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TMI Blog2022 (6) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... need to be visited with a different approach in the matter of bail. The jurisdiction of the Court to grant bail to a person accused of an offence under PMLA is circumscribed by the provisions of Section 45 as amended in 2018. The bail can be granted in a case where there are reasonable grounds for believing that the accused is not guilty of such an offence and that he is not likely to commit any offence while on bail. The twin conditions under sub-section (1) of Section 45 of PMLA as it originally stood were made applicable only to the offences punishable for a term of imprisonment of more than three years under Part A of the Schedule II of the Act. There are reasonable grounds for believing that the petitioner is not guilty of the offences alleged. The reasonable ground mentioned in Section 45(1)(ii) of PMLA connotes substantial probable causes for believing that the accused is not guilty of the offence charged. The investigation is going on and the same is at a crucial stage. Undoubtedly, the investigating agency may require further time to collect all the materials, particularly, the alleged nexus of the petitioner with the crime. The accused No. 1 is absconding. It is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the crimes registered against Sri. Nishad and others to the Directorate of Enforcement, Kochi on 11/05/2021. On the basis of the said information, since the offences committed under Section 420 of IPC is a scheduled offence under Section 2(1)(x) and 2(1)(y) of PMLA, an Enforcement Case Information Report (ECIR) was recorded vide number ECIR/KZSZO/07/2021 dated 2/8/2021 and investigation under the PMLA was initiated by the Director of Enforcement. Altogether 12 persons were arrayed as the accused. The petitioner is the accused No.12 and Sri. Nishad is the accused No.1. 5. According to respondent No.1, during the investigation by the Enforcement Directorate, it was revealed that Sri. Nishad, the main accused, appointed pin stockists to those who had invested a minimum of Rs.10,00,000/- in his scheme and he promised them that he would give 5% as commission on the investment. It is alleged that Sri. Nishad and pin stockists of the scheme in their hot pursuit of making quick and easy money, fraudulently and dishonestly promoted the three companies mentioned above and made aggressive enrolment of new members into an illegal money circulation scheme under the grab of multi-level mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner has already been given in enforcement custody for a period of 14 days, he has been extensively questioned for days together and the investigation as against him is practically over and hence his further detention is not necessary. As far as the rigour of Section 45(1) of the PMLA is concerned, the learned Senior Counsel submitted that the twin conditions therein were struck down and declared as unconstitutional by the Apex Court in Nikesh Tarachand Shah v. Union of India and Another (AIR 2017 SC 5500) and hence, the embargo under Section 45 would not apply to the case. 10. The learned Central Government Counsel Sri.Suvin R.Menon appearing for respondent No.1 submitted that there are materials on record to show the involvement of the petitioner in the crime and that he has actively and knowingly involved and assisted in the investment scheme mooted by the accused No.1. The learned Counsel sought to impress upon me the magnitude of the offence arguing that the economic offence forms a class apart. In such cases, the court must account for several factors while granting bail, especially, the gravity of the offence involved. Hence, for money launders, jail is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable only to the offences punishable for a term of imprisonment of more than three years under Part A of the Schedule II of the Act. The Apex Court in its decision Nikesh Shah (supra) has declared Section 45(1) of PMLA, in so far as it imposes two further conditions for release of bail, to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. Thereafter, in 2018, Section 45(1) of PMLA has been amended thereby inserting the words under this Act in place of the words punishable for a term of imprisonment of more than three years under part A of the Schedule in subsection 45(1). The learned Senior Counsel for the petitioner submitted that even though after effecting amendment of Section 45(1), the words under the Act are added to sub-section (1) of Section 45, the original Section 45(1) (ii) has not been revived or resurrected by amending the Act and therefore, as of today, there is no rigour of the said two further conditions under the original Section 45(1)(ii) of PMLA for releasing the accused on bail. Per contra, the learned Central Government Counsel submitted that in view of the amendment of Section 45(1) of PMLA which came into effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (M.Cr.C.No.34201 of 2018 decided on 29th August 2018)) and Chhattisgarh (Anil Tuteja and Others v. The Director, Directorate of Enforcement and others (M.Cr.C.