Seeking grant of bail - money laundering - proceeds of crime - fraudulent acquisition of land which was in possession of Ministry of Defence, Government of India - reasons to believe - twin conditions laid down u/s 45 PMLA, 2002 - it was held by High Court that 'The twin conditions as prescribed u/s 45 PMLA, 2002 having been fulfilled, this application is allowed.'
HELD THAT:- There are no reason to interfere with the impugned judgment and order passed by the High Court. The special leave petition is, accordingly, dismissed.
Grant of anticipatory bail - complaint has already been filed and the appellant not been arrested during the investigation - HELD THAT:- Taking note of the fact that the complaint has already been filed and the appellant not been arrested during the investigation, it is required to set aside the impugned order and grant anticipatory bail to the appellant.
In such view of the matter, the impugned order is set aside and the appellant is granted bail, subject to the conditions that may be imposed by the trial Court.
Money Laundering - Confirmation of attachment of the properties said to be the proceeds of crime - challenge to the order of Adjudicating Authority has been made mainly on the ground that the properties attached by the respondent are not the proceeds of crime thus could not have been attached - HELD THAT:- It is found that not only the role of the appellant was taken into consideration by the Adjudicating Authority but finding has also been recorded that out of the properties attached, few are for the equivalent value.
The perusal of the judgment in the case of Prakash Industries [2022 (7) TMI 877 - DELHI HIGH COURT] would not only make the things clear but gives proper interpretation to the definition of “proceeds of crime.” It has three limbs and out of which second limb is for the property of equivalent in value to the proceeds out of the crime. If the proceeds are not available in the hands of the appellant, either it is vanish or syphoned off then the property of the equivalent value can be attached and for that reason the words value thereof does not specify acquisition of the property prior or subsequent to the commission of crime.
There are no merit in the appeal in reference to the issues raised in the present case - The appellant has failed to disclose the source of acquisition of the property even in the appeal. The vague statements of fact regarding acquisition of property has been made by the appellant without giving detail description of the sources by which it was acquired. The Adjudicating Authority has given reference to the Income Tax Return submitted by the appellant Shamshad where income was shown between 4 to 5 lakhs only and therefore, it is found that the Adjudicating Authority has meticulously considered each aspect of the matter however appeal has been pressed only on few grounds and has been dealt with by us finding no merit in any of the ground, the appeal would fail.
Challenge to seizure order passed u/s 8(3) of PMLA 2002 - investigation required to be completed within 365 days as per Section 8(3)(a) of the Act has not yet been completed - HELD THAT:- The respondents fairly admitted that the investigation pursuant to the FIR No. RC 221/2020 dated 11.03.2020 and the ECIR registered thereupon has not been completed.
If the pendency of the proceedings relating to offence is construed or taken even prior to completion of investigation resulting in prosecution complaint then there was no necessity to even provide the period of investigation for the purpose of continuance of the order of attachment. In fact, proceedings before the Court starts from the stage of submission of prosecution complaint or charge-sheet and thereupon cognizance of the offence is taken and therefore only two limbs of the provision has significance and are not overlapping to each other and accordingly if the investigation is not completed within 365 days then the attachment or seizure would lapse.
The impugned seizure so as the order of the Adjudicating Authority cannot continue, rather the seizure stands lapsed after the period given under Section 8(3) of the Act of 2002 and is set aside - the impugned order set aside - appeal allowed.
The Supreme Court of India issued an order to issue notice to the respondent, returnable on 29.07.2024. The petitioner was granted liberty to serve notice through the Standing Counsel for the respondent(s).
Seeking enlargement on bail - leakage of the question paper and use of unfair means in the Rajasthan Eligibility Examination for Teachers (REET), 2021 - receiving bribe - scheduled offence - HELD THAT:- On a perusal of the complaint filed by the ED, it is revealed that the schedules offences alleged against the petitioner includes two FIRs, namely, FIR No.402/2021 and FIR No.298/2021. The first FIR which was registered under Sections 420, 120-B IPC and under Section 4/6 of Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992 pertains to the leakage of the REET question paper. The second FIR was registered under Sections 302, 365 and 120B IPC and Section 3(2)(v) of the Scheduled Castes & Scheduled Tribes (Prevention of Atrocities) Act, 1989 at PS Balaghat, District Karauli. Thereafter, an investigation was initiated by the ED under the provisions of the Prevention of Money Laundering Act, 2002 to trace out the process of crime and ascertain the role of suspected persons in the above-mentioned offences.
