TaxTMI 
TaxTMI 
2025 (1) TMI 1542
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....vernment liquor shops causing loss of Rs. 2161 crores to the State Government. 3. The FIR for the predicate offence as mentioned above is registered by the ACB/EOW, Raipur, Chhattisgarh under Sections 120- B, 420, 467 and 47 IPC and Sections 7 & 12 of the PC Act, which are schedule offences in para 1 & 8 of the Part A of Schedule to PMLA,2002 as defined under Section 2(1)(y) of the Act. The inquiries were initiated under PMLA against the suspected persons after recording the brief facts of scheduled offence and initiating money laundering investigation in ECIR/RPZO/04/2023 on 11.04.2024 by the officials of the Directorate of Enforcement, Raipur Zonal Office. 4. The Directorate has filed total 3 prosecution complaints dated 19.06.2024, 30.08.2024 and 5.10.2024 in the present case. The investigation has revealed that the applicant has knowingly participated in the criminal acts of the syndicate and is in possession of Proceeds of Crime. He was involved with the syndicate for safekeeping and concealment of the illegal commission collected for which he received large amount of Part A commission from the liquor suppliers in his FDR bank account. He is in possession of proceeds of ....
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....NSS, 2023 read with Section 45 and 65 of the PMLA Act, 2002. SUBMISSIONS 8. Contention of Shri Parganiha, learned counsel for the applicant is that the allegations levelled against the applicant in the first supplementary prosecution complaint dated 30.08.2024 filed in the ECIR No RPZO/04/2024 are as follows: a. The bank account of M/s. Dhillon City Mall Pvt Limited was used by the syndicate to park the Proceeds of Crime. b. The money received from FL-10A licensees operating in the State of Chhattisgarh has been shown to be unsecured loans in the accounts which was the commission paid by the FL-10A licensees to the syndicate. c. The alleged proceeds of crime thus infused in the bank account of M/s. Dhillon City mall has ben utilized to make various fixed deposits. d. another company of the applicant namely Petrosun Bio Refineries Pvt. Ltd. got Part -A commission from the Distillers by over invoicing the distillers by 20% purchase of rice. 9. Contention of learned counsel for the applicant is that the respondent has misused its power to arrest with a malafide intention to defeat the fundamental rights of the applicant enshrined under Arti....
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....out a reasonable satisfaction reached after some investigation as to the genuineness and bona fides of a complaint and a reasonable belief both as to the person's complicity and even so as to the need to effect arrest. Denying a person of his liberty is a serious matter. The recommendations of the Police Commission merely reflect the constitutional concomitants of the fundamental right to personal liberty and freedom. A person is not liable to arrest merely on the (2014) 8 SCC 273, (2022) SCC OnLine SC 897 (1994) 4 SCC 260. Necessity to arrest is not a precondition and safeguard mentioned in Section 19 of the PML Act, albeit treated as a part of the general law and exercise of the power to arrest. The legislature being aware of this interpretation has not excluded the application of this principle in Section 19 of the PML Act. suspicion of complicity in an offence. There must be some reasonable justification in the opinion of the officer effecting the arrest that such arrest is necessary and justified. Except in heinous offences, an arrest must be avoided if a police officer issues notice to person to attend the Station House and not to leave the Station without permis....
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.... offence) observed thus: "19. If the State or any prosecuting agency including the court concerned has no wherewithalto 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 applied irrespective of the nature of the crime." 13. In catena of decisions, the Apex Court, while considering the period spent in the custody and there being so likelihood of conclusion of trial within a short span has been pleased to enlarge the accused on bail. He has further relied upon the decision reported in SLP (Crl.) No. 3205/2024, Ramkripal Meena Vs. Directorate of Enforcement and SLP (Crl.) No. 8781/2024, Manish Sisodia Vs. Directorate of Enforcement wherein it has been observed that : "7. Adverting to the prayer for grant of bail in the instant case, it is pointed out by the learned counsel for the ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to been examined. The conclusion of proceedings thus....
