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TMI Blog2021 (10) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... was received from the Ministry of Home Affairs, vide which the original letter dated 20.04.2017, sent by the Embassy of Netherlands was endorsed, wherein a request was made for legal assistance in the matter of petitioner Shiv Lal Pabbi and others for their involvement in money laundering as they were indulged in secret banking and were having various assets in Dubai and India. The letter further states that the offence registered by the Dutch Police corresponds to Sections 420 and 467 of the IPC, which are scheduled offences under Part "A" of the PMLA. On the basis of the same, the aforesaid case/ECIR was registered on 07.09.2020 by the ED as per Part "C" and Section 58 of the PMLA. During investigation, it was found that the petitioner is involved in the acts of cheating and forgery in Netherlands by transferring of money of other persons through Hawala operations and earned commissions in the shape of cash. Statement of the petitioner and one Mukesh Sharma was recorded under Sections 17 and 50 of the PMLA, however, the petitioner did not disclose the details of the bank accounts held by him in India and sought time. Again, summons under Section 50 of the PMLA were issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities never brought it to the notice of the Writ Court that any LOC has been issued against the petitioner. Learned senior counsel has further submitted that after hearing both the sides, the judgment was reserved in the aforesaid writ petition on 12.07.2021 and in the meantime, the petitioner was arrested on 17.07.2021, therefore, the petitioner moved an application for withdrawal of the said writ petition to avail his appropriate remedy and the said writ petition was dismissed as withdrawn on 20.07.2021. Learned senior counsel has further submitted that in fact the petitioner was not fleeing from the process of law, rather he had received summons from the District Public Prosecutor Office in Netherlands with regard to a confiscation case pending before the competent authority in Netherlands and the petitioner was directed to appear on 27.07.2021. In order to attend the said proceedings, the petitioner had booked the return tickets from 17.07.2021 to 05.08.2021, however, he was detained at the Airport. Learned senior counsel further submitted that the entire process of arresting the petitioner, in pursuance to the LOC, which was never brought to the notice of the writ Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the conclusion of investigation, has argued that the petitioner has earned huge amount in cash by way of underground bank/Hawala business in Netherlands, which was generated as commission to cover up his legitimate business and the petitioner, in conspiracy with co-accused Mukesh Sharma, has prepared certain documents, which amounts to tax evasion in Netherlands and also amounts to forgery, cheating and money laundering as no permission was taken by him in Netherlands. The operative part of the conclusion of investigation, which runs from para 19.1 to 19.8, is reproduced below" "19.1 It has been established during the investigation that Shivlal Pabbi, with an intention to save taxes in the Netherlands and to cheat the Netherlands Authorities, incorporated a firm SM Fashion BV in Netherlands in the name of his childhood friend Mukesh Sharma, a resident of Phagwara, India. Mukesh Sharma was the owner of SM Fashion BV only on paper and the said form was managed and controlled by Shivlal Pabbi. Further, on 09.05.2005, Mukesh Sharma signed a power of attorney in Shivlal Pabbi's favour so tht the business operations of the company could be run by Shivlal Pabbi in the Nether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shivlal Pabbi and his firm S.M. Fashion B.V., for the period 2008 to 2014 revealed that Shivlal Pabbi was drawing wages in the capacity of Manager in M/s S.M. Fashion B.V. even after having General Power of Attorney issued in his name by Mukesh Sharma and even after effectively owning and controlling operations of SM Fashion BV; and that he received Euro 2,80,095 over the period as wages from S.M. Fashion B.V. Further, during the same period S.M. Fashion B.V. continuously yielded lossed totaling Euro 2,98,551.85. This finding corroborated the fact that Shivlal Pabbi had no legitimate means to earn such huge amount of money and then remit the same to India for investment; and that the amount transferred by him through Hawala from the Netherlands to Dubai and Hong Kong and thereafter to bank accounts in India was nothing else but proceeds of crime generated out of the criminal activities committee by him in the Netherlands. 19.6 It was also observed by the Netherlands authority that no payments relating to India were made during the period 2007 to 2015 from the Netherlands bank accounts and Shivlal Pabbi, his wife Marie Sharda Hiralal, or the sole proprietorship Euromode or SM Fas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also to buy property." Learned counsel for the respondent has referred to Section 2 (ra) of the PMLA, which reads as under; "offence of cross border implications means- (i) any conduct by a person at a place outside India which constitutes an offence at that place and which would have constituted an offence specified in Part A, Part B or Part C of the Schedule, had it been committed in India and if such person transfers in any manner the proceeds of such conduct or part thereof to India. Learned counsel for the respondent-ED has further referred to Section 2(u) of the PMLA, which reads as under: "proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad." It is next argued on behalf of the respondent-ED that under the provisions of Section 45 of the PMLA, no person accused of any offence under the PMLA shall be released on bail or on his own bonds unless (i) the Public Prosecutor has been given an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following reasons: (a) The primary objection raised by learned counsel for the respondent-ED is that the petitioner does not qualify the triple test laid down under Section 45 of the PMLA. The said three conditions laid down under Section 45 are that the public prosecutor should be given an opportunity of hearing, which has been given in the present case; secondly, if the public prosecutor opposes the application, a reasoned order be passed that the person is not guilty of offence and not likely to commit offence while on bail and thirdly that in addition to provisions PMLA, the provisions of Cr.P.C., regarding grant of bail, shall apply. Section 45 (1) (ii) is akin to Section 37 of the NDPS Act, wherein the Court, while granting bail, has to form an opinion. In a case under the NDPS Act, it is easy for an accused who has been released on bail to repeat such offence, however, in a case under the PMLA like the present case, it is not easy for an accused to commit the offence again while on bail while staying in India. (b) In view of the arguments raised by learned senior counsel for the petitioner that the entire proceedings were initiated on the basis of the mutual legal ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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