TaxTMI 
TaxTMI 
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2024 (8) TMI 1666
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.... remanded to the custody of Enforcement Directorate (for short, "E.D"), by learned Special Judge for a period of 05 days; iii. order dated 01.05.2024 (P-23), whereby application filed by the petitioner under Section 227 of the Code for discharge was declined; iv. grounds of arrest dated 30.04.2024 (P-18); arrest order dated 30.04.2024 (P-19); and arrest memo. dated 30.04.2024 (P-20) issued by E.D against the petitioner. Brief Facts :- 2. M/s Mahira Homes Pvt. Ltd is the holding company of various other associate companies, including M/s Sai Aaina Farms Pvt. Ltd. (for short, "SAFPL"), M/s Czar Buildwell Pvt. Ltd. (Presently Mahira Buildwell Pvt. Ltd.) and M/s Mahira Buildtech Pvt. Ltd., which are dealing with construction projects in Sectors 68, 103 & 104; respectively, at Gurugram. 2.1 On 17.05.2016, the SAFPL applied for an Affordable Housing Project under Pradhan Mantri Awas Yojana-Urban for construction of 1500 Flats in the land measuring 9.96875 acres, situated in revenue estate of Village Badhsahpur, Sector 68, Gurugram. 2.2 On the basis of above request, the Director General, Town & Country Planning, Haryana, (for short, "DGTCP") issued a Letter ....
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....he Prevention of Money Laundering Act, 2002 (for short, "PMLA") and covered under Part-A of the Schedule thereof. As a result of the above, ECIR No. GNZO/20/2021 was recorded by the E.D on 16.11.2021 against SAFPL as well as other co-accused, including present petitioner. 2.8 Initially, petitioner appeared before E.D, but he did not co-operate in the matter and gave evasive replies to the queries put to him by the E.D. It is alleged that later on, despite repeated summons under Section 50 of the PMLA, as well as the non- bailable warrants issued by learned Special Judge, petitioner and co-accused did not come forward and remained un-traceable. Therefore, finding no other alternative, the E.D moved an application for declaring them as proclaimed offender under Section 82 of the Code. Learned Special Judge after examining the application and hearing both sides, declined the request of E.D for issuing proclamation, vide order dated 29.04.2024 (P-17); but issued fresh arrest warrants against the petitioner as well as co-accused Dharam Singh Chhoker and Vikas Chhoker. 2.9 In pursuance of the aforesaid order, petitioner was apprehended on 30.04.2024 at about 6.30 a.m from Hotel "Pi....
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....d, so that petitioner could challenge the arrest. 3.4 Again contended that E.D failed to comply with the provisions of Section 19(2) of the PMLA and Rule 3 of the Prevention of Money-Laundering (the Manner of Forwarding a Copy of the Order of Provisional Attachment of Property alongwith the Material, and Copy of the Reasons alongwith the Material in respect of Survey, to the Adjudicating Authority and its Period of Retention) Rules, 2005 (for short "Rules, 2005") as the sealed envelope containing (i) material in possession; (ii) "grounds of arrest" and; (iii) "reasons to believe" was sent to Adjudicating Authority on 01.05.2024 at 01:53 p.m and which was received by the concerned quarter on 01.05.2024 at 02:33 p.m i.e. much after the conclusion of hearing before learned Special Judge. 3.5 Also contended that an attempt by E.D to show compliance of Section 19(2) of PMLA before conclusion of the remand hearing on the basis of an e-mail dated 30.04.2024 sent at 07:56 p.m is a cock and bull story, as no relevant document was sent along with the e-mail. In either case, the compliance of Section 19(2) of PMLA should have been in a proper format as prescribed in Rule 3 of the Rules,....
