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TMI Blog2017 (5) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... hat petitioner's arrest is premature as the offences under Sections 420/406/409/467/468/471/188/120-B IPC alleged in FIR No.205/2016 PS Crime Branch have not been prima facie established; no charge-sheet till date has been filed and the investigation is still at preliminary stage. The petitioner was not named therein; he was never asked to join the investigation in the said proceedings. Enforcement Directorate (hereinafter referred as 'ED') can't conduct investigation before the Crime Branch concludes its investigation in the FIR No.205/2016 as the 'scheduled offence' requires to be proved before attracting provisions of PMLA. Learned Senior Counsel further submitted that Sections 3 & 4 of PMLA are not attracted and an individual can be arraigned as an accused under PMLA only if 'scheduled offence' as defined in the PMLA is committed and the proceeds obtained from the criminal activity relating to such 'scheduled offence' is being laundered to make it legal or to take the benefit of the same. It is imperative for the investigating agency to ascertain that first the 'scheduled offences' are prima facie, proven or accepted to have been committed without any reasonable apprehension of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awoodbhai Memon vs. State of Gujarat', 1988 SCC 271; 'State of Uttaranchal vs. Rajesh Kumar Gupta', 2007 (1) SCC 355; 'Arnesh Kumar vs. State of Bihar & Anr.', 2014 (8) SCC 273, & 'Sanjay Chandra vs. Central Bureau of Investigation', 2012 (1) SCC 40. 7. Learned Addl. Solicitor General refuting the contentions urged that the ED has no role to play in the investigation of the offences in FIR No.205/2016 lodged by the police of Police Station Crime Branch; it is not concerned with the outcome in the said investigation. For the purpose of starting investigation by ED for commission of the offences under PMLA, only criminal complaint or FIR in respect of allegations for 'scheduled offence' is required. After the initiation of the investigation under PMLA, the proceedings are totally independent and distinct from the proceedings of the 'scheduled offence'. The petitioner was arrested only on the basis of the material in his possession by the Investigating Officer for commission of offence punishable under Sections 3 & 4 of the PMLA. Complaint under Section 45 PMLA has already been filed against the petitioner and others and the learned Special Judge has taken cognizance. Learned Addl. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai. Total cash (demonetized currency of Rs. 31.75 crores) was deposited in eight accounts of Kotak Mahindra Bank during 15.11.2016 to 19.11.2016 with RTGS inwards to the tune of Rs. 6.86 crores. During the said period, 75 Demand Drafts to the tune of Rs. 39.64 crores were issued from the said accounts; out of which three demand drafts of Rs. 1.11 crores were cancelled. Demand Drafts issued from Kotak Mahindra Bank amounting to Rs. 34.88 crores were recovered. Demand drafts amounting to Rs. 3.12 crores all dated 15.11.2016 issued by ICICI bank and Bank of Baroda have also been recovered. The funds actually pertaining to the petitioner were carefully distanced away from him through a calibrated planning. The collection of cash (demonetized currency) was used to be done through meetings at different dates with the petitioner and his associates Ashish Kumar, Dinesh Bhola and Raj Kumar during 14.11.2016 to 19.11.2016. The demonetized cash used to be taken over by Ashish Kumar and Raj Kumar Goel and others. Demand Drafts were used to be handed over by Ashish Kumar to Dinesh Bhola. Raj Kumar Goel used to bring such cash and depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that FIR No.205/2016 was lodged on 25.12.2016 and the matter is still under investigation. The petitioner has not been exonerated in the said proceedings as no charge-sheet has so far been filed. It is true that under Section 44 of PMLA, to avoid conflicting and multiple opinions of the Court, there is a provision of trial by a Special Court in case of 'scheduled offence' and offence under PMLA. Possibility of joint trial would arise under Section 44 of PMLA only when charge-sheet is filed upon completion of investigation in case FIR No.205/2016 and the case is committed to the Special Court. Section 44 does not talk of joint investigation or joint trial. It makes it mandatory that the offence punishable under Section 4 of the Act and any scheduled offence connected to the offence under that section shall be triable only by Special Court constituted for the area in which the offence has been committed. 