TaxTMI 
TaxTMI 
2025 (2) TMI 183
X X X X Extracts X X X X
X X X X Extracts X X X X
....which is punishable under Section 4 of the said Act. Six volumes of the charge-sheet is filed as compilation by Applicant. Reference to relevant documents is as per the documents appearing in the compilation. 2. Briefly stated, prosecution case is that Mumbai police registered FIR on 01.09.2023 on the basis of Complaint filed by Gopal Pandurang Lavne - EOW officer in respect of two specific Work orders issued by the Municipal Corporation of Greater Mumbai (for short "MCGM") dated 14.04.2020 and 17.04.2020 to supply cooked food (khichdi) during the COVID-19 Pandemic lock down period between March 2020 and July 2020 to the Ward Offices for distribution to the citizens. Delay in filing the complaint is prima facie evident. Work order dated 14.04.2020 was issued in favour of M/s. Vaishnavi Kitchen (Sahyadri Refreshments) and Work order dated 17.04.2020 to M/s. Force One Multi Services for supply of 300 gms of food packet (khichdi) @Rs. 33/- per packet plus GST. MCGM paid Rs.8.64 Crores to M/s. Force One Multi Services and Rs.5.93 Crores to M/s. Vaishnavi Kitchen (M/s. Sahyadri Refreshments) on completion of the above Work orders. Work orders were fully delivered and completed. Sanct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce he was instrumental in getting the Work order to supply cooked food for M/s. Force One Multi Services by using his influence as a leader of the then political party in dispensation without having played any role in contributing to the supply of the cooked food despite which he received an amount of Rs.1.35 Crores into his bank account from M/s. Force One Multi Services during June 2020 to December 2020. 8. Sixth allegation is that Applicant received the alleged amount of Rs.1.35 Crores into his bank account by showing that he was a salaried employee of M/s. Force One Multi Services by relying upon two ante dated appointment letters dated 01.04.2019 and 01.04.2020 and thus is liable for having conspired in generating and layering the proceeds of crime. 9. In the above background, Mr. Mundargi, learned Senior Advocate for Applicant has made the following five submissions for seeking Applicant's enlargement on Bail. 9.1. He has drawn my attention to the FIR filed by Complainant dated 01.09.2023 appended at page No.1 of Volume-I of the Chargesheet to contend that Applicant is not named as accused therein. Next he has drawn my attention to the ECIR dated 17.10.2023 at page N....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... criteria laid down by MCGM circumvented the regulations and resorted to illegitimate practices of supplying food (khichdi) packets and pocketed illegitimate gains of 2.82 Crores and 3.68 Crores respectively and thus this amount of Rs. 6.5 Crores is the proceeds of crime under Section 2 (1) (u) in the instant case. He would draw my attention to the accusation that Applicant and his firm M/s Fire Fighters Enterprises received Rs.1.35 Crores out of the above amount and Applicant has further laundered the said amount for wrongful and illegal gain and acquired properties and assets with that amount which are liable to be confiscated. In paragraph 14, he would draw my attention to the conclusion that further investigation is pending in respect of the other named accused in the FIR "if found" to be involved in PMLA offence. Juxtaposing these 3 paragraphs, he would argue that all suspect persons in the chain have not been arrested, neither they have been made an accused in the Special Case. He would submit that merely on the basis of accused's statement which are pure confessional statements, Applicant is arrested. He would vehemently submit that such accused statements are clearly hit by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Multi Services is engaged in sand transport business stands clearly disproved when the partnership deed is seen as Force One Multi Services is, inter alia, engaged into hospitality services apart from its other services / activities. 