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2022 (11) TMI 927 - DSC - Money LaunderingMoney Laundering - generation of proceeds of crime - predicate offence - whether materials indicates existence of scheduled offence - approbate and reprobate of proceeds of crime - whatever monies and trail thereof mentioned, demonstrate that no monies have been received by the applicant(A3) from the alleged FSI Sale Proceeds? - twin conditions of section 45(1) of PMLA fulfilled or not - HELD THAT - This Court reached at following conclusion. i. Extreme and exceptional power of effecting arrest which ought to have been used very very sparingly, has been used by the ED Investigating Officers under Sec.19 of the PML Act, is ab initio illegal. Hence, on this count alone the question of attracting rigors of stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act does not arise and both accused cannot be detained in the judicial custody henceforth, for the same. ii. Simply labeling pure civil disputes with money laundering or an Economic Offence itself cannot automatically acquire such status and ultimately drag an innocent person in a miserable situation in the guise of arrest under Sec.19 and stringent twin conditions of Sec.45(1)(i)(ii) of the PML Act. THE Court has to do what is right irrespective of who is before it. iii. From the records materials and the detailed discussion made above, it is clear how Pravin Raut (A3) is arrested for a pure civil litigation, whereas Sanjay Raut(A5) for no reason. This truth is glaring. The Court is under legal obligation and duty to find out truth even at the stage of bail. The Hon'ble Supreme Court time and again laid down, Truth is the guiding star. Criminal trial is voyage of discovery of truth. The truth alone triumphs and every endeavour has to be made by the Court to discover the truth and make justice. iv. Even otherwise the twin conditions cast such an important duty on the Court to have a thorough examination and assessment at the stage of bail without making any mini trial v Even if MHADA, who is party to the every stage and every litigation, which had reached upto the Hon'ble High Court, yet astonishingly lodged FIR No.22 of 2018 for the facts and circumstances of transaction which had allegedly taken place during 2006 to 2013. In this way the conduct of MHADA right from beginning till date is suspicious and even ED admitted the same in their complaints, yet ED has not made any MHADA staff accused. vi MHADA's attitude as such lodging FIR No.22 of 2018 on one fine morning can neither throw dust in the eyes of the Court nor can brush of and wash out long civil litigations which were even acknowledged by the Hon'High Court. Hence, this Court cannot join its voice in the chorus of ED and MHADA. vii Rakesh and Sarang (A1 and A2) for their misdeeds and being the main accused persons admitted the same by affidvit of Sarang Wadhawan, were not arrested by the ED but they have been left scot free. But at the same time Pravin Raut(A3) was arrested for civil dispute, whereas Sanjay Raut(A5) for no reason. All this clearly indicates disparity, pick and choose attitude of the ED and the Court cannot put premium on the same but legally bound to make parity. viii If the Court still accepts contention of ED and MHADA and further rejects the bail applications of Pravin Raut (A3) and Sanjay Raut(A5) that will amount putting premium on such pick and choose strategies of the Agency. Certainly in that event any common man, innocent and honest people, will loose faith and confidence which they have reposed in the judicial system as a temple of justice. Hence, judicial principles which guide the Court cannot be ignored. ix. Many statements of witnesses recorded by ED clearly refer the prominent role of Wadhawans (A1 and A2) and their HDIL, but they were not arrested and Pravin Raut (A3) and Sanjay Raut(A5) who have absolutely no concern in generating POC or laundering money as well as indulging the criminal activities relating to the Scheduled Offence, were arrested for subsequent transactions, they have made from their own money. Such conduct of the Agency cannot be garbed for detaining both accused (A3 and A5) behind bars for an uncertain period. x. Like the laudable object of the PML Act casting duty on the Court to safeguard it, equally the court is protector of rights of accused and innocent persons who are illegally arrested. The Court cannot become predator of such valuable rights of the accused, but is duty bound to be a protector thereof as laid down by the Hon'ble Supreme Court. If the Court ignores this aspect, where the people will go for justice? xi. This Court being the Court of First Instance has great responsibility of not committing a slightest mistake which will turn into miscarriage of justice. Therefore, this Court has taken a thorough survey of the available records/materials within four corners of the limits required to resolve this question relating to the twin conditions and only thereafter, arrived at such conclusion by not transgressing the boundaries and not committing any mini trial. xii. In PMLA bail matters, orders become long and run into at least around 40 50 pages, does not mean that Court has done minitrial as argued by the Ld. A.S.G. Mr. Anil Singh. On the contrary the stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act prescribe prima facie thorough examination. Even the recent order of the Hon'ble High Court in the case of Anil Vasantrao Deshmukh (supra) runs into 53 pages. The present order is a common order for two bail applications relating to voluminous record, hence bound to run in number of pages. Both accused are basically arrested illegally. Both of them are entitled to parity in view of disparity made by the ED in not arresting the main accused persons Rakesh(A1), Sarang (A2), their HDIL, MHADA and Government Officials/staff responsible for misdeeds of A1 and A2 at the relevant time in 20062018. Apart from this, I also held that both accused have satisfied twin conditions under Sec.45(1)(i)(ii) of the PML Act. There is absolutely nothing before the Court that eversince Pravin Raut (A3) has been released on bail in a Scheduled Offence, he has committed any breach of the conditions imposed by the said Court. Similarly, whatever contended by ED against Sanjay Raut(A5) can be safeguarded by imposing certain conditions on him. Application allowed.
