TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1032
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....e at the stage of considering an application for bail in as much as the same may prejudice the rights of either of the parties at the trial. Learned counsel has submitted as follows: - The predicate offence being FIR No. RCBSK 2022 E 0001 dated December 6, 2022 was registered under Section 120B/420/477A of the Indian Penal Code read with Section 13(1)(d)/13(2) of the Prevention of Corruption Act by the Central Bureau of Investigation (hereinafter referred to as the CBI) wherein the crux of the accusation revolves around non-payment of credit facilities, defrauding of funds, manipulating books of accounts, etc. The present ECIR followed the predicate offence. The FIR stemmed from the forensic audit report of M.C. Bhandari and company and in the proceedings before the NCLT, Kolkata Bench, it was held that the allegations that the transactions were entered into with the intention to defraud creditors were unreasonable. The ECIR is premised on the FIR registered by the CBI which was in turn registered on the basis of the report of M.C. Bhandari and company. The ECIR refers to the NCLT proceedings but does not taken into consideration the order passed on October 8, 2021 holding....
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.... society and is not at flight risk. The petitioner seeks bail. 6. Learned counsel for the petitioner has placed reliance on the following authorities in support of his contention. 1. P. Chidambaram v. Directorate of Enforcement reported in (2020) 12 SCC 791, 2. Ramkripal Meena v. Directorate of Enforcement reported in 2024 SCC OnLine SC 2276, 3. Manish Sisodia v. Directorate of Enforcement reported in 2024 SCC OnLine 1920, 4. Bhagwan Bhagat v. Directorate of Enforcement in Criminal Appeal No. 3392 of 2024, 5. Kalvakuntla Kavitha v. Directorate of Enforcement reported in 2024 SCC OnLine SC 2269, 6. Prem Prakash v. Union of India through the Directorate of Enforcement reported in (2024) 9 SCC 787, 7. Vijay Nair v. Directorate of Enforcement reported in 2024 SCC OnLine SC 3597, 8. Peeyush Jain v. Enforcement Directorate in SLP (Crl.) No. 10961 of 2024, 9. Balwinder Singh v. State of Punjab and Anr, SLP (Crl.) No. 8523 of 2024, 10. Manik Bhattacharya v. Enforcement Directorate in CRM (SB) 72 of 2024, 11. Arvind Kejriwal v. Central Bureau of Investigation reported in 2024 SCC OnLine SC ....
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....13 of 2022, 36. Anil Kumar Aggarwal v/s Enforcement Directorate Th. Its Assistant Director in Jammu W.P. (CRL.) 9 of 2024, & Directorate of Enforcement v Anil Kumar Aggarwal in SLP CRL. No. 12175/2024, 37. S. Martin vs. Directorate of Enforcement in Special Leave to Appeal (CRL.) No. 4768/2024; & 38. Narendar Kumar Gupta vs. The Assistant Director Directorate of Enforcement in SLP (CRL) 53973/2024. 7. Speaking for the E.D., learned counsel has submitted as hereunder: - The petitioner being the Chairman and Managing Director of M/s. Concast Steel and Power Limited was the mastermind behind the financial fraud and money laundering activities conducted through the company and its network of associate companies. After acquiring entire shares of the company, the petitioner orchestrated a complex web of financial transactions to inflate the company's turnover fraudulently, secure extensive credit facilities from a consortium of banks and systematically divert those funds for his personal enrichment and to support shell companies under his control. Total proceeds of crime generated from the predicate offence amounts to Rs. 6210.72 crores. During investigation....
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....disposal of the appeal. In view thereof, there is no stay on further proceedings pertaining to the predicate offence till disposal of the appeal. 10. Though the order of cognizance in the scheduled offence was set aside by this Court, the learned Special Court has granted an opportunity of hearing to the petitioner at the pre cognizance stage. 11. The case involves an economic offence of more than Rs. 6200 crores. The petitioner is constantly in touch with his employees and relatives from jail custody, is funding the co-accused and his companies are committing the offence of money laundering. The E.D. has contemplated appropriate steps in accordance with law in this regard. Benami properties of the petitioner/his accomplices have been identified during investigation. Investigation will be seriously prejudiced if the petitioner is released on bail at this stage. The bail petition is pre-mature since the petitioner is at best entitled to be released on bail in terms of Section 479(1) of the BNSS. About 444 cases are pending against him as on date. Learned counsel vehemently opposes the prayer for bail. Learned counsel has placed reliance on the following authorities in support ....
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....on of the petitioner and his account as "fraud" under the RBI Circular dated July 1, 2016 (updated as on July 3, 2017) and set aside all consequential actions on the basis of such classification primarily on the ground that the petitioner was not given prior notice of hearing before the classification. The respondent authorities were directed to re-visit the exercise of such classification upon giving prior notice of hearing to the petitioner and to proceed with the same in accordance with law. In compliance thereof, a show cause notice was issued upon the petitioner and his company on June 6, 2024 and upon consideration of the response given by the latter to the said notice on July 18, 2024 the bank classified the loan account of the petitioner's company as "fraud" by a reasoned order and contemplated further course of action to report the account and the petitioner's name to the Reserve Bank of India in terms of the directions contained in the RBI Master Direction/Circulars issued from time to time in this regard. The same was communicated to the petitioner by a letter issued on December 20, 2024. This fact has been suppressed by the petitioner before this Court in seeking bail. ....
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.... relatives from custody and is also funding the other co-accused in the ongoing cases. His companies are continuing to collect funds from financial institutions and are thereby indulging in the offence of money laundering. The E.D. by a letter dated September 4, 2025 has requested the Additional Director General and Inspector General, Correctional Services to look into the matter and take appropriate action. 18. The petitioner has alleged violation of Section 19 of the PMLA. It shall be useful to reproduce Section 19 of the Act. "19. Power of arrest - (1) If the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the or....
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.... before effecting arrest as contained in section 19 of the said Act are stringent and of higher standard. Those safeguards ensure that the authorized officers do not act arbitrary, but make them accountable for their judgment about the necessity to arrest any person as being involved in the commission of offence of money laundering even before filing of the complaint before the Special Court under the Act. 87. However, when the legality of such an arrest made under Special Acts like PMLA, UAPA, Foreign Exchange, Customs Act, GST Acts, etc., is challenged, the court should be extremely loath in exercising its power of judicial review. In such cases, the exercise of the power should be confined only to see whether the statutory and constitutional safeguards are properly complied with or not, namely, to ascertain whether the officer was an authorized officer under the Act, whether the reason to believe that the person was guilty of the offence under the Act, was based on the "material" in possession of the authorized officer or not, and whether the arrestee was informed about the grounds of arrest as soon as may be after the arrest was made. Sufficiency or adequacy of materia....
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....upon consideration of the material collected by him in course of investigation. Though in conclusion, he has stated four reasons which have necessitated the arrest of the petitioner, the details of investigation and material collected in course thereof have found place in the "grounds of arrest" and "reasons to believe" recorded by the officer. As stated earlier, sufficiency or adequacy of material on the basis of which the belief is formed by the officer or the correctness of the facts cannot be subjected to judicial review. Subjective satisfaction of the arresting officer with regard to the material and necessity to arrest appears to be in accordance with law. 21. True, statement of the petitioner under Section 50 of the PMLA was recorded in the wee hours of the night. But besides such statement, several other material/documents have been collected by the E.D. and statements of other witnesses recorded which led to the necessity of the arrest of the petitioner. The mandate of Section 19(1) of the Act has been sufficiently and adequately complied with by the arresting officer and the arrest cannot be said to be vitiated for non-compliance of the same. The petitioner was informe....