The only scheduled offence against the petitioner is the one under Section 420 IPC, which is in relation to the leakage of REET question paper, and in which the petitioner has already been enlarged on regular bail by this Court.
Adverting to the prayer for grant of bail in the instant case, it is pointed out by learned counsel for ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to be examined. The conclusion of proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year - Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and keeping in view the peculiar facts and circumstances of this case, it seems that the rigours of Section 45 of the Act can be suitably relaxed to afford conditional liberty to the petitioner.
The petitioner is, accordingly, directed to be enlarged on bail subject to such terms and conditions as may be imposed by the learned Special Judge - SLP disposed off.
Maintainability of the second set of appeals - Rejection of bail application - predicate offence - irregularities in the framing and implementation of Delhi’s Excise Policy for the year 2021-22 - right to speedy trial - delay and prolonged period of incarceration - whether the appellant is entitled for bail? - HELD THAT:- A perusal of the impugned judgment and order would reveal that though the learned Single Judge of the High Court has dismissed the applications for bail on merits, on medical grounds, it has permitted the appellant to visit his residence to meet his wife in custody once every week - It could thus clearly be seen that this Court expected the trial to be concluded within a period of 6-8 months. The liberty was reserved to approach afresh if the trial did not conclude within the period of 6-8 months. The liberty was also granted in case the trial proceeded at a snail’s pace in next three months.
A perusal of the material placed on record would clearly reveal that far from the trial being concluded within a period of 6-8 months, it is even yet to commence. Though in the first order of this Court, liberty was reserved to move afresh for bail if the trial proceeded at a snail’s pace within a period of three months from the date of the said order, the commencement of the trial is yet to see the light of the day. In these circumstances, in view of the first order of this Court, the appellant was entitled to renew his request - The learned Special Judge and the learned Single Judge of the High Court have considered the applications on merits as well as on the grounds of delay and denial of right to speedy trial. There are no error in the judgments and orders of the learned Special Judge as well as the High Court in considering the merits of the matter.
The question that arises is as to whether the trial court and the High Court have correctly considered the observations made by this Court with regard to right to speedy trial and prolonged period of incarceration. The courts below have rejected the claim of the appellant applying the triple test as contemplated under Section 45 of the PMLA. In our view, this is in ignorance of the observations made by this Court in paragraph 28 of the first order wherein this Court specifically observed that right to bail in cases of delay coupled with incarceration for a long period should be read into Section 439 Cr.P.C. and Section 45 of the PMLA.
The right to speedy trial and the right to liberty are sacrosanct rights. On denial of these rights, the trial court as well as the High Court ought to have given due weightage to this factor.
In the present case, in the ED matter as well as the CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial.
In the present case, the appellant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case, conditions can be imposed to address the concern of the State.
Insofar as the apprehension given by the learned ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant.
The impugned judgment and order dated 21st May 2024 passed by the High Court of Delhi in Bail Application Nos. 1557 and 1559 of 2024 is quashed and set aside - The appellant is directed to be released on bail in connection with ED Case No. HIU-II/14/2022 registered against the appellant by the ED and FIR No. RC0032022A0053 of 2022 registered against the appellant by the CBI on furnishing bail bonds for a sum of Rs.10,00,000/- with two sureties of the like amount - Appeal allowed.
Provisional Attachment Order - circular transaction - land property of the appellant was provisionally attached treating it to be `proceeds of crime’ - time limitation of 180 days.
Proceeds of crime - HELD THAT:- Even if the appellant is not named as an accused but he is holding the `proceeds of crime’ and even if the property if not directly or indirectly obtained out of the crime but is of the value thereof, it would fall in the definition of `proceeds of crime’ and such property or document can be subjected to seizure/attachment.
