TaxTMI 
TaxTMI 
2025 (3) TMI 510
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....CTS 2. Facts of the case relevant for adjudication of the instant bail application are as follows: The applicant is a retired officer of the Indian Administrative Services with a distinguished and unblemished service record. He retired as Joint Secretary in the Department of Commerce and Industry, Chhattisgarh in May 2023. The ECIR is a second ECIR and the first being ECIR/RPZO/11/2022 which was quashed by the Hon'ble Supreme Court vide order dated 08.04.2021 with a categorical finding that no scheduled offence is made out and there were no proceeds of crime in relation to ECIR 11 and the Prosecution Complaint filed therein. The said ECIR was registered merely 3 days after the quashing of the first ECIR on the same alleged liquor scam making the same allegations arising out of the same transactions. 3. Chhattisgarh State police registered FIR bearing No. 04/2024 dated 17.01.2024 at EOW/ACB, Raipur under Sections for the offence punishable under Sections 120-B, 420,467,468,471 of IPC and Section 7 & 12 of the Prevention of Corruption Act against Mr. Anil Tuteja (retired IAS) then Joint Secretary in CG State, Anwar Dhebar, Mr. Arunpati Tripathi (ITS) then Special Secretary, ....
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.... applicant Mr. Anil Tuteja, Arun Pati Tripathi and Anwar Dhebar was working under the aegis of retired Indian Administrative officer Mr. Vivek Dhand who was also the beneficiary of the scam. The syndicate received commission from the distillery owners by increasing, parallel manufacturing and supplying duplicate liquor through the FL-10A license between February 2019 to June 2022 by making illegal earning of Rs. 2161 crores. 8. The FIR for the predicate offence as discussed above is registered by ACB/EOW, Raipur Chhattisgarh under Sections 120-B, 420,467 and 471 IPC and Sections 7 & 12 of the P?C Act which are scheduled offence included in Part A of the schedule to PMLA ,2002 as defined under Section 2(1)(y) of the Act. Enquiries were initiated under PMLA against the suspected persons after recording brief facts of the scheduled offence and initiating money laundering investigation in file No. ECIR/RPZO/04/2024 on 11.04.2024 by the officials of the Directorate of Enforcement, Raipur. 9. The respondent/ED has analyzed the predicate offence FIR, documents including the statements recorded under Section 50 of the PMLA, 2002 shared by the Assistant Director, Prosecution Complaint....
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....pathi was assigned with the task to maximize the bribe commission collected on liquor procured by M/s. CSMCL and to make necessary arrangement for sale of non-duty paid liquor in the CSMCL run shops. Arun Pati Tripathi was supported by Anwar Dhebar and Senior IAS Officer in this operation. In furtherance of his plans, Anwar Dhebar gave the task of cash collecting to Vikas Agrawal @ Subbu and the logistics were set to be the responsibility of the present applicant - Arvind Singh. 14. In the investigation, it has been established that it has come that massive corruption has taken place in the Excise Department since 2019 to 2023 in multiple ways. The total extortion amount is around Rs. 2000 crores. This amount is nothing but rightful amount which should have gone to the State Exchequer and have been taxed and yielded revenue for Central and State government. Thus this is the proceeds of crime which ED is investigating and trying to establish money trial and trace the assets created out of these proceeds of crime. SUBMISSION ON BEHALF OF THE APPLICANT 15. Contention of Shri Khurana, learned counsel for the applicant is that the application of the applicant has been erroneous....
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....ED (2023) SCC OnLine SC1393 has held that : "27. However, we are also concerned about the prolonged period of incarceration suffered by the appellant - Manish Sisodia. In P. Chidambaram v. Directorate of Enforcement48, the appellant therein was granted bail after being kept in custody for around 49 days, relying on the Constitution Bench in Shri Gurbaksh Singh Sibbia and Others v. State of Punjab, (1980) 2 SCC 565. and Sanjay Chandra v. Central Bureau of Investigation, (2012) 1 SCC 40 that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case. Ultimately, the consideration has to be made on a case to case basis, on the facts. The primary object is to secure the presence of the accused to stand trial. The argument that the appellant therein was a flight risk or that there was a possibility of tampering 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....
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....nd 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." 19. Further he has relied upon the decisions of Satender Kumar Antil Vs. Central Bureau of Investigation (2002) 10 SCC 561; Surinder Singh Alias Shingara Singh Vs. State of Punjab (2005)7 SCC387 and Kashmira Singh Vs. State of Punjab (1977) 4 SCC 291. In the matter of Manish Sisodia Vs. ED and CBI (supra), it has been held that : 37. Insofar as the contention of the learned ASG that since the conditions as provided under Section 45 of the PMLA are not satisfied, the appellant 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....
