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TMI Blog2021 (6) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of any Scheduled offence to become proceeds of crime. In the charge-sheet filed by the ED, it is stated that because all the unaccounted cash has been deposited / placed into normal banking channels by use of this criminal modus operandi through the bank accounts opened through fraudulent means, thus, the same became proceeds of crime . The ingredients of crime offence are based on fact and not an inference or interpretation - offences alleged, if proved, may jeopardize the economy of the country. At the same time, I could lose sight of the fact that the investigating agency has already completed the investigation agency has already completed investigation and the charge sheet has already been filed before the Special Judge, ED, Patna. Therefore, his presence in the custody may not be necessary for further investigation. The petitioner is entitled to the grant of bail pending trial on stringent condition in order to ally the apprehension expressed by the ED - bail granted subject to conditions imposed - application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... s name and also in name of his employees, namely, Kunal Kumar (Informant) of Mithanpura P.S. Case No. 298/2016 and Sri Neeraj Kumar, so that they can also be deposited Pankaj Agrawal's cash in their bank accounts and transfer it to Sri Pankaj Agrawal. Sri Pankaj Agrawal's employees, sometimes including Gaurav Maheshwari, used to deliver 5-10 lakhs rupees daily to Raj Kumar Goenka in Muzaffarpur. The petitioner used to deposit such amount in self/employee' bank accounts and do RTGS to companies owned by Pankaj Agrawal. Commission @0.25% of transaction value was given by Pankaj Agrawal to Raj Kumar Goenka for such activity. 5. Learned senior counsel for the petitioner submits that around end of 2015, petitioner became aware of the Income Tax implications of such transactions, so immediately stopped all such transaction. In May 2016, Income Declaration Scheme (IDS) was launched by IT Department, as contained in Annexure-5 of the bail petition, where petitioner went ahead to declare all such transaction in his name, wife's name, daughter's name and also the transaction of accounts which were in the name of his employees, namely, Kunal Kumar (informant in Mithanpura P.S. Case No. 298/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mself used to go to the bank to deposit the amount in his account in between the period 2012-12 to 2016 and then used to transfer these amounts through bank to other places. In reply to Question no.7 of the ED, Kunal Kumar has accepted that Sanjay Mahto, Vikash Gathani and Ratan Goenka used to go alongwith him to deposit the amounts in the banks. In reply to Question no. 9 of the ED, Kunal Kumar has accepted that he used to get ₹ 500/- extra as consideration amount against operation of his accounts apart from the monthly salary. In reply to Question no.10 of the ED, Sri Kunal Kumar has further specifically admitted that the bank accounts were being operated by him on the direction of Ashok Goenka. Statement of Kunal Kumar recorded by ED shows that there is no merit in the FIR being recorded by him, as he himself has opened the bank account and has done transactions from such accounts on direction received from Ashok Goenka. FIR only includes bank accounts of Kunal Kumar, however, Enforcement Directorate claims that bank of account of Neeraj Kumar, who happens to be a brother of Kunal Kumar, has also been opened without his knowledge and consent. The Enforcement Directorate ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Authorities and has paid all due taxes alongwith penalty. The Income Tax Authority has accepted the defense of the petitioner and has dropped all further proceedings. Even upon completion of the entire investigation by ED, there is no allegation that the money deposited in the account of Kunal Kumar was acquired by commission of any scheduled offence. Thus, in absence of constitution of any crime, no offence of money laundering is made out, as PMLA has no legs to stand in absence of existence of a foundational structure of Scheduled Offence. In the present case, there has been no wrongful loss and no wrongful gain to any person. No loss has been claimed by either the informant, Bank or Income Tax Authority. In absence of no wrongful loss to any of the parties, Sections 420, 467, 468 and 471 of the IPC cannot be said to be constituted. 10. Learned senior counsel for the petitioner submits that the Income Tax proceedings against the petitioner is that the petitioner had made a voluntary and bonafide disclosure of the all transactions carried out by him from 2012 to 2016, standing in different persons names under Income Disclosure Scheme (IDS), 2016. Such disclosure was made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. Section 5 of PMLA requires that a report under Section 173 of the Cr.P.C. has to be forwarded to a Magistrate before proceeding for attachment of property. No such report has been sent by ED and the ED has also arbitrarily went ahead to attach properties of the petitioner. As per claims made by ED. The petitioner has deposited money in Kunal Kumar's bank accounts and then transferred it to companies controlled by Pankaj Agrawal (co-accused). Thus, no alleged proceeds of crime are left in possession of the petitioner. 