TaxTMI 
TaxTMI 
2025 (10) TMI 269
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....No.08 of 2024, arising out of Supplementary Record of Special Trial (P.M.L.A.) Case No. 09 of 2023, which in turn arises out of E.C.I.R. No. PTZO/07/2022 dated 10.01.2022 and the addendum E.C.I.Rs dated 04.06.2023 and 09.11.2023, registered for the offence under sections 3 and 4 of the Prevention of Money Laundering Act, 2002, pending before the Court of Learned District and Sessions Judge-cum-Special Judge (P.M.L.A.), Patna. 3. The nucleus of the entire matter is that several F.I.Rs. were registered by the Bihar Police against M/s Aditya Multicom Private Limited (for short "M/s. AMPL") and others for the offence under the Mines and Minerals (Development and Regulation) Act of 1957, the Bihar Minerals (Concession, Prevention of Illegal Mining, Transportation and Storage) Rules, 2019, the Indian Penal Code, 1860 and other penal provisions for the alleged wrongful loss to the State exchequer to the tune of Rs. 2,09,76,53,871/-. 4. Based on the aforesaid, several F.I.Rs and also F.I.R in connection with Dehri Nagar (Dalia Nagar) P.S. Case No. 407 of 2021 for the offence under sections 379, 384, 406, 411, 420, 467, 468, 471 read with sections 34 and 120-B of the Indian Penal Code....
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.... Kolkata, which resulted in recovery of physical documents relevant for investigation, seizure of bank accounts, fixed deposits worth about Rs.6.85 crore and seizure of cash amounting to Rs.24.6 lakhs. Further during the course of investigation, it was also gathered that the Income Tax Department, had carried out searches under the provisions of the Income Tax Act, 1961 in the month of February, 2023 at the premises of one Ashok Kumar, Director of M/s. Broad Son Commodities Private Limited and his associate one Sudama Kumar and a syndicate member Radha Charan Sah. The investigation further revealed that the documents seized from the premises of aforesaid Radha Charan Sah and Ashok Kumar included increminating materials i.e. details of ledger of income and expenditure related to sale of sand from multiple river banks (ghats) including those at Rohtas and Aurangabad districts along with profit sharing percentages among the syndicate members. It was alleged that the entries recorded therein were further corroborated with the bank transactions of M/s AMPL and other entities involved in illegal sand mining. It was also alleged that the documents seized from the premises of Radha Charan ....
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....such as cardiac, nephrological, liver and spinal. He also submits that the petitioner has an unblemished long career as a Chartered Accountant since 1984 and he had also served as the Chairman of the Eastern Indian Regional Council of I.C.A.I. during 2002-03. The petitioner on account of his old age and multiple medical issues, had resigned from his chartered accountancy firm in the month April, 2004. 10. Learned Senior Counsel for the petitioner further submits that the on the basis of the allegations levelled against the petitioner in the Second Supplementary Prosecution Complaint, no case under section 3 and 4 of the P.M.L.A. is made out and the petitioner qualifies the twin conditions as envisaged in section 45 of P.M.L.A. 11. In reply to the allegation that the petitioner has assisted M/s. AMPL in projecting and concealing of the Proceeds of Crime, learned Senior Counsel for the petitioner submits that the main allegation is that while conducting the audit of M/s. AMPL the petitioner exaggerated revenue from alleged non-existent businesses such as vegetables, fish and earthen clay, is wholly unfounded. Learned Senior Counsel has emphasized that the premise of such allega....
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....itted by learned Senior Counsel that that said Sadashiv Prasad Singh had been acting as Chief Executive Officer of M/s AMPL during the period of commission of alleged money laundering. Adverting to the statement of said Sadashiv Prasad Singh recorded under section 50 of the P.M.L.A. on 06.09.2023, which has been relied by the Enforcement Directorate, it has been submitted that a bare perusal of the statement of said Sadashiv Prasad reveals that he does not know anything about the workings of M/s. AMPL. Further, the Enforcement Directorate had arrested the Directors of M/s. AMPL namely, Jag Narayan Singh and Satish Kumar Singh and neither of them had indicated any indulgence of the petitioner in the commission of alleged offence. It is vehemently argued that even though an unaccounted cash of Rs. 24,00,000/- has been recovered/seized from the house of said Sadashiv Prasad Singh yet the Enforcement Directorate has not chosen to arrest him and rather subsequently concocted statement has been procured by the Enforcement Directorate from him in order to justify its otherwise hopeless case against the petitioner. It is emphasized that the Enforcement Directorate had seized the Books of A....