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.....m is in violation of Sections 79 & 80 of the Code. 3.9 In support of the above contentions, learned Senior counsels have also relied upon the following judicial pronouncements :- (i) Raghuvansh Dewanchand Bhasin Versus State of Maharashtra (2012) 9 SCC 791; (ii) Vijay Madanlal Choudhary and others Versus Union of India and others, 2022 SCC Online SC 929; (iii) V. Senthil Balaji Versus State Represented by Deputy Director and others, 2023 SCC Online SC 934; (iv) Pankaj Bansal Versus Union of India and others, 2023 SCC Online SC 1244; (v) Roop Bansal Versus Union of India and others, 2023 SCC Online P&H 3597; (vi) CRM-M- 2191-2024 titled as "Dilbag Singh @ Dilbag Sandhu Versus Union of India and another" decided on 08.02.2024 (Pb. & Hr.); (vii) Arvind Kejriwal Versus Directorate of Enforcement, 2024 INSC 512;(viii) CWP No. 24787 of 2023 "Pranav Gupta Versus Union of India and another: (ix) Joginder Nath Verus State of U.P 1994(4) SCC 260; (x) Lalita Kumari Verus Government of Uttar Pradesh and others (2014) 2 SCC; (xi) Satender Kumar Antil Versus CBI and another (2022) 10 SCC 51; (xii) D.K. Basu Versus State of West Bengal (1997) 1 SCC 416; (xiii) Chandra Deepak Kochhar Versus CB....
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....lice officer or other person executing warrants of arrest shall notify the substance thereof to the person to be arrested, and if so required, shall show him the warrant; but its non-supply shall not vitiate the arrest. 4.5 While stressing upon the expression "if so required", learned counsel submitted that not showing the warrants of arrest, which is otherwise in existence, does not vitiate the arrest in any manner. In the present case, the petitioner did not make any request to show him the warrants of arrest; nor any such averment has been made in the petition; therefore, in absence of any such request, it was not important to show him the warrants of arrest. 4.6 Further submitted that in view of the provisions of Section 76 of the Code, the police officer shall, without unnecessary delay, bring the person arrested within 24 hours before the Court concerned. Learned counsel by stressing upon the expression "without unnecessary delay", submitted that petitioner was produced well within 24 hours of his arrest before the Court concerned. Moreover, it is a matter of records that learned Duty Magistrate in its report confirmed that E.D produced the petitioner during intervening....
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....C 623; (vi) Gautam Thapar Versus Directorate of Enforcement,2021 SCC Online Del 4599; (vii) Roshan Beevi and others Versus Joint Secretary to Government of Tamil Nadu and other, 1983 SCC Online Mad 163; (viii) Directorate of Enforcement Versus Deepak Mahajan, (1994) 3 SCC 440; (ix) Harbansingh Sardar Lenasingh Versus. State, 1968 SCC Online Bom 51; (x) State of Madhya Pradesh Versus Shobharam and others, 1966 SCC Online SC 229 and; (xi) Union Territory of Ladakh and others Versus Jammu and Kashmir National Conference and another (SLP(Civil) No. 18727 of 2023). 5. Heard learned counsel for the parties and perused the paper-book. I. ISSUANCE OF FRESH ARREST WARRANTS DATED 29.04.2024 (P-17) BY Ld. SPECIAL JUDGE, GURUGRAM :- 6. Records reveal that initially, on 16.08.2023, E.D moved an application under Section 70 of the Code read with Section 65 of the PMLA seeking issuance of open-ended non-bailable warrants against petitioner, co- accused Dharam Singh Chhoker as well as Vikas Chhoker with the allegations that despite various summons issued under Section 50(2) & (3) of the PMLA, they were intentionally avoiding to appear before the Investigating Officer. After hearing both s....
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....ble the Supreme Court, co-accused Dharam Singh Chhoker joined investigation; but later on, SLP (supra) filed by him was dismissed vide order dated 06.05.2024 and now the fact of the matter is that he is absconding from the proceedings. 6.6 In pursuance of the order dated 29.04.2024 (P-17), petitioner was apprehended on 30.04.2024 at about 06:30 a.m from Hotel "Pilibhit", situated at 38/1 Niranjan Akhara Marg, Sharwan Nath, Haridwar and thereafter, he was brought to Zonal Office, Dehradun and then to Zonal Office, Gurugram. Records reveal that "grounds of arrest" dated 30.04.2024 (P-18); arrest order dated 30.04.2024 (P-19) and arrest memo. dated 30.04.2024 (P-20) were duly served upon the petitioner by E.D officials on 30.04.2024 at 18:45 hours. Also evident that on 30.04.2024 itself, the E.D approached learned Special Judge, Gurugram at about 8:30 p.m, for production of the petitioner, but due to non-availability of learned Special Judge, they could not succeed. Thereafter, E.D tried to produce the petitioner before learned Duty Magistrate during night on 30.04.2024 itself at 12:30 a.m; but learned Duty Magistrate had shown her inability to entertain the request. 6.7 Finally....