Issues Involved:
1. Legality of the arrests of the accused under Section 19 of the PML Act. 2. Examination of the existence of Proceeds of Crime (POC) and criminal activity relating to the Scheduled Offence. 3. Application of stringent twin conditions under Section 45(1)(i)(ii) of the PML Act. 4. Disparity and selective arrest strategy by the Enforcement Directorate (ED). 5. Quality and reliability of the evidence and statements under Section 50(2) and (3) of the PML Act. 6. Allegations of political vendetta and abuse of power by the ED. 7. Examination of the civil nature of the dispute and its qualification as a Predicate Offence. Detailed Analysis: 1. Legality of the Arrests: The court found that the arrests of Pravin Raut (A3) and Sanjay Raut (A5) under Section 19 of the PML Act were illegal, emphasizing that the power to arrest should be used sparingly and as a last resort. The court noted that the arrests were made without proper qualifications and primarily for a civil dispute, which is not a Predicate Offence under the PML Act. The court highlighted that the ED did not arrest the main accused persons Rakesh Wadhawan (A1) and Sarang Wadhawan (A2), who admitted their misdeeds, indicating a selective approach in the arrests. 2. Examination of Proceeds of Crime (POC): The court held that there was no clear evidence to establish that the amounts received by Pravin Raut (A3) and Sanjay Raut (A5) were Proceeds of Crime generated from criminal activities relating to the Scheduled Offence. The court noted that the ED's contention that Pravin Raut received Rs.95 Crore from HDIL out of an outstanding illegal loan from PMC Bank contradicted their claim that the same amount was generated from the sale of FSI in the Patra Chawl Project. This self-contradictory stance by the ED failed to establish the existence of POC. 3. Application of Twin Conditions: The court emphasized that the stringent twin conditions under Section 45(1)(i)(ii) of the PML Act require a thorough examination of the quality of materials and evidence. The court found that the materials and statements provided by the ED lacked quality and reliability, and thus, the twin conditions were not satisfied. The court concluded that both accused were not likely to commit any offence while on bail and were entitled to be released on bail. 4. Disparity and Selective Arrest Strategy: The court criticized the ED for its selective approach in arresting Pravin Raut (A3) and Sanjay Raut (A5) while leaving the main accused persons Rakesh Wadhawan (A1) and Sarang Wadhawan (A2) scot-free. The court highlighted that this disparity indicated a pick-and-choose strategy by the ED, which could not be justified at law. The court stressed the importance of maintaining parity and not putting a premium on such selective strategies. 5. Quality and Reliability of Evidence: The court scrutinized the statements recorded under Section 50(2) and (3) of the PML Act and found them lacking in quality and reliability. The court noted contradictions and inconsistencies in the statements of witnesses, including those of Ms. Swapna Patkar and Mr. Chandan Kelekar. The court emphasized that the quality of material is crucial in deciding bail applications under the PML Act and that the statements provided by the ED did not meet the required standard. 6. Allegations of Political Vendetta: The court acknowledged the allegations of political vendetta and abuse of power by the ED, noting that Sanjay Raut (A5) is a Member of Parliament and a senior leader of the Shivsena Party. The court found that the arrests and the manner in which they were conducted indicated a possible motive of political vendetta, further questioning the legitimacy of the ED's actions. 7. Civil Nature of the Dispute: The court concluded that the dispute was purely civil in nature and did not qualify as a Predicate Offence under the PML Act. The court highlighted that the long-standing civil litigation and the involvement of MHADA and other parties indicated that the matter was not criminal but civil. The court held that the civil dispute could not be labeled as money laundering or an economic offence to justify the arrests and detention of the accused. Conclusion: The court granted bail to Pravin Raut (A3) and Sanjay Raut (A5), finding that their arrests were illegal and that the stringent twin conditions under Section 45(1)(i)(ii) of the PML Act were not satisfied. The court emphasized the importance of maintaining parity, the quality of evidence, and the civil nature of the dispute in its decision. The court also highlighted the need for the ED to conduct trials expeditiously and not just focus on arrests.
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