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TMI Blog2021 (4) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... led offence in Part A has already been tried and persons charged under the scheduled offence have or have not been enlarged on bail under the Code of Criminal Procedure and thereafter convicted or acquitted. The question is the provision which was held constitutional by Apex Court in the case of Nikesh Shah stands revived in view of Amendment as stated above to Section 45 of the Act - In view of amendment, the original sub-Section (ii) of Section 45 (1) which imposes the said twin conditions automatically stands revived and the said condition therefore remain on statute book. The original Section 45 (1) (ii) has to be inferred and treated as it still exists on the statute book and holds the field even as of today for deciding application for bail by an accused under PMLA. It was further argued that by inserting words under this Act , the Judgment delivered by Supreme Court in Nikesh Shah has become in effective. The Court held that the Apex Court in Nikesh Shah (supra) has declared Section 45 (1) of PMLA in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Articles 14 and 21 of Constitution of India. After effecting amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail application allowed. - CRIMINAL BAIL APPLICATION NO. 1322 OF 202 0 - - - Dated:- 25-3-2021 - PRAKASH D. NAIK, J. Mr. Amit Desai, Senior Advocate i/b Mr. Dadhichi Mhaispurkar and Mr. H.K. Sudhakara, Advocate for Applicant. Mr. S.V. Raju, ASG, i/by Shri. H.S. Venegavkar, Special Public Prosecutor for Respondent No.1/UOI. Mr. Sudhir Kumar Sharma, Asst. Directorate of Enforcement. Mrs. M.R. Tidke, A.P.P. for the Respondent No.2/State. ORDER:- 1. This is an application for bail in connection with ECIR/02/HIU/2019 registered by Enforcement of Directorate, Mumbai for offence punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as PMLA for short). 2. First Information Report was registered by CBI, BS FC, New Delhi on 22nd January 2019 bearing No. RCBD1/2019/E/0001 under Section 120-B and 420 of Indian Penal Code (for short IPC ) and Sections 7 and 13(2) read with Section 13(1) (d) of Prevention of Corruption Act, 1988. FIR was registered against the following accused for causing loss to ICICI Bank by sanctioning loans to Videocon Group of Companies in contravention of the Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Group of Companies, namely, M/s. Millennium Appliances India Ltd. (MAIL), M/s. Sky Appliances Ltd. (SAL), M/s. Techno Electronics Ltd (TEL), M/s. Applicomp India Ltd. (AIL), M/s. Videocon Industries Ltd. (VIL) etc. Loans sanctioned to M/s. SAL, M/s. TEL and M/s. AIL were for enabling them to repay the unsecured loan availed by these companies from M/s. VIL. Loan was sanctioned to M/s. VIL for refinancing the existing loan of the Company. These loans were sanctioned in violation of credit policy of the Bank during the relevant period. On 1st May 2009, Ms. Chanda Kochhar took over the charge of ICICI Bank as Managing Director and Chief Executing Officer (MD CEO). The credit limits to the above companies were sanctioned after she took over the charge of the bank of the Company as MD and CEO. These loans were sanctioned by different Sanctioning Committees. Ms. Chanda Kochhar was one of the Committee Member which sanctioned RTL of ₹ 300 Crore. The outcome of Preliminary Inquiry reveals the commission of offence under Section 120-B read with Section 420 of IPC and read with Section 7 13(2) read with Section 13 (1) (d) of Prevention of Corruption Act, 1988 by M/s. VIEL, M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging that ₹ 64 Crores received by NRL and flat at 45, CCI Chambers were involved in money laundering. The proceeds of crime in the form of ownership of said flat was transferred by Mr. V. N. Dhoot/M/s. Videocon Group to Ms. Chanda Kochhar which is utilized by them. The ownership is still with QTAPL and complete shareholding of QTAPL is with Quality Advisors Trust. Provisional Attachment Order dated 10.01.2020 was issued in respect of movable and immovable properties. Original complaint dated 3rd February 2020 was filed on 4th February 2020 before authority. The Schedule of properties was as follows; (i) Flat No.45, CCI Chambers, Churchagate (ii) Cash of ₹ 10.5 lakh seized during search from premises of M/s. Pacific Capital Services Pvt. Ltd. on 1st March 2019. (iii) Assets of projects of M/s. NuPower Renewables Pvt. Ltd. and its subsidiaries viz Wind Farm Projects, movable assets, immovable assets. 5. According to applicant, he had extended co-operation with Enforcement Directorate. He was issued summons and in pursuant to that, he appeared before the Respondents from March 2019 till his arrest. He appeared on 2nd March 2019 at Mumbai and on 13th May 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the fact that some of the witnesses are close relatives of applicant, in itself appears sufficient for accepting the apprehension expressed by respondent that the applicant may tamper with the prosecution evidence, if released on bail by influencing witnesses. 