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TMI Blog2020 (7) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... stituted under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the 'Act'), for commission of offence under Section 3 which is punishable under Section 4 of the Act. 4. The allegation against the petitioner is of opening 22 bank accounts in his name using forged identification documents. 5. Mr. Sanjay Kumar, learned counsel for the petitioner, submitted that though the present case under the Act is an offshoot of EOU Case No. 13 of 2013, which was instituted by the State police in which the allegation is that almost rupees five crores were transferred into various fake accounts from government funds by cloning cheques issued by the State authorities, but against the petitioner, the allegation is limited only to about rupees nine lakhs. Learned counsel submitted that even if it is accepted, for the sake of argument, that the petitioner is involved in such fraudulent act, taking into consideration his period of incarceration, which is from 03.03.2017, he may be released on bail. It was submitted that even if convicted, his sentence would range between three to seven years and since the petitioner has not yet been convicted in any other offence, it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied that on the basis of materials, there are reasonable grounds for believing that the petitioner is not guilty of such offence and also, is not likely to commit any offence while on bail. It was submitted that the petitioner being involved in another case in Assam of similar nature, and thereafter again committing such crime in the State of Bihar and in many other states also there being investigation under progress with regard to involvement of the petitioner in similar types of crimes under the Act, the petitioner cannot be trusted not to commit such offence while on bail. Learned counsel submitted that with regard to reasonable grounds being available before the Court for believing that the petitioner is not guilty of such offence, the same is also not satisfied, as the petitioner himself has given statement under Section 50 of the Act accepting his complicity and providing details of how such crime was perpetrated. As far as the period of incarceration was concerned, learned ASG submitted that in view of the aforementioned two conditions for grant of bail not being satisfied, the prayer for bail to the petitioner deserves to be rejected, more so, since it would not override ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Reddy v. CBI, since reported as (2013) 7 SCC 439. Learned ASG further submitted that recently the Hon'ble Supreme Court in Directorate of Enforcement, New Delhi v. Upendra Rai being Special Leave Petition (Criminal) Diary No. 5150 of 2020 vide order dated 03.06.2020 has issued notice and stayed the operation of the order of the Hon'ble Delhi High Court which granted bail to Upendra Rai in a case under the Act and directed that if the said Upendra Rai, meaning thereby that if not already been released on bail, he shall not be released. 7. Learned APP adopted the arguments of learned ASG against grant of bail to the petitioner and sought rejection of the present application. 8. At this stage, the Court finds it apposite to consider the relevant aspects relating to the Act in the background of various precedents. 9. The Hon'ble Supreme Court in Nikesh Tarachand Shah v. Union of India and Anr., since reported as (2018) 11 SCC 1, ruled: '53. .o?=it is unnecessary for us to go into this aspect any further, in view of the fact that we have struck down Section 45 of the 2002 Act as a whole. 54. Regard being had to the above, we declare Section 45(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs:" Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees may be released on bail, if the Special Court so directs:"' (emphasis supplied) 11. Section 45 of the Act in its entirety presently stands as: '45. Offences to be cognizable and non-bailable.--(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted bail and held: '7. At the outset, it is to be noted here that, the Supreme Court in the case of Nikesh Shah (supra) has in unequivocal terms held in Para 44 that 'we have struck down Section 45 of the Act as a whole'. It is further held by the Supreme Court in Para 45 that, we declare Section 45(1) of the Prevention of Money Laundering Act, 2002 in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India.' 13. In Dr. Vinod Bhandari v. Asst. Director, Directorate of Enforcement, since a learned Single Judge of the Madhya Pradesh High Court granted bail and opined: '12. The Supreme Court in the case of Nikesh Tarachand Shah (supra) has in unequivocal terms held in para 44 that 'we have struck down Section 45 of the Act as a whole'. It is further held by the Supreme Court in para 45 that, we declare Section 45(1) of the PMLA Act in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. 13. It is to be noted here that, after effecting amendment to Section 45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence. This means that if an order passed by the Appellate Authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the Appellate Authority would be restored and it can be said to be pending before the Appellate Authority after the quashing of the order of the Appellate Authority. The same cannot be said with regard to an order staying the operation of the order of the Appellate Authority because in spite of the said order, the order of the Appellate Authority continues to exist in law and so long as it exists, it cannot be said that the appeal which has been disposed of by the said order has not been disposed of and is still pending. o?=.' (emphasis supplied) 18. In V.P. Sheth v. State of MP, since reported as (2004) 13 SCC 767, the Hon'ble Supreme Court expressed: '7. Bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court. Even though the order dated 03.06.2020 (supra) concludes with 'if the respondent has not already been released on bail.', in the opinion of this Court, the effect of the above would be: (a) if the respondent therein was not already released on bail, he would not be so released; and, (b) irrespective of the factum of such release or otherwise, the decision in Upendra Rai v. Directorate of Enforcement (supra) by the Delhi High Court would not be of any help to anyone else, till such time further orders are passed by the Hon'ble Supreme Court in the matter. 20. In any event, the applicability, or lack thereof, of the ratio in Nikesh Tarachand Shah (supra) post the amendment(s) to the Act, as it now stands, has not been, and is not being examined by this Court in the present proceeding, as the said point has neither been raised nor adverted to by any party herein, and is likely to be determined by the Hon'ble Supreme Court in the pending afore-referred lis. However, this Court has noticed the above for the sake of completeness. 21. In Nimmagadda Prasad v. Central Bureau of Investigation, since reported as (2013) 7 SCC 466, the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le doubt. 25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.' (emphasis supplied) 22. In Rohit Tandon (supra), the Hon'ble Supreme Court, while upholding the rejection of bail, laid down: '21. The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused persons under Section 24 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439]. Usually socio-economic offence has deep-rooted conspiracies affecting the moral fibre of the society and causing irreparable harm, needs to be considered seriously.' (emphasis supplied) 25. In the present case, the petitioner faces serious allegations, inter alia, of transferring government funds into various fake accounts by cloning cheques issued by the State authorities. While Mr. Sanjay Kumar, learned counsel for petitioner submitted that he has secured bail in the CBI case in Assam, Mr. S.D. Sanjay, learned ASG submitted that the petitioner is accused of similar offences in other states which are at different stages of investigation, as stated in the counter affidavit filed by the Union of India. The Court notes that the case involves defrauding the public exchequer and the petitioner has admitted his role by the statement under Section 50 of the Act. This Court would refrain from offering any comment as to what would be the likely sentence awarded to the petitioner, if convicted, as at best, today, it would be merely speculative. Since the alleged offence is not a crime simpliciter, the period of custody already und ..... 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