TaxTMI 
TaxTMI 
2025 (1) TMI 849
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....l custody and now he is incarcerated in judicial custody at Central Jail, Raipur. Earlier, the applicant had filed application seeking regular bail before the learned Special Judge (PMLA) ASJ-04, Raipur and vide order dated 07.08.2024 dismissed the application. On 18.07.2023, a search operation under Section 132 of the IT Act was carried out by the officials of the Income Tax Department at various premises including the residential premises of the applicant as well as at the premises of firms owned and controlled by the family members of the applicant. However, no incriminating documents or material or any cash was recovered during the search. Thereafter on 21.08.2023, the Income Tax Department filed complaint case through the Deputy Director of Income Tax (Inv.)-II Raipur inter alia arraying the applicant as accused No.3 for the alleged commission of offences under Section 277 of the IT Act and under Sections 181,191, 193, 196, 200, 383, 384,417,418,420 and 120-B/34 of the IPC. The applicant along with seven other accused persons have been made accused in the said IT complaint. As per the prosecution, following three criminal cases are pending against him : 1. Income Tax ....
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....re the ED and he was arrested by the ED and produced before the Special PMLA Court and was remanded to ED custody till 21.05.2024 which was further extended till 27.05.2024. 5. After completion of investigation, the ED filed its complaint in the subject ECIR before the learned PMLA Court, arraigning the applicant as accused No.2 on 28.06.2024. The applicant filed a written retraction before the PMLA court retracting from the statements and preferred application under Section 439 Cr.P.C. read with Section 45 of the PMLA before the learned trial court seeking grant of regular bail in the subject ECIR. However, the bail application for dismissed on 23.07.2024. Hence constrained by the said order of dismissal, the applicant has come before this Court by filing the instant application under Section 483 of the BNSS read with Section 45 of the PMLA seeking bail. SUBMISSIONS ON BEHALF OF APPLICANT 6. Contention of Shri Gupta, learned counsel for the applicant is that the case pertains to the alleged custom rice milling levy scam. The allegation is that in the year 2022, the Govt. increased the special incentive for custom milling from Rs. 40/- to Rs. 120/- per quintal. It is alleg....
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....g with the evidence or influencing the witnesses, was rejected by the Court. Again, in Satender Kumar Antil v. Central Bureau of Investigation and Another, (2022) 10 SCC 51 this Court referred to Surinder Singh Alias Shingara Singh v. State of Punjab (2005) 7 SCC 387 and Kashmira Singh v. State of Punjab, (1977) 4 SCC 291 to emphasize that the right to speedy trial is a fundamental right within the broad scope of Article 21 of the Constitution. In Vijay Madanlal Choudhary (supra), this Court while highlighting the evil of economic offences like money laundering, and its adverse impact on the society and citizens, observed that arrest infringes the fundamental right to life. 49 In P. Chidambaram v. Central Bureau of Investigation, (2020) 13 SCC 337, the appellant therein was granted bail after being kept in custody for around 62 days. This Court referred to Section 19 of the PML Act, for the in-built safeguards to be adhered to by the authorized officers to ensure fairness, objectivity and accountability. Vijay Madanlal Choudhary (supra), also held that Section 436A of the Code can apply to offences under the PML Act, as it effectuates the right to speedy trial, a ....
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....ellant is not entitled to grant of bail is concerned, it will be apposite to refer to the first order of this Court. No doubt that this Court in its first order in paragraph 25, after recapitulating in paragraph 24 as to what was stated in the charge-sheet filed by the CBI against the appellant, observed that, in view of the aforesaid discussion, the Court was not inclined to accept the prayer for grant of bail at that stage. However, certain paragraphs of the said order cannot be read in isolation from the other paragraphs. The order will have to be read in its entirety. In paragraph 28 of the said order, this Court observed that the right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 Cr.P.C. and Section 45 of the PMLA. The Court held that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted that he be ensured and given a speedy trial. It further observed that when the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, would be guided to ex....
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.... this Court in the first order, they were entitled to consider the same. However, the question that arises is as to whether the trial court and the High Court have correctly considered the observations made by this Court with regard to right to speedy trial and prolonged period of incarceration. The courts below have rejected the claim of the appellant applying the triple test as contemplated under Section 45 of the PMLA. In our view, this is in ignorance of the observations made by this Court in paragraph 28 of the first order wherein this Court specifically observed that right to bail in cases of delay coupled with incarceration for a long period should be read into Section 439 Cr.P.C. and Section 45 of the PMLA. 9. In another decision of the Apex Court, Prem Prakash Vs. ED vide order dated 28.08.2024 in SLP (Crl.) No. 5416 of 2024 it has been observed as under: 12. Independently and as has been emphatically reiterated in Manish Sisodia (II) (supra) relying on Ramkripal Meena Vs Directorate of Enforcement (SLP (Crl.) No. 3205 of 2024 dated 30.07.2024) and Javed Gulab Nabi Shaikh Vs. State of Maharashtra and Another, 2024 SCC online 1693, where the accused has already ....
