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TMI Blog2022 (3) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and it will be for the Court concerned to determine the gravity of the charged offence in each case based on the facts and circumstances. Further, the gravity of the offence is a factor which is in addition to the triple test/tripod test. In matters of regular bail under Section 439 Cr.P.C., a Court must consider aspects, including but not limited to, the larger interest of the State or public, whether the accused is a flight risk, whether there is likelihood of his tampering with evidence, whether there is likelihood of his influencing witnesses, etc. Apart from these, another factor relevant to the question of bail would be the gravity of the alleged offence and/or nature of the allegations levelled, which may serve as an additional test and can be applied while keeping in view the severity of the punishment that the offence entails - It is equally well-settled that economic offences constitute a class apart and need to be visited with a different approach, given their severity and magnitude. Albeit these offences are likely to adversely impact the economic fabric of the country, bail shall not be denied to a person accused of an economic offence in a routine manner. Each c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Mir, Mr. Vir Sandhu, Ms. Niharika Karanjawala, Mr. Mridul Yadav, Mr. Aashneet Singh, Mr. Mudit Jain, Mr. Mridul Yadav, Mr. Aashneet Singh, Mr. Avishkar Singhvi and Mr. Sahil Modi, Advocates. Respondent Through: Mr. Zoheb Hossain, Spl. Counsel for ED with Mr. Vivek Gurnani, Advocate. (VIA VIDEO CONFERENCING) J U D G M E N T MANOJ KUMAR OHRI, J. 1. The present application has been filed under Section 439 Cr.P.C. on behalf of the applicant seeking regular bail in Complaint Case No.39/2021 filed under Sections 44/45 of the Prevention of Money Laundering Act, 2002 (hereinafter, referred to as the PMLA ) and arising out of ECIR No. 14/STF/2019 registered under Sections 3/4 PMLA by the respondent/ED. Factual Background 2. Briefly stated, the facts of the case are that one M/s Aman Hospitality Pvt. Ltd. (hereinafter, referred to as AHPL ), a group entity of Ambience Group which was founded by the applicant, purchased a plot of commercial land at Shahdara in an open auction held by the DDA on 03.03.2006 for the purpose of construction and development of a hotel. Upon technical evaluation, the cost of the hotel project was estimated as ₹ 867 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered against the applicant and others under Sections 3/4 PMLA. During investigation, it was revealed that out of the Term loan of ₹ 810 crores, ₹ 781 crores were routed by the accused through Escrow Account No. CD *** (i.e. 0408010*********) maintained with J K Bank, Ansal Plaza Branch, Delhi, in which the loan amount was disbursed. The payments were made to various entities, including 25 noncontracting parties (21 companies and 4 individuals), who were not connected with the project in any manner and did not provide any service or goods in furtherance of its implementation. 5. The amounts received by the 25 non-contracting parties were transferred to one M/s Raj Commercials and Agencies and one M/s M N Commercials, which companies further transferred the funds to Ambience Group companies, wherefore the money was used to settle loans of Ambience Group companies and for meeting expenses of the applicant, his family and his friends. 6. The applicant joined investigation between 31.07.2020 and 28.07.2021. On 28.07.2021, he was arrested in the present case and remained in custody of the respondent till 07.08.2021. Thereafter, he was remanded to judicial custody. His ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged APL on turnkey basis to obtain permissions/clearances/approvals from various authorities and to further undertake construction/development/completion of the aforesaid hotel project. Prior to the sanction of the Term loan, i.e., up till 31.03.2009, APL invested an amount of ₹ 267.33 crores towards the project, using its own funds as well as funds raised from Ambience Group. The said funds were to be reimbursed by means of the payments received from AHPL in terms of the turnkey contract, after the loan was disbursed to it. Thus, the allegations of siphoning off of funds to the tune of ₹ 781 crores are baseless. (B) It has been alleged that funds from the Term loan were diverted to 25 noncontracting parties, but the allegation is misleading, as after disbursal of the Term loan, funds were transferred from the Escrow Account, on instructions of the turnkey contractor, to entities who had given financial assistance to AHPL/APL for the construction of the hotel. Besides, the loan was disbursed over a long period of time and lenders, engineers visited the site time and again to inspect the progress of the project. It has further been alleged that funds were sipho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hotel at Shahdara is operational since 2012 and an occupancy certificate has also been issued in respect thereof. (G) The investigation by the ED is not focusing on the Bank loans alone. ED s case is that the promoters contribution was siphoned off and the Term loan was not used directly . The averment with respect to the promoter s contribution is logically flawed, as the same can never be siphoned off . Besides, if the allegations of siphoning off are to be believed, the hotel could never have been constructed. (H) The submission made on behalf of the respondent that the Term loan was obtained on the basis of expired sanction letters is erroneous, as the only sanction letter that had expired was with respect to