AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 654
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....Section 13 (1) (d) of the Prevention of Corruption Act, 1988, (for short, 'PC Act'), registered with CBI, ACB, Chandigarh. Factual Background 2. The present ECIR arises out of FIR/RC being RCCHG2020A0021 which was registered with CBI on a complaint filed by the then Chief Manager of Punjab National Bank, Hindu College Branch, Sonipat, Haryana, against M/s Sunstar Overseas Ltd. (for short, 'accused company') and its directors. As per the said FIR, accounts of 5 banks, namely, PNB, ICICI Bank, IDBI Bank and State Bank of India were declared NPAs (Non-Performing Assets). It was alleged that the accused company had availed various credit facilities from 'Consortium of 9 lender Banks' [Punjab National Bank; Corporation Bank; City Union Bank; Karur Vysya Bank; Karnataka Bank; Canara Bank; ICICI Bank; IDBI Bank; and State Bank of Patiala] and had diverted/siphoned off the said loan amount, thereby, failing to repay the said loan amounts to the banks. It was also alleged that the accused company had also violated terms and conditions of the loan agreements in respect of hypothecated goods as the said goods were disposed of without depositing sale proceeds in their Cash Credit A....
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.... company through its directors/promoters was indulged in generation of proceeds of crime to the tune of Rs. 539 Crores approximately. It was further revealed that groups of firms/companies [M/s Star Global Multi Ventures Pvt. Ltd./SGMV and M/s. Star Rice Land Pvt. Ltd./SRLP] were created as fictitious debtor of the accused company for the sole purpose of generation of 'proceeds of crime' by diversion/siphoning off of rice stocks procured out of loan availed from the aforesaid consortium. It was further revealed that the said entities were owned and controlled by ex-directors, promoters of the accused company and were diverting 'proceeds of crime' to a NBFC, namely, Kalptaru Fincap Ltd., (Kalptaru), through layers of ARCs (Asset Reconstruction Companies). It had further emerged that dummy entities, i.e., M/s Shivakriti Agro Ltd., Shivakriti, allegedly owned and controlled by ex-directors and promoters of the accused company, was used as mode for diversion of stocks of rice from the accused company and its fictitious debtor company (SGMV), as noted hereinabove. It was further revealed that proceeds of crime to the tune of Rs. 1.35 Crores were possessed and diverted from SGMV to Shiva....
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....ncealment, diversion and finally, projecting the 'proceeds of crime' involved in the case as untainted property. 10.20.3 That to verify and ascertain above facts, his very good friend-Mr. Ajay Soni, ex-director and shareholder of M/s Shivakriti Agro Pvt. Ltd. (SAPL) in his recorded statement discussed supra, wherein he inter alia stated and accepted that on the directions/ instructions/ requests of Mr. Rakesh Kumar Gulati, he handed over his company-M/s Shivakriti Agro Pvt. Ltd. for operational purposes to Rohit Aggarwal, who was director and controller of M/s Sunstar Overseas Ltd.. Thereafter, ex-directors of M/s. Sunstar Overseas Ltd. appointed new employees in M/s. Shivakriti Agro Pvt. Ltd. from a pool of ex-employees of M/s. Sunstar Overseas Ltd. By this, they assumed control of M/s. Shivakriti Agro Pvt Ltd. and commenced business operations but in the name of Ajay Soni, as he was still director and shareholder. Ajay Soni further revealed that he also signed many documents, such as agreements and board resolutions, as per the instructions of Rakesh Kumar Gulati, without questioning their contents. Ajay Soni further revealed that he had no knowledge of any transacti....
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....evealed that Mr. Ajay Soni and his wife Mrs. Madhu Soni transferred 100% shareholding of their company-M/s Shivakriti Agro Pvt. Ltd. to Mr. Paramjeet and his wife Mrs. Seema Sharma on the instructions of Rakesh Kumar Gulati, who was the common auditor & CA for M/s Sunstar Overseas Ltd. as well as M/s Shivakriti Agro Pvt. Ltd. That some of above facts were also admitted by Rakesh Kumar Gulati in his Statement dated 16-17.01.2024 tendered on oath U/s 17 and testified on 01. 07.2024 Us 50 of the PMLA, 2002. 10.20.6 That to further very the facts disclosed supra, statement dated 27.05.2024 of Mr Navin Kanjwani, M/s. Kalptaru Fincap Ltd. recorded U/s 50 of the PMLA revealed that Rakesh Kumar Gulati arranged the meeting of Rohit Aggarwal with the authorized representatives of M/s. Kalptaru Fincap Ltd, to facilitate major siphoning-of /diversion of the funds of Rs.40 Crore which is nothing but the "proceeds of crime" from M/s. Star Global Multi Ventures Pvt. Ltd., an erstwhile related entity of Sunstar Overseas Ltd., to M/s. Umaiza Infracon LLP which was used for acquisition of Sunstar Overseas Ltd. in NCLT. That furthermore, Vijay Inder Bhatia of Compact Capital Ltd. also stated....