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....herewithal 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." 15. Further contention of the counsel for the applicant is that the status of the trial in predicate offence (FIR No.04/2024), four accused persons have been arraigned and 146 documents have been relied which runs into thousands of pages citing 295 witnesses. The first supplementary charge sheet was filed against three accused persons on 27.09.2024 and the second charge sheet was filed on 17.11.2024 arraigning three more accused persons. It is contended by the counsel for the applicant that the further investigation is going on and the learned Special Court (PC Act) Raipur is yet to frame the charges, therefore even the trial in the predicate offence is not likely to conclude early. He has referred to the judgment of the Apex Court in the matter of V. Sentil Balaji Vs. Deputy Director, Directorate of Enforcement, Criminal Appeal....
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....Crl.) No. 14697/2024 has directed the applicant shall be enlarged on bail by producing him before the trial court on 15th January 2025. The Trial court shall enlarge the applicant on bail on appropriate stringent terms including the conditions ie. the applicant shall regularly and punctually attend the trial court and cooperate with trial court for completion of trial at all stages. 18. He contended that even otherwise the applicant has a strong case on merits to satisfy the twin test under Section 45 of the PMLA, 2002. The reminder letters sent by M/s. Dishita Ventures Pvt. Ltd. the then FL- 10A licensee to M/s. Dhillon City Mall Pvt. Ltd. as well as payment of interest component established bolsters that the money infused were actual unsecured loans. The alleged over invoicing to the distillers are legitimate business transaction. He contended that the applicant had already undergone incarceration of 94 days on the same set of facts and allegations. The role attributed to the applicant in the present ECIR by the respondent is identical to that in the prosecution complaint dated 04.07.2023 filed by the non-applicant in ECIR No. RPZO/11/2022 before the learned Special Court (PML....
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....e is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial." 19. He further contended that the applicant has satisfied the triple test ie. flight risk, influencing witnesses and tampering evidence. The applicant has his business setup and is a permanent resident of State of Chhattisgarh. The applicant has complied with all the summons issued by the ED in connection with the ECIR/RPZO/11/2022 and after being released on interim bail in ECIR No. RPZO....
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.... has to be exercised with great care and caution by balancing valuable right of liberty of an individual and the interest of the society in general. If such power is recognized, then it may lead to chaotic situation and would jeopardize the personal liberty of an individual. In Kalyan Chandra Sarkar Vs. Rajesh Ranjan (2005) 2 SCC 42, it has been observed that: "18. It is trite law that personal liberty cannot be taken away except in accordance with the procedure established by law. Personal liberty is a constitutional guarantee. However, Article 21 which guarantees the above right also contemplates deprivation of personal liberty by procedure established by law. Under the criminal laws of this country, a person accused of offences which are non bailable is liable to be detained in custody during the pendency of trial unless he is enlarged on bail in accordance with law. Such detention cannot be questioned as being violative of Article 21 since the same is authorized by law. But even persons accused of non bailable offences are entitled for bail if the court concerned comes to the conclusion that the prosecution has failed to establish a prima facie case against him and/or ....
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....t of the society for the Court to decline bail to the appellants. Shri. Raval would further urge that consistency is the norm of this Court and that there was no reason or change in circumstance as to why this Court should take a different view from the order of 20th June 2011 in Sharad Kumar Etc. v. Central Bureau of Investigation [in SLP (Crl) No. 4584- 4585 of 2011] rejecting bail to some of the co- accused in the same case. Shri. Raval would further state that the investigation in these cases is monitored by this Court and the trial is proceeding on a day-to-day basis and that there is absolutely no delay on behalf of the prosecuting agency in completing the trial. Further, he would submit that the appellants, having cooperated with the investigation, is no ground for grant of bail, as they were expected to cooperate with the investigation as provided by the law. He would further submit that the test to enlarge an accused on bail is whether there is a reasonable apprehension of tampering with the evidence, and that there is an apprehension of threat to some of the witnesses. The learned ASG would further submit that there is more reason now for the accused not....
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....th the witnesses if left at liberty, save in the most extraordinary circumstances. Apart from the question of prevention being the object of a refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any Court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an un- convicted person for the purpose of giving him a taste of imprisonment as a lesson. 15) In the instant case, as we have already noticed that the "pointing finger of accusation" against the appellants is `the seriousness of the charge'. The offences alleged are economic offences which has resulted in loss to the State exchequer. Though, they contend that there is possibility of the appellants tampering witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the relevant considerations while considering bail applications but that is not the only test or the factor : The other factor that also requires to be taken note of is the punishment that could be ....