14. Learned senior counsel for the petitioner submits that ED's investigation has begun in Feb'17 and the petitioner was summoned 8 times before being arrested on 22.09.2020. The petitioner has appeared on every single summon and has answered all questions asked by ED. Despite being so medically unfit, he has fully cooperated in the entire investigation till date. Even after his arrest on 22.09.2020, he was available for further interrogation in last six months, however, ED has not asked for his remand after interrogating him one for seven days and then for four days. Since 05.10.2020, ED has not taken him on remand. This shows that they do not require the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to Bail matters remains the same inasmuch as grant of Bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. Patna High Court in case of Ahilya Devi vs State of Bihar dated 28 May, 2020, while granting Anticipatory Bail, has said in para 24 that "I have no hesitation in reaching to a definite conclusion that the amendment in sub Section (1) of Section 45 of the Act introduced after Supreme Court's decision in case of Nikesh Tarachand Shah (supra) does not 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." Delhi High Court in case of Raj Kumar Goel vs Directorate of Enforcement has held in para 25 that "because all evidence are documentary in nature and statement of accused has already been recorded and because trial of PMLA &Scheduled Offence are required to be held together, which is likely to take some time, the Court deems it fit to grant Bail". The Hon'ble Supreme Court in case of Sanjay Chandra vs CBI, (2012) I SCC 40 in determining the grant or otherwise of bail, the seriousness of the charge and seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was fraudulently opened in his name by his empoyer Raj Kumar Goenka (petitioner) and his brother Ashok Kumar Goenka without his knowledge and consent which was done by cheating and inducing him to deliver his photographs and documents on pretext of job requirement which was fraudulently used by accused for opening several bank accounts in his name and that of Neeraj Kumar without their knowledge. The two accused Goenka brothers admittedly deposited huge cash to the tune of ₹ 20,97,01,912/- and ₹ 12,78,94,516/- into these accounts. Subsequently Kunal Kumar came to know of the opening of accounts in their names and huge deposits made into them during the survey operation under the Income Tax Act when it was emerged that the petitioner by using else and other accounts fraudulently opened in names of his employees placed huge cash for layering through several bank accounts which in itself constitutes a Scheduled Offence under as per Schedule I of the PMLA, 2002 or PMLA. Neeraj Kumar has further stated and alleged that his signatures were forged on cheques. 20. Learned ASG submits that scrutiny of statement of above bank accounts revealed that the above cash deposits were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,66,090/- 3,99,763/- 2,02,88,615/- P.51 2012-13 1,90,490/- 2,25,835/- 3,04,19,315/- P.55 2013-14 2,05,190/- 2,76,295/- 1,81,70,723/- P.59 2014-15 2,19,570/- 2,28,490/- 2,55,15,382/- P.65 2015-16 2,91,060/- 8,77,666/- 1,33,52,54,200/- P.71-72 2016-17 6,16,720/- 82,90,35,810/- P.79 Total 10,72,400/- 22,08,049/- 9,93,624/- Tax+SC+ Penalty at IDS Rates 2,25,86,84,045/- 22. Learned ASG submits that it would be clear from the above that although an honest and complete declaration of all concealed income is the sine qua non of the Income Declaration Scheme he did not do so and later when the IT caught the huge deposits he concocted the story of commission for laundering. However, the scope of proceedings under the IT Act and the PMLA are entirely different and independent of such other. 23. Learned ASG submits that the further investigation revealed that all these private limited companies have a very negligible paid up capital and were shell having dummy directors and most of them were not found at the given address. Inquiries revealed that many of these Companies, more than 50 of some 200 such Companies had a single common ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in predicate offence i.e. has not committed that crime, nevertheless he will be prosecuted for offence under PMLA if the money has come to him (he has possessed it or dealt with it in any manner) and hence emphasis of petitioner of not being charge sheeted in Case no. 298/2016 is of no avail. This has been clarified and held by High Court of Kerala in A.K. Samsuddin Vs Union of India in WP (C ) No. 15378 of 2016 (V) and the High Court of Judicature at Bombay in the case of Babulal Verma & Anr Vs ED & Anr. In Cr. Appl. No.201 of 2021 with Cr. Bail Appl. No. 974 of 2021 dated 16.03.2021. 