Provisional attachment should lapse on completion of 180 days - HELD THAT:- Reliance placed in the judgement of Telangana High Court in the case of Hygro Chemicals PharmtekPvt. Limited Vs. Union of India &Ors. [2023 (3) TMI 1367 - TELANGANA HIGH COURT ] where the period of 180 days was counted after excluding the period between 15.03.2020 till 28.02.2022.
The Government had also notified for the exclusion of period of Covid and elaborate discussion has been made in the case of Hygro Chemicals PharmtekPvt. Limited. Thus, the aforesaid need not be reiterated, but it also supports the respondent and thereby a challenge to the order on the ground that it was passed beyond the period of 180 days given under Section 8 (3) of the Act of 2002 is not made out.
Coming back to the factual issue, it is necessary to refer to main allegation which exists against M/s Seabird International Pvt. Ltd. and its two Directors Gurinder Singh and Jagmohan Singh and prior to that Pirtpal Singh who had extracted money from 51 students for arranging visa and admission in different colleges in Australia. The amount of Rs.7.56 crores was taken to be `proceeds of crime’ derived as a result of criminal activity. The detailed investigation has revealed deep involvement of Pirtpal Singh, Jagmohan Singh and Gurinder Singh for generating money to the tune of Rs.7.56 crores from 51 students - The facts on record reveal that the sole purpose of creating circular transaction is to project `proceeds of crime’ as untainted. In fact, Gurinder Singh and Pirtpal Singh tried to show the amount generated by them out of scheduled offence as bonafide transaction by creating channel of circular transaction with Sant Singh and many others. In the light of the facts referred to above, we do not find a case in favour of the appellant.
Seizure of Indian Rupees under PMLA, 2002 - allegation of involvement of the appellant in Hawala transaction.
The first argument was that the appellant is not an accused in the FIR or ECIR thus the currency, apart from the mobile phone and the documents could not have been seized by invoking Section 17 of the Act of 2002 - HELD THAT:- The material on record shows Hawala transaction of total sum of Rs.15 Crore and odd. It is also that the appellant failed to indicate as to from where he was getting and putting the money in the bank account. No material to show innocence of the appellant could be produced and otherwise the statement recorded under Section 50of Arun Muthu proved involvement of the appellant in Hawala transaction, that too at his instance or to facilitate Sukesh Chandrasekhar and his wife, Leena Paulose. Thus, the first argument raised by the appellant cannot be accepted.
The second argument is in reference to the facts of the case. It is submitted that the amount was withdrawn by the appellant from time to time and has been reflected in the bank account - HELD THAT:- The bank account shows withdrawal of Rs.6.5 lakhs and 8 lakhs on the relevant date and may be lying in the office for that reason but appellant has failed to clarify as to how the Company used to utilize the money after its withdrawal because if the matter is looked in sequence of events, the total transaction in the hands or through the appellant’s company comes to Rs.15 Crore and odd. If the appellant was involved in foreign exchange business, the withdrawal of the amount should have been shown to have utilized for foreign exchange and for that to produce the document. The appellant has failed to do so - there are no case in favour of the appellant.
Legality of arrest of the Petitioner - arrest on the material that was in possession of the respondent/CBI prior to 04.06.2024 - Insurance arrest - Compliance of Section 41(1) Code of Criminal Procedure for Arrest without Warrants - Compliance with S.41(2) Cr.P.C. for Arrest with Warrants.
Compliance of Section 41(1) Code of Criminal Procedure for Arrest without Warrants - HELD THAT:- From the bare perusal of this Section 41(1), it is evident that the Police in cognizable offences where the person accused of an offence punishable with a term which may be less or extend to seven years with or without fine, can be arrested without warrants by the Police Officer. However, this power to arrest without warrants is circumscribed by Section 41 (1) (b) which provides that the arrest without warrants can only be on the satisfaction of the existence of three circumstances i.e., (i) the credible information (ii) reasonable complaint or (iii) reasonable suspicion. However, such power of arrest is further subject to five circumstances described in Section 41 (1) (ii) (a) to (e).
