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TMI Blog2019 (8) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... nd application [Bail Appln. 1713/2018], petitioner seeks pre-arrest bail in ECIR/07/HIU/2017, registered under the provisions of The Prevention of Money-Laundering Act, 2002 (henceforth referred to as the 'PMLA'). 2. With the consent of learned counsel representing both the sides, these applications have been heard together and are being disposed of by this common order. 3. It is the case of petitioner that M/s INX Media Pvt. Ltd. sought approval for FDI in a proposed TV channel upto 46.216 percent of the issued equity capital. The policy allowed investment upto 74 percent of equity. Foreign Investment Promotion Board (FIPB) Unit examined the proposal, found it to be in order and submitted the case to the Finance Minister. FIPB consisted of six secretaries to the Government of India and was chaired by the Secretary, Economic Affairs. FIPB unanimously recommended the proposal and placed it before the Finance Minister for his approval, along with several other proposals. In May, 2007, the Finance Minister (i.e. the petitioner herein) granted his approval in the normal course of official business. 4. According to learned senior counsel for petitioner, ten years later, based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o seek petitioner's custody. It is urged that since petitioner is cooperating in investigation, therefore, there is no ground to deny bail to petitioner. 7. Learned senior counsel for petitioner vehemently argued that there is no averment or allegation in the FIR that the petitioner accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, prima facie the accusation under Section 8 of PC Act does not apply to the case of petitioner. It is further submitted that since offence under Section 8 of PC Act is not made out, therefore, the ED cannot lodge money laundering case against petitioner. Learned senior counsel for petitioner vehemently submits that offences under Sections 420/120B IPC and under the PC Act were not Scheduled Offences under the PMLA and so, petitioner cannot be prosecuted under the provisions of PMLA. It is pointed out by learned senior counsel for petitioner that minimum threshold for ED to acquire jurisdiction at the relevant time was Rs. 30 Lakh and in the instant case, there is no averment of any payment apart from Rs. 10 Lakh approximately, which was allegedly paid by M/s INX Media Pvt. Ltd. to M/s Adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd decision of High Court of Mumbai in Bail Appl. No. 286/2018 titled as Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement & Ors. and decision of High Court of Madhya Pradesh in M.Cr.C.No.34201/2018, titled as Vinod Bhandari Vs. Assistant Director, Directorate of Enforcement. 10. On behalf of respondents, it is submitted that Section 19 of PMLA empowers the ED to arrest petitioner on the basis of material collected so far and respondents have reason to believe that petitioner is guilty of offences of money laundering, cheating etc. and some of the proceeds of crime have been already identified and have been attached vide provisional attachment order of 10th October, 2018 and that petitioner's custodial interrogation is necessary in order to trace out further proceeds of the crime. According to respondents, petitioner's son Karti Chidambaram is involved in INX Media case, which is being currently investigated by CBI and ED and that petitioner's son has committed offences under the IPC and PMLA at the behest of petitioner. According to learned Attorney General of India, material on record manifestly indicates that petitioner was personally involved in the act of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply of respondent-CBI, material on record and the decisions cited, I find that from the material collected by the Investigating Agency, it prima facie appears that Rs. 3 Crores approximately has come into the account of M/s Advantage Strategic Consulting Pvt. Ltd. (ASCPL) and other concerns during the tenure of the petitioner as the Finance Minister. The table below shows the payments made from Span Fibre and Satyam Fibres to ASCPL and associated entities:- BROKER NAME YEAR PERIOD TOTAL Amount in Rs. TDS DEDUCTED@ AMOUNT PAID in Rs. Paid by ASCPL 2007-08 Q1 3875077 439046 3436031 Span 2007-08 Q2 3462875 392344 3070531 Span 2007-08 Q3 2617386 296550 2320836 Span 2007-08 Q4 2573662 291596 2282066 Span TOTAL 12529000 1419536 11109464 KRIYA FMCG DISTRIBUTORS PVT. LTD. 2007-08 Q1 2662667 301680 2360987 Span 2007-08 Q2 2259514 256003 2003511 Span 2007-08 Q3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i R. Joseph Kennedy of Blue Bugs was given the task of designing the logo, stationery of M/s Castle Gordon Global Advisory Ltd., UK, development of its website, domain name registration, hosting and email facilities. An invoice of Rs. 46,175/- for the work was raised by Blue Bugs in the name of ASCPL. Shri Mike Nithavrianakis who had allegedly floated M/s Castle Gordon Global Advisory Ltd. is the Director and partner of Shri Karti P. Chidamdaram in M/s Totus Tennis Ltd. (d) Incorporation expenses of M/s Ausbridge Holding and Investments Pvt. Ltd. (in which Karti P. Chidambaram and Mohanan Rajesh were promoters, directors and shareholders ) were paid by ASCPL vide cheque no. 116868 dated 23.02.2006. Karti P. Chidambaram held 95% shares in Ausbridge in 2006. (e) Mohanan Rajesh, Director in ASCPL and a schoolmate of Karti P. Chidambaram has disclosed in his statement that on Karti's instructions ASCPL allotted 66.67% of the total share to Ausbridge Holding