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2024 (5) TMI 1414 - HC - Money LaunderingSecond bail application filed for grant of regular bail - Money Laundering - scheduled offences - proceeds of crime - conspiracy with certain other persons started obtaining an illegal levy of Rs. 25 per ton of coal for issuance of delivery order for coal transportation - insufficient reason in remand order - reasons to believe - fulfillment of twin conditions of Section 45 of the PMLA, 2002. Whether disclosure of insufficient reason in remand order, alleged illegal custody entitled the applicant to be released on bail under the PMLA, 2002? - HELD THAT - From bare perusal of the Section 19 of the PMLA, 2002, it is quite vivid that for arresting any person, any officer authorized has on the basis of material on his possession and through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002, then only, he is at liberty to arrest. This Section further provides that the said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception. From bare perusal of the order dated 13.10.2022 passed by the learned Special Judge granting remand of the applicant along with other accused has given reason wherein it has specifically stated that the present applicant has purchased coal washeries from M/s KJSL Coas Power Ltd. to M/s Maa Madwarani Coal Benefaction Pvt. Ltd. at the cost of Rs. 35 crores and other two coal washeries have been purchased and the investigation within 24 hours is not possible, therefore, the custodial remand was ordered. Whereas in the present case, the learned Special Judge has categorically recorded its reason and satisfaction while granting the remand of the applicant to the Enforcement Directorate. Thus, there is compliance of Section 19 of the PMLA, 2002 and the order dated 13.10.2022 passed by the learned Special Judge is inconformity with the law laid down by Hon ble the Supreme Court in case of PANKAJ BANSAL VERSUS UNION OF INDIA ORS. 2023 (10) TMI 175 - SUPREME COURT . Therefore, the contention raised by learned Senior counsel for the applicant that there is non-compliance of Section 19 of the PMLA, 2002 vitiating the entire proceedings, applicant is entitled to be released on bail, deserves to be rejected. The submission of the learned counsel for the applicant that his summon for 12.10.2022 and he remained in custody upto 5.30 a.m. cannot be considered as it is a matter of evidence which can be very well taken during the trial. Even the trial Court while granting remand has recorded its finding that within 24 hours of arrest, the applicant has been produced before the Court and there is no material to rebut the said finding recorded by the learned trial Court, as such the contention that the accused was remained in illegal custody from 12 a.m. to 5.30 a.m. deserves to be rejected and accordingly, it is rejected - the question answered against the applicant. Whether the applicant fulfills twin conditions of Section 45 of the PMLA, 2002 for grant of bail? - HELD THAT - From bare perusal of ECIR with regard to the allegations leveled against the present applicant, it is quite vivid that the the present applicant has played specific role and he is kingpin of the offence and is promoter of M/s Indermani Group having a close relationship with Suryakant Tiwari. Investigation revealed that the applicant had helped Surykant Tiwari in acquiring coal washeries from M/s Indus Udyog Infrastructure Pvt. Ltd. and M/s Satya Power and Ispat Ltd. These coal washeries were acquired for an amount of Rs. 96 crore, out of which Rs. 34 crore was the registered value and was paid through banking channel and rest of the amount was to be paid in cash. Thus, large amount of illegally acquired cash was layered in these transactions. After the Income Tax raids, he made sham paper transactions to show that he was the owner of these two washeries - He has only blocked his capital in these assets and the remaining entire cash transactions were still done by Suryakant Tiwari only. The record would further reflect that several properties in the names of companies of the applicant herein viz., M/s Indermani Minerals Pvt. Ltd. M/s KJSL Coal Power Pvt. Ltd. which were acquired using proceeds of crime have been attached under Section 5(1) of the PMLA, 2002 on 09.12.2022 and 29.01.2023 and the same were subsequently confirmed by the learned Adjudicating Authority (PMLA), vide orders dated 01.06.2023 17.07.2023. Thus, the applicant is unable to fulfill the twin condition of Section 45 of the PMLA, 2002. Considering the factual legal matrix, it is quite vivid that the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail - considering the judgment of Hon ble the Supreme Court in case of SAUMYA CHAURASIA VERSUS DIRECTORATE OF ENFORCEMENT 2023 (12) TMI 685 - SUPREME COURT SATYENDAR KUMAR JAIN VERSUS DIRECTORATE OF ENFORCEMENT, ANKUSH JAIN VERSUS DIRECTORATE OF ENFORCEMENT AND VAIBHAV JAIN VERSUS DIRECTORATE OF ENFORCEMENT 2024 (3) TMI 862 - SUPREME COURT , it is quite vivid that the applicant is unable to fulfill the twin conditions for grant of bail as provided under Section 45 of the PMLA, 2002. Thus, question is answered against the applicant. The role played by the applicant, prima facie, the remand and arrest order are in accordance with the provisions of the PMLA, 2002 and also considering the gravity of offence, it is not inclined to enlarge the applicant on bail - the second bail application filed under Section 439 of the Cr.P.C. is also liable to be and is hereby rejected.
Issues Involved:
1. Whether disclosure of insufficient reason in remand order and alleged illegal custody entitled the applicant to be released on bail under the PMLA, 2002. 2. Whether the applicant fulfills twin conditions of Section 45 of the PMLA, 2002 for grant of bail. Summary: Issue 1: Insufficient Reason in Remand Order and Alleged Illegal Custody The applicant argued that the remand order lacked sufficient reason and that his custody was illegal. The court examined Section 19 of the PMLA, 2002, which mandates that the arresting authority must have "reason to believe" that an individual is guilty of an offense under the Act, and this reason must be recorded in writing. The Enforcement Directorate (ED) provided detailed reasons for the applicant's arrest, including his involvement in acquiring coal washeries through sham transactions and his attempts to erase evidence. The court found that the Special Judge had recorded sufficient reasons while granting the remand, thus complying with Section 19 of the PMLA, 2002. The applicant's contention about wrongful custody from 12 a.m. to 5.30 a.m. was considered a matter of evidence to be examined during the trial. The court concluded that there was no non-compliance with Section 19 of the PMLA, 2002, and rejected the applicant's argument for bail on this ground. Issue 2: Twin Conditions of Section 45 of the PMLA, 2002 Section 45 of the PMLA, 2002, stipulates that for bail to be granted, the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offense and is not likely to commit any offense while on bail. The court noted that the applicant had played a significant role in the alleged money laundering activities, including layering large amounts of illegally acquired cash and participating in sham transactions to obfuscate the real ownership of tainted properties. The court found that the applicant had not prima facie reversed the burden of proof and dislodged the prosecution's case, which is a mandatory requirement to get bail under Section 45 of the PMLA, 2002. The court also considered the gravity of the offense and the applicant's potential to influence witnesses or tamper with evidence. Consequently, the court concluded that the applicant did not fulfill the twin conditions for grant of bail under Section 45 of the PMLA, 2002, and rejected the bail application. Conclusion: The court rejected the second bail application filed u/s 439 of the Cr.P.C., finding that the remand and arrest orders were in accordance with the provisions of the PMLA, 2002, and considering the gravity of the offense and the applicant's involvement. The observations made by the court were not to influence the trial, which would be decided based on evidence and material placed on record.
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