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2017 (3) TMI 1483 - HC - Money LaunderingLimitation for grant of bail under Section 45(1) of PML Act - Held that - The fact remains that whilst there was an earlier raid in the year 2008 and Lokayukta is awaiting approval from the Government to prosecute the petitioner, the current raid by the Income Tax has taken place. The explanation with regard to legitimacy of ownership of properties listed in the complaint are all subject matters of previous raid in the year 2008 and investigation thereon. Thus, prima facie , it appears that petitioner after a raid in the year 2008, has again indulged in the offences alleged against him in the FIR registered by the CBI on 03.12.2016. There is no order passed by any competent Court holding that the offences alleged against the petitioner, which are scheduled offences are not made out. In the light of all discussions, two indubitable determinants emerge. Firstly, that even before he was cleared of allegation of acquisition of assets disproportionate to his known source of income of 1 02.69% during the check period 1.2.1985 to 18.12.1988, petitioner has been alleged of converting demonetized currency of ₹ 6,12,50,000/- out of which possession of ₹ 27 Lakhs has been admitted in the petition itself. Secondly, that the explanation to the possession of ₹ 27 Lakhs is not satisfactory. In the circumstances, petitioner s case does not merit recording a finding of satisfaction by this Court to the effect that there are reasonable grounds for believing that the petitioner is not guilty of the offences alleged against him and that he is not likely to commit any offence while on bail. Grant of bail in this case is undebatably contingent upon this Court recording it s satisfaction as required under Section 45(ii) of the PML Act. In view of the finding that the petitioner s case does not merit recording such satisfaction, the said statutory requirement remains unfulfilled. Resultantly, this petition fails and is accordingly dismissed.
Issues Involved:
1. Legality of the arrest without registering an FIR. 2. Ownership and legitimacy of the properties claimed to be 'proceeds of crime.' 3. Applicability of Section 45 of the PML Act to the case. 4. Evidence and statements regarding the possession of demonetized currency. 5. Satisfaction of conditions under Section 45(ii) of the PML Act for granting bail. Detailed Analysis: 1. Legality of the Arrest Without Registering an FIR: The petitioner argued that the ED arrested him without registering an FIR, contrary to the Supreme Court rulings in Lalita Kumari v. Government of Uttar Pradesh and Patai alias Krishna Kumar v. State of Uttar Pradesh. The ED countered that Section 19(1) of the PML Act empowers an authorized officer to arrest any person if there is reason to believe that such person is guilty of an offence under the Act, making the arrest lawful without an FIR. 2. Ownership and Legitimacy of the Properties Claimed to be 'Proceeds of Crime': The petitioner contended that the 17 properties listed by the ED were lawfully acquired and not 'proceeds of crime.' Detailed documentation was provided to support this claim, including sale deeds, gift deeds, and government permissions. However, the ED alleged that the petitioner misused his official position to acquire these properties through money laundering, involving the conversion of demonetized currency. 3. Applicability of Section 45 of the PML Act to the Case: The petitioner argued that the limitations for granting bail under Section 45(1) of the PML Act should not apply, citing the Punjab & Haryana High Court's ruling in Gorav Kathuria v. Union of India. However, the Supreme Court's ruling in Gautam Kundu v. Manoj Kumar held that Section 45 of the PML Act is binding and imposes mandatory conditions for bail, overriding the general provisions of the Cr.P.C. This judgment was found to be applicable to the present case, making the limitations of Section 45(1) applicable. 4. Evidence and Statements Regarding the Possession of Demonetized Currency: The petitioner explained the possession of ?27 Lakhs in demonetized and new currency as advance payments from prospective purchasers of flats. However, the ED presented statements from the petitioner's wife and others, indicating that the petitioner was involved in exchanging demonetized currency for new notes. The court found the explanation for the possession of the currency unsatisfactory and noted inconsistencies in the statements provided. 5. Satisfaction of Conditions Under Section 45(ii) of the PML Act for Granting Bail: The court evaluated whether there were reasonable grounds to believe that the petitioner was not guilty of the offences and that he was not likely to commit any offence while on bail. Given the previous allegations of disproportionate assets and the current case involving the conversion of demonetized currency, the court concluded that the petitioner did not meet the conditions required under Section 45(ii) of the PML Act. Conclusion: The petition for bail was dismissed. The court held that the arrest without an FIR was lawful under Section 19(1) of the PML Act. The properties listed by the ED were not satisfactorily proven to be legitimate. The limitations of Section 45(1) of the PML Act were applicable, and the petitioner failed to satisfy the conditions required under Section 45(ii) for granting bail.
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