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....hemselves to the said higher constitutional edict. 10. He further contended that time and again it has been reiterated by the Apex Court that in cases where the fundamental right to speedy trial of the accused is violated, the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applied irrespective of the nature of the crime. He has referred to the decision of the Apex Court in the matter of Javed Gulam Nabi Shaikh Vs. State of Maharashtra, 2024 SCC OnLine SC 1693 wherein it has been observed that : "19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime." 11. He contended that Section 436-A Cr.P.C. should not be construed as a mandate that an accused should not be granted bail under the PML....
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.... about 493 witnesses to be examined and the documents to be considered are in the range of about 50,000 pages, the likelihood of the trial being concluded in near future is impossible. 12. Relying on the various pronouncements of this Court, we had observed in the case of Manish Sisodia (supra) that the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. 13. We had also reiterated the well-established principle that "bail is the rule and refusal is an exception". We had further observed that the fundamental right of liberty provided under Article 21 of the Constitution is superior to the statutory restrictions. 13. Further in the case of Krishnan Subramanian Vs. State NCT of Delhi, 20-22 SCC OnLine Del 1384, it has been observed that : 24. A perusal of record shows that charge sheet has already been filed, all materials have been collected by the investigating authorities and the evidence against the applicant is documentary in nature. In the considered opinion of this Court, the applicant is neither a flight risk, nor can there be any propensity on his part to tamper with any....
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....akh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. 55. As observed by this Court in the case of Gudikanti Narasimhulu (supra), the objective to keep a person in judicial custody pending trial or disposal of an appeal is to secure the attendance of the prisoner at trial." 16. He further contended that the existence of a scheduled offence is a sine qua non for an offence under PMLA to be made out. The IT complaint it self is not maintainable and liable to be dismissed inter alia for the reasons that it has been filed by the Deputy Director of Income Tax, who is not the competent statutory authority to file the complaint. He further submits that the entire case against the applicant is based on extortion and the t....
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....dated 20.01.2023, wherein it was held as under: "45. The fact is that the complaint has been filed by the SFIO without feeling the need of any custody of the 53 out of 55 accused persons. The main accused even as per the SFIO has not been arrested, being protected by the order passed by this Court in Writ Petition (Criminal) No. 1242 of 2022. The said writ petition was filed by accused namely Vinod Kumar Dandona' and others including the main accused 'hantanu Prakash' seeking quashing of the order dated 17.08.2018 passed by the MCA under Section 212 (1) (c) of the Companies Act, which led to the start of investigation into the affairs of ESL. 46. The coordinate bench of this court, considering the facts of the case, by its order dated 26.05.2022, had directed SFIO not to take any coercive steps against the petitioners therein, which includes the main accused Shantanu Prakash'. 47. From the perusal of the complaint, it is apparent that even in relation to the charges which are alleged against the present applicant, there are various other accused persons who have been named as co-accused. The role assigned to them at this stage is no different than the App....
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....overy of unaccounted cash is very relevant factor and this prima facie shows a strong possibility of falsity of the case against the applicant. He contended that the recovery of unaccounted money which is a meagre amount of Rs. 47.60 lacs which was recovered from the office bearers ie. Manoj Agrawal and Sunil Ubhrani of Rajnandgaon District Association who are the conspirators but no proceedings have been initiated against them. 19. It is contended that from perusal of the statements of the rice millers and other individuals whose statements are being relied upon by the ED shows that these persons have been tutored by the ED to give identical statements. The documents seized during investigation failed to disclose any connection of the applicant with the alleged scheme. There is nothing recorded in the diary to show that the said money, after having been received from rice millers was handed over to the applicant and the unaccounted money recovered by the ED was from the possession of two rice millers-Manoj Agrawal and Sunil Ubhrani. He contended that there was a conspiracy hatched by some of the office bearers of State Rice Millers Associations to make the applicant a scape goa....
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....s it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the formers' correctness still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations levelled against them for there is not an iota of independent evidence in support thereof. In that view of the matter we need not discuss, delve into or decide upon the contention raised by Mr. Altaf Ahmed in this regard. Suffice it to say that the statements of the for witnesses, who have admitted receipts of the payments as shown against them in MR 71/91, can at best be proof of reliability of the entries so far they are concerned and not others. In other words, the statements of the above witnesses cannot be independent evidence under Section 34 as against the above two re....