10. Mr. Amit Desai learned Senior Advocate has put forth several submissions, which can be summarized as under:- (i) The alleged transactions are of the years 2009 to 2012. FIR was registered by CBI on 22nd January 2019. ECIR was registered on 31st January 2019. Summons was issued to the applicant on several occasions. He had appeared before the Directorate of Enforcement repeatedly. He was interrogated on several occasions, information sought from him was provided by the applicant. Voluminous documents in support of his explanation were tendered before respondents. Inspite of co-operation, the applicant was arrested on 7th September 2020. Further detention of the applicant is not necessary. (ii) The wife of the applicant was interrogated and her statement was recorded. Mr. V. N. Dhoot was interrogated and his statement was recorded. On 12th February 2021, accused Ms. Chanda Kochhar had appeared before the Speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground has to be considered in proper perspective. (xi) Primary borrower has not been arrested. Investigation proceeded without his custody. (xii) No charge-sheet is filed by CBI in respect of Schedule offences. (xiii) The applicant satisfies the triple test for releasing him on bail. There is no real and genuine apprehension of tampering and influencing the witnesses. (xiv) The applicant has past medical history. He is suffering from various ailments and was infected with Covide-19 while in custody. (xv) The flat in question belongs to applicant. He is in possession of flat since long. (xvi) Videocon has been taking loan from ICICI bank since several years. (xvii) Economic offences are not classified for determination of grant of bail and the same is determined on the basis of length of punishment. (xviii) Trial is not likely to conclude in near future. Further detention of applicant is not warranted. (xix) The Adjudicating Authority has given finding that there is no material to connect act of illegal gratification and allegation that, Mr. V. N. Dhoot transferred ₹ 64 Crores to NRL as undue benefit. (xx) Statements recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to the accused, Mr. Dhoot has resigned from the directorship of NRPL as well as SEPL. (f) Mr. Dhoot in his statements recorded under Section 50 of PMLA stated that all the affairs/operations of NRPL were handled, controlled and managed by the applicant and he was holding shares on papers. He was not exercising any control or decision making in NRPL. (g) Learned counsel relied upon the statement of Sunil Bhuta, Chief Financial Officer of NRPL, statement of Aniruddha Shreekant Godbole, Engagement Director for Audit of NRPL, and submitted that Mr. V. N. Dhoot transferred his shareholding to Mahesh Pungalia and thereafter Mr. Pungalia became director and shareholder of NRPL. Hence, Dhoot was holding 95% shareholding of NRPL. Mr. Dhoot and Pungalia did not participate in decision making or other aspect of NRPL. The applicant was charged with governance of NRPL and controlling its affairs. Thus, as a part of plan and design it was ensured that the applicant remains beneficial owner and controller of NRPL where proceeds of crime were received in the Company of the applicant from Videocon Group which was laundered by the accused and Company beneficially owned by him. (h) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... His wife told Mr. Dhoot to take care of him. (o) Reliance is placed on Inspection Report dated 28.05.2019 of NRPL prepared by Ministry of Corporate Affairs which shows that applicant is decision maker in NRPL. (p) Since 1996-97 Ms. Chanda Kochhar and her family has been residing in flat at CCI Chambers. Consent terms were agreed upon between VIL, applicant and Company CFL, whereby ownership of flat was agreed to be transferred by CFL to VIL. (q) Applicant has played role in money laundering. The applicant created structure with Mr. V. N. Dhoot to layer the transfer of proceeds of crime. He has committed offence of money laundering. (r) The special Court has considered all aspects and by reasoned order rejected the application for bail. (s) Economic offences are to be viewed seriously. The Court has to keep in mind nature of accusations, nature of evidence and severity of punishment. (t) As per Section 24 of PML Act, in any proceeding relating to proceeds of crime, unless contrary is proved, it would be presumed that such proceeds of crime are involved in money-laundering. (u) Learned Additional Solicitor General has relied upon the reply filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may, be order in writing provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order or in such manner as may be prescribed. The Director or any other officer not below the rank of Deputy Director shall immediately after attachment forward copy of order with material to the Adjudicating Authority. The Director or any officer who provisionally attaches any property shall within a period of thirty days from attachment file a complaint stating facts of such attachment before the Adjudicating Authority. 