The reliance has been heavily placed by the Ld. Senior Advocate on the decision of Apex Court in Arvind Kejriwal v. Directorate of Enforcement [2024 (7) TMI 760 - SUPREME COURT] wherein under similar circumstances the arrest of petitioner in the PMLA case has been held as illegal. However, this judgement is distinguishable as the arrest was made under Section 41 (1) Cr.P.C. without warrants, which is not the case herein involving the arrest of petitioner by the CBI with the Orders of the Court.
Compliance with S.41(2) Cr.P.C. for Arrest with Warrants - HELD THAT:- Section 41(1) Cr.P.C. gets attracted only when the arrest is made without the warrant of the Court. Pertinently, in the present case, the I.O. after having interrogated the petitioner on 24.06.2024 with the permission from the Court, moved another Application on the next day i.e. 25.06.2024 seeking permission to arrest the petitioner. The said Application though again did not mention the Section in which it was filed, but from its title as well as the contents, it is evident that it was an application filed not under Section 41(1) but under Section 41(2) of Cr.P.C. 1973.
It is on record that the “arrest was not solely based on ambiguous terms of non-cooperative attitude and evasive replies but these terms were duly qualified and explained.” It was pointed out the aspects on which the petitioner was not forthcoming. It is not a case where he was being compelled to be a witness against himself in contradiction to his valuable rights enshrined and protected under Article 20 (3) of Constitution of India, but it was his specific non-cooperative attitude, which was also borne out from the case diary, that hampered the collection of relevant evidence that prompted the arrest.
In the present case, while permitting the arrest, the only factors to be considered by the Court were whether there is a reasonable suspicion or credible information about the commission of the offence. These factors were clearly detailed in the Application for arrest dated 26.04.2024 and it is not the argument of either party that there were no suspicious circumstances against the petitioner in regard to the conspiracy to commit the offence.
In the present case, it is not in dispute that initially, after registration of FIR on 17.08.2022, the petitioner was examined on 16.04.2023 for 9-10 hours after service of summons under Section 160 CrP.C. dated 14.04.2023 since at that stage he was identified only as a person, who was acquainted with the facts and circumstances of the case. The prosecution has explained that respecting his position as a Chief Minister of NCT of Delhi, the police treaded with trepidation and caution and proceeded to collect the evidence from other persons suspected to be the accused. Consequently, extensive investigations were carried out across India to ascertain the entire web of conspiracy involving numerous persons - The reasons for not proceeding immediately against the petitioner, after registration of the FIR is thus, well explained by the CBI and does not reek of malice.
It is correct and true that the petitioner herein is not an ordinary citizen of this country but is a distinguished holder of Magsaysay Award and a convenor of Aam Aadmi Party. The control and the influence which he has on the witnesses, is prima facie borne out from the fact that these witnesses could muster the courage to be a witness only after the arrest of the petitioner - Also, it establishes that the loop of evidence against the Petitioner got closed after collection of relevant evidence after his arrest. No malice whatsoever, can be gathered from the acts of the respondent.
Thus, it cannot be said that the arrest was without any justiciable reasons or was illegal - Petition dismissed.
Determination of jurisdiction to entertain the present writ petition - reasons to believe - relied upon documents - whether the existence of alternative remedies, as stipulated under Section 42 of the PMLA and as argued by the Respondents, precludes this Court from exercising its discretionary powers under Article 226 of the Constitution? - HELD THAT:- The statute clearly outlines that appeals can be filed to the High Court within sixty days from the date the decision or order is communicated to the aggrieved party, addressing any question of law or fact arising out of such order. For the purpose of this Section, ‘High Court’ has been defined to be the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain. The Petitioner is based in Mumbai, conducting business and presumably working for gain there. Consequently, based on the explicit language of Section 42, the High Court of Bombay would ordinarily have jurisdiction to hear appeal against decision passed by the Appellate Tribunal on 25th July, 2024.
