2019 (11) TMI 1283 - HC - Money Laundering

Enhancement of the period of police remand - offence of money laundering - siphoning of funds - proceeds of crime - refusal of police custody - petitioner submitted that the Judge has not applied its mind while refusing the police custody for the purpose of custodial interrogation of the respondents and passed the order which is bereft of any sound reasoning - Principles of natural justice - whether the Judge has properly applied his mind regarding the material available on record and has given sufficient reasons in the impugned order or not while rejecting the police remand of the respondents? - HELD THAT - The remand, admittedly, is a fundamental judicial function of a Magistrate; the Magistrate has to satisfy himself/herself that there are reasonable grounds and that the material placed before him justify the police remand of the accused. There may be circumstances in which the accused may provide intimation leading to discovery of material facts. It may be necessary to detain a person in order to conduct investigation without hindrances and to protect witnesses and persons connected with the victim of the crime. Sometimes, it may be required even to maintain law and order in the locality. The investigating agency is required to bring to the notice of the Court the material collected against an arrested accused to persuade the Court to remand him into police custody for the purpose of further investigation and it is the duty of the Magistrate to satisfy itself that there are reasonable grounds and that the material placed before him, as discussed hereinabove, justify the police remand of the accused - After satisfying himself regarding the adequacy of the grounds for the purpose of police detention or remand before passing the order of detention or remand, the Magistrate shall pass necessary orders only thereafter. The Magistrate authorising remand under Section 167 of the Cr.P.C. can only examine the record to see whether there exists some material to justify the remand, however, the Magistrate cannot conduct a roving enquiry to test the sufficiency of material at this stage for the obvious reason that investigation would be at a nascent stage and the police are yet to file a report either under Section 169 or Section 170 of the Cr.P.C. - here is no doubt that while exercising jurisdiction to remand under Section 167 Cr.P.C., the Magistrate is not required to write an elaborate order granting or refusing remand. However, as the Magistrate acts judicially in deciding an application for remand, he is required to briefly set out his reasons. The practice of passing nonspeaking order of police remand and mechanically extending or refusing the same is illegal and must be avoided. The case of the petitioner, in nut-shell, is that the Judge has not applied its mind while refusing the police custody for the purpose of custodial interrogation of the respondents and passed the order which is bereft of any sound reasoning. The custodial interrogation of the respondents could not be completed during the period of 9 days when the accused/respondents were in police custody in view of voluminous record and documents as well as the statements which were required to be confronted to them and the time was not sufficient to confront all the material collected and required to be confronted to them - The offence stated to have started way-back in 2008 and the offence of money laundering is complicated in nature requiring investigation of various aspects and the money trail. During the course of the investigation/interrogation, some of the proceeds of crime are, allegedly, found to be linked and siphoned off to foreign companies. The money trail which is found during investigation is required to be confronted and further investigated. In view of the voluminous record, documents and the nature of transactions in the present matters, the Judge ought to have granted police custody of the respondents to the petitioner for the purpose of custodial interrogation till 28.11.2019. In view of the clear, cogent, valid and weighty reasons stated by the petitioner for the enhancement of the period of police remand, alleged gravity of the offences and to unearth the conspiracy in the matter, the existing facts and circumstances prima facie justify the police remand of the respondents/accused. The police remand, all the more, is essential in the matter for the purpose of proper investigation, failing which the investigation may hamper. The application, to my mind, discloses and assigns convincing reasons why investigation cannot proceed further without seeking police remand of the respondent/accused - Hence, this Court is of the opinion that the custodial interrogation of the respondents is required for the purpose of further investigation in the matter. The impugned orders dated 23.11.2019 are set aside and the respondents are remanded to the custody of the Directorate of Enforcement till 28.11.2019. The Jail Superintendent concerned is directed to handover the custody of the respondents to the Investigating Officer of the case for custodial interrogation - Petition allowed.

Summary

Issues Involved:
1. Application of mind by the Judge in refusing police custody.
2. Necessity of custodial interrogation for further investigation.
3. Adequacy of the period of police custody granted.
4. Legal standards and precedents regarding police remand.

Issue-wise Detailed Analysis:

1. Application of mind by the Judge in refusing police custody:
The petitioner argued that the Judge did not apply its mind while refusing police custody for custodial interrogation of the respondents, passing an order lacking sound reasoning. The Judge's orders were criticized for being almost bereft of any sound and proper reasoning, adopting a casual and mechanical approach without scrutinizing the petitioner's specific contentions. The court emphasized that application of mind is sine qua non at the stage of granting or refusing police custody.

2. Necessity of custodial interrogation for further investigation:
The petitioner contended that the offence of money laundering, which started in 2008, is complicated and requires investigation of various aspects, including the money trail. The custodial interrogation was deemed necessary to unearth the conspiracy hatched by the respondents over the last 9/10 years. The petitioner highlighted that the voluminous record, documents, and nature of transactions necessitated police custody for effective confrontation and further investigation. The court found substance in the petitioner's plea, noting that custodial interrogation is essential for proper investigation and to unearth the conspiracy.

3. Adequacy of the period of police custody granted:
The petitioner argued that the 9-day period of police custody was insufficient to confront the respondents with the voluminous record, documents, and statements collected. The respondents' further police custody was sought till 28.11.2019 to complete the interrogation. The court agreed with the petitioner, noting that the existing facts and circumstances prima facie justified the police remand of the respondents/accused for further investigation. Consequently, the respondents were remanded to the custody of the Directorate of Enforcement till 28.11.2019.

4. Legal standards and precedents regarding police remand:
The court referred to several legal standards and precedents, including Section 167(2) of the Cr.P.C., which outlines the conditions for authorizing detention in police custody. The court emphasized that the Magistrate authorizing remand must briefly set out reasons and avoid passing non-speaking orders. The court also cited the Supreme Court's judgment in Satyajit Ballubhai Desai and Ors. v. State of Gujarat, which held that police remand should be an exception and not a rule, requiring strong justification by the investigating agency. The court concluded that while the respondents' cited judgments were not pari materia with the present case, the petitioner's reasons for seeking police remand were clear, cogent, valid, and weighty, justifying the extension of police custody.

Conclusion:
The court set aside the impugned orders dated 23.11.2019, remanding the respondents to the custody of the Directorate of Enforcement till 28.11.2019. The petitions were allowed, with instructions for the respondents to be produced before the competent court immediately after the remand period for appropriate orders.