25. Learned ASG submits that in course of investigation, it was found that bank accounts of certain innocent persons have been misutilized by Goenka Brothers and huge illegal cash (approx 33.76 Crores) has been deposited and subsequently transferred through these accounts. Hence, FIR No.298/2016 has been filed by the account holders with P.S. Mithanpura, Muzaffarpur and Bihar for commission of scheduled offences under Sections 420, 467, 468, 471 and 120B of the Indian Penal Code. The cash, so deposited into and from, became proceeds of crime and its transfer to other accounts clearly represents t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid : "The question always is, I think, a short question of construction: is there trade …... carried on within the meaning of Case I ?" and held that one you find a trade, profession, employment or vocation and find profits derived from that, then, at once, the tax is leviable and it would be irrelevant to the taxing statute whether the trade is lawful or unlawful. Viscount Haldane, delivering the opinion of the Privy Council, also to the same effect while construing the Canadian income tax law in Canadian Minister of Finance v. Smith, where the question was whether profit made from a business of illicit traffic in liquor carried on by the tax-payer in Ontario contrary to the provisions of the Ontario Temperance Act were taxable under the Canadian income tax laws : " Construing the Dominion Act literally, the profits in question, although by the law of the particular province they are illicit, come within the words employed... There is nothing in the Act which points to any intention to curtail the statutory definition of income, and it does not appear appropriate under the circumstances to import any assumed moral or ethical standard as controlling in a case such as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd non-bailable (1) [Notwithstanding anything contained in the code of criminal procedure, 1973, 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 he is not likely to commit any offence while on bail." 30. Learned ASG submits that the Hon'ble Supreme Court of India has upheld these provisions in Rohit Tandon vs. The Enforcement Directorate (2018) 11 SCC 46. The relevant observations are reproduced as follows: " 18. the consistent view taken by this Court is that economic offence 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing convinced from the material available on record, the learned Court was pleased to take the cognizance of the offence committed by the petitioner. 33. Learned ASG submits that having perused the judgments cited by the petitioner such as P. Chidambaram case (apart from the personality there was no allegation that he had received any money the allegation was that aided and complicity was yet to be proved in trial whereas in instant case Pankaj admits receiving the money), Dheeraj Jain case, Arvind Kumar case, Bimal Jain case, Rinku Singh case, Laloo Yadav, Karti Chidambaram case and Shivkumar case it is submitted that same are quite distinguishable from the present case. In the referred cases either the petitioner were in jail for much longer period than the present petitioner or they were not the main accused or the similarly situated accused were already on bail or they were ladies or seriously ill and in most cases there was no further scope of investigation but in the present case, the various illegal sources behind the cash transactions made by the petitioner is yet to be unraveled as only the tip of the iceberg has been revealed in this case and there being serious apprehe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sight of the fact that the investigating agency has already completed the investigation agency has already completed investigation and the charge sheet has already been filed before the Special Judge, ED, Patna. Therefore, his presence in the custody may not be necessary for further investigation. I am of the view that the petitioner is entitled to the grant of bail pending trial on stringent condition in order to ally the apprehension expressed by the ED. 37. In course of investigation, the petitioner appeared before the ED on 22.10.2020, the ED has filed the charge-sheet against the petitioner. When the under trial prisoners are detained in jail custody to an indefinite period, Article 21 of the constitution is violated. Every person, detained or arrested is entitled to speedy trial, the question is: whether the same is possible in the present case. ED has cited 32 witnesses for moving the case. Further defence witnesses will be required to be deposed. The petitioner is in jail custody since 22.10.2020 and has got no criminal antecedent mentioned in para 3 of the bail petition. 38. Let the petitioner, above named, be released on bail on furnishing bail bond of ₹ 10,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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