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TMI Blog2022 (2) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... n 45(1) of PMLA. While dealing with the bail application, three factors are mainly to be seen namely; (i) flight risk (ii) tampering evidence and (iii) influencing witnesses. So far as flight risk in context of applicant is concerned, the proceeding in relation to earlier FIRs against the applicant has taken care of the said factor, further the condition of surrender of passport can secure the presence of applicant during the trial. So far, no overt act is alleged against the applicant, who is on interim bail vide order dated 28.10.2021 in Cr.M.A. No.6 of 2021 in present Cr.M.A. No.23944 of 2019 and extended from time to time, to even consider the aspect of influencing the witnesses. Further, all the necessary documents and evidence would be in the custody of investigating agency, so the fear of tampering with the evidence would also not arise - In the present case, the applicant has already spent 20 months imprisonment and in total has spent 47 months. Considering the punishment to sections invoked under the schedule offence, this Court finds the present to be a fit case, where discretion could be exercised in favour of the applicant. The applicant is ordered to be released on reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 2008 'Sai Info System (India) Pvt. Ltd. was again converted to closely hold public limited company i.e. 'Sai Info System (India) Ltd. (hereinafter referred to as 'SIS' for short). 2.4 The applicant states that he had very good business and had reputed clients, therefore, availed various facilities from the Bank under the consortium of SBI based on past performance with the orders on hand being the order of ₹ 1600 Crores of Department of Post, order of ₹ 700 Crores from Maharashtra Home Department for CCTV Surveillance for entire Mumbai, ₹ 64 Crores of Bank of Baroda and ₹ 25 to 30 Crores of State Bank of India. Over and above that orders, various others were pending execution. The applicant further states that by his sheer hard-work of more than a decade he had grown in the market of Information Technology, but for the circumstances beyond the applicant and SIS control, the FIRs were filed by the Bankers. 3. Learned Senior Advocate Mr. I.H. Syed along with Mr.Aditya A. Gupta, learned advocate for the applicant, presented a Chart with the details of Schedule Offence, to apprise about the status of the cases registered against the applicant. Sr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 56 Crores. Mr. Syed submitted that based on the documents, which are also part of chargesheet, it could be considered as a genuine case of business failure, as till December 2012, SIS was making regular payment to the banks including the SBI. Mr. Syed stated that the Company had repaid ₹ 342 Crores to the Bank. 3.3 It was submitted that the Company was I.T. Total Solution Pvt., which provided turn-key projects and was carrying out healthy operations from 1992 to 2012. In the year 2011, the revenue of the Company was ₹ 1,138 Crores, net profit was ₹ 74 Crores and the tax paid was ₹ 18.46 Crores and the Company has successfully executed business orders received from Courts and prisons, health department, education department and revenue department etc., and the Company had entered into public private agreements with BSNL and MTNL and business was done through the said agreement with various government companies. He submitted that till 2012, the financial position of the Company was sound and the Company was functioning for a period of 20 years. 3.4 Mr. Syed submitted that it was totally because of the business failure and the consequences that followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perly understood at the time of appraisal by the member banks and since the terms of the projects were not fulfilled, the equipments stood transferred to BSNL at zero cost and the realization of receivables/debtors was linked with providing uninterrupted AMC services, failing which the entire receivables amounting to ₹ 506.51 crores have become doubtful. Thus, Mr. Syed submitted that it was absolutely a business failure, which had led to the financial liquidity crunch and in the consequence FIRs came to be registered against the applicant and he is made accused in nine schedule offences. 