TaxTMI 
TaxTMI 
2025 (2) TMI 562
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....erred by the Application in Special PMLA Case No. 1500 of 2023 vide order dated 04.05.2024. Hence, the present Bail Application. 3. The predicate offence was registered on 24.08.2022 as FIR No. 0756 of 2022 with Azad Maidan Police Station, Mumbai for offences punishable under Sections 120B, 304A, 406, 420, 465, 467, 468, 471 readwith 34 of Indian Penal Code, 1860 (for short 'IPC'). On 12.10.2022 the case was transferred to Economic Offence Wing (for short 'EOW') Mumbai and renumbered as FIR No. 144 of 2022. Subsequently ECIR No. ECIR/MBZO-1/63/2022 was registered on 21.11.2022. Applicant was not named as Accused in the FIR and ECIR. 4. A complaint was lodged by one Member of Parliament alleging that during Covid-19 pandemic, Municipal Corporation of Greater Mumbai (for short 'MCGM') issued two Expressions of Interest (for short EOI) on 22.06.2023 and 25.06.2023 awarding contracts to various agencies including M/s. Lifeline Hospital Management Services Hospital Management Services for providing manpower supply to operate and manage ICU and general Units at Jumbo Covid Centres for the purpose of making treatment available to the citizens. Dr. Hemant Gupta, Sujit Mukund Patkar, ....
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....nagement Services during his tenure. 11. Fifth allegation is that Applicant approved fabricated invoices which were prepared showing requisite deployment of medical personnel on the basis of fabricated attendance sheets aiding generation of proceeds of crime to M/s. Lifeline Hospital Management Services. 12. Sixth allegation is that proceeds of crime were received by Applicant on a monthly basis in kind i.e. laptop and cash approximately amounting to Rs. 20 lakhs. It is alleged that he received proceeds of crime through Dr. Arvind Singh - Accused No. 7 [Accused No. 7 in the Prosecution Complaint filed by ED.] which were routed via Applicant's driver to the Applicant. 13. Mr. Mundargi, learned Advocate for the Applicant has made the following submissions for seeking Applicant's enlargement on Bail. 13.1. He has drawn my attention to the FIR filed by the complainant dated 24.08.2022 appended at page No. 30 of the Application to contend that there are five (5) accused however Applicant is not named as Accused therein. Next he has drawn my attention to ECIR dated 21.11.2022 at page No. 49 of the Application to contend that same five (5) accused are named in ECIR. Those five....
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....endorsement. Subsequently bills / invoices were forwarded to the Accounts Officer of MCGM for final verification and clearance. 13.4. He would draw my attention to statement of Prince Vishwakarma appended at page No. 160 of the Application. In that statement he has admitted that he prepared fabricated attendance sheets on the instructions of Mr. Sujit Patker [Accused No. 1 in the Prosecution Compliant filed by ED.] and Mr. Sunil Kadam to ensure that staff per bed ratio as mentioned in the EOI was maintained. Hence he would submit that Applicant was not the only person dealing with it. 13.5. He would draw my attention to the statement of Ms. Varsha Desai - Junior Accountant and Audit Assistant at MCGM appended at page No. 176 of the Application. It is stated that Additional Municipal Commissioner (Western Suburban) directed her to clear the invoices of M/s. Lifeline Hospital Management Services with complete documents. Hence this would clearly show and reflect that Applicant had no role to play in facilitating fraudulent activities to swindle public money. 13.6. He would submit that bill amount was not based on staff provided but on bed occupancy on day to day basis as stat....
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....ct. 13.10. He would draw my attention to the provisions of PMLA. He would draw my attention to Section 19 (1) and he would and argue that for enforcement of the said provisions 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 that such belief ought to have been recorded in writing which is not done in the present case nor the Applicant is informed of the reasons. He would submit that the grounds of arrest required to be conveyed as mandated under Section 50(1) of Cr.P.C. are not informed. He would submit that indictment of Applicant and his arrest in the present case is on illegal grounds as Applicant had no role in obtaining the Vendor's contract and he did not gain any alleged proceeds of crime. The allegation of conspiracy of the Applicant falls to the ground as he being an employee of MCGM was appointed only for a period of 5 months and only 15 bills were approved / signed by him which were scrutinised by the MCGM's accounts department. He would submit that no proceeds of crime have been recovered from the Applicant till date. 13.11. In support of his abo....
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..... He would draw my attention to the statement of Dr. Arvind Singh who was the Center Operator / in-charge of Dahisar Jumbo Covid Center recorded on 12.07.2023 and 24.07.2023 wherein he has stated that he paid money to Applicant in cash sent in an envelope. He has stated that a laptop worth Rs. 47,418/- was also given to the Applicant. He would draw my attention to the statement of the cheques amounting to Rs. 2,30,000/- without name which were handed over to him which were subsequently deposited in Rajkumar Vishwakarma's account i.e. the driver of Applicant. Attention is also drawn to statement of the driver wherein he states that two cheques of 1,30,000/- and 1,00,000/- without name were handed over by the Applicant and he was instructed to encash them and return the amount in cash. He would submit that this itself shows and reflects the kickback received by Applicant from the Partners of M/s. Lifeline Hospital Management Services which are proceeds of crime. 14.2. On the legal aspect, he would submit that argument of Applicant is that it is necessary to record the belief and reasons in writing and apprise it to the Applicant before his arrest and required to be shown to him is....