TFCI, which had not taken any loan. (I) The second bail application preferred by the applicant was dismissed by the Sessions Court on the ground that there was no change in circumstance but the dismissal was erroneous, inasmuch as after dismissal of the first bail application, the ED had filed the prosecution complaint and the same constituted a material change in circumstance. (J) Establishing of an offence under PMLA involves three tests - the commission o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for trying of both the PMLA offence as well as the predicate offence by the Special Court. As such, the trial is likely to take a long time considering there are 28 accused persons and the investigation is stated to be pending in the predicate offence. It was stressed that the prosecution has cited nearly 35 witnesses and the documents run into 6201 pages. While placing reliance on the decision in State of Kerala v. Raneef reported as (2011) 1 SCC 784, it was urged that the applicant may not be subjected to further pre-trial incarceration. (O) In support of his submissions, learned Senior Counsel placed reliance on the decisions in Sanjay Chandra v. Central Bureau of Investigation reported as (2012) 1 SCC 40, P. Chidambaram v. Directorate of Enforcement reported as (2020) 13 SCC 791, Tunde Gbaja v. Central Bureau of Investigation reported as 2007 SCC OnLine Del 450, Babu Singh and Others v. State of U.P. reported as (1978) 1 SCC 579, Laxman Irappa Hatti and another v. State of Maharashtra reported as 2004 SCC OnLine Bom 599, Mahima v. State of Maharashtra reported as 2015 SCC OnLine Bom 6161, Sri Mohammed Nalpad Haris v. State of Karnataka by Cubbon Park Police Station r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari v. Union of India 2 reported as 2015 SCC OnLine Guj 6256, Suresh @ Bubby v. State, BAIL APPLN. 699/2011, Parvez Akhtar v. State (NCT of Delhi) reported as 2006 SCC OnLine Del 1084, Brahm Singh v. State (N.C.T. of Delhi) reported as 2009 SCC OnLine Del 3792, Amar Singh v. State Ors. reported as 2011 SCC OnLine Del 4522, Santosh s/o Dwarkadas Fafat v. State of Maharashtra reported as (2017) 9 SCC 714 and Ishwar Singh v. State (Delhi Admn.) Another reported as 1993 SCC OnLine Del 244. (P) With regard to Section 45 PMLA, it was submitted that the twin conditions set out in sub-clause (1), having been struck down in Nikesh Tarachand Shah v. Union of India and Another reported as (2018) 11 SCC 1 , are not applicable to the present case. In this regard, reference was made to sub-clause (e) of Clause 205 of the Finance Bill, 2018, which reads as under :- (e) in section 45, in sub-section (1), (i) for the words punishable for a term of imprisonment of more than three years under Part A of the Schedule , the words under this Act shall be substituted; (ii) in the proviso, after the words sick and infirm, , the words or is accused either on his own or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies that led to its invalidation. (S) Reliance was placed on Shri Prithvi Cotton Mills Ltd. and Another v. Broach Borough Municipality and Others reported as 1969 (2) SCC 283 and Madan Mohan Pathak and Another v. Union of India and Others reported as 1978 (2) SCC 50 to submit that nullification of judicial order cannot be done by legislative amendment. Learned Senior Counsel also placed reliance on the decisions of various High Courts in this regard and pressed that there is no revival by implication. 10. Mr. Mukul Gupta, learned Senior Counsel appearing for the applicant, additionally submitted that as per the charge sheet filed by ACB, Srinagar, it was noted at the time of conducting of Techno Economic Viability study by PNB Gilts Ltd. that the applicant had already spent ₹ 267.33 crores upto 31.03.2009 towards the twin hotel project, out of which ₹ 189.76 crores were spent on land and site development and ₹ 65.78 crores were spent on cost of building and furnishing, Furniture and interior, P M, Fixed Assets etc. He further drew attention of the Court to the complaint filed in the present case, wherein it has been stated that an amount of ₹ 267.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentation dated 15.09.2020 addressed to the respondent, it was admitted by the applicant that ₹ 486.9 crores were transferred from the Escrow Account to 25 non-contracting parties without any bill/invoice being raised by them. The applicant was also the 'Introducer' as well as the 'Authorised Signatory' in most of these parties, which had not provided any services or goods whatsoever for the hotel project. During the investigation, the non-contracting parties produced only generic receipts towards payment received and failed to produce any corresponding invoices/bills. (E) The amounts received by the 25 non-contracting parties were further transferred to two entities, namely M/s Raj Commercials and Agencies and M/s M N Commercials. Almost all of the aforesaid 25 non-contracting parties as well as the two entities were controlled by the applicant, as the directors/owners/individuals therein were either his relatives or employees of the Ambience Group companies. The amounts received by the two entities were again transferred to the credit of other companies of Ambience Group, and ultimately diverted for purposes other than implementation of the hotel pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Advances Sh. Kuldeep Kumar Gupta are also arrayed as accused. (I) The cost of project mentioned in the complaint as ₹ 1204.79 crores is not a finding of the investigation, but rather a reproduction of the statement given by the applicant during investigation. (J) With respect to Section 45 PMLA, it was submitted that the twin conditions under sub-clause (1), which were held unconstitutional in Nikesh Tarachand Shah (Supra), have been revived by the amendment made vide the Finance Act, 2018. Reference was made to the judgment dated 28.01.2022 passed in Ajay Kumar v. Directorate of Enforcement, Criminal Application (BA) No. 1149/2021 , where a Division Bench of the Bombay High Court, while answering a reference in respect of Section 45 PMLA post the decision in Nikesh Tarachand Shah (Supra) and the amendment made in the provision by virtue of Finance Act, 2018, has held:- 49. Undoubtedly, the Legislature has power and competence to amend the provisions of the Act. Unless the amended provision is struck down by the Courts, it cannot be watered down. Since after the amendment the entire complexion of section 45 has been changed, we are not in agreement with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joined the investigation, being a qualified CA, he has not cooperated in the same and not divulged the complete facts which are in his exclusive knowledge. As further investigation is pending, bail ought not to be granted to the applicant. 12. In rebuttal, Dr. A.M. Singhvi, learned Senior Counsel appearing for the applicant, submitted that the twin conditions do not stand revived by the decision in Dr. V.C. Mohan (Supra), as the order was passed on the facts of the case and in the context of anticipatory bail. It was also contended that pendency of further investigation should not prevent the Court from exercising its jurisdiction to grant bail. In response to the averment that Ms. Rajni Saraf, ex-Branch Head of J K Bank, Ansal Plaza Branch, was mischievously transferred, learned Senior Counsel submitted that no evidence has been placed on record to show that the applicant was in any way connected with said transfer. In fact, the transfer took place in routine manner. Thereafter, the enhanced sum was sanctioned in favor of AHPL because it had achieved financial closure and the project had progressed manifold. In this regard, he also placed reliance on the statement recorded unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the witnesses being tampered with or the apprehension of there being a threat for the complainant should also weigh with the court in the matter of grant of bail. (c) While it is not expected to have the entire evidence establishing the guilt of the accused beyond reasonable doubt but there ought always to be a prima facie satisfaction of the court in support of the charge. (d) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail, and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail. 17. In Masroor v. State of Uttar Pradesh and Another reported as (2009) 14 SCC 286 , it was noted that while deciding the question of bail, Courts must strike a balance between the interest of the society in general and the right of an accused to personal liberty. While stressing on the importance of achieving said balance, the Supreme Court held:- 15. There is no denying the fact that the liberty of an individual is precious and is to be zealously protected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence, have to be simultaneously weighed while determining whether or not to grant bail to an accused. Relevant excerpt from the decision is extracted hereunder:- 21. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it can be required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty. 22. From the earliest times, it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time, necessity demands that some unconvicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases, necessity is the operative test. In this country, it would be quite contrary to the concept of personal liberty enshrined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public or State and similar other considerations. It has also to be kept in mind that for the purposes of granting the bail the legislature has used the words reasonable grounds for believing instead of the evidence which means the court dealing with the grant of bail can only satisfy it (sic itself) as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt. xxx 45. In Bihar Fodder Scam (Laloo Prasad case) this Court, taking into consideration the seriousness of the charges alleged and the maximum sentence of imprisonment that could be imposed including the fact that the appellants were in jail for a period of more than six months as on the date of passing of the order, was of the view that the further detention of the appellants as pretrial prisoners would not serve any purpose. 46. We are conscious of the fact that the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rregularities and in the said circumstance this Court in addition to taking note of the deep-rooted planning in causing huge financial loss, the scope of consideration relating to bail has been taken into consideration in the background of the term of sentence being seven years if convicted and in that regard it has been held that in determining the grant or otherwise of bail, the seriousness of the charge and severity of the punishment should be taken into consideration. 23. the basic jurisprudence relating to bail remains the same inasmuch as the 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. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of grave offence and in such circumstance while considering the application for bail i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. 