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TMI Blog2023 (5) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances which normally weigh with the Court while exercising discretion under Section 439 of Cr.P.C. In P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [ 2019 (12) TMI 186 - SUPREME COURT] , the Apex Court upon considering the previous decisions has reiterated that the basic jurisprudence relating to bail remains the same in as much 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 circumstances, while considering the application for bail, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused - the underlining confusion is that irrespective of the nature and gravity of charge, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct, which is a scheduled offence is made out. It is stated that the closure report has not been accepted and further investigation has been ordered. Hence, at this stage the predicate offence does not cease to exist. The Hon ble Supreme Court, while upholding the validity of Section 19, rejected the grounds pressed into service to declare Section 19 as unconstitutional and held that such a provision has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act of Prevention of Money Laundering and Confiscation of proceeds of crime involved in money laundering, including to prosecute persons involved in the process or activity involved in the process of crime so as to ensure that the proceeds of crime are not dealt with in any manner which may result in frustrating any proceedings relating to confiscation thereof. In the instant case, it is not the case of the Applicant that the authorized officer has not adhered to the safeguards or the stringent conditions contained in Section 19 of the PMLA, 2002, and has thus failed to demonstrate violation of Article 21 of the Constitution as to entitle him for bail. The Applicant has failed to meet the test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deed of Sale dated 28.04.2016, at a price much below the prevailing market rate. It is alleged that the Applicant and the other co-accused entered into a criminal conspiracy to usurp the said land, and in pursuance thereof, the co-accused Eknath Khadse, the then Revenue Minister of the State of Maharashtra, misused his position as a Minister and mobilized the Revenue as well as MIDC Officials to pay compensation and/or to hand over possession to the owner of the land. On the basis of these allegations, offence came to be registered for offences under Section 13(1)(d), 13(2), and 15 of P.C. Act and under Section 109 of the IPC. 5. The Anti Corruption Bureau investigated the said crime and on 27/04/2018 filed C summary in respect of the predicate offence. It is stated that the report is not accepted and further investigation has been ordered. Since Section 13 of the P.C. Act is a scheduled offence under the PMLA, 2002, and treating the said FIR as source from which the information is received, the Respondent-Enforcement Directorate (ED) registered the aforestated ECIR dated 28.08.2019 against the Applicant and the co-accused for the offence under Section 3 r/w. Section 4 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on record to indicate that the Applicant and the co-accused had entered into any criminal conspiracy. He further submits that Anti Corruption Bureau has filed a closure report in form of C summary and hence at the time of registration of the ECIR there was no valid predicate offence. He submits that notice under Section 32(1) is null and void since it was issued without complying with the provision under Section 32(2) of the MID Act. It is submitted that the land was not acquired and this is evident from the affidavit of the Deputy Collector in Writ Petition No. 6027 of 2018, as well as from the fact that the name of the MIDC is recorded only in other rights column. He therefore contends that the purchasers were not required to obtain any NOC from the MIDC for sale of the said land. 10. Mr. Gupte, further submits that the Applicant and the coaccused had purchased the property in a distress sale by executing a registered sale deed. Though the property has been purchased for Rs.3,75,00,000/- the Applicants have paid Rs.1,37,05,000/- towards registration fees and stamp duty on the prevailing market rate of the land. He therefore contends that no loss has been caused to the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for grant of bail and for no other purpose. He submits that allegations made in the FIR as well as ECIR do not constitute offence and there is no sufficient ground to proceed against the Applicant under the provisions of PMLA, 2002. The test of twin condition having been satisfied, it is imperative to secure and safeguard the liberty of the Applicant keeping in mind the well settled principle that bail is rule and jail is an exception. He has relied on the decision of the Apex Court in P. Chidambaram vs. Directorate of Enforcement AIR 2020 SC 1699 and Arnab Manoranjan Goswami vs. The State of Maharashtra (2021) 2 SCC 427, Satender Kumar Antil vs. Central Bureau of Investigation, (2022) SCC Online SC 825. 