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....uments including annual returns and shareholding records of M/s. AMPL, as filed with the Registrar of Companies (RoC), unequivocally establishes that since 30.09.201l, the shareholding of M/s AMPL was vested in Mr. Jag Narayan Singh, Mr. Satish Singh, and the entities owned by them including Mahabir Fuels (Aurangabad) Pvt. Ltd. It is argued that the baseless nature of allegation is further underscored by the fact that neither the petitioner nor any of the companies allegedly linked to him had any control or influence over M/s. AMPL during the period relevant to the present investigation. It is a well-settled principle of law that allegations of financial misconduct or criminal liability must be substantiated by cogent documentary evidence. However, in the in instant case, the Enforcement Directorate has completely failed to present any credible material linking the petitioner to the alleged acquisition of shares in M/s. AMPL and mere reference to companies without any corroborative evidence, does not suffice to establish criminal liability. The statutory records confirm that between 31.03.2010 and 31.03.2016, the shareholders of M/s AMPL were Jag Narayan Singh, Mr.Satish Kumar Sing....
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....y the petitioner from records perused by him in the capacity of an accountant, it had extended an unsecured loan to the tune of Rs. 1 crore to M/s AMPL in the year 2014 i.e. much prior to the commission of alleged offence. Further, Samskar Financial Services Private Limited had received money from M/s. AMPL towards the interest and principal of loan amount. 21. On the allegation that the petitioner is a member of an organized syndicate, the learned Senior Counsel has submitted that the same is an utter contradiction to the stand taken by the Enforcement Directorate in the provisional Attachment Order No.01 of 2024. To support the aforesaid stand, the learned Senior Counsel submits that the Enforcement Directorate had not mentioned the name of the petitioner as one of the alleged members in the provisional attachment order. Further, the Enforcement Directorate has allocated 100% of the said alleged syndicate where the name of the petitioner does not appear in any capacity. 22. Lastly, it has been submitted by learned Senior Counsel that co-accused Ajay Singh, who was also made an accused in the same Second Supplementary Prosecution Complaint and thereafter he was arrested by t....
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....egal sand mining done by M/s. AMPL in the districts of Aurangabad and Rohtas. The proceeds of crime amounting to Rs. 7,10,37,580/- was seized or frozen during the course of search operation and has been subsequently confirmed by the Adjudicating Authority. It has further been stated that the firm of the petitioner i.e. J. Gupta & Company is the auditor of M/s. AMPL since the year 2005. Summons were issued to the petitioner for personal appearance on various dates, however, he kept on avoiding the investigation by not joining the same on various flimsy grounds and he appeared only on 21.08.2023 and 11.09.2024. 27. It has further been stated that the petitioner in his statement recorded under section 50 of PMLA stated that he is the only Chartered Accountant for M/s AMPL for last 15 years and his firm was carrying out the audit work of the company. Further, the investigation revealed that the Audit report of the company is signed by one Nancy Gupta, who is the daughter of the petitioner and the Partner at the firm. However, as per her statement recorded under section 50 of the PMLA, the final audit of M/s. AMPL is done on the directions of her father i.e. the petitioner. Further, ....
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....ed in the case of State through D.C.P. Special Branch vs. Jaspal Singh Gill reported as (1984) 3 SCC 555 and Satendra Kumar Antil vs. C.B.I. & Anr. reported as (2022) 10 SCC 51. 29. It has also been stated that mere attendance of the petitioner in response to summons does not automatically imply cooperation in the investigation. The arrest order clearly states that the petitioner was withholding information and not co-operating with the investigation. The purpose of issuing summons is distinct from the powers of arrest provided under section 19 of the P.M.L.A. 30. In the counter affidavit, the Enforcement Directorate has placed reliance on the following decisions to substantiate their argument for denial of bail under section 45 of the PMLA for failure to comply with the twin conditions therein. i. Tarun Kumar vs. Assistant Director, Directorate of Enforcement reported as 2023 SCC OnLine SC 1486. ii. Anoop Bartaria & Ors. vs. The Directorate of Enforcement reported in 2023 SCC OnLine SC 477. iii. Directorate of Enforcement vs. M. Gopal Reddy & Anr reported as 2022 SCC OnLine SC 1862. iv. Saumya Chaurasia vs. The Directorate of Enforcement r....
