TaxTMI 
TaxTMI 
2024 (9) TMI 1686
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....the Economic Offence Wing at Lucknow. 3. The contents of the Enforcement Case Information Report (hereinafter referred to as "ECIR"), in a gist, reflects that many real estate projects were floated by various companies under the umbrella of Shine City Group of Companies in Uttar Pradesh, Bihar and West Bengal. The said companies is said to have allured the investors to invest in the projects of the companies which promised handsome returns. The company is said to have issued post-dated cheques to instill confidence in the investors, however, as alleged, as and when the said cheques matured for redemption, they were dishonored. 4. It is further alleged that in order to dupe the investors forged documents were shown to the investors in order to instill confidence that the company had a very healthy land bank, however, neither the investors got the plot as promised nor the amount invested was returned. 5. The company is also alleged to have a scheme for investing in its alleged virtual currency titled as 'Shine Victory Coin' which was floated through Shine City Infrastructure Projects Pvt. Ltd though the Company had no authority or approval from its Board of Directors....
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....t applicant reveals that the applicant is said to be the main confidant of Sri Rasheed Naseem who is said to be the Director and master-mind of the companies under the umbrella of Shine City Group of Companies. The role of the applicant is summarized as under:- (i) It is alleged that the applicant had created a social media group under the name and style of 'Customer ka Haq'; It is also alleged that she had been acting on behalf of Sri Rasheed Naseem and Shine City Group of Companies trying to give possession, illegally, of the land to their own persons which was already provisionally attached by the Enforcement Directorate. This led to frustrating the final confiscation of the attached property which had been confirmed by the Adjudicating Authority; (ii) Several incriminating information and data in digital form was available on the applicant's mobile phone which established her role in assisting Sri Rasheed Naseem and Shine City Group of Companies to conceal the proceeds of crime and also siphoning the said proceeds; (iii) The applicant is said to be the single point of contact between Rasheed Naseem and Shine City Group of Companies; (....
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....ly salary, she had received a total sum of Rs. 16,82,331/- in her bank account in cash which is alleged to be the proceeds of crime generated by the criminal activities of the Shine City Group of Companies and being a close confidant of Sri Rasheed Naseem, she was controlling the affairs and was the face of the company vis.a.vis its investors. (iii) Mobile device recovered from her residence pointed towards the conversation between the applicant and Sri Rasheed Naseem which also indicated that she was in constant touch and was acting at his behest including her involvement in giving possession of the properties provisionally attached by the Enforcement Directorate to persons being loyal to the offending group of companies. 14. The specific role of the applicant as indicated in para 6.1 of the ECIR, is being reproduced hereinafter for ease of reference:- " ROLE OF SHASHI BALA (ACCUSED 1) 6.1 She is a teacher in a government school and confidant of Rashid Naseem, head of operations of Shine City Group. She created a social media group and channel namely 'Customer ka Haq' and acting on the directions of Rashid Naseem. Further evidence from the Wha....
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.... applicant has also stated that she has been in Government Service since 2005 and has been receiving salary and as such over a period of one decade i.e. for the period 2009-10 till 2019-20, she had received salary of Rs. 46 lakhs and odd as per her salary account statement. 19. It has further been urged that the applicant being a School Teacher had her own independent source of income and she also earned additional income from agriculture and sale and purchase of land and sale of milk and dairy products. 20. It is submitted that the applicant was not named in the ECIR but came to be arrested on 25.11.2023. Significantly, the applicant has not been named in any FIRs which was lodged against Rasheed Naseem and his group of companies and associates. The applicant is neither a Director nor Officer or employee or associated with Rasheed Naseem or any companies of the Shine City Group of Companies. 21. It is also urged by the learned counsel for the applicant that the applicant has been falsely implicated for the reason that a Division Bench of this Court at Allahabad is seized of a bunch of writ petitions, leading petition being Criminal Misc. Writ Petition No. 1834 of 2021 (Sr....
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....er, the Apex Court thereafter referred the matter to a Larger Bench for resolving the issue referred and then interim bail was granted considering that Sri Kejriwal, the accused was an elected leader and the Chief Minister of Delhi and further leaving it open for the Larger Bench to either extend or recall the interim bail. Thus, the case in hand is quite different where there is no challenge to the legality of arrest. (ii) The learned counsel further relied upon the decision of the Apex Court in Kalvakuntla Kavitha v. Enforcement Directorate, 2024 SCC OnLine SC 2269 wherein the Apex Court has held as under:- "26. This Court in the case of Saumya Chaurasia (supra) 2023 SCC OnLine SC 1674, while paraphrasing proviso to Section 45(1) of the PML stated in paragraph 23 as follows: "23. ..... No doubt the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements ......." 27. This Court, in the carefully couched para....