15. Per contra, Shri Anil Singh, learned ASG, submits that the Applicant has not satisfied the test of twin condition under Section 45 of the PMLA, 2002. He submits that in view of the notification under Section 32(1) of the MID Act, the land vests in the Government free of all encumbrances. He submits that the Government took possession of the property in exercise of powers under Section 32(5) of the Act, and developed and allotted the same to various allottees. He submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by corrupt or illegal means, which is an offence punishable under Section 13(1)(d) of the P.C. Act. He submits that the Special Court has not accepted the C Summary Report and has ordered further investigation. 18. Learned ASG submits that the material on record reveals that the Applicant herein had mobilized funds of Rs.3.15 Crores in his name, and he had arranged cash fund of Rs.2 Crores from unknown sources and routed, placed, and layered the cash of Rs.2 Crores to the Shell company M/s. Benchmark Buildcon Pvt. Ltd. and received Rs.2 Crores from M/s. Benchmark Buildcon Pvt. Ltd. in the guise of unsecured loan. Ld. ASG further submits that the Applicant had also arranged Rs.2 Crores cash for Mrs. Mandakini Khadse to purchase the said land on the basis of forged back dated loan documents. He has relied upon the decisions in the case of Vijay Madanlal Choudhary vs. Union of India, (2022) SCC Online 929 , to emphasize that the offence of money laundering is grave since it has direct impact on the financial health, sovereignty and integrity of the country. He further submits that though the Court is not required to delve deep into the merits of the case, the Court is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uences, 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 circumstances, while considering the application for bail, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard, what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature, nor does the bail jurisprudence provides so. Therefore, the underlining confusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for the grant or refusal of bail, though it may have a bearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeds of crime, arising out of criminal activity in relation to the scheduled offence. In Vijay Chaudhary (supra) the Apex Court has observed that the proceeds of crime being the core of the ingredients constituting the offence of money-laundering, that expression needs to be construed strictly. In that, all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as proceeds of crime. There may be cases where the property involved in the commission of scheduled offence attached by the investigating agency dealing with that offence, cannot be wholly or partly regarded as proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act- so long as the whole or some portion of the property has been derived or obtained by any person as a result of criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, as a result of criminal activity relating to the scheduled offence. To put it differently, the vehicle used in commission of scheduled offence may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act or otherwise. (b) Independent of the above, we are clearly of the view that the expression and occurring in Section 3 has to be construed as or , to give full play to the said provision so as to include every process or activity indulged into by anyone. Projecting or claiming the property as untainted property would constitute an offence of money-laundering on its own, being an independent process or activity. (c) The interpretation suggested by the petitioners, that only upon projecting or claiming the property in question as untainted property that the offence of Section 3 would be complete, stands rejected. (d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court to ascertain that once the accused is enlarged on bail, he would not commit any offence whatsoever? 37. Such findings are required to be recorded only for the purpose of arriving at an objective finding on the basis of materials on records only for grant of bail and for no other purpose . 38. We are furthermore of the opinion that the restrictions on the power of the Court to grant bail should not be pushed too far. If the Court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the Court as regards his likelihood of not committing an offence while on bail must be construed to mean an offence under the Act and not any offence whatsoever be it a minor or major offence. If such an expansive meaning is given, even likelihood of commission of an offence under Section 279 of the Indian Penal Code may debar the Court from releasing the accused on bail. A statute, it is trite, should not be interpreted in such a manner as would lead to absurdity. What would further be necessary on the part of the Court is to see the culpability of the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch cannot be the intention of the legislature. Section 21(4) of MCOCA, therefore, must be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. Similarly, the Court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in futuro must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. 45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. 46. The duty of the court at this stage is not to weigh the evidence me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad 636, the words 635 Supra at Footnote No.275 (also at Footnote No.53) 636 Supra at Footnote No.256 used in Section 45 of the 2002 Act are reasonable grounds for believing which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. 