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....ourt of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate." 18. Corresponding to the aforementioned rights enshrined in the Constitution is the provisions of Section 50 of the Cr.P.C. pertaining to the grounds of arrest and right of bail to be informed to the person arrested. Section 50 of the Cr.P.C. reads thus:- "50. Person arrested to be informed of grounds of arrest and of right to bail - (1) Every police officer or other person arresting any person without warrant shall forthwith communicate to him full particulars of the offence for which he is arrested or other grounds for such arrest. (2) Where a police officer arrests without warrant any person other than a person accused of a non-bailable offence, he shall inform the person arrested that he is entitled to be released on bail and that he may arrange for sureties on his behalf." 19. In the present case it is seen that on 19.07.2023 Applicant was summoned by ED in connection with the investigation however ED exercised its power under Section 19 (1) of the PMLA arrested Applicant on the same day. It is seen that no grounds of arr....
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....ean. It is prima facie seen that Dr. Arvind Singh and Prince Vishwakarma were responsible for preparing the attendance lists on behalf of the Vendor which were subsequently verified by Dr. Rohan Patani and Dr. Jyoti Contractor before being approved by the Applicant. Furthermore, the invoices were later reviewed and cleared by the MCGM's accounts team, indicating that the Applicant did not unilaterally prepare or approve bills for clearance. Considering the statement of Data Entry Operator / Clerk Prince Vishwakarma appended at page No. 160 and read at page No. 165 for indictment of Applicant it is seen that he has stated that bogus and fabricated invoices / bills used to be prepared on the instructions of Mr. Sujit Patker i.e. Accused No. 1 and one person called Mr. Sunil Kadam. Mr. Sunil Kadam is not an Accused in predicate offence or ECIR. It is further seen that allegation of Applicant receiving 21.6 lakhs is not substaintiated by the prosecution prima facie though it is vehemently argued by the learned prosecutor. That apart allegation of prosecution that it was responsibility and duty of Applicant to have verified on daily basis prima facie cannot be contenanaced as duties of ....
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.... is completed, can twin conditions under Section 45 of PMLA be applied mechanically despite in absence of prima facie evidence, warranting further incarceration of the Applicant or otherwise? In this regard I would like to refer to provisions of Section 45 of PMLA reads as under: - "45. Offences to be cognizable and non-bailable. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees, may be released on bail, if the Special Court so directs: Provided further t....
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....as 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 statutes contain provisions laying down higher threshold for the grant of bail. The expeditious disposal of the trial is also warranted considering the higher threshold set for the grant of bail. Hence, the requirement of expeditious disposal of cases must be read into these statutes. Inordinate delay in the conclusion of the trial and the higher threshold for the grant of bail cannot go together. It is a well-settled principle of our criminal jurisprudence that "bail is the rule, and jail is the exception." These stringent provisions regarding the grant of bail, such as Section 45(1)(iii) of the PMLA, cannot become a tool which can be used to incarcerate the Accused without trial for an unreasonably long time. 26. There are a series of decisi....
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....stitutional 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 a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials Under Article 21of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the Accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the Accused, there is every possibility of the Accused becoming a real threat to society if enlarged on bail. The juri....
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....y; 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.]" 26. Perusal of the above statutory provisions clearly depict that existence of the Scheduled Offence is a sine qua non for alleging the existence of proceeds of crime. Property derived or obtained, directly or indirectly, by a person as a result of criminal activity relating to a Scheduled Offence constitutes proceeds of crime. Thus existence of proceeds of crime at the time of trial of the offence under Section 3 of the PMLA can be proved only if the Scheduled Offence is established in prosecution of the Scheduled Offence. This clearly envisages that even if trial of the case under the PMLA proceeds it cannot be officially tested unless the trial of the Scheduled Offence concludes. In the present case before me in the Scheduled Offence, Chargesheet has been f....
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....asonable procedure. Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied. 12. Independently and as has been emphatically reiterated in Manish Sisodia (II) (supra) relying on Ramkripal Meena v. Directorate of Enforcement (SLP (Crl.) No. 3205 of 2024 dated 30.07.2024) and Javed Gulam Nabi Shaikh v. State of Maharashtra, 2024 SCC OnLine SC 1693, where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of India and that prolonged incarceration before being pronounc....
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....ed. 30. The Applicant was arrested on 19.07.2023 and has been in custody for last 1 year 6 months and 25 days. Except for cognizance being taken, no substantial progress has been made in the trial, and charges are yet to be framed. The prosecution has cited 82 witnesses, making the conclusion of the trial in the near future unlikely. The Applicant has cooperated fully with the investigation. 31. Given the incarceration of Applicant and the absence of any foreseeable conclusion of the trial, continued detention would violate the Applicant's fundamental right under Article 21 of the Constitution, which guarantees a speedy trial and personal liberty. The primary allegation relates to the Applicant's temporary position which no longer persists, mitigating concerns of tampering with the evidence. Any such apprehension can be addressed through appropriate conditions. Continued incarceration of the Applicant would be unwarranted and would amount to punitive detention prior to the establishment of guilt. 32. In view of the above prima facie observations from the record, Applicant is granted bail subject to the following terms and conditions:- i. Applicant is directed to b....