In M/s Incred Financial Services Ltd. [2022 (6) TMI 1360 - DELHI HIGH COURT], the Court diverged from the precedent set in Aasma Mohammed Farooq, focusing on the specific circumstances of the cases before and overruled objection of maintainability of the petition on the ground of territorial jurisdiction.
The Petitioner is assailing the order of the Appellate Tribunal. They have invoked the jurisdiction of this Court based on the presence of the Appellate Authority within its geographical bounds. This fact, while establishing a basic criterion for territorial jurisdiction, does not inherently justify overlooking the structured remedies provided under statutory law. The legal framework provided by Section 42 of the PMLA specifies that appeals against decisions of the Appellate Tribunal are to be filed at the High Court within the jurisdiction where the aggrieved party resides or conducts business. The Petitioner cannot override the statutory mechanism by relying on the geographical location of the Appellate Authority within this Court’s jurisdiction. There is no basis for the Court to conclude that the alternate remedy is not equally efficient and adequate - the Court concludes that the mere location of the Appellate Authority within its territorial bounds does not provide sufficient ground to deviate from the prescribed statutory appellate route. The Petitioner can easily pursue their grievances through the statutory appellate process as stipulated in Section 42 of the PMLA, by following the hierarchal judicial process intended by law.
In this instance, given the specific statutory remedies provided under the PMLA, particularly the appeal mechanism outlined in Section 42, the court finds that the said remedy is both appropriate and sufficient for addressing the grievances presented by the Petitioner. There is no evidence to suggest that the remedy would be ineffective or lead to an injustice that justifies bypassing them - considering the established legal framework and the factual circumstances of this case, the Court is not inclined to exercise its discretionary powers under Article 226 of the Constitution. The Petitioner is free to pursue the available statutory remedies, which are deemed adequate for resolving the legal challenges at hand.
Money Laundering - predicate offence - Seeking for quashing of the ECIR proceedings - stand-alone nature of PMLA offence - even if a person is not an accused in the predicate offence, whether he/she could still be prosecuted for an offence under the PMLA, 2002? - HELD THAT:- It is seen from the record that the petitioner, who is shown as 2nd accused in C.C.No.14 of 2019, had filed S.L.P. (Criminal) No(s).13304 of 2023 before the Hon'ble Supreme Court, challenging the dismissal of her quash petition. The Hon'ble Supreme Court had quashed the proceedings against the petitioner by an order dated 23.04.2024. The allegation in the said case is that A1 to A7 have entered into a criminal conspiracy in the commission of offence relating to allotment of housing plots under Government Discretionary Quota; that A1 and A2 were allotted lands under the said quota; that the petitioner, even before the sale deed was executed in her favour, had handed over the possession of the plot to A5 and entered into a joint venture agreement with A5 and unjustly enriched herself.
This Court has, in similar cases, expressed its view that the proceedings under the PMLA 2002 cannot proceed further, once the FIR/Final Report relating to the predicate offence is quashed. The law is well settled by the larger Bench of the Hon'ble Supreme Court in the case of Vijay Madanlal Choudhary and Others v. Union of India and Others[2022 (7) TMI 1316 - SUPREME COURT], wherein, it is ruled 'The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.'
This Court is of the view that in view of the fact that the proceedings against the petitioner/A2 in the predicate offence, has been quashed by the Hon'ble Supreme Court, the impugned proceedings cannot be sustained. Hence, the Criminal Original Petition stands allowed.
Seeking grant of Regular Bail - Money Laundering - scheduled offence - Proceeds of Crime - right to personal liberty - applicability of the proviso to Section 45 of PMLA - HELD THAT:- There is no gainsaying that Article 21 of the Constitution of India guarantees right to personal liberty to every individual and that bail is the rule and jail is an exception. This Court is also conscious of the fact that in the present case charge sheet has been filed against the applicant albeit as stated in the status report considering the nature of offence, multi-layered transactions and the nation-wide nexus, further investigation is on-going.