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.... supported by other material, making it reliable and admissible. Reliance is placed on the following decisions:- i. Vijay Madanlal Choudhary vs. Union of India reported as (2023) 12 SCC 1. ii. Kashmira Singh vs. State of Madhya Pradesh reported as AIR 1952 SC 159; iii. Rohit Tandon vs. Directorate of Enforcement reported as (2018) 11 SCC 46; iv. Enforcement Directorate vs. Aditya Tripathi reported as (2023) SCC OnLine SC 619. 35. It has also been stated that the investigation revealed that the petitioner owned and controlled Kolkata-based paper/shell companies which invested Rs. 1,00,00,000/- in M/s AMPL and the petitioner in his statement has accepted that several directors and shareholders of entities like Pigeon Barter Pvt. Ltd., Samskar Financial Services Pvt. Ltd., Aachman Sales Private Limited and Bhagya Laxmi Commerce Pvt. Ltd. are either employees or partners of the firm of the petitioner and were working under his instructions. Therefore, it is evident that these individuals serve as nominal directors to facilitate control by the petitioner. Further, the Enforcement Directorate has provided bank account statements of Samskar Financial....
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....plementary Prosecution Complaint. The petitioner is neither named in the underlying F.I.Rs. nor in the subject E.C.I.R. The allegation against the present petitioner is to have assisted M/s AMPL in laundering huge sums of money to the tune of Rs. 2,09,76,53,871/- in the guise of providing accounting and auditing services to the aforesaid company. The petitioner is in custody since 01.10.2024. 40. Section-45 of the P.M.L.A., 2002 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 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 [or is accused either on h....
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....ed 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 2002 Act. 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 for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the legislature. Section 21(4) of Mcoca, therefore, must be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail m....
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....uring trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt." 42. The Hon'ble Supreme Court in its recent decision rendered in the cases of Manish Sisodia (supra) has clarified and crystallized the law on the aspect of harmonization between the stringent twin conditions under section 45 of the P.M.L.A. and the valuable and treasured right to personal liberty enshrined under Article 21 of the Constitution of India. 43. The relevant portion of the decision rendered in the case of Manish Sisodia (supra) read as under:- "47. We find that, on account of a long period of incarceration running for around 17 months and the trial even not having been commenced, the appellant has been deprived of his right to speedy trial. 48. As observed by this Court, the right to speedy trial and the right to liberty are sacrosanct rights. On denial of the....
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....at the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straightforward open-and-shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts and the High Courts should recognise the principle that "bail is rule and jail is exception". 53. In the present case, in ED matter as well as CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitised documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. 54. As observed by this ....
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....hat certain conditions are to be satisfied. The principle that, "bail is the rule and jail is the exception" is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individual is always a Rule and deprivation is the exception. Deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure. Section 45 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. 13. Independently and as has been emphatically reiterated in Manish Sisodia v. Enforcement Directorate, (2024) 12 SCC 660, relying on Ramkripal Meena v. Enforcement Directorate, (2024) 12 SCC 684 and Javed Gulam Nabi Shaikh v. State of Maharashtra, (2024) 9 SCC 813, where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of....
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....21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict." (emphasis supplied) 47. In an another decision, the Hon'ble Supreme Court in the case of V. Senthil Balaji (supra) has held as under:- "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 decis....
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....urts 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 21 of 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 jurisdiction to i....
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....cution Complaint, upon which, the learned Special Court has taken cognizance against the petitioner and other accused persons. However, there are altogether 38 witnesses and 28 documents, which runs into 5787 pages and the trial itself will take considerable time and it is not reasonably excepted to conclude soon and therefore, it would not be in the interest of justice and would be affront to the fundamental rights of the petitioner, who is sick and approximately 70 years old, to keep him in custody as under-trial for an indefinite period. Further, the allegations levelled against the petitioner involves complex questions and issues which warrants detailed appreciation of evidence which is to be considered by the Special Court. 50. In the considered opinion of this Court, the petitioner, who is a septuagenarian and has clean antecedents, deserves to be enlarged on bail on the grounds of his prolonged incarceration and that there being no possibility of conclusion of trial in near future. Further, keeping the petitioner in custody without actually being held guilty would be against Article 21 of the Constitution of India and the law laid down by the Hon'ble Supreme Court in the ....