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....l had observed that derivation of liberty must be considered a punishment unless it is required to ensure that an accused person would stand his trial when call upon and that the courts owe more than verbal respect to the principle that punishment begins after conviction and that every man is deemed to be innocent until duly tried and found guilty. It was underlined that the object of bail is neither punitive nor preventive. This Court sounded a caveat that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of a conduct whether an accused has been convicted for it or not or to refuse bail to an un convicted person for the purpose of giving him a taste of imprisonment as a lesson. It was enunciated that since the jurisdiction to grant bail to an accused pending trial or in appeal against conviction is discretionary in nature, it has to be exercised with care and caution by balancing the valuable right of liberty ofan individual and the interest of the society in general. It was elucidated that the seriousness of the charge is no doubt one of the relevant considerations while examining t....
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.... Shri Pandey that the applicant was safe keeping the proceeds of crime acquired by the syndicate members using his associated companies. He received Rs. 10.50 crores from the FL-10A license which was shown as loan and invested in FDR by him. The original plan was to show these payments as share application money and forfeit the proceeds of crime in his companies. The plan was made in the office of co-accused Anwar Dhebar in his presence. The applicant had used the method of invoicing goods and keeping the margin in his company by doing paper transaction in the name of his company M/s.Petrosun Bio Refineries Pvt. Ltd. whereas this payment was actually the commission generated from the distillers. The applicant had shown unsecured loan from various agro based companies in M/s. Dhillon City Mall Pvt. Ltd. whereas in reality these were the entries against cash that was generated out of funds generated by the syndicate. He submits that the investigation has clearly proven that the agro base companies were just dummy companies and all the unsecured loans provided by them were just bank entries arranged against cash. 28. Contention of Shri Pandey, learned counsel for the ED is that the....
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....d that this amount of Rs. 12.52 crores is part of the Proceeds of Crime. He contends that the source of funds for creation of the five freezed FDRs amounting to Rs. 23 crores was actually the funds received from the FL-10A licencees viz. M/s. Om Sai Beverages Ltd. and M/s. Dishita Ventures Pvt. Ltd. and entry against the cash providers viz. M/s. AK Agro, M/s. Pitambra Trades, M/s. Saraswati Corporation, M/s. Shree EkVira Agro Products and others. Thus, from the above submissions it is clear that the applicant is in possession of the Proceeds of Crime to the tune of Rs. 27.2 crores approximately. He submits that the entities from whom these funds were received have categorically admitted that excess funds or unsecured loans were given to the applicant at the behest of the syndicate. He has placed his reliance in the matter of Gautam Kundi Vs. Directorate of Enforcement (2015) 16 SCC 1. It is also not out of place to mention that the applicant is involved in money laundering of huge sum of money amounting to Rs.28,13,66,989/-(approximately). The Enforcement Directorate has also produced reports and documents as to how the applicant tried to coerce with the co-accused (members of the ....
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....ated 27.07.2022, Hon'ble Supreme Court in Vijay Madanlal Chouhdary and Others Vs. Union of India and Others Special leave Petitioner (Criminal) No. 4634 of 2014 has held that it is no longer res integra that the twin conditions under Section 45 of the PMLA have to be met before grant of bail under PMLA. The relevant observation of the Hon'ble Court is as under: "135. We are conscious of the fact that in paragraph 53 of the Nikesh Tarachand Shah 642, the Court noted that it had struck down Section 45 of the 2002 as a whole. However, in paragraph 54, the declaration is only in respect of further (two) conditions for release on bail as contained in Section 45(1), being unconstitutional as the same violated Articles 14 and 21 of the Constitution. Be that as it may, nothing would remain in that observation or for that matter, the declaration as the defect in the provision [Section 45(1)], as existed then,and noticed by this Court has been cured by the Parliament by enacting amendment Act 13 of 2018 which has come into force with effect from 19.4.2018. We, therefore, confined ourselves to the challenge to the twin conditions in the provision, as it stands to this date post amend....