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.... external auditor of the accused company, was neither involved in managing day-to-day affairs of the said company nor was holding any key managerial personnel position in the said company. It is further submitted that the persons who were, in fact, actively participating in the management of the affairs of the accused company have not been arrested by the respondent/ED in the present complaint case. Reliance has been placed on Himansh @ Himanshu Verma v. Enforcement Directorate Order dated 08.07.2024 passed by Hon'ble Supreme Court in SLP (Crl.) Nos. 2438/2024, to contend that in the present case the respondent/ED has arrested the accused persons in a pick and choose manner and based on this ground alone, the present applicant is to be granted bail. 8. Learned Senior Counsel for the applicant has further submitted that the latter was accountant and auditor of the accused company and Shivakriti and the respondent/ED has arrayed him as accused in the present ECIR merely on the said basis without ascribing any specific role. It is further submitted that being an external auditor the applicant never had control over the financial records of the aforesaid companies and he was only pr....
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....esolutions which, in fact, shows that he was actively involved in taking of various key decisions of Shivakriti. Attention of this Court was drawn towards the Statement of Paramjeet, recorded under Section 50 of the PMLA, wherein, in respect of question that who used to take decisions in Shivakriti, he had stated that it was Ajay Soni, who used to manage affairs of Shivakriti. It is also submitted that neither respondent/ED nor Ajay Soni has ever produced any document whereby it can be concluded that the present applicant was discharging any role relating to the internal affairs of Shivakriti. 11. It is the case of the respondent/ED, the present applicant was involved in aiding and assisting Rohit Aggarwal to facilitate funds for Umaiza so that it could acquire the accused company indirectly during CIRP. Learned Senior Counsel has submitted that the said allegation is based on the statement of Navin Kanjwani and the same is in contradiction with his own statement as well as to that of Navin Gupta, who was the director of Kalpataru. It is pointed out that Navin Kanjwani is not associated with M/s Kalpataru in any capacity and any statement made by him in respect of the affairs of....
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....ses. The complaint in the present ECIR has been filed and learned Special Court has taken cognizance of the offence alleged therein. The respondent/ED has cited 26 witnesses in the present complaint and the applicant has been in custody since 01.07.2024. It is further submitted that in view of the V. Senthil Balaji (supra) the trial in both the predicate/scheduled offence as well as the ECIR/complaint case registered with the respondent/ED has to be simultaneous, which is not likely to culminate in near future and keeping the applicant under prolonged incarceration will not serve any purpose. Reliance has also been placed on Pankaj Kumar Tiwari & Anr. v. Enforcement Directorate 2024:DHC:8280, in support of this contention. Submissions on behalf of the Respondent/Directorate Of Enforcement 14. Learned SPP for respondent/ED has submitted that the present applicant is prima facie guilty of commission of offence of money laundering and has not been able to satisfy the twin conditions provided under Section 45 of the PMLA. It is further submitted that the present applicant, while acting as Chartered Accountant/Auditor of the accused company and its other related entities, was look....
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....eeting of Rohit Aggarwal with the authorised representatives of Kalptaru to facilitate major siphoning of the funds of Rs. 40 Crores, a part of proceeds of crime from the loan defaults committed by the accused company, and the same were subsequently utilised in Umaiza for acquisition of the accused company whilst it was undergoing CIRP. Attention of this Court has been drawn towards a chart in the complaint filed by the respondent/ED depicting/showing completed trajectory of activities and processes identified in the money-laundering of bank loans by the accused company as well as its related entities. The said chart is reproduced hereinunder: - Thus, it is submitted that the present applicant is prima facie guilty of the commission of the offences alleged against him in the present complaint. 17. It is further submitted that the present applicant has undergone incarceration merely 9 months and in view of the allegations made against him and the incriminatory evidence revealed during investigation, no latitude is to be granted to him and the present application is to be dismissed at this stage. Analysis and Findings 18. Heard learned Senior Counsel for the applicant as ....
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....eds of crime nor any provisional attachment of property belonging to the applicant has been done by the respondent/ED. It has also been vehemently argued that the alleged main beneficiaries of the proceeds of crime, i.e., ex-promoters/directors of the accused company and its related entities, were charge-sheeted without arrest in the predicate/scheduled offence as well as the present complaint case. 25. The entire case of the prosecution is that the accused company had misappropriated the funds availed through loan from the consortium of banks, and thereafter, diverted the same into different entities and used Umaiza to acquire the control of the said company again through resolution plan, which was passed by NCLT. It is, thus, alleged that the entire process of NCLT was misused and that the present applicant, being an external statutory auditor of the accused company and its related entities, was the key member in the entire conspiracy. Reliance has also been placed on Manish Kothari (supra), to contend that a Coordinate Bench of this Court had granted bail to the applicant therein on similar facts as the said applicant was also arrayed as accused as an external auditor. The re....