3.7 Mr. Syed stated that earlier the standard for grant of bail in PMLA matters was higher on account of twin conditions in section 45 of PMLA; however, the same were struck down by the Hon'ble Supreme Court in the case of Nikesh Tarachand Shah Vs. Union of India (2018 11 SCC 1), thus submitted that now the considerations for grant of bail applicable to an offence under PMLA is identically similar to grant of bail in an offence under IPC. Mr. Syed, thus submitted that regular bail has been granted in large number of PMLA cases after Nikesh Tarachand Shah (supra). Mr. Syed urged to consider t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of Directorate of Enforcement Vs. Deepak Virendra Kochhar passed on 10.01.2022 in SLP (Cr.) No.7800 of 2021, to submit that, the Hon'ble Supreme Court had dismissed the SLP and found no reason to interfere with the impugned order passed by the High Court of Bombay, granting bail to the applicant therein, however the question of law was kept open to be decided in an appropriate case. 3.12 Mr. Syed placed reliance on Upendra Rai Vs. CBI & Anr. (2021 SCC Online Del 2494), to submit that section 44 of PMLA, contemplates the joint trial of the schedule offences along with offence under PMLA Act, therefore, it is unlikely that the trial would commence anytime soon. He submits that the entire evidence is based on the documentary evidence and all transactions were either by cheque transaction or banking transaction, hence, the custody of the applicant is no longer necessary for those alleged offences. 3.13 Mr. Syed during the course of arguments referred the judgments of (i) Sanjay Chandra Vs. CBI [2012 1 SCC 40], (ii) P.Chidambaram Vs. Directorate of Enforcement [2019 SCC Online 1549], (iii) Jignesh Kishorebhai Bhajiawala Vs. State of Gujarat [CRMA No.7970 of 2017] (iv) Afroz Has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alse and inflated stocks and inflated dues from the debtors and on the basis of these false documents, the company induced the banks and availed various credit facilities and got sanctioned higher amounts of loans, which were later on diverted in purchase of properties and for other personal purposes; the LCs were opened on related companies and all of them got developed, and the accused company fraudulently and dishonestly siphoned off the public funds. 4.2 Learned A.S.G., Mr. Vyas contended that during the course of investigation under PMLA, it was found that the applicant had incorporated various group of companies, which were basically shell companies and having no genuine business, for use of circular transactions to show higher turnover. He submits that the applicant is also director of M/s. Atruim Infocomm Pvt. Ltd. and M/s. Click Telecom Pvt. Ltd, group companies of SIS, against them the FIRs were registered by CBI, BS&FC Mumbai and chargesheets were filed for causing loss of approximately ₹ 93.93 crores and approximately ₹ 74.16 crores respectively to the various banks by commission of cheating. 4.3 He submits that during the course of investigation, the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies. 4.7 It is submitted that the applicant was having mens rea of committing crime, as he has submitted forged and false documents to the banks for availing various credit facilities. He states that enough documentary evidence/material are available with the respondent, which shows that the applicant has committed the offence of money laundering. It is stated that subsequent to the issuance of Provisional Attachment Order, a prosecution complaint being PMLA Case No.04/2019 was registered before the Special Court under PMLA on 16.11.2019 against total seven accused including the applicant and Court has issued the process. It is contended that from the said prosecution complaint, it is evident that the applicant was the master mind and he was controlling the business affairs of all the group companies. 4.8 Mr. Vyas, learned A.S.G. stated that original complaint No.1227/2019 filed before the adjudicating authority on 29.11.2019 is yet to be decided and as the matter is pending before the Special Court and the witnesses and evidences are yet to be examined by the Court, enlarging the applicant may frustrate the proceedings as the applicant may influence the witnesses and tamper th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Upendra Rai [SLP (Crl.) Diary No.(S) 5150 of 2020] (xi) Nimmagadda Prasad Vs. Central Bureau of Investigation [(2013) 7 SCC 466] (xii) Directorate of Enforcement Vs. Dr. Shivinder Mohan Singh [SLP (Crl.) No.(s) 3474 of 2020] (xiii) State of Bihar Vs. Amit Kumar [(2017) 13 SCC 751], (xiv) Kutbuddin Vs. Raja Nizamuddin Saiyed Vs. State of Gujarat [CRMA No.9162 of 2014], (xv) Sharafat parmar [Criminal Appeal Nos.143-144 of 2015, SLP (Crl.) Nos.9805-9806], (xvi) State of Gujarat Vs. Mohanlala Jitamalji Porwal [(1987) 2 SCC 364]. 5. Post Nikesh Tarachand Shah Vs. Union of India (supra), section 45 of PMLA saw amendment vide from 19.04.2018. After effecting amendment to section 45(1) of the PMLA, the words "under this Act" are read to subsection (1) of section 45 of the Act. On a comparative reading of section 45(1) of the Act, pre-amendment and post-amendment, as could be observed, original subsection 45(1)(ii) is neither revived or resurrected by the amending Act. The Notification dated 29.03.2018 is silent about its retrospective applicability. 