15. Section 8 of PML Act relates to adjudication. On receipt of complaint under Section 5 of the Act, if the Adjudicating Authority has reason to believe that any person has committed offence under Section 3 or in possession of proceeds of Crime, he may serve notice of not less than 30 days on such person calling upon him to indicate source of income, earning or assets out of which he has acquired the property attached under Section 5 (1) or seized under Section 17 or 18, the evidence on which he relies and to show cause why properties should not be declared as property involved in money-laundering. 16. On the basis of mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking process for corporate credit approvals wherein no individual can independently approve/sanction corporate credit proposals. The bank has laid down credit policy approved by board of Directors. Various departments are involved in due diligence process for credit approval. Multilayer credit approval authorization framework. The Board of Directors of ICICI Bank in press release dated 28.03.2018 has mentioned that no individual employee whatever may be his/her position has ability to influence the credit decision at the Bank. Videocon group has been client of ICICI Bank as early as 1985. The Bank has extended several loans/credit facility to Videocon group and the relationship between the bank and Videocon group has been long standing. In the context of loans to 6 Videocon group it was submitted that, she was one of the Committee Member which sanctioned 2 loans out of 6 loans. The facilities were sanctioned in ordinary course of business. Loans were repaid to ICICI Bank. In her various statement s recorded under PMLA, she has explained on various allegations against her. Applicant replied that, he had not influenced any decision making by his spouse Chanda Kochhar. The Provisiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k. The loan amount was never declared NPA. The business decision and transaction of investment of 64 Crores in M/s. NRL managed by the Mr. Deepak Kochhar (applicant), Mr. V. N. Dhoot from M/s. SEPL is not linked in any way with the FIR filed by CBI with the fact of sanctioning RTL of ₹ 300 Crores by ICICI Committee wherein Ms. Chanda Kochhar was one of the member. On the other hand, defendants therein had revealed the facts concerning the said investment and discharged the burden cast upon them in terms of Section 8(1) of PMLA. The FIR failed to justify any investigation having been done before alleging the wrongful loss in respect of RTL of ₹ 300 Crores from ICICI Bank to M/s. VIEL. 20. The Adjudicating Authority in concluding paragraphs in the order dated 06.11.2020 has observed that the preliminary inquiry in the matter was commenced on 08.12.2017 by the CBI, on the allegation that ICICI Bank sanctioned Credit Facilities to M/s. Trend Electronics Ltd, M/s. Century compliance Ltd., KAIL Ltd., Value Industries Ltd. and M/s. EVANS Fraser and Company India Ltd. belonging to Videocon group promoted by Mr. V.N. Dhoot. The allegations were the officials of ICICI Bank san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t), Mr. V. N. Dhoot from M/s. SEPL is not linked in any manner with the FIR filed by CBI with sanctioning of RTL of ₹ 300 Crores by ICICI Committee wherein Ms. Chanda Kochhar was one of the member. On the other hand, the other defendant in the said proceedings have revealed fact concerning the investment and discharged the burden cast upon them in terms Section 8 (1) of PMLA. The FIR fails to justify any investigation having been done before alleging the wrongful loss in respect of RTL of ₹ 300 Crores from ICICI Bank to M/s. VIEL. The said RTL loan account of ₹ 300 Crores is shown by Ms. Chanda Kochhar to be not declared NPA. Even as per the FIR on 26.04.2012, the existing outstanding of six accounts were adjusted in RTL of ₹ 1730 Crore sanctioned under re-finance of domestic debt. The account of M/s. VIL and its group companies were declared NPA with effect from 30.06.2017. The FIR alleges no other illegal gratification, undue benefit other than for sanctioning RTL of ₹ 300 Crores to M/s. VIL, corresponding to which it is duly established by the defendants with the investment made by Mr. V. N. Dhoot of ₹ 64 Crores to M/s. NRL through SEPL was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and his brother Rajiv Kochhar vide conveyance Deed in 1996. He has been residing at this property since 1996 as owner and he never conveyed the property to anyone. Mahesh Chandra Punglia was Director in NuPower Renewables Pvt. Ltd. since January 2009, 9990 shares of SEPL transferred to him by Mr. V.N. Dhoot were purchased from Mr. Punglia by Pinnacle Energy. In February 2009 he gave proposal to Mr. Punglia for investment in NuPower Renewables. 