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....n before police in aid of the Investigating Agency. While Mr. Ashok Desai, the learned Attorney General who appeared on behalf of CBI, submitted that Section 73 coupled with Section 167 of the Code bestowed upon the Court such power, Mr. Kapil Sibal, who appeared as amicus curie (the respondents did not appear inspite of publication of notice in newspaper) submitted that Court had no such power. To appreciate the steps of reasoning of the learned counsel for their respective stands it will be necessary to refer to the relevant provisions of the Code and TADA relating to issuance of processes. xxx xxx xxx xxx 21. Apart from the above observations of the Law Commission, from a bare perusal of the Section (quoted earlier) it is manifest that it confers a power upon the class of Magistrates mentioned therein to issue warrant for arrest of three classes of person, namely, (i) escaped convict, (ii) a proclaimed offender, and (iii) a person who is accused of a non-bailable offence and is evading arrest. If the contention of Mr. Sibal that Section 204 of the Code is the sole repository of the Magistrate's power to issue warrant and the va....
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....nless the Court issues a warrant the provisions of Section 82, and the other Sections that follow in that part, cannot be invoked in a situation where in spite of its best efforts the police cannot arrest a person under Section 41. Resultantly, if it has to take the coercive measures for the apprehension of such a person it has to approach the Court to issue warrant of arrest under Section 73; and if need be to invoke the provisions of part 'C' of Chapter VI. [Section 8(3) in case the person is accused of an offence under TADAJ. 24. Lastly, we may refer to Section 90, which appears in part 'D' of Chapter VI of the Code and expressly states that the provisions contained in the Chapter relating to a summon and warrant, and their issue, service and execution shall, so far as may be, apply to every summons and every warrants of arrest issued under the Code. Therefore, when a Court issues a warrant of arrest, say under Section 155 of the Code, any steps that it may have to subsequently take relating to that warrant of arrest can only be under Chapter VI. 25. Now that we have found that Section 78 of the Code is of general application and that in course ....
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....as justified and within his jurisdiction in having issued non-bailable warrants of arrest during the course of investigation. In the present case also, no fault can be found with the order dated 29.09.2023 (Annexure P-23) which has been impugned by the petitioners and by way of which non-bailable warrants were ordered to be issued. The order is a well reasoned and speaking order and it nowhere directs the production of the petitioners before the Investigating Agency. It goes without saying that once the warrants are executed, the respondent-ED would be bound by the provisions of law be that the PMLA or that of the Code. The other judgments relied upon by the petitioners, therefore, would be of no aid to them." "17. A perusal of the aforesaid judgment shows that even if one of the petitioners was not shown to be an accused, he could be prosecuted under the PMLA so long as the scheduled offence exists. The scheduled offence, as already mentioned in the preceding paragraphs, is not only in FIR Nos.10 & 11 dated 14.01.2021 but also in other FIRs referred to therein. It is also clear from a perusal of the aforesaid judgment that since there were other FIRS also, proceeds of cri....
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....ended by E.D officials with the help of local Police. Thus, all these facts clearly indicate that petitioner has no respect for the rule of law; rather tried to flee from the justice. Despite repeated non-bailable warrants issued by learned Special Judge, petitioner has made the process of law as a mockery; hence no interference is warranted with the order dated 29.04.2017 (P-17); rather the same is perfectly legal and valid. Hence, rightly been executed by E.D officials with the assistance of local Police. That apart, petitioner is involved in four other FIRs (supra). II. REMAND ORDER DATED 01.05.2024 7. As already discussed, due to unavoidable circumstances, E.D could not produce the petitioner before learned Special Judge on 30.04.2024 at PWD Guest House, where he was staying temporarily, due to some exigencies. E.D made efforts to produce petitioner before learned Duty Magistrate, but remained unsuccessful and the factual position is already narrated under preceding paragraph No.6.6; hence not repeated here. Ultimately, after serving "grounds of arrest" (P-18); arrest order (P-19) and arrest memo. (P-20) to petitioner on 30.04.2024, he was produced before learned Special ....