11. Section 44 PMLA reads as under : "(a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed. Provided that the Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of crime. The opposite parties had challenged the order of discharge before this Court but this Court has upheld the order of discharge passed by the trial Court. The said order has become final." (Emphasis given) 13. More so in Sushil Kumar Katiyar's case (supra), the complaint under Section 45 PMLA was filed for commission of offences under Sections 3 & 4 of PMLA only after the petitioner therein had been discharged from all the 'schedule offences' on merits by the courts of competent jurisdiction. The discharge order was upheld by the High Court and had attained finality. 14. In FIR No.205/2016 allegations are that Raj Kumar Goel; Ashish Kumar, Bank Manager, Kotak Mahindra Bank, K.G. Marg Branch and others conspired for illegal conversion of demonetized currency notes into monetized currency by way of depositing cash in various accounts of the firms and subsequently getting Demand Drafts issued in fictitious names. It is further alleged in the said FIR that accused therein opened bank accounts in the name of 'Group of Companies' in Kotak Mahindra Bank. In ECIR No.18, transactions statements of accounts were collected pertaining to these 'Group of Companies' from Kotak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquired as to why the Demand Drafts were got issued in the names of the persons referred above and what was its specific purpose. Learned Senior Counsel for the petitioner avoided to answer these queries stating that the defence of the petitioner could not be disclosed at this juncture to impact his case during trial. Apparently, no plausible explanation has been offered as to what forced the petitioner to deposit the old currency to the tune of Rs. 31.75 crores in eight accounts of the different 'Group of Companies' in Kotak Mahindra Bank during the short period from 15.11.2016 to 19.11.2016. There was no explanation as to why the Demand Drafts for the said amount were got issued in the name of sham people whose identity was not known. The purpose of all this exercise seemingly was to deposit the cash (old currency) first, get the Demand Drafts issued in fictitious names and obtain monetized currency by cancelling them subsequently. The petitioner also did not place on record any document whatsoever to show as to from which legal source, the cash was procured to deposit in the bank accounts of strangers. I find no substance in the petitioner's plea that petitioner's only liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the offence under PMLA is cognizable, the respondent was bound to follow and comply with the said provision of the Code of Criminal Procedure. It was further observed that in the absence of the procedure having been followed, the rights of the petitioner under Article 21 of the Constitution stand violated." 20. Learned ASG Mr. Jain has submitted that the petitioner's arrest was duly made under Section 19 of PMLA as the petitioner had committed the offence of money laundering. Section 19 of PMLA provides that if, on the basis of the material in his possession, the authorized officer has reason to believe that a person is guilty of offence punishable under Section PMLA, he may arrest such person. At the time of taking cognizance, the learned Trial Court had noted that there was sufficient material on record to proceed against the petitioner and others for commission of offence punishable under Section 4 of PMLA. 21. Besides above, Section 45 of PMLA puts stringent conditions for the release of an accused charged under part A of the Schedule on bail. These conditions have overriding effect over the general provisions of Cr.P.C. In Anand Chauhan's case (supra) this Court pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Crl.) No. 2823/2016 observed that the pendency of the writ petition shall not prevent the petitioner from moving an application to seek bail under the Code, and the said direction was continued vide order dated 07.10.2016, but, the same does not mean that this Court while dealing with the bail application under Section 439 Cr.P.C. can take into consideration aspects which fall within the realm of writ jurisdiction, and in respect whereof the petitioner's writ petition is pending. This Court is clearly bound by the decision of the Supreme Court in Gautam Kundu (supra)." 22. Antecedents of the petitioner are also to be noted. Undisputedly, the petitioner along with others is also involved in case FIR No.197/2016 registered under Section 420/409/188/120B IPC on 14.12.2016 by Crime Branch and ECIR No.14/DZ-II/2016 registered on 16.12.2016 by ED for the offences under Sections 3/4 PMLA. It is alleged that on 10.12.2016 at around 10.00 p.m., raid was conducted by Crime Branch and Income Tax Department at the petitioner's office premises jointly. It is alleged that during the said raid Rs. 13.62 crores were recovered which included Rs. 2.62 of new currency in the Rs. 2000 denomination. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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