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....usion of proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year. Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and keeping in view the peculiar facts and circumstances of this case, it seems to us that the rigours of Section 45 of the Act can be suitably relaxed to afford conditional liberty to the petitioner. Ordered accordingly." 44. The learned Special Judge and the learned Single Judge of the High Court have considered the applications on merits as well as on the grounds of delay and denial of right to speedy trial. We see no error in the judgments and orders of the learned Special Judge as well as the High Court in considering the merits of the matter. In view of the observations made by 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....
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....y depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant." 22. In the matter of Gudikanti Narasimhulu Vs. Public Prosecutor, High Court of Andhra Pradesh (1978) 1 SCC 240 it has been held as under: The significance and sweep of Art. 21 make the deprivation of liberty 'a matter of grave concern and permissible only when the law authorizing it is reasonable, even-handed and geared to the goals of community good and State necessity spelt out in Art. 19. Indeed, the considerations I have set out as criteria are germane to the constitutional proposition I have deduced. Reasonableness postulates intelligent care and predicates that deprivation of freedom- by refusal of bail is not for punitive purpose but for the bi-focal interests of justice- to the individual involved and society affected." 23. Next contention of the learned counsel for the applicant is that the applicant shall be severely prejudiced and prejudged if he i....
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....ere is absolutely no material to show any proximity of the applicant with the erstwhile Chief Minister of Chhattisgarh or any role played by him in the working or appointment of any individual either at CSMCL or in the Excise Department or any involvement in the liquor trade in the State of Chhattisgarh. He submits that the very individuals who gave incriminating statements against the applicant have retracted solely for the reason that the same were coerced out of them by the ED. It is submitted that the alleged chats being relied upon by the ED, it is submitted that the same has been derived from the devices which have been accessed by various authorities at various instances without any intimation to the applicant and without due process and thus the possibility of tampering with the same cannot be denied. 26. He further contended that the applicant satisfies the twin conditions for grant of bail in terms of Section 45 of the PMLA. In terms of Section 45 of the PMLA, two conditions are to be satisfied before a person is granted bail for offence under Section 3 of the PMLA ie. firstly the public prosecution is given an opportunity to oppose the application and second if public....
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....in the increase in price of liquor is completely false and that the prices were in fact increased at the request of the Distillers themselves. It is well settled law that the statement of co-accused person is an extremely weak piece of evidence and cannot be treated as substantive evidence against the other co-accused persons. Therefore all the statements under Section 50 of the PMLA sought to be relied upon by the ED to substantiate its allegations against the applicant are inadmissible and does not form the basis for denial of bail. He has relied upon the judgment of Haricharan Kurmi Vs. State of Bihar, AIR 1964 SC 1184, wherein it has been held that: "13. As we have already indicated. this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co- accused person. in dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach to adopt is to consider the other evidence against such an accused person, and if the said evidence appears to be satisf....
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.... of a co-accused person; it must (1) (1911) I.L.R. 38 Cal. 559 at p. 588. begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence. That, briefly stated, is the effect of the provisions contained in s. 30. The same view has been expressed by this Court in Kashmira Singh v. State of Madhya Pradesh(1) where the decision of the Privy Council in Bhuboni Sahu's(2) case has been cited with approval. 16. Considering the evidence from this point of view, we must first decide whether the evidence other than the confessional statements of the co- accused persons, particularly Ram Surat, on whose confession the High Court has substantially relied, is satisfactory and tends to prove the prosecution case. It is only if the said evidence is satisfactory and is treated as sufficient by us to hold the charge proved against the two appellants, that an occasion may arise to seek for an assurance for our conclusion from the s....
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....icers have been made accused in the instant case. Various other stake holders are being protected by the different prosecuting agencies with the aim and hope of extracting false statements implicated inter alia from them which clearly shows the mala fide and pick and choose manner of investigation being conducted by the Prosecuting Agency. He submits that while the allegations of a multi crore syndicate has caused loss of the State exchequer in the State of Chhattisgarh, neither any change has been brought about to the existing liquor policy nor any license of any hologram manufacturer/distiller/cash collection agency etc. has been cancelled. No action under Section 8 of the Prevention of Corruption Act has taken against these individuals by the prosecuting agency and the liquor trade has been continuing as usual. He submits that even otherwise, any apprehension regarding the applicant being a flight risk or tampering with evidence or influencing witnesses can be taken care of by imposing suitable conditions on the applicant while granting bail. He contended that the there is no material on record to suggest that the applicant does not satisfy the triple test as there is no allegat....