9990 shares of M/s. Supreme Energy were owned by Mr. V.N. Dhoot who transferred the same to Mr. Punglia in 2010. Mr. Punglia owned 9990 shares of SEPL out of 10,000 shares purchased with liability of ₹ 64 Crores plus 60% redemption premium. In September 2012, Mr. Punglia mentioned that, Videocon group felt that as a promoter he could fetch best value of NuPower Renewables shares and therefore Videocon group desired redemption option from him to receive back ₹ 64 Crores plus 60% of which they would not have got otherwise since Videocon group through their investment it. M/s. Supreme Energy had invested in fully convertible debentures of M/s. NuPower Renewables which has compulsorily to be converted into equity as per the terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame Director of QTAPL in 2009. The applicant was residing in the apartment even during 2009 to 2016-17 while it was reflected in books of QTAPL, being the original owner and occupant. Thereafter applicant statement was recorded on 13.05.2019 and 17.05.2019. He again stated that since CFL made payment, flat was appearing in balance sheet of CFL. Consideration for flat was paid out of earnings in CFL pre-merger. 22. Statement of Mr. V.N. Dhoot was recorded under the provision of PMLA on 01.03.2019. He stated that he came in contact with applicant in the year 1991. M/s. Credential was the Company of applicant. In 1992-1993, he had invested amount of ₹ 15 Crores in M/s. Credential. He stated that the payment ₹ 64 Crores has no bearing with the receipt of ₹ 300 Crores as loan from ICICI Bank in VIEL. ₹ 64 Crores were given from other sources. Subsequent statement was recorded on 02.03.2019. Mr. V.N. Dhoot was again asked to explain why he handed over his flat at CCI Chambers, Churchgate, Mumbai to Kocchar family. He stated that flat was purchased by the applicant and his family from their own funds around 1994-95. In 199496 one of his Company i.e. Blue Mines L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant jointly decided to transfer shareholding to M/s. Supreme Energy Pvt. Ltd. since SEPL was proposing to invest ₹ 64 Crores in NEPL. They jointly decided that entire ownership of NEPL be transferred to SEPL. 23. Further statement of Mr. V.N. Dhoot was recorded under Section 50 of PMLA on 20.06.2019, 02.12.2019 and 03.12.2019. He stated that, among Videocon group companies, namely SEPL, IRCL, RAPL/RCPL and VIL, no documents were there, as a matter of policy. The transactions between all these companies were carried out as normal business transactions. Therefore, no documents were created among these companies for transfer of ₹ 64 Crores to NRL from VIL through SEPL and latter authorizing IRCL and RCPL to receive back the funds from NRL. Oral agreement was made with Mr. Deepak Kochhar (applicant) for investment of ₹ 64 Crores in NRL. He stated that SEPL, IRCL, RAPL/RCPL and VIL were promoted by him. The transactions among these companies were authorized by him. SEPL was company of Mr. Deepak Kochhar post 29.09.2012. Mr. Dhoot was holding 95% of NRL (through SEPL) on paper and not controlling decision making in NRL. NRPL/NRL was controlled by Mr. Deepak Koch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dhoot was recorded on 17.10.2020. He reiterated his version in statement dated 12.09.2020. 25. The statement of Akash Singhal was recorded under Section 50 of PMLA on 27.11.2019. He stated that he had never met Ms. Chanda Kochhar for seeking loans which are matter of investigation. He met her in the year 2014, when she was in meeting with other officers. SEPL was incorporated in 2008. Mr. V.N. Dhoot and Vasant Kakde were first directors. He resigned from SEPL on 15.01.2009. He transferred his share of Supreme Energy Pvt. Ltd. to Mahesh Chandra Punglia, he was pre-occupied with urgent activities within the group. It was Videocon Telecommunications Ltd. which was keeping him busy. Mahesh Punglia sold entire holding in Supreme Energy Pvt. Ltd. to Pinnacle Trust of Mr. Deepak Kochhar. Mr. Dhoot and Pungalia transferred the control of SEPl to applicant by selling/transferring his shares to Pinnacle Energy Trust. These shares were sold to Pinnacle Energy Trust at fair market value. VIL was engaged in business of Consumer Electronics Home Appliances. To diversify its activities, VIL identified power generation and trading and dealing in various mineral including coal required for E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L. He submitted details of subsidiaries of NRPL. Statement of Anirudha Godbole was recorded on 29.11.2019. He was Engagement Director in respect of Audit of NRL. ₹ 64 Crores were received by NRL on 08.09.2009 from SEPL as recorded in Audit statements of NRL for the period of 24.12.2008 to 31.10.2010. The inflow of ₹ 64 Crores in NRL from SEPL was disclosed under unsecured loans. Mr. V.N. Dhoot was 50% shareholder of NRPL (earlier known as NRL). Shareholding of Mr. V.N. Dhoot in SEPL was 99.99% statement of Ms. Neelam Advani was recorded on 13.06.2019 and 21.06.2019. She is sister-in-law of Ms. Chanda Kochhar. She stated that she made investment in M/s. Pacific Services Pvt. Ltd. She attended board meeting of CFL once. Small investment was made by her in CFL through personal savings. Statements of Mr. Lokesh Saliyan were recorded on 31.07.2020 and 25.08.2020. He was working in ICICI Bank as, Deputy Manager. He submitted documents. He explained the procedure for sanctioning loan. Business group can present urgent proposals before Sanctioning Committee. The control committee was not called while sanctioning loan of Videocon. He also gave details about process followed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during