(A) Nos. 469 484 of 2020 decided on 14/08/2020)) took a contra view that the amendment in Section 45(1) of PMLA introduced after the Apex Court's decision in Nikesh Shah (supra) does not have the effect of reviving twin conditions for grant of bail which has been declared ultra vires to Articles 14 and 21 of Constitution of India and as such, there is no bar of twin conditions contained in Section 45(1) of PMLA and the application for bail has to be considered and decided under Section 439 Cr.P.C. However, the decision of the Delhi High Court in Upendra Rai (supra) has been stated by the Hon'ble Apex Court in SLP (Criminal) No.515/2020 dated 03/06/2020. 14. Before the amendment, the twin conditions laid down in Section 45 did not relate to an offence under the PMLA (Section 3 or 4) at all, but only to a separate and distinct offence found under Part A of the Schedule. Thus, in Nikesh Shah (supra), the Apex Court stated: Obviously, the twin conditions laid down in Section 45 would have no nexus whatsoev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 2022 decided on 25/2/2022)) rejected the challenge against Madras High Court's decision in Umashankar (supra) that the 2018 Amendment revived twin conditions for bail under Section 45. Hence, I have no hesitation to hold that the twin conditions as amended in Section 45(1) in 2018 have now become referrable and reliable to the offences punishable under PMLA and an accused charged with an offence under the Act still has to satisfy the rigours of those conditions notwithstanding the judgment of the Apex Court in Nikesh Shah (supra). 15. Section 65 of PMLA requires that the provisions of theCr.P.C. shall apply, in so far as they are not inconsistent with the provisions of the Act and Section 71 of PMLA provides that the provisions of PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of the Cr.P.C would apply only if they are not inconsistent with the provisions of the said Act. Therefore, the conditions enumerated in Section 45 of the PMLA will have to be complied with even in respect of an application for bail made under Section 439 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court in Rohit Tandon v. Enforcement Directorate (2017 KHC 6767) observed that the statement of the accused recorded under Section 50 of PMLA is admissible in evidence. The provisions of Section 50 of PMLA are analogous to the provisions of Section 108 of the Customs Act. Both Sections are similarly worded. Identical power is conferred upon the Customs Officer under Section 108 of the Customs Act. The Apex Court in Naresh J.Sukhawani v. Union of India (AIR 1996 SC 522) considering Section 108 of the Customs Act held that statement made before the Customs Officials under Section 108 of the Customs Act is not a statement recorded under Section 161 of Cr.P.C and therefore, it is a material piece of evidence which can certainly be used to connect the accused in contravention of the provisions of the Act. In Assistant Collector of Central Excise Rajamundry v. Duncan Agro Industries Ltd. and Another (AIR 2000 SC 2901), the Apex Court held that the statement recorded by the Customs Officers under Section 108 of the Customs Act is admissible in evidence. In Percy Rustomji Basta v. State of Maharastra (1971 Crl.Law Journal 933), one of the questions before the Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the layering of possession of proceeds of crime acquired by the accused No.1. 18. On a careful analysis of the materials placed on record, the factual discussions made above and the legal submissions advanced, it is not possible for me at this stage to record satisfaction that there are reasonable grounds for believing that the petitioner is not guilty of the offences alleged. The reasonable ground mentioned in Section 45(1)(ii) of PMLA connotes substantial probable causes for believing that the accused is not guilty of the offence charged. The investigation is going on and the same is at a crucial stage. Undoubtedly, the investigating agency may require further time to collect all the materials, particularly, the alleged nexus of the petitioner with the crime. The accused No. 1 is absconding. It is made clear that it is for the limited purpose of considering this bail application, that too at this stage, these findings have been arrived at. Indeed, different yardsticks might be required at different stages of the investigation. For the reasons stated above, without expressing any opinion as to the merits of the case and also with regard to the claim of the Enforcement Di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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