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....above factors and the facts and circumstances of the case, we are of the view that the appellant is entitled to be granted bail." 31. It is submitted that the applicant is a senior citizen suffering various medical ailments including osteoarthritis, liver disorder, raised GGTP, hyponatremia, hypertension, hypothyroidism, anxiety and prolonged custody will have deleterious effect on his health. He has also filed certain documents to this effect. As per settled law, no case under the PMLA can continue without an underlying scheduled offence and therefore prays that the applicant may be granted regular bail in ECIR/RPZO/04/2024 dated 11.04.2024 registered by the Enforcement Directorate under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002. SUBMISSION ON BEHALF OF THE RESPONDENT/ED 32. It has been contended by Dr. Saurabh Pandey, learned counsel for the respondent/ED that the applicant was a promotee IAS officer who retired in the year June 2023. He was the most powerful bureaucrat in Chhattisgarh, wielding enough power to control the police, mining, environment and liquor departments by placing the individuals of his choice in key position. The applicant was th....
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....directly from the FL-10A license companies on the directions of Anwar Dhebar. The properties worth Rs. 15.82 crores acquired by the accused and his family members, during the period of the scam, have already been attached vide PAO bearing No. 04/2024 dated 02.05.2024. It is by this way the applicant has actively and willingly participated in the liquor scam and generated proceeds of crime owing to the role played by him. He had acquired the proceeds of crime and is involved in their concealment, layering and use of the proceeds of crime and ha committed the offence of money laundering as defined under Section 3 of the PMLA, 2002 punishable under Section 4 of the PMLA, 2002. 35. Next contention of learned counsel for the respondent/ED is that the mandatory provisions of Section 45 of the PMLA are not being satisfied. One of the conditions prescribed by the Section pertains to a finding by the Court that the accused is "not guilty of the offence of Money Laundering" and that he is not likely to commit any offence while on bail. Thus, in view of the facts putforth, the possibility of the applicant being "not guilty of the offence of Money Laundering" is highly unlikely. In the ligh....
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....nt observation is as under: "38.... Crimes are now committed by influential persons belonging to upper class in organized manner after well planning by use of modern gadgets in course of performance of their official, professional, business activities in which they have expertise. Criminal Acts committed by professionals, businessmen and public servants, it is very difficult to identify whether sober and civilized activity was committed or criminal act was committed. Such criminals have o criminal self image, further by societal members there is no labelling which affect seriously pursuits to cope with crime and criminality,. Economic offenders are only concerned with their personal gain even at the cost of irreparable and serious loss to society. "40.... Criminal acts committed by such persons are creating a serious challenge before criminal justice system; It is difficult to identify whether crime was committed, when it is identified that crime was committed, it is difficult to find out clues and thereby evidences; when evidences are available, nature of evidences is completely different as not possible to be collected by simple investigating presented by prosec....
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....iberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum left behind to be borne by the unfortunate "starry eyed" petty investors. The perpetrators of such deviant "schemes" including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial "faustian bargain" and are grossly unmindful of untold miseries of the faceless multitudes who are left high and dry and consigned to the flames of suffering." 38. In yet another decision, ie. in the case of Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation; (2013) 7 SCC 439, wherein Hon'ble the Apex Court in paragraphs 34 & 35 has held as under:- "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail, the court has to keep in mind the nature of accusat....
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.... which would frustrate the further proceedings. He submits that satisfaction of triple test is not sufficient for persons arrested under PMLA, 2002 as this triple test stage will come when the applicant satisfy the twin conditions given under Section 45 of the PMLA, 2002. 42. The contention of the applicant that there is long delay in trial is misconceived and therefore it has been denied by the counsel for the respondent. He submits that the Prosecution Complaint has been filed against the applicant on 19.06.2024 and cognizance has been taken by the Special Court on 5.10.2024 and ED had demonstrated complete modus operandi adopted by the applicant for omission of the offence of money laundering and investigation against the applicant is complete but the investigation on money trial and identification of remaining proceeds of crime and the persons involved therein. It has been submitted that the trial in the PMLA is at appearance Stage and the next date of hearing is scheduled for 22.03.2025. the delay in trial is no ground for claiming bail. It is submitted that there are only 35 witnesses in the Prosecution Complaint filed by the Directorate and since there are less witnesses ....
