2015 (11) TMI 131 - HC - FEMA

Bail application - Arrest made without the mentioning of name in FIR - arrest of the applicant without a warrant in a non-cognizable offence - applicant is alleged to have received ₹ 7 crores from one Natural Trading Company and ₹ 6.31 crores from one M/s Gangeshwar Mercantile Pvt. Ltd. without satisfactory explanation - revention of Money Laundering Act, 2002 - Held that - Applicant, at this stage, has failed to satisfactorily establish that the moneys received by him are untainted, inasmuch as, the circumstances brought on record by the Directorate of Enforcement reveal that there are doubts that the origin of the moneys received by the applicant, which appear to be connected with the scheduled offence. Under the circumstances, having regard to the involvement of the applicant in the offences in question as indicated hereinabove, it would not be possible for this court at this stage, to state that there are reasonable grounds for believing that the applicant is not guilty of the offences alleged against him. It may be reiterated that while considering the question of grant of bail in the present case, since the applicant is an accused in the scheduled offence, the rigours of section 45 of the PML Act would apply and the court is required to record twin satisfaction, one that, there are reasonable grounds for believing that the applicant is not guilty of such offence and second that, he is not likely to commit any offence while on bail. One of the conditions precedent, namely, that the applicant is not guilty of such offence, is not satisfied, the applicant is not entitled to be released on bail under section 45 of the PML Act. - any observation made in this order is a prima facie observation made only for the purpose of deciding the bail application and the same shall have no bearing on the merits of the case at the time of trial which has to be adjudicated on the basis of the evidence that may be led by the respective parties. - Decided against appellant.

Issues Involved:
1. Validity of the applicant's arrest under the PML Act without a warrant.
2. Applicability of Section 45 of the PML Act in granting bail.
3. Evidentiary value of statements recorded under Section 50 of the PML Act.
4. Whether the applicant's detention violates Articles 14 and 21 of the Constitution of India.
5. Whether the applicant is entitled to bail based on merits and procedural grounds.

Detailed Analysis:

1. Validity of the Applicant's Arrest Under the PML Act Without a Warrant:
The applicant contended that his arrest without a warrant in a non-cognizable offense under the PML Act was unauthorized and illegal. He argued that the Directorate of Enforcement (ED) could not have arrested him without obtaining a warrant from the Metropolitan Magistrate, citing Section 2(l) read with Section 155 of the Code of Criminal Procedure (CrPC) and Section 45 of the PML Act. The applicant's counsel referenced the amendment in Section 45 of the PML Act, which made offenses under the Act non-cognizable, thus requiring a warrant for arrest.

2. Applicability of Section 45 of the PML Act in Granting Bail:
The court emphasized that while considering a bail application under Section 439 of the CrPC read with Section 45 of the PML Act, it must satisfy itself about the two conditions stipulated under Section 45 of the PML Act. These conditions are: (i) there are reasonable grounds for believing that the accused is not guilty of such offense, and (ii) the accused is not likely to commit any offense while on bail. The court noted that these conditions are cumulative and not alternative, requiring substantial probable causes for believing that the accused is not guilty.

3. Evidentiary Value of Statements Recorded Under Section 50 of the PML Act:
The applicant argued that the statements of co-accused recorded under Section 50 of the PML Act have no evidentiary value. However, the court noted that Section 50 of the PML Act is in pari materia with Section 108 of the Customs Act, which allows such statements to be used as evidence. The court held that it is not permissible to record a finding on the evidentiary value of these statements at the bail stage, as this can only be determined during the trial.

4. Whether the Applicant's Detention Violates Articles 14 and 21 of the Constitution of India:
The applicant's counsel argued that his arrest and continued custody violated his fundamental rights under Articles 14 and 21 of the Constitution of India. The court, however, observed that it is considering a bail application and not a habeas corpus or other application under Article 226 of the Constitution of India. The court noted that the applicant had not raised these grounds in his habeas corpus petition, which had been dismissed by the Division Bench.

5. Whether the Applicant is Entitled to Bail Based on Merits and Procedural Grounds:
The court examined the facts of the case and the allegations against the applicant, including his involvement in fraudulent foreign remittances and receiving proceeds of crime. The court found that the applicant had failed to satisfactorily establish that the monies received by him were untainted. The court held that the applicant had not met the first condition under Section 45 of the PML Act, which requires reasonable grounds for believing that the accused is not guilty of the alleged offense. Consequently, the applicant was not entitled to bail under Section 45 of the PML Act.

Conclusion:
The court rejected the bail application, emphasizing that the applicant had not satisfied the conditions under Section 45 of the PML Act. The court clarified that its observations were prima facie and would not influence the merits of the case during the trial.

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