In PRASANTA KUMAR SARKAR VERSUS ASHIS CHATTERJEE AND ORS. [2010 (10) TMI 1199 - SUPREME COURT] the Supreme Court elucidated the factors to be considered while deciding a bail application, where it was held that 'It is trite that this Court does not, normally, interfere with an order passed by the High Court granting or rejecting bail to the accused. However, it is equally incumbent upon the High Court to exercise its discretion judiciously, cautiously and strictly in compliance with the basic principles laid down in a plethora of decisions of this Court on the point.'
From a conspectus of the judgements in Satyendar Kumar Jain [2024 (3) TMI 862 - SUPREME COURT] and Vijay Madanlal [2022 (7) TMI 1316 - SUPREME COURT], it is clear that the present bail application will have to be considered on the touchstone and anvil of the twin conditions under Section 45 of PMLA and Court will have to arrive at a prima facie satisfaction that the applicant crosses the threshold.
Based on the evidence disclosed in the predicate offence, present ECIR was registered against the applicant. Conscious of the settled legal position that at the stage of considering a bail application this Court is not to enter into a meticulous examination of the statements of the witnesses or hold a mini-trial, the case set up by the ED and the defence set up by the applicant examined only to satisfy whether there are reasonable grounds for believing that the applicant is not guilty of the alleged offence under the PMLA and that he is not likely to commit any offence while on bail as required by Section 45 of PMLA.
There is prima facie sufficient material to show the involvement of the applicant in the alleged offence of money laundering and/or connecting the monies involved in the various transactions to the predicate offence as ‘proceeds of crime’, under Section 3 of PMLA. This Court is prima facie unable to agree with the applicant at this stage that the monies generated from cattle smuggling and concealed through various transactions, purchases and shell companies formed only for accommodation entries were not from criminal activities relating to scheduled offence.
As held in Tarun Kumar [2023 (11) TMI 904 - SUPREME COURT], as per the statutory presumption permitted under Section 24 of PMLA, the Court or the Authority is entitled to presume, unless the contrary is proved, that in any proceedings relating to PoC under PMLA, in the case of a person charged with the offence of money laundering under Section 3 of PMLA, such PoC are involved in money laundering. In view of the above, more particularly, the role ascribed to the applicant, he has failed to meet and satisfy the test of twin conditions under Section 45 (1) of PMLA for this Court to come to a prima facie conclusion that there are reasonable grounds for believing that the applicant is not guilty of the alleged offence.
The Bombay High Court in Mahendra Manilal Shah v. Rashmikant Mansukhlal Shah, [2009 (6) TMI 1022 - BOMBAY HIGH COURT], held that the nature of the sickness needs to be seen as to whether the accused can be treated in the government hospitals and custody.
In the bail application, applicant has not set out a case that the medical ailments, from which he allegedly suffers, are such that they are not being treated or cannot be treated either in the Jail hospital or the referral hospitals and therefore, benefit of Proviso to Section 45 of PMLA cannot accrue to the applicant on this ground.
Money Laundering - Seeking to revoke and release the attachment and seizure of all the movable and immovable properties of the petitioners - HELD THAT:- When the authorities of the ED have reasons to believe, on the basis of the material, that any person in possession of any proceeds of crime and are likely to conceal or create any encumbrance in order to frustrate any proceedings relating to confiscation of proceeds of crime, the ED would be justified in issuing a provisional attachment order of such properties and thereafter seek for confirmation of the attachment by making a complaint before the Adjudicating Authority.
The provisional attachment order under Section 5(1) of PMLA shall be valid only for a period of 180 days. Under Sub-section 3 of Section 5, the provisional attachment made under Sub-section 1, ceased to have effect after a period of 180 days. Admittedly, when the ED has sought for confirmation of the provisional attachment of movable and immovable properties of the petitioners before the Adjudicating Authority and the same has been dropped, the provisional attachment also would lapse, in view of the limitation prescribed under Section 5(1). Consequently, it requires to be declared that as on date, there is no attachment at all over the subject properties.
There shall be a direction to the Enforcement Directorate/4th respondent herein to revoke and release the attachment and seizure of all the movable and immovable properties of the petitioners, within a period of two (2) weeks from the date of receipt of a copy of this order - Petition allowed.