9.3. Apart from the aforesaid factual issues, on the legal front he would draw my attention to the provisions of PMLA. While drawing my attention to Section 19 (1), he would argue that for enforcement of the said provision to arrest the Applicant, Competent Authority is required to record and form a belief of the reasons on which it desires to proceed against the Accused. He would submit to the extent that such belief ought to be recorded in writing which is not done in the present case nor Applicant is informed about the said reasons. In the same breath he would submit that before arrest applicant ought to have been conveyed the grounds of his arrest which is also not complied with as mandatorily provided under Section 50 (1) of Cr.P.C.. He would submit that if arrested after compliance of the aforesaid two statutory provisions, Applicant ought to have been produced before the Magistrate to show compliance of the aforesaid provisions which is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh Court.; (iv) Superintendent and Rememberancer of Legal Affairs, West Bengal Vs. Mohan Singh and Ors. (1975) 3 SCC 706; (v) Anil Khadkiwala Vs. State (Government of NCT of Delhi) and Anr. (2019) 17 SCC 294; (vi) Vinod Kumar, IAS Vs. Union of India and Ors. 2021 SCC OnLine SC 559; (vii) Ramkripal Meena Vs. Directorare of Enforcement Special Leave to Appeal (Cri.) No(s).3205/2024 decided on 30.07.2024; (viii) Prem Prakash Vs. Union of India (2024) 9 SCC 787; (ix) Manish Sisodia Vs. Directoate of Enforcement AIR 2024 SC 4053; (x) Mahesh Pandurang Naik Vs. The State of Maha and Anr. WP(ST) No.13835 of 2024; (xi) Prabir Purkayastha Vs. State (NCT of Delhi) (2024) 8 SCC 254 : (2024) 3 SCC (Cri) 573; (xii) Vaibhav Jain Vs. Directorate of Enforcement 2024 SCC OnLine Del 7478. 9.6. He would finally submit that Applicant has been in custody for more than one year and taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, Applicant having fully co-operated with the prosecution, investigation having been completed, Applicant not being fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... entered into a sub-contract with M/s. Sneha Caterers and Decorators and M/s. Golden Star Banquet Hall & Catering Services to supply food packets (khichdi) to MCGM without there being any provision for the same under the Work order. On the factual front, he would finally submit that both the aforesaid entities supplied under weighing food packets of 100 grams instead of the prescribed 300 grams under the said Work orders thus illegally profiteering and unjustly enriching them by crores of rupees and out of this amount of Rs. 1.35 Crores was routed to the bank account of Applicant without Applicant playing any role whatsoever in supply of food packets to MCGM. He would submit that the aforesaid amount of Rs. 3.64 Crores has been surreptitiously misappropriated by M/s. Force One Multi Services and investigation is on in the matter at present and if found guilty, other accused will also be implicated in accordance with law. 10.2. On the legal front, he would draw my attention to the relevant provisions of IPC and PMLA Act and would submit that it is not necessary for any person to be an accused in the Scheduled Offences to be implicated in PMLA. He would refer to the provisions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmissions for the State. 12. I have heard Mr. Mundargi, learned Senior Advocate for Applicant; Mr. Venegavkar, learned Special PP for Respondent No. 1 and Mr. Dedhia, learned APP for the State. Submissions made by the learned Advocates have received due consideration of the Court. 13. At the outset, the statutory legal position as applicable is required to be considered and stated. Chapter III of the Constitution of India enumerates the fundamental rights which have been time and again construed to be inherent and any law which abrogates and abridges such fundamental rights would be violative of the basic structure doctrine including right of protection imposed against arrest and detention in certain cases contemplated under Article 22 of the Constitution of India. Article 22 (1) and (2) read thus:- "22. Protection against arrest and detention in certain cases - (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. (2) Every person who is arrested and detained in custody shall ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....z; NRAI (2 Work orders), Delhi Darbar (3 Work orders), Bohra Kitchen, Wadia Kitchen - Mini Bodhanwala (3 Work orders), Blue Sea Worli (2 Work orders), Dhanraj Shetty (2 orders), Laxmi SHG - Masurkar Madam, Shivsena - Rajashree Madam, Yogesh, Dhanraj Shetty, Sai Palace, Vaishnavi Kitchen - Bala Kadam, Force One Multi Services, Sundeep Hotels, Iskon Pankaj Singh, Classic Fast Food - Shetty, Amini Industries, Sheetal Ashish Hotel Pvt Ltd - Bhola Yadav, Shetty Brothers (Link View), Sheetal Ashish Hotels Pvt Ltd, Hotel Prasad International Dahisar Check Naka, Laxman Yadav Kitchen, Dinesh N. Shetty, SHG N Ward, Shetty Dinesh & Pravin Shetty all throughout Mumbai. 