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....l Choudhary (supra); and Satyendar Kumar Jain (supra). 27. With regard to the admissibility of ledgers, loose pages, etc., applicant relies heavily on the judgment in V.C. Shukla (supra), however, the decision is not applicable to the present case. Complete records seized by the Income Tax Department are part of relied upon documents of the ED. Section 34 of the 1872 Act will not be attracted in view of the presumption in law under Section 22 of PMLA, which provides that where any record or property is found in the possession or control of any person, it shall be presumed that such record or property belongs to such person and the contents are true and in the handwriting of the said person. Rabin Kalai in his statement dated 12.08.2021 acknowledges his handwriting on the ledgers and the vouchers are acknowledged by Sanu Mallick in his statements on 30.09.2021 and 01.10.2021 and there is thus sufficient corroboration of the documents by oral statements." 21. Next contention of the learned counsel for the applicant is that the applicant fulfills the triple test. The entire material is documentary and is in the custody of the Court. The applicant does not have the propensi....
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....y, that he is not likely to commit any offence while on bail. To meet this requirement, it would be essential for the arrested person to be aware of the grounds on which the authorized officer arrested him/her under Section 19 and the basis for the officer's 'reason to believe' that he/she is guilty of an offence punishable under the Act of 2002. It is only if the arrested person has knowledge of these facts that he/she would be in a position to plead and prove before the Special Court that there are grounds to believe that he/she is not guilty of such offence, so as to avail the relief of bail. Therefore, communication of the grounds of arrest, as mandated by Article 22(1) of the Constitution and Section 19 of the Act of 2002, is meant to serve this higher purpose and must be given due importance. 23. Contention of the learned counsel for the applicant is that the applicant is a businessman and is engaged in the business of rice milling and he is not a flight risk. There is no likelihood of tampering with evidence or influencing the witnesses. Another paramount consideration for grant of bail is that there is no likelihood of the applicant to tamper with the evidence. He submit....
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....son for believing that evidence." In Bhuboni Sahu v. King the Privy Council has expressed the same view. Sir. John Beaumont who spoke for the Board observed that a confession of a co-accused is obviously evidence of a very weak type. It does not indeed come within the definition of "evidence" contained in s. 3 of the Evidence Act. It is not required to be given on oath, nor in the presence of the accused, and it cannot be tested by cross-examination. It is a much weaker type of evidence than the evidence of an approver, which is not subject to any of those infirmities. Section 30, however, provides that the Court may take the confession into consideration and thereby, no doubt, makes it evidence on which the court may act; but the section does not say that the confession is to amount to proof. Clearly there must be other evidence. The confession is only one element in the consideration of all the facts proved in the case, it can be put into the scale and weighed with the other evidence." It would be noticed that as a result of the provisions contained in s. 30, the confession has no doubt to be regarded as amounting to evidence in a general way, because whatever is considered by th....
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....pellants under S.396 of the Indian Penal Code. 25. He further contended that the only material which the ED has placed was relying upon the statement recorded under Section 50 of the PMLA apart from the inadmissible diary entries. It is settled law that the same cannot be considered at this stage of bail in as much as no opportunity to cross-examine is given to the applicant. He has placed his reliance in the matter of Paras Mal Lodha Vs. Directorate of Enforcement (2017) SCC OnLine Del 8676; Chandra Prakash Khandelwal Vs. Directorate of Enforcement 20223 SCC OnLine Del 1094 and Sanjay Jain Vs. Directorate of Enforcement, 2024 SCC OnLine Del 1656. In Sanjay Jain (supra), it has been held that : "62. Thus, the confessional statement of a co-accused under Section 50 fo the PMLA is not a substantive pice of evidence and can ben used only for the purpose of corroboration in support of other evidence to lend assurance to the Court in arriving a to a conclusion of guilt." 26. Learned counsel for the applicant contended that prima facie the applicant is not guilty of the offence of money laundering and the entire case is circumstantial. He submits that the entire case is ba....
