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TMI Blog2011 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... of Enforcement Case Information Report No.02/MZO/07 based on certain information and documents received from the Income Tax Department. On the said date, the Income Tax Department carried out a search in the premises owned and/or possessed by the Respondent No.1 and a sum of Rs. 88,05,000/-in cash was found in his residence at Peddar Road, Mumbai, and was seized. A number of imported watches and some jewellery were also found and seized during the search. 4. The search also revealed that the Respondent No.1 had purchased an expensive car, worth about Rs. 60 lakhs, from one Anil Shankar of Bangalore through one Sheshadari and that he had paid till then a sum of Rs. 46 lakhs towards purchase of the said car. It also appears that the documents which were recovered by the Income Tax Department contained several transfer instructions said to have been issued by the Respondent No.1 for transfer of various amounts to different persons from the bank accounts held by him outside India. The said amounts forming the subject matter of the instructions issued by the Respondent No.1 ran into billions of dollars. The Income Tax Department assessed the total income of the Respondent No.1 for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e available on record prima facie discloses the commission of an offence by the Respondent No.1 punishable under the provisions of the PML Act, this Court vide order dated 29th March, 2011, disposed of the appeal as well as the Special Leave Petition and set aside the order dated 11th March, 2011, of the Special Judge, PMLA, Mumbai, and directed that the Respondent No.1 be taken into custody. Thereafter, the Respondent No.1 was remanded into custody from time to time and the complaint came to be filed on 6th May, 2011. A further prayer for bail was thereafter made on behalf of the Respondent No.1 on 1st July, 2011, but the same was dismissed by the Special Judge, PMLA, Mumbai, on the same day. 8. The said order of the Special Judge, PMLA, Mumbai, rejecting the Respondent No.1's prayer for bail was challenged before the Bombay High Court in Bail Application No.994 dated 2nd July, 2011. After a contested hearing, the Bombay High Court by its order dated 12th August, 2011, granted bail to the Respondent No.1 and the said order is the subject matter of the present proceedings before this Court. 9. Learned Additional Solicitor General, Mr. Haren P. Raval, appearing for the Union of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 2(u) of the PML Act, which describes "proceeds of crime" to mean any property derived or obtained, directly or indirectly by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. He, thereafter, referred to the definition of "scheduled offence" in Section 2(y) of the above Act to mean (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences amounted to Rs. 30 lakhs or more. 12. The learned ASG submitted that the enormous sums of money held by Shri Hassan Ali Khan in foreign accounts in Switzerland, United Kingdom and Indonesia and the transactions in respect thereof, prima facie indicated the involvement of the Respondent No.1 in dealing with proceeds of crime and projecting the same as untainted property, which was sufficient to attract the provisions of Section 3 of the PML Act, 2002. The learned ASG submitted that under Section 24 of the aforesaid Act, when a person is accused of having committed an offence under Section 3, the burden of proving that the monies involved were neither proceeds of crime nor unta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls with offences under the Immoral Traffic (Prevention) Act, 1956, and paragraph 5 deals with offences under the Prevention of Corruption Act, 1988. The learned ASG submitted that the facts of the case attracted the provisions of paragraph 1 of Part A of the Schedule, since the money acquired by Shri Hassan Ali Khan, besides being the proceeds of crime, is also connected with transactions involving the international arms dealer, Adnan Khashoggi. The learned ASG submitted that the same became evident from the notarized document which had been obtained by the Directorate of Enforcement during the course of investigation which had been signed by the Respondent No.1 on 29th June, 2003, at London and notarized by Mr. Nicolas Ronald Rathbone Smith, Notary Public of London, England, on 30th June, 2003. It was also submitted that the said document certified the genuineness of the signature of the Respondent No.1 and also mentioned his Indian Passport No. Z-1069986. The learned ASG further contended that the said notarized document also referred to Dr. Peter Wielly, who was a link between Mr. Adnan Khashoggi, and one Mr. Retro Hartmann on whose introduction the Respondent No.1 opened an acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of a Three Judge Bench of this Court in Uday Mohanlal Acharya v. State of Maharashtra [2001] 5 SCC 453, wherein the scope of Section 167(2) Cr.P.C. and the proviso thereto fell for consideration and it was the majority view that an accused had an indefeasible right to be released on bail when investigation is not completed within the specified period and that for availing of such right the accused was only required to file an application before the Magistrate seeking release on bail alleging that no challan had been filed within the period prescribed and if he was prepared to offer bail on being directed by the Magistrate, the Magistrate was under an obligation to dispose of the said application and even if in the meantime a charge-sheet had been filed, the right to statutory bail would not be affected. It was, however, clarified that if despite the direction to furnish bail, the accused failed to do so, his right to be released on bail would stand extinguished. 18. It was, therefore, submitted that the Bombay High Court had granted bail to the Respondent No.1 on an incorrect interpretation of the law and the said order granting bail was, therefore, liable to be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be treated as offences under the Indian Penal Code, the Passport Act and the Antiquities and Art Treasures Act, 1972. On the question of the alleged absconsion of the Respondent No.1, Mr. Bagaria submitted that the said Respondent had not gone to Singapore on his own volition, but had there been taken by one Amalendu Kumar Pandey and Shri Tapuriah. Shri Pandey was subsequently made a witness and Shri Tapuriah was made a co-accused with the Respondent No.1. 21. Mr. Bagaria also contended that once bail had been granted, even if the special leave petition is maintainable, the power to cancel grant of such bail lies with the High Court or the Court of Sessions under Section 439(2) Cr.P.C. and, consequently, all the principles laid down by this Court relating to cancellation of bail, would have to be considered before the order granting bail could be cancelled. Mr. Bagaria submitted that even though the offences were alleged to have been committed by the Respondent No.1 as far back as in the year 2007, till he was arrested on 7th May, 2011, there had been no allegation that he had in any manner interfered with the investigation or tampered with any of the witnesses. Mr. Bagaria subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f having committed the offence under Section 3, the burden of proving that proceeds of crime are in tainted property shall be on the accused." 24. The High Court having proceeded on the basis that the attempt made by the prosecution to link up the acquisition by the Respondent No.1 of different Passports with the operation of the foreign bank accounts by the said Respondent, was not believable, failed to focus on the other parts of the prosecution case. It is true that having a foreign bank account and also having sizeable amounts of money deposited therein does not ipso facto indicate the commission of an offence under the PML Act, 2002. However, when there are other surrounding circumstances which reveal that there were doubts about the origin of the accounts and the monies deposited therein, the same principles would not apply. The deposit of US$ 700,000 in the Barclays Bank account of the Respondent No.1 has not been denied. On the other hand, the allegation is that the said amount was the proceeds of the sale of diamond jewellery which is alleged to have been stolen from the collection of the Nizam of Hyderabad. In fact, on behalf of the Respondent No.1 it has been submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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