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....findings like acquittal or conviction of the petitioner in PMLA case. Needless to say that petitioner shall have opportunities to raise his plea(s) before learned Special Judge at the time of taking cognizance as well as consideration of charges. IV. GROUNDS OF ARREST (P-18); ARREST ORDER (P-19); ARREST MEMO. (P-20) :- 9. From records, it is quite evident that petitioner is the major share holder of Mahira Group Companies. Also discernible that M/s SAFPL; M/s Mahira Buildtech Pvt Ltd and M/s Czar Buildwell Pvt Ltd are the companies under Mahira Group, engaged in housing project in Sector 68, 103 and 104, respectively, Gurugram. It is discernible that above companies submitted fake bank guarantees while obtaining licenses for Affordable Housing Projects and collected huge money from home buyers to the tune of Rs. 363 crore (approx.) Rs. 160 crore (approx) and Rs.90 crore (approx.), respectively on the basis of above licenses and siphoned off the money collected from the home buyers for their personal gains and the petitioner, who is the main beneficiary of the proceeds of crime, utilized the tainted money through various transactions and tried to convert the same into untai....
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..... Ltd. for selling construction materials and the payments were got credited in the bank accounts of M/s Balaji Cement Store and M/s Shri Balaji India Private Limited; but no material was supplied against the said invoices; rather the amount of approximately Rs.30 crore was refunded in cash to petitioner after deducting 4% commission by the dummy sellers. 9.7 Apart that, from the "grounds of arrest", it transpires that prima facie, petitioner is guilty of the offence of money laundering. There is sufficient material on record that petitioner knowingly, actually and directly indulged in the illegal activities connected with proceeds of crime; he has siphoned off the hard earned money of 1500 prospective home buyers and used the same for his personal gain; thus, committed the offence of money laundering. For reference, the relevant part of "grounds of arrest" is recapitulated as under :- "26. Analysis of material evidences in possession found so far and statement of various key and related persons recorded under Section 50 of PMLA, clearly establish that petitioner is guilty of offence of money laundering as defined under Section 3 of PMLA punishable under Section 4 of PM....
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....ner that there was non-compliance in this regard. Moreover, it is a matter of records that learned Duty Magistrate in its report dated 01.05.2024 confirmed that E.D had produced petitioner at 12:30 a.m during night of 30.04.2024 and as such, the same is well within 24 hours and it is so recorded by learned Special Judge in his order dated 01.05.2024. 9.12 Keeping in view the discussion made here-in-above, it is held that "grounds of arrest"; arrest order and; arrest memo. were duly and validly served upon petitioner at the time of his arrest on 30.04.2024. That apart, "reasons to believe" were also recorded by E.D officials. Thus, there has been due compliance of Section 19 of the PMLA, in letter and spirit. V. DISCUSSION ON JUDICIAL PRONOUNCEMENTS :- 10. Although, learned Senior counsels for petitioner tried to convince the Court while citing various judicial pronouncements that his arrest is illegal, but the same are not helpful in any manner for the following reasons :- (i) Raghuvansh Dewanchand Bhasin's case (supra), lays down guidelines to be adopted for issuance and execution of non-bailable warrants in terms of Section 78 & 79 of the Code. There is no q....
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.... the same time, Hon'ble the Supreme Court issued a caveat that "where the non-disclosure of the "reasons to believe" with redaction is justified and claimed, the Court must be informed. The file, including the documents, must be produced before the Court. Thereupon, the Court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the Court. In the present case, "grounds of arrest" were duly supplied to petitioner at the time of his arrest. The "reasons to believe" were also recorded by the officers and this Court has minutely gone through the same. In Union Territory of Ladhakh's case (supra), Hon'ble the Supreme Court observed that the High Courts will proceed to decide matters on the basis of law as it stands, unless specifically directed by Hon'ble the Supreme Court to await an outcome of a reference or review petition. In other words, till the time, reference in Kejriwal's case(supra) is decided, the law laid down in Vijay Madan Lal's case (supra) is to be followed being binding under Article 141 of the Constitution. (viii) In ....