Second bail application for grant of regular bail - online betting in Live Ludo, Football, Casino games and marks through Mahadav Book - applicability of Section 45 of the PMLA - HELD THAT:- As per provisions of Section 45 of the PMLA, apart from providing Public Prosecutor, opportunity to oppose bail application, filed by the applicant, two conditions are required to be fulfilled i.e. firstly, the court is satisfied that there are reasonable grounds for believing that applicant is not guilty of such offence and secondly, he is not likely to commit any offence while on bail.
In the case of Sanjay Jain Vs. Enforcement Directorate [2024 (3) TMI 598 - DELHI HIGH COURT], the Delhi High Court vide order dated 7-3-2024 considering various observations of Hon’ble Supreme Court made in the case of Vijay Madanlal Choudhary Vs. Union of India [2022 (7) TMI 1316 - SUPREME COURT] has held that 'A finding is also required to be recorded as to the possibility of the bail applicant committing a crime after grant of bail. This aspect has to be considered having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence.'
In the instant case, as per case of Enforcement Directorate itself, applicant has not played any role in the predicate offence of online betting, but applicant himself has admitted in his statement recorded under Section 50 of the PMLA, 2002 that, he and his brother Anil Dammani work as Havala operator. Promoter of Mahadev Book App namely Sourabh Chandrakar frequently purchased gift items from his jewellery shop namely ‘Abhushan Jewelers’ since 2019 till 2021 - Applicant has also admitted that, he knows Rahul Wakte (associate of ASI Chandra Bhushan Verma), who had come many times in their shop for Havala transaction worth Rs. 3-4 crorers. These facts have also been supported by chandra Bhushan Verma in his statement under Section 50 of the PMLA, 2002.
The evidence available on the complaint shows that, the applicant is not only involved in Hawala transactions, rather, he is also aware about the persons to/from whom he delivered/received the amount of Hawala. Since, the party was organized by promoters of Mahadev Book App and other connected persons, therefore, contentions raised by learned counsel for the applicant that, he was not aware about the fact that said amount of Hawala transaction was proceed of crime of Mahadev Book App, does not appear to be correct - Transaction of amount through Hawala made by the applicant also comes in purview of proceeds of crime, as has been defined in Section 2 (1) (u) of PMLA, 2002. Since applicant is engaged in the business of jewellery, but, his connection in Hawala transaction, that too, in respect of money pertaining to Mahadev Book App, shows his involvement in such economic offence.
The applicant used to receive Havala money in his shop namely ‘Abhushan Jewelers’ and persons who brought money of Havala and persons who collected the same, are found to be associates of money transaction of proceeds of crime of Mahadev Book App. Even promoters of Mahadev Book App namely Ravi Uppal and Sourabh Chandrakar had organized a party in the farm house of applicant and his brother, in which, Ravi Uppal, Sourabh Chandrakar, applicant and his brother, Ashish Rathore, Deepan Josef and he himself were present - Considering such significant role of applicant in ensuing money laundering case of proceeds of crime of Mahadev Book App, it is found that, there is sufficient evidence collected by the respondent-Enforcement Directorate to prima facie come to the conclusion that the applicant was involved in the offence of money laundering as defined in Section 3 of the PMLA.
Having regard to the provisions of Section 45 of the PMLA, bail cannot be granted to applicant - instant bail application is rejected.
Money Laundering - HELD THAT:- The case is covered by the decision of this Court in the case of Tarsem Lal vs. Directorate of Enforcement Jalandhar Zonal Office [2024 (5) TMI 837 - SUPREME COURT]. Hence, the interim order dated 24th June, 2024 is made absolute on the same terms and conditions. The Special Court may direct the appellant to furnish bonds for appearance in accordance with Section 88 of the Code of Criminal Procedure, 1973 (Section 91 of the Bhartiya Nagarik Suraksha Sanhita).
Seeking anticipatory bail under Section 438 of the Criminal Procedure Code (Cr.P.C.) in the context of proceedings under the Prevention of Money Laundering Act - it was held by High Court that the petitioner's request for anticipatory bail was not maintainable.