5.1 In Nikesh Tarachand Shah, the Hon'ble Apex Court while considering the effect of section 45 of PMLA had made certain observations, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable grounds to believe that the person is not guilty of such offence and that he is not likely to commit any offence while on bail. 46. We must not forget that Section 45 is a drastic provision which turns on its head the presumption of innocence which is fundamental to a person accused of any offence. Before application of a section which makes drastic inroads into the fundamental right of personal 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. 6. In Nikesh Tarachand Shah, the Hon'ble Apex Court, thereafter concluded in paragraph-54 as under: 54. Regard being had to the above, we declare Section 45 (1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail, to be unconstituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence arose out of the statutory jurisdiction and not constitutional jurisdiction of that Court. It was observed that unless and until there would be a proper challenge and pleading, the issue of constitutional validity cannot be undertaken. The Court has clarified at the very beginning that the constitutional validity of amending Act No.13 of 2018 was not the subject matter of challenge, and thus, further observed that the legislature has the power and competence to amend the provisions of the Act and unless the amended provision is struck down by the Courts, it cannot be watered down, and thus has observed that after the amendment, the entire complexion of section 45 has been changed, thus the Hon'ble Court did not concur with the contention that the entire section has to be re-enacted by way of amendment after the decision of Nikesh Shah (supra). Therefore, the reference Court came to their conclusion that the twin conditions would revive and operate by virtue of amendment Act, which was in force, and thus in view of the observation, the Bench answered by stating that the twin conditions in section 45(1) of 2002 Act, which was declared unconstitutional by the judgment of Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.52, which reads as under: 52. In Gorav Kathuria (supra), the 2012 Amendment Act read down having regard to the object sought to be achieved by the amendment, namely, that Part B of the Schedule is being made Part A of the Schedule, so that the provision of a monetary threshold limit does not apply to the offences contained therein. The High Court concluded: Guided by the aforesaid principles laid down by the Hon'ble Supreme Court regarding statutory interpretation and the duty of the Court to secure the ends of justice, we have no hesitation in holding that in 2013, Part B of the Schedule was omitted and the Scheduled Offences falling thereunder were incorporated in Part A with the sole object to overcome the monetary threshold limit of ₹ 30 lakhs for invocation of PMLA in respect of the laundering of proceeds of crime involved in those offences. No substantive amendment was proposed with express intention to apply limitations on grant of bail as contained in Section 45 (1) in respect of persons accused of such offences which were earlier listed in Part B. Therefore, twin limitations in grant of bail contained in Section 45 (1) as it stands today, are not applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uencing witnesses. So far as flight risk in context of applicant is concerned, the proceeding in relation to earlier FIRs against the applicant has taken care of the said factor, further the condition of surrender of passport can secure the presence of applicant during the trial. So far, no overt act is alleged against the applicant, who is on interim bail vide order dated 28.10.2021 in Cr.M.A. No.6 of 2021 in present Cr.M.A. No.23944 of 2019 and extended from time to time, to even consider the aspect of influencing the witnesses. Further, all the necessary documents and evidence would be in the custody of investigating agency, so the fear of tampering with the evidence would also not arise. 9. In the present case, the applicant has already spent 20 months imprisonment and in total has spent 47 months. Considering the punishment to sections invoked under the schedule offence, this Court finds the present to be a fit case, where discretion could be exercised in favour of the applicant. 10. Hence, the present application is allowed. The applicant is ordered to be released on regular bail in connection with ECIR No.AMZO/02/2018 registered with Directorate of Enforcement, Ahmedabad f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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