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....e sheet. Therefore, the respondent's presence in the custody may be necessary for further investigation. Furthermore we cannot approve the order of the High Court, in directing the concerned investigating authority to file the charge sheet within a month, as the case involves almost 32 accused and a complex modus operandi." 45. So far as the submission on behalf of the applicant that he had filed Special leave petition (SLP) No.12124/2024 against the order dated 20.08.2024 passed by this Court, the petitioner had raised several points including illegal arrest, the illegality of the ECIRs, malafide investigation etc. before the Apex Court however, the same was withdrawn by the applicant on 6.12.2024. Thus, from the perusal of the material on record, the arrest and subsequent order of remand passed by the learned Magistrate or the Special Judge is non-violative of any of the provisions of the PMLA Act or the Cr.P.C. The Apex Court in the matter of State of Orissa Vs. Mahimanda Mishra 2018 (10) SCC 516, has held that "It is by now well settled that at the time of considering an application for ail, the Court must take into account certain factors such as the existence of a....
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.... not be considered. Moreover, in view of what is stated in para 6 of her affidavit, no doubt, possibility of cancer of prostate is raised but no specific diagnosis about the cancer of prostate is made. 24. The attempt of the petitioner is to get bail for unspecified period on medical ground which cannot be entertained in view of the serious charges made against him and well-founded possibility of tampering with the evidence." 47. Another contention is that the averments made by the counsel for the applicant that the grounds of arrest and the reasons to believe do not meet the threshold of Section 19 of the PMLA an are grossly insufficient and there an be no necessity of arrest in the case is strongly denied by the learned counsel for the respondent and it is submitted that role of the applicant in the offence of money laundering is clearly established. The applicant was found to have committed the criminal activities related to the scheduled offence and thereby generating and possessing the proceeds of crime as defined under Section 2 (i)(u) of PMLA, 2002. The IO had reasons to believe on the basis of matter in his possession that the applicant was involved in money lau....
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.... material against a person. Under the PMLA, ED officers can arrest a person if they have reasons to believe based on the material in their possession that the individual is guilty. It has been held by the Apex Court that PMLA allowed arrests on the subjective opinion of ED officer, the court said an officer's "reasons to believe" that a person was guilty an deserved arrest should not be based on mere suspicion. "Suspicion requires a lower degree of satisfaction and does not amount to belief. Belief is beyond speculation or doubt.... Existence and validity of the 'reasons to believe' goes to the root of the power to arrest. The subjective opinion of the arresting officer must be founded and based upon fair and objective consideration of the material, as available with them on the date of arrest. 52. The judiciary's interpretative role in shaping due process within the PMLA represents a significant stride. Emphasizing the written communication of arrest grounds is vital for transparency and accountability. However, this positive development raises practical questions for the ED. The nuanced compromise between oral communication and subsequent provision of written grounds reflects ....
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.... (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. [(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorized, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in [* **] sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail." 55. The Apex Court in the matter of Directorate of Enforcement Vs. Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on 12.05.2023 has held as under:- 6. At the outset, it is required to be noted that respective respondent No. 1 - accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Sectio....
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.... the High Court has not considered the rigour of Section 45 of the PML Act, 2002he Supreme Court on July 12 held that the power to arrest under the Prevention of Money Laundering Act (PMLA) cannot be exercised on the "whims and fancies" of Directorate of Enforcement (ED) officers. 6.1 Even otherwise, the High Court has not at all considered the nature of allegations and seriousness of the offences alleged of money laundering and the offences under the PML Act, 2002. Looking to the nature of allegations, it can be said that the same can be said to be very serious allegations of money laundering which are required to be investigated thoroughly. 6.2 Now so far as the submissions on behalf of the respective respondent No. 1 that respective respondent No. 1 were not named in the FIR with respect to the scheduled offence(s) and/or that all the other accused are discharged/acquitted in so far as the predicated offences are concerned, merely because other accused are acquitted/discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1. An enquiry/investigation is going on against respective respondent No. 1 with respect t....
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.... counsel for the applicant, it appears that there is no attachment of property against accused persons being distillers despite quantifying the same at over 200 crores and no proceedings under Section 8 of the PC Act has been initiated against them. The distillers, Excise officers, Siddarth Singhania and FL-10A license holders have not been made accused which shows that there is pick and choose manner in the investigation. It has been revealed that the utilization of the proceeds of crime in purchase of assets by the applicant cannot be ruled out. The fact that the applicant had actively participated in the commission of predicate offence; had acquired proceeds of crime and had substantial share in proceeds of unaccounted liquor cannot be ignored. It is also true that the applicant has suffered long period of incarceration and the trial has not yet commenced and is not likely to conclude but 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 of Criminal Procedure and Section 45 of the PML Act. 58. Thus, it is held that after examining the entire documents, it i....