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....ential to usher in economic crisis. It is expected to be on guard to these kinds of adroit moves with its principal duty should be to scan the entire fact to find out the trust and the veracity of allegations in the present criminal proceedings against the applicant who is an accused under the Scheduled offence case. In the matter of Alok Agrawal Vs. Directorate of Enforcement bearing MCRC No. 6533 of 2019, it has been discussed about the seriousness of the offences of money laundering and their impact on the economy of the country. The allegations in the Enforcement Case Information Report/Prosecution Complaint is a matter of final outcome of the trial but the burden of proof under Section 24 of the PMLA 2002 with regard to the said money is not proceeds of crime and is always on the accused person. "....6. It is true that at present there may or may not be direct or indirect attempts to indulge the applicant in any process of activity connected with the proceeds of crime, there is no attempt on the part of the applicant to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said money was th....
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.... sui generis in nature as they stifle the delicate economic fabirc of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world. The offences, such as this, are committed with a deliberate 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. It is contended by the learned counsel for the respondent that the economic offences constitute a class apart and need to be visited with different approach. In this regard, it is pertinent to refer to the following observations of this Court in Y.S. Jagan Mohan Reddy: "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 ro....
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....led principle of law that while dealing with an application for grant of bail, it is the duty of the Court to take into consideration certain factors and they basically are: (i) the nature of accusation and the severity of punishment in cases of conviction and the nature of supporting evidence, (ii) reasonable apprehension of tampering with the witnesses for apprehension of threat to the complainant and (iii) Prima facie satisfaction of the court in support of the charge." 41. The gravity or seriousness of the offence cannot merely be seen from the severity of punishment and in fact the nature of the offence would also be relevant as the amount of proceeds of the crime in the present case is more than Rs. 2000 crores. In this regard, he has relied upon the judgment of the Apex Court in State of UP Vs. Gayatri Prasad Prajapati AIR 2020 SC 5014, wherein certain guidelines have been laid down vix-a-vis the present facts whereby, the Apex Court while dismissing the bail application has observed that humane treatment to all including an accused is requirement of law. A prisoner, who is suffering from an ailment has to be given due treatment and care while i....
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....r where such property is taken or held outside the county, then the property equivalent in value held within the country or abroad. 45. Considering that the present is a bail application for the offence under Section 45 of PMLA, the twin conditions mentioned thereof become relevant. Section 45(1) 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: ....
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....ng to a scheduled offence --except the proceeds of crime derived or obtained as a result of that crime. XXXX XXXX XXXX 295. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention of money- laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as Section 5(1) envisages that such an action can be initiated only on the basis of material in possession of the authorised officer indicative of any person being in possession of proceeds of crime. The precondition for being proceeds of crime is that the property has been derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. The sweep of Section 5(1) is not limited to the accused named in the criminal activity relating to a scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence), if ....
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....laundering has been regarded as an aggravated form of crime "world over". It is, therefore, a separate class of offence requiring effective and stringent measures to combat the menace of money-laundering." 47. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the Act, 2002. While dealing with a similar provision prescribing twin conditions in MCOCA, this Court in Ranjitsing Brahmajeetsing Sharma(2005) 5 SCC 294, held as under: "44. The wording of Section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible ....
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....nt of bail, in the considered opinion of this Court, prima facie the money trail has been established by the prosecution and therefore, it is not proper to order release of present applicant on regular bail for the reasons mentioned hereinabove. 49. The contention of the applicant that vide order dated 27.11.2024, the Apex Court in Criminal Appeal No. 4844/2024 @ SLP (Crl.) No. 14697/2024 has directed the applicant shall be enlarged on bail by producing him before the trial court on 15th January 2025 directing the trial court to impose stringent terms including the conditions. So far as the case of the applicant in the said case is related FIR No.04/2024 dated 17.01.2024 (arrested on 25.04.2024) registered by the EOW/ACB, Chhatisgarh for commission of offences punishable under Sections 420,467, 471 & 120(B) of the IPC and Sections 7 and 12 of the Prevention of Corruption Act and the present is a case of money laundering under Section 3 & 4 of the PMLA,2002. Hence, the ground taken by the applicant cannot be considered at this stage. 50. What is required is to prima facie, consider the material available on record to satisfy itself and to enable it to reasonably form an opi....