and Investments Pvt. Ltd., a company for purchase of shares of ASCPL was made by Mohanan Rajesh from his personal account and he was later compensated by way of payments from companies controlled by acquaintances of Shri Karti P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares or compensate any money for them. (l)The recovery of paintings purchased by ASCPL from the premises of Karti P. Chidambaram during searches conducted on 13.01.2018, the statements of Shri S. Bhaskararaman recorded under Section 50 of PMLA, the extracts of books of accounts of ASCPL as recovered from the hard disks of Shri S. Bhaskararaman seized from the premises of Shri Karti P. Chidambaram on 1.12.2015, banks statements of ASCPL, statements of people dealing with ASCPL recorded under section 50 of PMLA, emails of Shri Karti P. Chidambaram, Shri S. Bhaskararaman etc. recovered from the aforesaid hard disks seized on 1.12.2015 all show that every aspect of the business affairs of ASCPL was controlled by Karti P. Chidamabram, every expense incurred by ASCPL no matter how small was approved by Karti P. Chidambaram, expenses of Karti P. Chidambaram were paid by ASCPL and the people making payments to ASCPL said that the payments were made to Karti P. Chidambaram. This shows that the ASCPL was beneficially owned by Karti P. Chidambaram. 14. The investigation conducted reveals that ASCPL and other concerns are not conducting any genuine and bona fide business activities. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation conducted further revealed that no brokerage services were actually rendered by ASCPL or associate entities (CBN Placement and Management Centre and Kriya FMCG). The investigation conducted with the buyers of PSF shows that they had never interacted with ASCPL or associate entities. This fact was also admitted by the directors of ASCPL, including Sh. CBN Reddy who is also the proprietor of CBN Placement and Management Centre and the director and shareholder of Kriya FMCG. Sh. Bhaskararaman, the main person behind the laundering of these funds also stated that these debit notes were raised on the directions of Sh. Karti P. Chidambaram to show some transaction which in-fact did not occur. It is further revealed that fake invoices were raised to the companies by ASCPL and other concerns in order to show and legitimize the payments received from those companies which were in fact the bribe money for the favours shown by the petitioner. It is also established that the money was collected by Karti P. Chidambaram through these concerns on behalf of the petitioner for the favours shown by the petitioner to the companies who had transferred money into the account of ASCPL and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter, ASCPL sold further 36245 share of Vasan to Vasan Medical Hall @ Rs. 5242/- per share at a total value of Rs. 19 Crores. Therefore, it is projected that the amount of Rs. 19 Crores is also property involved in money laundering as it is arising from sale of shares of Vasan i.e. property involved in money laundering. 20. The investigation conducted further reveals as follows:- Out of the above property involved in money laundering i.e. amount received by ASCPL from sale of shares of Vasan Healthcare, further property was purchased including that of AGS Healthcare acquired for Rs. 11 Crores. These shares are also property involved in money laundering as they were bought from tainted money. They were further sold by ASCPL for a sum of Rs. 29,49,25,885/- i.e. at benefit of Rs. 18.49 Crores approx. This money is again tainted money as it arises out of sale of property involved in money laundering. The funds of Rs. 22.5 Crores derived by ASCPL from the sale of shares of Vasan Health Care to Sequoia, funds of Rs. 19 Crores derived from the sale of shares of Vasan to Vasan Medical Hall and the profit of Rs. 18.49 Crores approx. on the sale of shares of AGS Health Care was arisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences in question being Scheduled or not Scheduled, as these legal pleas are sub-judice before Supreme Court and cannot persuade this Court to grant pre-arrest bail, as the gravity of offence committed by petitioner is quite evident from case diaries etc. produced by the Investigating Agencies. The gravity of offence committed by petitioner demands denial of pre-arrest bail to him. 22. Economic offences constitute a class part and need to be visited with a different approach in matters of bail. Taking note of huge magnitude of conspiracy angle qua petitioner, it would be premature to jump to a conclusion that provisions of PMLA would not apply to the instant case, as it cannot be said that the amount involved is below Rs. 30 Lakhs. Rather, money laundering involved in this INX Media Scam and Aircel Maxis deal scandal is of Rs. 3,500 Crores. 23. Supreme Court in Y.S Jagan Mohan Reddy (Supra) while dealing with a money laundering case, has reiterated as under:- "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations of Supreme Court in CBI Vs. Anil Sharma (Supra) which aptly apply to the instant case, are as follows:- "6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of a suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to third-degree methods need not be countenanced, for, such an argument can be advanced by all accused in all criminal cases. The Court has to presume that responsible police officers would conduct themselves in a responsible manner and that those entrusted with the task of disinterring offences would not conduct t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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