investigation. By order dated 12.02.2021 Ms. Chanda Kochhar has been granted bail on conditions. Mr. V. N. Dhoot suo motu appeared before trial Court on 12.03.2021. He was taken into custody and granted bail on the same day. It was contended on his behalf that, Court has taken cognizance of complaint on 30.01.2021. During the course of investigation accused was available for investigation. He was never arrested under Section 19 of PMLA and therefore, he is entitled for bail. The respondents had objected grant of bail on the ground that, accused might abscond and influence witnesses. Further investigation is in progress. He has played major role in money laundering in the offence. He has diverted funds and loan amount is not used for intended purpose. Accused is influential person. Complaint speaks volume about role of the accused. The accused had also submitted that, he was not arrested during investigation. Twin conditions under section 45 are struck down by Supreme Court. Health condition is not good. He is suffering from many aliments. It was also argued that accused has attended Enforcement Directorate office 31 times and co-operated with investigation and submitted docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court had quoted the note produced by respondents. It was further observed that while the learned Judge is empowered to look at the material produced in a sealed cover to satisfy his judicial conscience, the Court ought not to have recorded finding based on material produced in a sealed cover. It was further observed that though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case prosecution presents documents in sealed cover and finding on the same are recorded as if the offence is committed and the same is treated of having bearing grant or denial of bail. Hence, I refrain from making observation on contents of sealed envelope. 31. The question urged by both sides is whether, in view of amendment to Section 45 of PMLA, the twin conditions stipulated therein stands revived post decision of Hon ble Supreme Court in the case of Nikesh Tarachand Shah Vs. Union of India (2018) 11 SCC 1. 32. The amendment to Section 45 has come into effect 19th April 2018. Prior to said amendment Section 45 was as follows: - Notwithstanding anything contained in the Cr.P.C., 1973 (a) every offence punishable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aundering is involved, if Section 45 is to be applied, the Court must be satisfied that there are reasonable grounds for believing that he is not guilty of the offence under Part A of the Schedule, which is not the offence of money laundering, but which is completely a different offence. It is submitted that, in this context, the Apex Court felt that the provisions are arbitrary and unconstitutional. Learned ASG further submitted that the amendment has introduced the words under this Act which would mean the twin conditions are applicable only for the offence under this Act as mentioned in the Schedule. It is submitted that on account of introduction of words under this Act and by deleting the provision, no person accused of an offence punishable for term of imprisonment of three years under Part A of Schedule shall be released on bail or on his own bond being deleted, the twin conditions shall stand automatically revived. He relied upon decision of Apex Court in the case of Molar Mal Vs. Kay Iron Works Pvt. Ltd (2000) 4 SCC 281. The Apex Court observed that where the constitutional validity of a provision is not under challenge, the Court will have to proceed on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative power on the provincial Government and therefore, the said section was stillborn and that, as the said section was the charging section, the entire Act was void, with the result Act 19 of 1952 which amended Section 5 with retrospective effect could not breathe a new life into the said Act. Void act was not non-est and, therefore, could not be brought into force by amending Act. The Court observed that the first question, therefore is whether Section 5 of the East Punjab General Sales Tax Act, 1948, as it originally stood was void and the second question is, if the said section was void, whether the amendment could give life to it. The Apex Court held that under Section 5 of the Act as it originally stood, an uncontrolled power was conferred on the provincial Government to levy every year on the taxable turnover of a dealer a tax at such rates as the said Government might direct under the section legislature practically effaced itself in the matter of fixation of rates and it did not give any guidance under that section or any other provisions of the Act. It was then argued that even if the act was valid, Section 5 was non-est, that amending Act purported to amend the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09th April 2018 is silent about its retrospective applicability. The original Section 45 (1) is neither revived nor resurrected by the amendment Act and as of today rigor of two further conditions under original Section 45 (1) (ii) of PMLA for releasing the accused on bail does not exist. The decision in