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....as been held that: "24. Although considerable arguments have been made by Mr Singhal, on the aspect of CDRs' of the petitioner, the same are not being adverted to at this stage. Suffice to say that the CDR's of the petitioner can only be used as supporting or corroborative piece of evidence and cannot form the sole basis of conviction. 2 Likewise, the evidentiary value of the CDRs can be seen only at the time of trial and not at the stage of considering the bail application. Reference may advantageously be had to the decision of the Supreme Court in State (By NCB) Bengaluru v. Pallulabid Ahmad Arimutta, the relevant paragraph of which reads as under:- "12. ...The CDR details of some of the accused or the allegations of tampering of evidence on the part of one of the respondents is an aspect that will be examined at the stage trial." 27. In the matter of Azad Vs. State of GNCT of Delhi and Another, 2023 SCC OnLine Del 1769 wherein it has been held that : 44. The other connecting evidence against the accused persons are the recoveries effected from them in pursuant to their disclosure statements. As already noted in para no. 4 of this order, that part of....
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....ffence under the PMLA Act. The instant ECIR was recorded on the basis of said prosecution complaint filed against the applicant for the commission of the offence of money laundering as defined under Section 3 and punishable under Section 4 of the PMLA,2002. 30. The applicant, the then Treasurer of CG State Rice Millers Association, in active collusion and assistance had come up with a plan to collect extortion amounts illegally @ Rs. 20/- per quintal of paddy and accordingly, issued instructions to the office bearers of all the district rice millers associations and rice millers in the State. From the Investigation, it was revealed that the applicant with the assistance of co-accused Manoj Soni used to keep the bills of rice millers who did not pay the amount pending, got inspection conducted by the Food Department at the premises of those rice millers who denied to pay the extortion amounts. The applicant had collected the amount from the office bearers of District Rice Millers association and sometimes from the rice millers directly. In the investigation, it has also been revealed that the applicant along with co-accused Manoj Soni forbade one Ms. Pritika Pooja Kerketta, the t....
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....rt in Vijay Madanlal Choudhary Vs. Union of India SLP (Crl.) NO. 4634/2014, wherein it has been held as under: 60. As a matter of fact, prior to amendment of 2015, the first proviso acted as an impediment for taking such urgent measure even by the authorized officer, who is no less than the rank of Deputy Director. We must hasten to add that the nuanced distinction must be kept in mind that to initiate "prosecution" for offence under Section 3 of the Act registration of scheduled offence is a prerequisite, but for initiating action of "provisional attachment" under Section 5 there need not be a pre-registered criminal case in connection with scheduled offence. This is because the machinery provisions cannot be construed in a manner which would eventually frustrate the proceedings under the 2002 Act. Such dispensation alone can secure the proceeds of crime including prevent and regulate the commission of offence of money-laundering. The authorized officer would, thus, be expected to and, also in a given case, justified in acting with utmost speed to ensure that the proceeds of crime/property is available for being proceeded with appropriately under the 2002 Act so as not to....
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....21 of 2022, decided on 4.1.2022 clearly provides that anything contained in the 1973 Code (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond, unless the stipulations provided therein are fulfilled. On account of the non-obstante clause in Section 45 (1) of the 2002 Act, the sweep of that provision must prevail in terms of Section 71 of the 2002 Act. Further, the expression "anticipatory bail" is not used either in the 1973 Code or the 2002 Act. The relief granted in terms of Section 438 of the 1973 Code is one of directing release of the person on "bail" in case of his arrest; and such a relief has been described in judicial pronouncements as anticipatory bail. Section 45 (1) uses generic expression "bail" without reference to any provision of the 1973 Code, such as Sections 437, 438 and 439 of the 1973 Code. Concededly, Section 65 of the 2002 Act states that the provisions of the 1973 Code shall apply to the provisions under the Act insofar as they are not inconsistent with the provisions of the 2002 Act. Further, Section 71 of the Act gives overriding effect to the Act. Section 45 of the Act begins with a non-obstante clause, ....
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....ertain dates, he did not objected and had duly signed the statements. When the statements were recorded, the applicant was vague and evasive in his answers therefore in terms of Section 19, the accused was placed under arrest for his involvement in the offence of money laundering and his non-cooperative behaviour through out the investigation. 37. Shri Pandey, learned counsel for the respondent/Ed in reply to the submission of the learned counsel for the applicant that the applicant has been suffering from various ailments and is a sick person under the proviso to Section 45 of the PMLA and therefore he is entitled to the benefit of the proviso, contended that regular medical check up of the accused was conducted during his period of custody and medication was also provide to him as prescribed by the doctor. It thus clearly demonstrates that frivolous allegations have been leveled by the applicant against the ED. 38. It is contended that the action of search under PMLA is merely a tool for investigation and is one of many such tools granted to ED by the Act which are employed to collect evidences during investigation. The possibility of parking the proceeds of crime at a secr....
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....e Apex Court in the ase of Gautam Kundu Vs. Directorate of Enforcement (2015) 16 SC 1, while dealing with the provisions of bail under Section 45 of the PMLA held as under: 8. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA 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 PMLA deals with the offence of money laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with money laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29. Section 45 of the PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overridin....