HELD THAT:- In view of a decision of this Court in the case of Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Official [2024 (5) TMI 837 - SUPREME COURT], the interim order dated 6th May, 2024 is made absolute on the same terms and conditions.
Money Laundering - seeking enlargement on bail - mastermind of the alleged offence named Bharat Bomb has never been arrested in view of the statement made on behalf of the Directorate of Enforcement - HELD THAT:- It is required to set aside the impugned order by granting bail to the appellant subject to the conditions that may be imposed by the designated Court.
Money Laundering - withdrawal of monitoring petitions challenging the cognizance order issued by the trial court under PMLA - HELD THAT:- The petitioners are allowed to withdraw the monitoring petitions.
These surveillance petitions are dismissed on the ground of withdrawal of qualified counsel by the petitioners and it is ordered that the petitioners should present themselves before the subordinate court within one month from today. During this period of one month, the proceedings for execution of arrest warrant issued against the petitioners will remain suspended. If the petitioners do not present themselves before the trial court within a period of one month, it will be presumed that the petitioners are avoiding appearance by ignoring the order of the court and the trial court will be free to summon the petitioners / accused again with arrest warrant.
The stay applications filed along with these review petitions are also disposed of.
Legality of arrest of the Petitioner - non-compliance with Article 22(1) of the Constitution of India and Section 50 of the Code of Criminal Procedure, 1973 - whether the subsequent remand orders were null and void due to this alleged illegality? - HELD THAT:- The amendment was effected in the Code of Criminal Procedure, with the very object of zealously safeguarding the inherent fundamental right available to every citizen and it’s protection at every stage, with a corresponding obligation to be discharged by every civilised State. Infraction of these fundamental rights have always been frowned upon by the Constitutional Courts and wherever necessary, for breach of the fundamental right,, compensation has been granted under public law, in addition to the private law remedy available to a person for tortious action and punishments have been imposed on the wrong doer.
The Apex Court considered the argument in light of the three-Judge Bench decision in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], holding that Section 65 of the Act of 2002 predicates that the provision of Code of 1973 shall apply insofar as they are not inconsistent with the provisions in respect of arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings thereunder. Taking note of Section 19 of the Act of 2022 which prescribes the manner of arrest of a person involved in money laundering, with the inbuilt safeguards to be adhered to, by the authorised officers, such as recording of reasons for belief regarding involvement of the person in the offence of money laundering and, that the reasons shall be recorded in writing and while effecting arrest, the grounds of arrest are to be informed to that person.
Reliance was also placed on the decision of the Division Bench of the Bombay High Court in Chhagan Chandrakant Bhujbal Vs. Union of India & Ors. [2016 (12) TMI 1014 - BOMBAY HIGH COURT], where it was held that the grounds of arrest are to be informed to the person arrested and that would mean that they should be communicated at the earliest, but there is no statutory requirement of the grounds of arrest being communicated in writing.
Reiterating that right to life and personal liberty is the most sacrosanct fundamental right guaranteed under Articles 20, 21 and 22 of the Constitution of India and any attempt to encroach upon the same would be looked at with all seriousness and to be dealt with strictly, it is specifically held that the right to be informed about the grounds of arrest flows from Article 22(1) of the Constitution of India and any infringement of this fundamental right would vitiate the process of arrest and remand. It is also clarified that mere fact that the charge-sheet has been filed in the matter, would not validate the illegality and its unconstitutionality, committed at the time of arrest of the accused and the grant of initial police custody remand to the accused.
Conclusion - The grounds of arrest must be communicated in writing, as a matter of course and without exception, to uphold the fundamental rights of the accused. The Petitioner's arrest is declared illegal and the remand orders set aside. The Petitioner was ordered to be released on bail, subject to furnishing bail bonds to the satisfaction of the trial judge.
The Petitioner is entitled for his release and, since, the charge-sheet has been filed against him, his release from custody is directed on furnishing bail and bonds to the satisfaction of the trial Judge - petition disposed off.
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