the case of Sameer Bhujbal is also under challenge before Apex Court. There is no stay to the said order. Mr. Desai further submitted that in recent decision, the High Court of Manipur at Imphal has held in the case of Okram Ibobi Singh Vs. The Directorate Enforcement, 2020 SCC OnLine Mani 365, that it can be easily deciphered, on comparative reading of Section 45 (1) of the Act, pre-amendment and post- amendment, that Clause (ii) of sub- Section (1) remained as it stood before amendment. The issue which arises for consideration is as to whether the Hon'ble Supreme Court's decision in case of Nikesh Tarachand Shah (supra) can be said to have lost its significance because of the aforesaid amendment in Section 45(1) of the PML Act. The Court after considering submission of both sides and the law laid down in case of Nikesh Shah, and also referring to several decisions has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the altered circumstances. Mr. Desai then relied upon the decision in the case of Dr.Vinod Bhandari Vs. Assistant Director, Directorate of Enforcement decided by High Court of Madhya Pradesh. The Court has taken a view that the original Section 45 has neither revived nor resurrected by the amending Act. It is submitted that, as of today there is no rigour of said two further conditions under Section 45 (1) (ii) of the PML Act for releasing the accused on bail under the said Act. 36. According to respondents post amendment Section 45 reads as follows:- - Offences to be cognizable and non-bailable.-( 1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), No person accused of an offence [under this Act] shall be released on bail or on his own bond unless-] (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail to the Special Court/High Court. The Special Court/ High Court, in this illustration, would grant him bail under Section 439 of Criminal Procedure Code and thus can enlarge X on bail with or without conditions under Section 439. Mr. X would not have to satisfy the twin conditions mentioned in Section 45 of 2002 Act in order to be enlarged on bail, pending trial for an offence under 2002 Act. The second illustration would be of Mr. X being charged with an offence under 2002 Act together with predicate offence contained in Part B of the Schedule. Both these offences would be trial together. In this case, again the Special Court/High Court can enlarge Mr. X on bail, with or without conditions, under Section 439 of Code of Criminal Procedure, as Section 45 of 2002 Act would not apply. In a third illustration, Mr. X can be charged under the 2002 Act together with a predicate offence contained in Part A of the Schedule in which the term for imprisonment would be 3 years or less than 3 years (this would apply only post amendment Act 2012 when predicate offences of 3 years and less than 3 years contained in Part B were lifted into Part A). In this illustration again, Mr. X would be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets of offences are being tried together, Mr. X would be denied bail because the money laundering offence is being tried along with the scheduled offence, for which Mr. Y alone is being prosecuted. This illustration would show that a person who may have nothing to do with the offence of money laundering may yet be denied bail, because of the twin conditions that have to be satisfied under Section 45(1) of the 2002 Act. Also, Mr. A may well be prosecuted for an offence which falls within Part A of the Schedule, but which does not involve money laundering. Such offences would be liable to be tried under the Code of Criminal Procedure, and despite the fact that it may be the very same Part A scheduled offence given in the illustration above, the fact that no prosecution for money laundering along with the said offence is launched, would enable Mr. A to get bail without the rigorous conditions contained in Section 45 of the 2002 Act. All these examples show that manifestly arbitrary, discriminatory and unjust results would arise on the application or non application of Section 45, and would directly violate Articles 14 and 21, inasmuch as the procedure for bail would become harsh, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal liberty guaranteed by Article 21 of the Constitution of India, we must be doubly sure that such provision furthers a compelling State interest for tackling serious crime. Absent any such compelling State interest, the indiscriminate application of the provisions of Section 45 will certainly violate Article 21 of the Constitution. Provisions akin to Section 45 have only been upheld on the ground that there is a compelling State interest in tackling crimes of an extremely heinous nature. In the paragraph 48 the Court referred to similar provision under MCOC Act and the observation of Supreme Court in the case of Ranjitsing Sharma Vs. State of Maharashtra (2005) 5 SCC 294 about nature of restriction on power of Court to grant bail and conclusion to be arrived in accordance with Section 21 (4) of MCOC Act. In paragraph 54 the Court held that, regard being had to the above, Section 45 (1) of PMLA 2002 in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Article 14 and 21 of the Constitution of India. 