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.... only if the predicate/scheduled offence is established in the prosecution of said offence. It was submitted that in view of the fact that the trial in case under PMLA cannot be finally decided unless the trial of predicate/scheduled offence concludes. It has been pointed out that the chargesheet in the scheduled offence has been filed and the case is still at the stage of Section 207 of the CrPC (for supply of documents). It is pointed out that the respondent/ED has still not preferred any application before learned Special Court, Panchkula in the chargesheet filed with respect to the predicate/scheduled offence to get the same transferred before the PMLA Court in Delhi. It is also submitted that 98 witnesses have been cited by the CBI in the predicate/scheduled offence and 26 witnesses have been cited by the respondent/ED in the present complaint case. It is also pointed out there are nearly 8000 documents in the predicate offence and approximately, 6000 documents in the present complaint case. 28. In V. Senthil Balaji (supra), the Hon'ble Supreme Court had further observed and held as under: - "25. Considering the gravity of the offences in such statutes, expeditious....
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....One of the most relevant factor is the duration of the minimum and maximum sentence for 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 Sectio....
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....s where stringent provisions have been made applicable by way of special legislation. The stringent provisions would have to be interpreted with due regard to Article 21 and in case of a conflict, the stringent provisions, such as Section 45 of the PMLA in the instant case, would have to give way. 35. Thus, where it is evident that the trial is not likely to conclude in a reasonable time, Section 45 cannot be allowed to become a shackle which leads to unreasonably long detention of the accused persons. What is reasonable and unreasonable would have to be assessed in light of the maximum and minimum sentences provided for in the statute. In cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The same has to be kept in mind while considering the period of incarceration which has been undergone. 36. In the present cases, both the applicants were arrested on 11-1-2024. They have been in custody since more than 9 months. Moreover, the trial in the predicate as well as the present complaint is yet to commence and would take some time to conclude. It is also pertinent to note that the main accused and other similarly ....
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....s case, the appellant has undergone incarceration for a period of 1 year and 2 months. There are 225 witnesses cited, out of which only 1 has been examined. Therefore, the trial is not likely to be concluded within few years. Hence, a decision of this Court in the case of V. Senthil Balaji v. Deputy Director, Directorate of Enforcement will apply. Paragraphs 27 and 29 of the said decision read thus: "27. Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. The minimum sentence is higher when the scheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45 (1) (ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence.....
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.... an infringement of his fundamental right under Article 21 of the Constitution of India of speedy trial." 5. Our attention is invited to a decision of a coordinate Bench in the case of Union of India through the Assistant Director v. Kanhaiya Prasad2. After having perused the judgment, we find that this was a case where the decisions of this Court in the case of Union of India v. K.A. Najeeb3and in the case of V. Senthil Balaji were not applicable on facts. Perhaps that is the reason why these decisions were not placed before the coordinate Bench. The respondent-accused therein was arrested on 18th September, 2023 and the High Court granted him bail on 6th May, 2024. He was in custody for less than 7 months before he was granted bail. There was no fining recorded that the trial is not likely to be concluded in a reasonable time. In the facts of the case, this Court cancelled the bail granted by the High Court. Therefore, there was no departure made from the law laid down in the case of Union of India v. K.A. Najeeb and V. Senthil Balaji. 6. The learned Solicitor General of India very fairly stated that in the facts of the case, the decision in the case of V. Senth....
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....hout the prior permission of the learned Trial Court. iii. The applicant is directed to give all his mobile numbers to the Investigating Officer and keep them operational at all times. iv. The applicant shall not, directly or indirectly, tamper with evidence or try to influence the witness in any manner. v. In case it is established that the applicant tried to tamper with the evidence, the prosecution will be at liberty to apply for cancellation of his bail. 38. Needless to state that, nothing mentioned hereinabove, is an opinion on the merits of the case or pending trial before the learned Trial Court and observations made herein are only for the purposes of the present bail application. 39. The application stands allowed and disposed of along with all the pending application(s), if any. 40. Let a copy of this judgment be communicated to the concerned Jail Superintendent. 41. Judgment be uploaded on the website of this Court, forthwith. ============= Document 1 Page 237 of 333 Consortium of 09 banks 1 Rs. 196 Crores Loan/ Limit of Rs. 1099.98 Crore (outstanding Rs. 951 Crore) M/s. Sunstar Overseas Ltd. Overseas trades w....