15.1. From the above, it is seen that Vaishnavi Kitchen - Bala Kadam and Force One Multi Services have been issued one Work order each. Material has been placed before me to show the application made by them in the prescribed format giving all such details appended thereto along with licenses issued by the Food and Drug Administration, Maharashtra State and the Health Department of the Municipal Corporation which are appended in Volume -I at page Nos. 1 to 50 of the Chargesheet. Licenses appended are all valid licenses issued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore the Court in the above facts is that when the investigation is completed, is further incarceration of the Applicant warranted or otherwise. 15.2. In this regard, I would like to refer to the provisions of Section 45 of the PMLA which reads as under:- "45. Offences to be cognizable and non-bailable - (1) 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, 3[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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rectorate of Enforcement AIR 2024 SC 4760. Paragraph Nos. 24 to 28 read as under:- "24. There are a few penal statutes that make a departure from the provisions of Sections 437, 438, and 439 of the Code of Criminal Procedure, 1973. A higher threshold is provided in these statutes for the grant of bail. By way of illustration, we may refer to Section 45 (1) (ii) of PMLA, proviso to Section 43D (5) of the Unlawful Activities (Prevention) Act, 1967 and Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (for short, 'NDPS Act'). The provisions regarding bail in some of such statutes start with a non-obstante Clause for overriding the provisions of Sections 437 to 439 of the Code of Criminal Procedure. The legislature has done so to secure the object of making the penal provisions in such enactments. For example, the PMLA provides for Section 45 (1) (ii) as money laundering poses a serious threat not only to the country's financial system but also to its integrity and sovereignty. 25. Considering the gravity of the offences in such statutes, expeditious disposal of trials for the crimes under these statutes is contemplated. Moreover, such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K.A. Najeeb, can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction Under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45 (1) (ii) to become instruments in the hands of the ED to continue incarceration for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rocess or activity connected with the 1[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. [Explanation.--For the removal of doubts, it is hereby clarified that,-- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:-- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, 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.]" 16.1.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....call that in England, bail in treason or felony is discretionary in the High Court or Courts having jurisdiction to try the offence: R. v. Mc Cartie [1859] 11 Ir. C.L.R. 188; R. v. Platt [1777] 1 Leach 157; on the other hand, bail in misdemeanour is said to be of right at common law : R. v. Spilsbury [1898] 2 Q.B. 615; R. v. Badgar [1843] 4 Q.B. 468; Re Frost [1888] 4 J.L.R. 757; see also R. v. Crowe [1829] 4 C. & P. 251; R. v. Beardmore [1836] 7 C. & P. 497; R. v. Osborne [1837] 7 C. & P. 799; King v. Fortier [1902] 13 Quebec K.B. 251. This distinction is reflected in sections 496 and 497 of the Criminal Procedure Code which treat respectively of the grant of bail in cases of what are described in the phraseology of the Indian Legislature as bailable and non-bailable offences. 15. The substance of the matter is that the discretionary power of the Court to admit to bail is not arbitrary, but is judicial, Manikam v. Queen [1882] 6 Mad. 63, and is governed by established principles. The object of the detention of the accused being to secure his appearance to abide the sentence of law, the principal enquiry is, whether a recognizance would effect that end. In seeking an answe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be proper to equate these cases with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, kidnapping for ransom, mass violence, etc. Neither is this a case where 100/1000s of depositors have been defrauded. The allegations have to be established and proven. 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 of the Code and Section 45 of the PML Act. The reason is 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. When the trial is not proceeding for reasons not attributable to the Accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years." 20....