38. The question is the provision which was held constitutional by Apex Court in the case of Nikesh Shah (supra) stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) has to be inferred and treated as it still exists on the statute book and hold the field even as of today for deciding the application for bail by an accused under PMLA and the Judgment of Apex Court has become in effective. The Madhya Pradesh High Court held that, the Supreme Court held that the Supreme Court in the case of Nikesh Tarachand Shah (supra) has in unequivocal terms held that, we declare that Section 45 (1) of PMLA 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. After effecting amendment to Section 45 (1) of the PMLA, the words under this Act are added to sub-Section (1) of Section 45 of the Act. However, the original Section 45 (1) (ii) has not been revived or resurrected by Amending Act. The notification dated 29.03.2018 is silent about its retrospective applicability. The original sub-Section 45 (1) (ii) has neither revived nor resurrected by Amending Act and there is no rigour of twin conditions. High Court of Delhi in the case of Upendra Rai Vs. Directorate of Enforcement (supra) has also considered similar issue. Similar argument was advanced by respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the Supreme Court decision in case of Nikesh Tarachand Shah does not have effect of reviving twin conditions for grant of bail, which have been declared ultra vires Article 14 and 21 of Constitution of India. 40. I do not find any reason to differ from the view expressed by this Court in the case of Sameer Bhujbal (supra), Madhaya Pradesh High Court in the case of Dr. Vinod Bhandari (supra), Delhi High Court in the case of Upendra Rai (supra) and High Court of Manipur in the case of Okram Singh (supra). 41. The respondents have relied on the decision of High Court of Orissa in the case of Mohammed Arif, it is contended that the Court had considered twin conditions under Section 45 of the Act. It was held that reliance placed on Nikesh Tarachand Shah Vs. Union of India (supra) is untenable in view of the fact that Section 45 has been amended whereby the original expression imprisonment for a term of more than tree years under Part A of the Schedule (Pre-Amendment) now stands substituted by expression no person accused of an offence under this Act shall be released on bail or on his own bond. Similar sentiment has been echoed by Apex Court in P. Chidambaram Vs. Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal liberty guaranteed by Article 21 of the Constitution of India. Indiscriminate application of the provision of Section 45 will violate Article 21 of the Constitution. In view of the conclusion of the Apex Court in the case of Nikesh Tarachand Shah (supra) it cannot be accepted that amendment in sub-Section 1 of Section 45 of PMLA introduced after the Supreme Court decision have the effect of reviving the twin conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of the Constitution of India. The Supreme Court in the decision of Nikesh Shah (supra) had declared that Section 45 (1) of the PML Act so far as it imposed two further conditions for release on bail to be unconstitutional. It is pertinent to note that after effecting amendment of Section 45 (1) of the PMLA, the words under this Act are added to sub-Section 1 of Section 45 of the Act and some part of old provision is deleted. However, the original Section 45 (1) (ii) has not been revived or resurrected by the amending Act. The notification dated 29.03.2018 amending under Section 45 (1) of PMLA which came into effect from 19.04.2018 is silent about its retrospective effect. The original su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of its expansive meaning not only protects life and liberty but also envisages a fair procedure. Liberty of a person should not ordinarily be interfered with unless there exist cogent grounds therefor. Sub-Section (4) of Section 21 must be interpreted keeping in view the aforementioned salutary principles. Giving an opportunity to the public prosecutor to oppose an application for release of an accused appears to be reasonable restriction but Clause (b) of Subsection (4) of Section 21 must be given a proper meaning. 47 Does this statute require that before a person is released on bail, the court, albeit prima facie, must come to the conclusion that he is not guilty of such offence? Is it necessary for the Court to record such a finding? Would there be any machinery available to the Court to ascertain that once the accused is enlarged on bail, he would not commit any offence whatsoever? 48 Such findings are required to be recorded only for the purpose of arriving at an objective finding on the basis of materials on records only for grant of bail and for no other purpose. 49 We are furthermore of the opinion that the restrictions on the power of the Court to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. Similarly, the Court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in future must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. 56 . 