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....sm of the twin conditions laid down in the statute itself under Section 45 of the PMLA, 2002. It even stands substantiated by the ruling of the Apex Court in Vijay Madanlal Choudhary Vs. Union of India SLP (Crl.) No. 4634 of 2014, which is reproduced as under: 133. This Court has been restating this position in several decisions, including Gautam Kundu639 and Amit Kumar640. Thus, while considering the application for bail under Section 45 of the 2002 Act, the Court should keep in mind the abovementioned principles governing the grant of bail. The limitations on granting bail as 638 Supra at Footnote No.255 639 Supra at Footnote No.207 640 Supra at Footnote No.258 prescribed under Section 45 of the 2002 Act are in addition to the limitations under the 1973 Code." 42. Further in the matter of Sajjan Kumar Vs. Directorate of Enforcement, MANU/DE/2155/2022, it has been held that "in matter of regular bail, the Court must consider aspects, including but not limited to, the larger interest of the State or public-another factor relevant would be the gravity of alleged offence and /or nature of allegations levelled-Economic offences constitute a class apart and need to be visit....
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....re is no denying the fact that allegations have been made that the said money was the proceeds of crime and by depositing or investing the same in his wife's account and in the business of his wife and brother, the applicant has attempted to project the same as untainted money. The said allegations may be the subject matter of final outcome of the trial, but having been made, the burden of proof that the said money is not the proceeds of crime and, therefore, shifted to the applicant under Section 24 of the PML Act, 2002. For the sake of reference, Sections 3 and 24 of the PML Act are extracted herein below :- "3. Offence of money-laundering.-Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the 4[proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering." "24. Burden of Proof. - In any proceeding relating to proceeds of crime under this Act, (a) in the case of a person charged with the offence of money-laundering under Section 3, the A....
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.... 420 IPC has been made against the applicant. Though it has been submitted by the counsel for the applicant that there is no direct or specific evidence against the applicant to suggest that he was involved in any of the offence as alleged in the subject ECIR or the prosecution complaint. 51. From the investigation of the ED, it has been revealed that the applicant was one of the key conspirator and main beneficiary of the POC extorted from the rice millers. It has also been revealed that the rice milers were forced for payment of the same under threat that their incentive bills would not be cleared from the MARKFED. As per Section 50 (4) of the PML Act, the statements recorded under Section 50 of the PMLA has evidentiary value as the proceedings under Section 50 (2) and (3) are deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the IPC, 1860. 52. The applicant is closely connected with POC as he had deputed some persons at certain place and the cash was not physically taken by him but it was initially demanded by the applicant and payment, he conveyed it to the rice millers over phone. It has come in the statements of some of the rice millers who....
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.... registered against the applicant by the ED under various provisions of Sections 3 and 4 of the PMLA (ECIR registered by the ED) respectively. In the context of interpretation of Section 45 of the PMLA, held that the twin conditions obligate the Court to arrive at a positive finding that applicant has not committed an offence under the PMLA. A tentative finding should be recorded on the basis of broad probabilities and detailed reasons are not necessary to be assigned, nor evidence be weighed meticulously. It was further observed that the assertion of Rs 19.39 crores out of Rs. Total POC of Rs. 147 crores having been paid as bribe to the applicant as alleged by ED however only properties worth Rs. 19.39 crores has been recovered from the applicant in the form of proceeds of crime as well as under clause 'value thereof' as per Section 2(1)(u) of the PMLA. 55. Under PMLA, there is a presumption of guilt on the accused which they have to disprove to get bail. In an older version of the PMLA, the first condition stated that it would be presumed that the accused was guilty of the 'scheduled offence', and the reversed burden of proof on the accused was to disprove their involvement in....
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....y enshrined under Article 14 and held that the ED "should act uniformly, consistent in conduct, confirming one rule for all". Since there is prima facie involvement of the Applicant in the commission of the offence and as such, the burden of proof under Section 24 of the PMLA is upon the applicant to demonstrate before the Ld. Special Judge that the money involved does not fall within the proceeds of crime involved in the present ECIR. 58. The Court after examining the entire documents found substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. There were documents and evidences that reflected the involvement of the applicant and he is the key conspirator and beneficiary from the said scam. Thus, the guilt of the accused in the offence of money laundering has been gathered and since, the allegations against the applicant were extremely serious and taking into account, the nature and gravity of the offence and from perusal of the record and in view of the fact that looking to the special and stringent provision under Section 45 (1) of the PMLA for grant of bail, in the considered opinion of this Court, p....