24. During the course of arguments, an issue regarding applicability of Section 45(1) PMLA was raised on behalf of the parties. In connection therewith, I shall advert at the very outset to the provision, as it stood prior to the amendment in 2018:- 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 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 the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs : Provided further that the Special Court shall not take cognizance of any offence punishable under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween them. As mentioned earlier, Section 45 of PMLA imposes two conditions for grant of bail, specified under the said Act. Therefore, there is no doubt that the conditions laid down under Section 45-A of PMLA, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of committing offence punishable under Section 4 of PMLA, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure. 27. Later, while relying on the decision in Gautam Kundu (Supra), the Supreme Court, in Rohit Tandon (Supra), observed thus:- 18. The other observations in the said order will have no bearing on the merits of the controversy and required to be reckoned whilst considering the prayer for grant of regular bail. For that, the appellant must succeed in overcoming the threshold of the rigors of Section 45 of the 2002 Act Suffice it to observe that indulgence shown to the appellant in terms of order dated 10-8-2017 will be of no avail. In that, the facts such as the appellant never tried to evade the investigation or that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t likely to commit any offence while on bail : Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees], may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. 30. Dr. Singhvi, learned Senior Counsel for the applicant, while placing reliance on the decisions of different High Courts, had submitted that the amendment made to Section 45 PMLA in 2018 does not revive the twin conditions set out in sub-clause (1). Learned Special Counsel for the respondent, on the other hand, had placed reliance on the views expressed in certain other decisions of High Courts, where discordant notes were sounded. 31. During the course of submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the prayer for grant of anticipatory bail in connection with PMLA offence, the mandate of Section 45 of the PMLA Act would not come into play. Mr. Dama Seshadri Naidu, learned senior counsel appearing for the respondent invited our attention to the dictum in paragraph 42 of the judgment in Nikesh Tarachand Shah vs. Union of India Anr. reported in (2018) 11 SCC 1. The observations made therein have been misunderstood by the respondent. It is one thing to say that Section 45 of the PMLA Act to offences under the ordinary law would not get attracted but once the prayer for anticipatory bail is made in connection with offence under the PMLA Act, the underlying principles and rigors of Section 45 of the PMLA Act must get triggered - although the application is under Section 438 of Code of Criminal Procedure. As aforesaid, the High Court has not touched upon this aspect at all. It is urged before us by the respondent that this objection was never taken before the High Court as it is not reflected from the impugned judgment. It is not a question of taking objection but the duty of court to examine the jurisdictional facts including the mandate of Section 45 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chartered Accountant, having deep roots in the society. He was not arrested in the scheduled offence and the charge sheet came to be filed without arrest. Thereafter, he was formally admitted to regular bail in the scheduled offence and his passport has already been seized by the ACB, Srinagar. The applicant has also admittedly joined investigation on a number of occasions. The evidence in the case is primarily documentary in nature, which has been seized. Under these circumstances, this Court is of the opinion that the applicant is not a flight risk and fears, if any, of his fleeing from justice can be allayed by imposing conditions and taking measures such as issuance of LOCs, etc. The statements of the witnesses having been recorded under Section 50 PMLA and the documents relevant to the investigation having been collected, the apprehensions regarding the applicant influencing witnesses and/or tampering with evidence are unfounded. The respondent has also failed to point out any instance of influencing of witnesses/tampering with evidence by the applicant during the investigation. In this backdrop, this Court is of the view that the applicant satisfies the triple test for grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant, M/s M N Commercials was the HUF concern of Late Sh. Nakul Gehlot (nephew of the applicant). Both the entities were controlled by the applicant. It has come in the investigation that the amounts received by M/s Raj Commercials and Agencies and M/s M N Commercials were further diverted to Ambience Group companies, which ultimately utilized the funds to settle unrelated loans and to make fixed deposits. 42. In the investigation conducted so far, ₹ 113.73 crores have been detected to have been diverted and used for purposes such as settling of outstanding loan and overdraft liabilities of other companies and projects, tax payments, making of FDs, salary and cash withdrawals for expenses of other Group companies. 43. In addition to the above, ₹ 41.56 crores out of the Term loan have been detected as having been utilized to purchase materials for the other projects of Group companies, such as for project site of shopping mall of M/s Apex Homes Pvt. Ltd.; for project site of M/s Ambience Tower Pvt. Ltd. at Rohini and Shalimar Bagh in Delhi; for project site of M/s Ambience Project Pvt. Ltd. at Ambience Island, Nathupur, Gurgaon; for Caitrona project site in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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