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TMI Blog2021 (6) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ement both of which have been filed for the grant of anticipatory bail in case bearing No.ECIR/01/HIU/2019 dated 25.01.2019 registered under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (for short - the PMLA), arising out of FIR No.291 dated 13.12.2018 registered under Section 10 of the Haryana Development and Regulation of Urban Area Act, 1975 (for short - the 1975 Act) and Section 420 IPC at Police Station Bajghera, District Gurugram. Briefly stated, the case of the prosecution is that on 31.03.2007, Chintels India Limited (for short - Chintels), which owned 149.093 acres of land in Gurugram, applied to the Director, Town and Country Planning, Haryana (for short - DTCP) for the grant of a licence under the 1975 Act for developing a residential colony. Thereafter, on 28.03.2008, Chintels and QVC Realty Company Limited (for short - QVC), the assignors of the aforesaid land, entered into an agreement with Sobha Limited (for short - Sobha) for developing the aforesaid land on a salable area sharing basis and in support of the aforesaid application for the grant of licence, filed such agreement before the DTCP. On favourable consideration of the application, on 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Police Station Bajghera, District Gurugram and after going through the aforesaid FIR, since the Enforcement Directorate (for short - ED) believed that an offence for laundering of money had also been committed, on 25.01.2019, the ED lodged Enforcement Case Information Report No.ECIR/01/HIU/2019 (for short - ECIR) under Sections 3 and 4 of the PMLA and started its own investigations. Investigations conducted by the Haryana Police in the FIR lodged by them revealed that the accused therein were guilty of breach of the terms of the agreement/ licence but had not committed any offence under Section 420 IPC. Accordingly, the Haryana Police filed a report under Section 173 Cr.P.C. seeking therein to prosecute the accused only under Section 10 of the 1975 Act. Since the accused in the FIR lodged by the Haryana police were no longer being prosecuted under Section 420 IPC, which was the only scheduled offence under the PMLA of which the petitioners were accused of, Chintels knocked the doors of the Delhi High Court through WP (CRL) 979-2020 - M/s Chintels India Limited vs. Union of India seeking therein quashing of the ECIR. Such petition was disposed of on 07.08.2020 with a directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than the rates of the Villas sold under the general category and in this manner they had generated over Rs. 50 crores and Rs. 60 crores respectively. When the purchaser of such Villas came to Chintels and QVC for documentation, such purchaser was first asked to sign a document which would show that at an earlier point of time he/ she had been allotted a NPNL plot at the rate determined by the DTCP and that thereafter he/ she had sought construction of a Villa thereupon through Sobha. After the purchaser had been made to sign such document(s) the petitioners then incorporated in the sale/ conveyance deed the price of the land at the rate so determined by the DTCP and correspondingly inflated the cost of the construction to reach at the final sale price which was equivalent to or even higher than the price of Villas sold under the general category. It is further the case of the prosecution that on 25.05.2012, Sobha and Chintels entered into 59 agreements to sell through which they agreed to sell 59 NPNL plots to LLPs created by Sobha at the price determined by the DTCP for sale of NPNL plots. On these agreements petitioner - Jagadish Nangineni appended his signatures on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire case of the prosecution is based on documents which have already been seized in the course of several raids conducted by the ED on the premises of both the petitioners; the ECIR itself is illegal as the only scheduled offence under the PMLA on which the ECIR rests i.e. Section 420 IPC, is not made out because the allegations to attract applicability of Section 420 IPC are based on an alleged breach of the terms of the agreement/ licence between Chintels and the DTCP which breach is exclusively covered under Section 10 of the 1975 Act; even in the initial complaint filed by the DTCP, which became the basis for lodging of the FIR by the Haryana Police, the only allegation contained therein was that the accused had breached the terms of the agreement/ licence and therefore they be proceeded against under Section 10 of the 1975 Act; contravention of Section 10 of the 1975 Act is bailable as it entails a punishment for imprisonment which may extend to three years along with fine; in the supplementary charge sheet filed by the Haryana police the petitioners are sought to be prosecuted under Section 420 IPC only on the ground that qua licence Nos. 58/2013 and 79/2014 Chintels had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble grounds for believing that the petitioners were not guilty of the alleged offences and that while on bail they were not likely to commit any offence; though in Nikesh Tarachand Shah vs. Union of India and another (2018) 11 SCC 1 Section 45(1) of the PMLA, as it then stood, had been declared unconstitutional by the Supreme Court but the defect pointed out by the Supreme Court which formed the basis to declare Section 45(1) to be unconstitutional had since been cured by the Legislature through its Act No.13 of 2018 which came into force from 19.04.2018; as per Act No.13 of 2018 the offending expression "punishable for a term of an imprisonment of more than three years under Part A of the Schedule" has been substituted with "under this Act"; in view of the afore amendment the twin conditions prescribed under Section 45(1) of the PMLA stood revived; the amended Section 45(1) of the PMLA has not been challenged by the petitioners and therefore the petitioners as also this Court was bound by the aforesaid twin conditions prescribed therein; in terms of the law laid down by the Supreme Court in Nagaland Senior Government Employees Welfare Association and others vs. State of Nagaland a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners' case is premature as investigation by the ED qua the petitioners is still going on; so far, the ED has found that on 25.05.2012 Sobha and Chintels entered into 59 agreements to sell through which they agreed to sell 59 NPNL plots to LLPs created by Sobha at the price determined by the DTCP for the sale of NPNL plots; on these agreements petitioner - Jagadish Nangineni has signed on behalf of Chintels and Sobha; the sale consideration, for each plot, under such agreement i.e. Rs. 48 lakhs, was agreed to be paid within 24 months from the date of execution of the agreement; within three weeks from the date of the aforesaid agreement the LLPs created by Sobha, through 59 agreements to sell, all dated 15.06.2012, further agreed to sell the NPNL plots to Eunomia, which was another LLP created by Sobha; this time the agreed sale consideration for each plot was a little less than Rs. 50 lakhs and the payment was to be made on or before 24 months from the date of execution of the agreement; thereafter, through separate agreements Eunomia and Sobha agreed to jointly develop 59 NPNL plots with a further agreement to share the revenue in the ratio 17:83; this agreement was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver Rs. 250 crores and the cumulative unaccounted difference between the actual and recorded sale price of the 59 NPNL plots was Rs. 40 crores (approximately). The ED further seeks to probe if other persons are involved in the crime of which the petitioners are accused of. Seeking the petitioners' custodial interrogation the learned ASG relied upon the law laid down by the Supreme Court in P. Chidambaram vs. Directorate of Enforcement (2019) 9 SCC 24. The PMLA, as enacted by the Parliament in the year 2002, contained Section 45(1) which read as under:- "Section 45. 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 punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 2002 Act. Considering that persons are languishing in jail and that personal liberty is involved, all these matters are to be taken up at the earliest by the respective Courts for fresh decision. The writ petitions and the appeals are disposed of accordingly." By Act 13 of 2018 Section 45(1) of the PMLA was sought to be amended w.e.f. 19.04.2018. Through such amendment the words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" as occurring in Section 45(1) before the judgment of the Supreme Court in Nikesh Tarachand Shah's case (supra) were substituted with the words "under this Act". As per learned ASG, after such amendment, the defect on the basis of which the Supreme Court had declared Section 45(1) of the PMLA to be unconstitutional was cured and consequently the twin conditions prescribed in Section 45(1) stood revived. The declaration by the Supreme Court in Nikesh Tarachand Shah's case (supra) would render the twin conditions prescribed in Section 45(1) of the PMLA for release of an accused on bail to be void in toto; such conditions have to be disregarded of any legal force from its inception; they cease to be law; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red and followed by the Bombay High Court in its judgment dated 25.03.2020 rendered in Bail Application No.1322 of 2020 - Deepak Virendra Kochhar vs. Directorate of Enforcement and another. The relevant observations in this regard are as follows:- 38. The question is the provision which was held constitutional by Apex Court in the case of Nikesh Shah (supra) stands revived in view of Amendment as stated above to Section 45 of the Act. This Court in the case of Sameer Bhujbal (supra) has turned down the submission of respondents therein that Government has brought an amendment to Finance Act, 2018 which has come into effect from 19.04.2018 to Section 45(1) of PMLA thereby inserting words "under this Act" in Section 45 (1) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Enforcement, decided on 29.08.2018 and the High Court of Patna in Criminal Miscellaneous No.41413 of 2019 - Ahilya Devi vs. The State of Bihar and others, decided on 28.05.2020. In view of the above discussion as also the reasoning given in the afore referred judgments by different High Courts, operation of none of which has been stayed by the Supreme Court and with which this Court concurs, this Court has no hesitation to hold that as on date the twin conditions for grant of bail, as sought to be pressed by the learned ASG, are liable to be ignored and that the present petitions are required to be considered under Section 438 Cr.P.C. In the light of the above conclusion, this Court considers it unnecessary to delve into the issues raised by the learned ASG with regard to the observations of the Supreme Court in Nikesh Tarachand Shah's case (supra) that Section 45(1) of the PMLA would not apply to anticipatory bails being per incuriam. Learned counsel appearing for the petitioners contended that Section 420 IPC was not attracted to the facts of the present case whereas the learned ASG argued otherwise. Lengthy and elaborate submissions of both the sides on this issue hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anticipatory bail in the case of an economic offence like the present case and the relevant observations by the Supreme Court in this regard are as follows:- "78. Power under Section 438 Cr.P.C. being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of the society. In Directorate of Enforcement v. Ashok Kumar Jain, it was held that in economic offences, the accused is not entitled to anticipatory bail........... 83. Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. Having regard to the materials said to have been collected by the respondent-Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to share revenue in the ratio 17:83; after construction of the Villas they were sold to the general public not by the final vendor under the aforesaid agreements to sell i.e. Eunomia but by Sobha and coaccused Chintels; the rates for these Villas were not at NPNL rates but equal to or even higher than rates fixed for Villas sold under the general category and that though as per the conveyance deed each of the Villas had been sold for Rs. 3.56 crores, some of the purchasers, on being questioned by the ED, have stated that they have paid Rs. 4.25 crores for the same. The ED alleges that both the petitioners are actively involved in the planning and execution of all the above transactions involving repeated transfer of funds and that since investigations qua the petitioners are still going on this may only be the tip of the iceberg. As per the afore allegations both the petitioners are accused of serious economic offences. The ED is in the midst of analysing the exact role of each of the petitioners qua the offences they are accused of. Grant of anticipatory bail to the petitioners at this stage would certainly result in putting a spoke in the wheel of the investigating agency and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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