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....nt portion (Para 131) from Vijay Madanlal Choudhary (supra): "131. It is important to note that the twin conditions provided under section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under section 45 impose absolute restraint on the grant of bail. The discretion vests in the court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under section 45 of the 2002 Act. While dealing with a similar provision prescribing twin conditions in MCOCA, this court in Ranjitsing Brahmajeetsing Sharma (supra), held as under: "44. The wording of section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the Legislature. Section 21(4) of the MCO....
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....e material collected during investigation and the said view will not be taken into consideration by the Trial court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this court in Nimmagadda Prasad (supra), the words used in section 45 of the 2002 Act are "reasonable grounds for believing" which means the court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt." (emphasis supplied) Importance of the foundational facts-under Section 24 PML 14. In Vijay Madanlal Choudhary (supra) dealing with Section 24 of the PML, the three-Judge Bench held as under:- "97. Be that as it may, we may now proceed to decipher the purport of section 24 of the 2002 Act. In the first place, it must be noticed that the legal presumption in either case is about the involvement of proceeds of crime in money-laundering. This fact becomes relevant, only if, the prosecution or the authorities have succeeded in establishing at least three basic or foundational facts. First, that the criminal activity ....
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....hooses to do and as is permissible in law, including by replying under section 313 of the 1973 Code or even by cross-examining prosecution witnesses. The person would get enough opportunity in the proceeding before the Authority or the court, as the case may be. He may be able to discharge his burden by showing that he is not involved in any process or activity connected with the proceeds of crime. In any case, in terms of section 114 of the Evidence Act, it is open to the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. Considering the above, the provision under consideration [section 24(a)] by no standards can be said to be unreasonable much less manifestly arbitrary and unconstitutional." (Emphasis supplied)" The proposition in the aforesaid case cannot be disputed and this Court while considering the case of the applicant shall also notice the applicability of the said decision. (iv) Learned counsel for the applicant next relied upon the decision of the Apex Court in Manish Sis....
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....impressed on the, magistracy of the country that bail is not to be withheld as a punishment, but that the requirements as to bail are merely to secure the attendance of the prisoner at trial."" 53. The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straight forward open and shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts and the High Courts should recognize the principle that "bail is rule and jail is exception". 54. In the present case, in the ED matter as well as the CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest p....
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....ame but she was not able to indicate that under what circumstances, the said 11 properties were parked in her name. 31. It is further urged that her own admission which was even recorded before a Division Bench of this Court while hearing was in progress of a bunch of writ petitions at Prayagraj clearly indicates that she was in constant touch with Rasheed Naseem and the applicant's daughter and her son-in-law had even met Rasheed Naseem in Dubai. This clearly linked the applicant to the Director as well as the master-mind of the Shine City Group of Companies. 32. The conversation and exchange of photos between the applicant and another close confidant of Rasheed Naseem namely Abhishek Thakur also fortifies the strong links between the applicant and the Shine City Group of Companies and her assistance in siphoning of the proceeds of crime. 33. In view of the aforesaid, it is urged that there is ample material available on record which clearly incriminates the applicant and for the aforesaid reasons the bail application of the applicant deserves to be rejected. 34. Before dealing with the respective submissions of the learned counsel for the parties, it will be appropria....
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....rty 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] 4. Punishment for money-laundering:- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a terms which shall not be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime inolve in money- laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted." 37. In so far as the issue regarding consideration of an application for bail is concerned, the same is provided under Section 45 which reads as under:- "45. Offences to be cognizable and non-bailable:- (1) [....
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....ving taken a glance at the aforesaid statutory provisions it now will be worthwhile to notice certain decisions of the Apex Court on the issue of the offence of money laundering and the approach of courts while dealing with an application for bail. 39. The Apex Court in Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46 has held as under:- "19. The sweep of Section 45 of the 2002 Act is no more res intergra. In a recent decision of this Court in Gautam Kundu v. Directorate of Enforcement (2015) 16 SCC 1, this Court has had an occasion to examine it in paras 28-30. It will be useful to advert to paras 28 to 30 of this decision which read thus : (SCC pp. 14-15) "28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of PML are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PML deals with the offence of money laundering and Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PML is a special statute enacted by Parliament for dealing with money....
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....ng effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. As mentioned earlier, Section 45 of PML imposes two conditions for grant of bail, specified under the said Act. We have not missed the proviso to Section 45 of the said Act which indicates that the legislature has carved out an exception for grant of bail by a Special Court when any person is under the age of 16 years or is a woman or is sick or infirm. Therefore, there is no doubt that the conditions laid down under Section 45-A of PML, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of committing offence punishable under Section 4 of PML, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure." The decisions of this Court in Subrata Chattoraj v. Union of India (2014) 8 SCC 768, Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439 and Union of India v. Hassan Ali Khan (2011) 10 SCC 235 have been noticed in the aforesaid decision. 21. The consistent view taken by this Court is that ....