57 The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in Sub-section (4) of Section 21 of the Act, the Court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the Court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting the presumption would be during the trial. In the case of Upendra Rai Vs. Enforcement Directorate (supra). The Delhi High Court in paragraph No.25 has observed as follows:- 25 a bare perusal of Section 24 reveals that in the case of a person charged with the offence of money laundering, the authority or the Court shall presume that such proceeds of crime are involved in money laundering unless the contrary is proved. The stage of raising the presumption or for the accused to rebut the said presumption would be during the course of trial. Even if assuming that at the stage of bail this Court is required to consider that the accused is prima facie required to rebut the presumption, the same would not have to be beyond reasonable doubt but on the basis of broad probabilities. 46. From the statements recorded during the investigation, it is apparent that the applicant, co-accused Ms. Chanda Kochhar and Mr. V.N. Dhoot have tendered explanation to the questions put to them on the basis of charges attributed to them. The contention of applicant is that Videocon Group owned 95% of NRL (through their Company SEPL), when the investment of ₹ 64 Crores was made in NRL on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind Power capacity of 9 MW at Tamil Nadu. Against the investment of ₹ 64 Crores, SEPL allotted optionally convertible debenture of ₹ 64 Crores to RAPL subsequent to the assignment of ₹ 64 Crores from VIL to IRCL to RAPL (Videocon group companies) by Mr. V.N. Dhoot as stated in his statements. 47. The case of the applicant is that flat No.45 CCI chambers is not proceeds of crime. He is the title holder and the owner of the flat since 1996. The said flat has never moved out of of his name till date. Transactions regarding Credential Finance Ltd., Quality Appliances Pvt. Ltd., Quality Advisors Trust relied upon by the respondents are inconsequential so far as applicant title to the flat. Agreement for sale was executed between Bilquis Jehan Begum as seller and applicant and his brother Rajiv Kochhar as purchasers for ₹ 5.25 Crores on 07.09.1995 and part consideration of ₹ 75 lacs was paid on 07.09.1995. On 28.11.1995 certificate under Section 269 UL of Income Tax Act,1961 was obtained by applicant and his brother as the transferees of the flat. On 19.02.1996, transfer Deed was executed and balance consideration of ₹ 4.50 Crores was paid. Various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repaid. 49. From the statements and the documents on record. It is apparent that the applicant had tendered explanation to the respondent No.1. The statement of Ms. Chanda Kochhar and several statements of Mr. V. N. Dhoot were recorded. It is pertinent to note that statements of Mr. V.N. Dhoot were recorded on 01.03.2019, 02.03.2019, 20.06.2019, 02.12.2019, 03.12.2019, 21.07.2020 and 12.09.2020. On perusal of the statements which are referred to hereinabove, it can be seen that from inception Mr. Dhoot had supported the transactions. However, at the latter stage, in the statement dated 12.09.2020 he had attributed motive to the applicant and his wife. Statements of applicant were recorded on 01.03.2019, 02.03.2019, 03.03.2019, 13.05.2019 and 17.05.2019. Several other statements of witnesses were also recorded. The statement of Mr. Lokesh Salian who was earlier working with ICICI Bank were recorded on 31.07.2020 and 25.08.2020. He has referred to the procedure adopted while sanctioning loan and had pointed out the alleged discrepancies while sanctioning loan. It is pertinent to note that until this statement was recorded, none had pointed out alleged anomalies while sanctioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pertinent to note that, the applicant is in custody from 07.09.2020. The Adjudicating Authority had dismissed the original complaint under Section 5 (5) of the PMLA. The appeal is pending, the order is under challenge before the Appellate Tribunal and there is an order of status quo. The applicant was arrested after the period of about 18 months pursuant to registration of ECIR. Ms. Chanda Kochhar and Mr. V. N. Dhoot has been granted bail by Special Court under PMLA. The entire loan amount was repaid to ICICI bank. The applicant is in custody for more than 6 months. The transactions in question were for the period of 2009. The entire loan of ICICI Bank was repaid in 2012. Prior to arrest, applicant had appeared before respondent No.1 on several occasions. His statements were recorded and documents were tendered. The arrest was effected 18 months pursuant to the registration of ECIR. No charge-sheet is filed in CBI case. Videocon group has been taking loan from ICICI Bank for several years. The trial is not likely to commence and conclude immediately. The debatable issues are to be adjudicated during trial. The question of tampering evidence does not arise. The applicant is perma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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