 926; (ix) Tarun Kumar Versus Assistant Directorate of Enforcement (SLP(Crl.) No. 9431 of 2023); (x) Serious Fraud Investigation Office Versus Rahul Modi (2019) 5 SCC 266; (xi) State of Maharashtra Versus Tasneem Rizwan Siddiquee (2018) 9 SCC 745; (xii) Directorate of Enforcement Versus Sunil Godhwani 2019 SC....
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....bserve that w.e.f 07.11.2013, petitioner has ceased to be the Director of DSPL. 7. Of course, the NGT had imposed a penalty of Rs.2.5 crore against DSPL, vide order dated 18.11.2022, but that will not hold the petitioner liable under the PMLA for the reasons that: - i. As already observed, there is no material produced on record by the E.D; or disclosed in the "grounds of arrest" that petitioner is the Director or a person in-charge of the affairs of DSPL; rather the information gathered from the website of Ministry of Corporate Affairs (P-8) clearly proves that petitioner ceased to be the Director w.e.f 07.11.2013 of the said company and having no role in its affairs. ii. Apart that, the order of NGT was challenged before Hon'ble the Supreme Court and that has already been stayed, subject to payment of 60% of the penalty amount vide order dated 13.03.2023. For reference, the interim stay order granted by Hon'ble the Supreme Court reads as under:- "Delay condoned. Issue notice. Notices would be served by all modes, including dasti. Tag with Civil Appeal No.319 of 2023 titled "M/s Delhi Royalty Company Vs. Union of India and o....
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....f "illegal mining" and/or supplying the "illegally mined" material vide fake e-rawana bills; therefore, the foundation of case is "illegal mining" and rest of the allegations in all the nine FIRs are peripheral, relatable to "illegal mining". Of course, "illegal mining" is an offence under Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short "MMDR Act"), but neither "illegal mining"; nor the MMDR Act has been included under the Schedule attached with the PMLA. In other words, "illegal mining" is not a scheduled offence under the PMLA; hence, prima facie, petitioner cannot be prosecuted on that count. 10. As per the case of E.D itself, petitioner was issued notice/summons under Section 50 of PMLA and in pursuance thereof, he duly appeared in the Zonal Office of E.D at Gurugram on 19.07.2024 at 11:00 a.m and he was constantly interrogated uptill 1:40 a.m (20.07.2024) for 14 hours and 40 minutes, which is not heroic on the part of E.D; rather it is against the dignity of a human being. For future, in view of the mandate under Article 21 of the Constitution, this Court is observing that Directorate of Enforcement shall take remedial measures and sen....
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.... to further enhance trust-based governance for ease of living and doing business. BE it enacted by Parliament in the Seventy-fourth Year of the Republic of India as follows:- 1. (1) This Act may be called the Jan Vishwas (Amendment of Provisions) Act, 2023. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint; and different dates may be appointed for amendments relating to different enactments mentioned in the Schedule. 2. The enactments mentioned in column (4) of the Schedule are hereby amended to the extent and in the manner mentioned in column (5) thereof. 3. The fines and penalties provided under various provisions in the enactments mentioned in the Schedule shall be increased by ten per cent. of the minimum amount of fine or penalty, as the case may be, prescribed therefor, after the expiry of every three years from the date of commencement of this Act. 4. The amendment or repeal by this Act of any enactment shall not affect any other enactment in which the amended or repealed enactment has been applied, incorporated or referred to; and this Act shall not ....
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.... proceeds of crime, in any manner whatsoever and/or projected the same as untainted by any means; hence there was/is no reason to believe; nor any ground of arrest is made out against him on the premise that petitioner is guilty of an offence under the PMLA. 14. No doubt, learned counsel for E.D raised a plea that once the initial arrest has been sanctified by the judicial orders dated 20.07.2024 & 29.07.2024 (P-2 & P-4, respectively), petitioner cannot challenge the legality of the arrest later on. However, the contention is liable to be rejected in view of the old legal maxim, i.e. "Sublato Fundamento Cadit Opus"; which means that once foundation is removed, the superstructure will also fall. 15. In the present case, initial arrest as well as grounds of arrest have been found to be unsustainable in law; hence in view of the law laid down by Hon'ble the Supreme Court in Chairman-cum-Managing Director Coal India Limited and others Versus Ananta Saha and others (2011) 5 SCC 142, impugned orders passed by learned Special Judge shall not validate the arrest of the petitioner. For reference, the relevant paragraphs 32 & 33 thereof are reproduced as under:- "32. It is a s....
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....be furnished to the arrestee. However, at the same time, Hon'ble the Supreme Court issued a caveat that "where the non-disclosure of the "reasons to believe" with redaction is justified and claimed, the Court must be informed. The file, including the documents, must be produced before the Court. Thereupon, the Court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the Court. (ii) Pankaj Bansal's case (ibid) is a reiteration of the dictum of law that "grounds of arrest" have to be supplied to the arrestee and that "reasons to believe" that person is guilty of the offence have to be recorded. (iii) In Vijay Madan Lal's case (supra), it was held by Hon'ble the Supreme Court that (i) there must be material in possession with the Authority before arresting a person; (ii) there should be reason to believe that the person being arrested is guilty of the offence punishable under PMLA; (iii) "reasons to believe" must be reduced in writing; (iv) Arrestee has to be informed of the "grounds of arrest". (iv) ....
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....corpus petition. (xii) In Sunil Godhwani's case (supra), the order passed by Special Court refusing custody of accused to E.D was challenged before Delhi High Court. The Court, on facts of the case, dealt with the same and allowed the application of E.D. (xiii) In J.A.C. Saldanha; P.P. Sharma; Ishwar PirajiKalpatri; Prakash Singh Badal; Monica Kumar (Dr.); Umesh Kumar; Daxaben and; Rameer Upadhyay's cases (supra), it was held that if an information is lodged at the Police Station and an offence is registered, the mala fide of the informant would be of secondary importance if the investigation produces unimpeachable evidence disclosing the offence. (xiv) In Amanatullah Khan's case (supra), Delhi High Court held that an MLA or a public figure is not above the law of the land. There is no quarrel with this proposition. (xv) In Pavana Dibbur; Vijay Madan Lal Choudhary; Aditya Tripathi; P. Rajendran's cases (supra), it was held that even if a person is not named in the FIR forming scheduled offence, that will not affect proceedings against him under the PMLA. The proposition of law is not disputed by any one. (xvi) H.N. Rishbud's case; P. Chi....