31. In Sandip Omprakash Gupta (supra), while interpreting the embargo under Section 20(4) of the Gujarat Control of Terrorism and Organized Crime Act, 2015, which is para materia to section 45 of PMLA, 2002, the Apex Court has observed that the conditions are cumulative and not alternative. The satisfaction contemplated regarding the accused being not guilty has to be based on reasonable grounds. The expression reasonable grounds means something more than prima facie grounds. It contemplates substantial probable caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the subject land and issued notification dated 11.11.1971 under Section 32(1) of MID Act. By virtue of Section 31(4) when a notice under sub section (1) is published in the official gazette, the land vests absolutely in the State Government, free from all encumbrances. In the Civil Suit No.2024 of 1974, filed by the original owner Rasulbhai Ukani, it was averred that the Spl. land Acquisition Officer had served a notice dated 16.11.2017 demanding possession of the land. Similarly, in the Writ Petition No. 10000 of 2015 Abbas Rasulbhai Ukani, the son of the original owner, had averred that though the land was not acquired by following due process, the Respondent had taken illegal possession and encroached upon the said land. Referring to letter dated 29.11.2010, he had averred that MIDC had no authority to take possession of the land, prepare plots and allot the same to the allottees. The grievance of Ukani was that they were not paid the compensation and that the possession of the land was taken without following due procedure. He had therefore sought direction that the acquisition had lapsed, had sought removal of encroachment and recovery of physical possession of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have been exercised to gain financial or other undue advantage for himself or his family members. In the instant case, as noted above, the wife and son-in-law of the Accused No. 1 had already entered into an Agreement for Sale and paid the sale consideration in respect of the subject land to the original owners. Moreover, under the agreement, they had right to receive the compensation. In such circumstances, holding a meeting to discuss acquisition only in respect of the said land and giving directions to pay compensation to the owner and/or to return possession of the land, though the issue did not relate to his portfolio, was not prima facie to resolve public interest, but was an exercise to achieve personal gain or gain for his near and dear ones. 39. The records reveal that though in the agreement for sale dated 28/03/2016 the sale consideration was mentioned as Rs.50 Lakhs, the Applicant and the co-accused subsequently purchased the said property vide sale deed dated 28.04.2016 for sale consideration of Rs.3.75 Crores. The Applicant and the co-accused have paid stamp duty of Rs.1,78,16,600/- on the prevailing market rate of the land, which as per the ready reckoner wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was transferred to the account of the Applicant and the co-accused on the same date. The Directors of most of these Companies were the same. 44. The flow chart of the source of the funds received by M/s. Benchmark Buildcon and transferred to the bank account of the Applicant and the co-accused is as under :- 45. As noted above, it is the case of the Respondent that M/s. Benchmark Buildcon had received the funds of Rs. 4 Crores from the said five shell companies which was transferred to the account of the Applicant and the co-accused. It is stated that M/s. Benchmark Buildcon played crucial role in the placing, routing, and layering of Rs. 4 Crores cash through its bank account and projecting as untainted in guise of unsecured loan, which was utilized to purchase the land acquired by MIDC. In this context, the records reveal that on 11.4.2016 the Board of Directors of M/s. Benchmark Buildcon had taken a resolution to sanction loan of Rs. 4 Crores to the Applicant and the co-accused. Accordingly, from 20.04.2016 to 29.4.2016, an amount of Rs. 4 Crores was disbursed to the Applicant and the co-accused. Loan agreements dated 11.4.2016 were executed by the Applicant and M/s. Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, at this stage the predicate offence does not cease to exist. As regards the offence under Section 3 of the PMLA, 2002 the records prima facie reveal that the Applicant had placed, routed, layered the amount of Rs. 5.53 Crores through various shell companies and that he was involved in the activity connected to the proceeds of crime and thereby committed an offence punishable under Section 4 of the PMLA, 2002. 48. Shri Gupte, learned Senior Counsel for the Applicant has made a grievance that the Applicant was not served with a notice under Section 41A of the Cr.P.C. and has thereby failed to follow the guidelines laid down by the Apex Court while effecting arrest of the Applicant. Section 41A lays down that in all cases, whether arrest of a person is not required under the provisions of Section 41(1) of Cr.P.C., the police officer shall issue a notice as required under the said provision. In Satender Kumar Antil (supra) the Hon ble Supreme Court has held that Section 41 and 41A of Cr.P.C. are facets of Article 21 of the Constitution and that non-compliance of Section 41 and 41A would entitle the Applicant for bail. It is to be noted that PMLA, 2002 is a special enactment whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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