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....ments of 26 witnesses/accused already recorded, out of which 7 were considered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the 2002 Act. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of money laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence. Further, the courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail and concluded that it is not possible to hold that the appellant is not likely to commit any offence ascribable to the 2002 Act while on bail. Since the threshold stipulation predicated in Section 45 has not been overcome, the question of considering the efficacy of other points urged by the appellant to persuade the Court to favour the appellant with the relief of regular bail will be of no avail. In other words, the fact that the investigation in the predicate offence instituted in terms of FIR No. 205/2016 or that the investigation qua the appellant in the complaint CC No. 700 of 2017 is comp....
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....e 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. ---------******--------****** ****** 295. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention of money-laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as Section 5(1) envisages that such an action can be initiate....
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....ting menace of money-laundering, including for attachment and confiscation of proceeds of crime and to prosecute persons involved in the process or activity connected with the proceeds of crime. In view of the gravity of the fallout of money-laundering activities having transnational impact, a special procedural law for prevention and regulation, including to prosecute the person involved, has been enacted, grouping the offenders involved in the process or activity connected with the proceeds of crime as a separate class from ordinary criminals. The offence of money-laundering has been regarded as an aggravated form of crime "world over". It is, therefore, a separate class of offence requiring effective and stringent measures to combat the menace of money-laundering. ---------******--------****** ****** 400. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by ....
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....undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby" (emphasis supplied) 401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad(2013) 7 SCC 466 the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the Court ha....
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.... 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." 43. Again, the Apex Court in Pavana Dibbur v. Enforcement Directorate, 2023 SCC OnLine SC 1586 has held as under:- "15. The condition precedent for the existence of proceeds of crime is the existence of a scheduled offence. On this aspect, it is necessary to refer to the decision of this Court in the case of Vijay Madanlal Choudhary. In paragraph 253 of the said decision, this Court held thus: "253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money- laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the ....
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....d before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge t....
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....ceedings of the scheduled offence; c. The first property cannot be said to have any connection with the proceeds of the crime as the acts constituting scheduled offence were committed after the property was acquired; d. The issue of whether the appellant has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial; and e. The offence punishable under Section 120-B of the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule." 44. The Court has heard the learned counsel for the parties at length and also perused the material on record. 45. As far as the alleged involvement of the present applicant is concerned if the documents on record are perused, it indicates that the applicant was appointed as an Assistant Teacher in the year 2009 and was promoted later and for her service she received a sum of Rs. 46,81,538/- as salary for the period 2009 to 2020. 46. An attempt has been made to indicate that the amount as shown by the prosecution as received by the applicant as proceeds of crime is....
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....gh had paid some money to Richa Singh, the daughter of the applicant and he also transferred some money to the son of the applicant. Then there is transfer of a sum of Rs. 6,70,000/- from the account of Richa Singh, the daughter of the applicant. There are certain other payment receipts indicating that the applicant had some stake in project 'Royal Residency'. Certain E-payment receipts were also recovered indicating movements of fund from the applicant in respect of certain plots of Shine City Infra Project. 52. In this manner, it would be seen that there are several transactions between the applicant and Kuldeep Singh and the son and daughter of the applicant. There is no explanation regarding the aforesaid transactions as to why the Bank Manager of Aryavrat Bank would give money to the son and daughter of the applicant and why would he keep 12 original sale deeds relating to properties in his name at the residence of the applicant. 53. Merely to suggest that a sum of Rs. 16,00,000/- and odd has been shown as proceeds of crime and the applicant being a school teacher and later promoted to the post of Headmaster between the year 2009 to 2020 had the means to garner s....
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....eep into the evidence to return a finding of guilt but what is required of the Court is to consider the matter before it and it must enable the Court to prima facie satisfy itself and form an opinion that the applicant is not guilty and that the applicant is not likely to commit any offence on bail and while forming such satisfaction, the Court is required to consider the nature and gravity of accusations, severity of punishment in the event of conviction, danger of the accused absconding or fleeing also the character, behaviour, means, position and standing of the accused and the likelihood of the offence being repeated, coupled with the reasonable apprehensions of the witnesses being influenced and danger of justice being defeated by grant of bail. 58. Thus, keeping the aforesaid in mind and considering the material before this Court, including the fact that Rasheed Naseem is absconding but the applicant has been in touch with him and also being in touch with other co-accused and this was while prosecution was searching for the Directors and the applicant was knowing their whereabouts but she never came forward to assist the prosecution and this also casts a doubt on the plea ....