9911796707
TMI Blog2024 (2) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the crime proceeds in different bank accounts opened by fake names or companies, and later on the transfer of money to the prime accused in the bank accounts of his relatives to remove the taint. The material collected by the Enforcement Directorate had also not been rebutted, which prima facie reflected the involvement of the petitioner in the alleged offence. It is evident that the petitioner happens to be a Chartered Accountant and he used to divert the money which has been obtained by way of illegal means. It is required to refer herein that the Hon'ble Apex Court in the case of Pavana Dibbur vs. The Directorate of Enforcement passed in Criminal Appeal No. 2779 of 2023 [ 2023 (12) TMI 49 - SUPREME COURT] has considered the effect of the appellant not being shown as an accused in the predicate offence by taking into consideration the Section 3 of the Act, 2002 - The Hon'ble Apex Court by interpreting the provision of Section 3 of the Act, 2002 has come out with the finding that on a plain reading of Section 3, unless proceeds of crime exist, there cannot be any money laundering offence. Based upon the definition Clause (u) of sub-section (1) of Section 2 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail is required to be considered by passing an order for grant of pre-arrest bail if prima facie case is not made out. Here, in the instant case, prima-facie it appears that the present petitioner is involved in concealment and diversification of the property/money of Veerendra Kumar Ram as would appear from the ECIR which is having cross-border implication since the money was concealed and diversified in Delhi which has been procured by Veerendra Kumar Ram while working as Engineer in Jamshedpur in the State of Jharkhand - This Court, in view of the aforesaid material available against the petitioner, is of the view, that in such a grave nature of offence, which is available on the face of the material, applying the principle of grant of anticipatory bail wherein the principle of having prima facie case is to be followed, the nature of allegation since is grave and as such, it is not a fit case of grant of anticipatory bail. The applicant failed to make out a special case for exercise of power to grant bail and considering the facts and parameters, necessary to be considered for adjudication of anticipatory bail, without commenting on the merits of the case, this Court doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttal's employees/relatives. It is also alleged that Veerendra Kumar Ram used to give cash to the present petitioner who with the help of entry providers used to make entries in the bank accounts of his employees and relatives and then such fund was transferred by present petitioner into the bank accounts of Rajkumari (Wife of Veerendra Ram) and Shri Genda Ram (Father of Shri V K Ram). Further, it is also alleged that some bank accounts opened (at Delhi) on the basis of forged documents were also being used in such routing of funds. Therefore, information related to the same was shared with the Delhi Police under Section 66(2) of the PMLA. Further on the basis of the information shared under Section 66(2) of PMLA, 2002 to Commissioner of Police, Delhi, Police Head Quarter, an FIR No. 22/2023 was registered by Economic Offence Wing( EOW), Delhi on 03.03.2023 against (i) Shri Veerendra Kumar Ram, (ii) Mukesh Mittal (present petitioner), and (iii) unknown Others under Section 419, 420, 465, 466, 468, 471, 473, 474, 476, 484, and 120 B of IPC, 1860, and Section 7 and 5 of Specified Bank Notes (Cessation of Liabilities) Act, 2017. In light of the additional facts emerging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orial jurisdiction of the State of Jharkhand wherein there is no allegation of commission of any predicate offence rather on the basis of the case instituted at Delhi of the economic offence the conduct of the petitioner said to have caused in the territorial jurisdiction of Delhi is being connected with the instant FIR and based upon the same, the petitioner has been implicated in the instant case. 5. The petitioner is having the profession of Chartered Accountant and in case of his professional work merely because he has given financial suggestion, the petitioner has been implicated in the instant case in the garb of commission of predicate offence. 6. Learned counsel for the petitioner based upon the aforesaid ground has submitted that the learned court while considering the prayer for pre-arrest bail ought to have taken into consideration all these aspects of the matter both legal and factual but having not done so, serious error has been committed. 7. Further submission has been made in the aforesaid view of the matter as per the ground agitated that it is a fit case where the petitioner is to be given the benefit of pre-arrest bail. Argument on behalf of the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or bail under Section 45 of the Act, 2002 must be made, i.e., the court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and is not likely to commit offence while on bail. 14. Mr. Das, learned counsel for the respondent has submitted by referring to the imputation as has been come in course of preliminary enquiry conducted against the present petitioner in Delhi by instituting a case of laundering therein, wherein, the serious involvement of the petitioner has been found in laundering the money which has been acquired by the co-accused person, namely, Veerendra Kumar Ram. 15. Mr. Das, learned counsel for the Enforcement Directorate has referred the imputation as has come against the petitioner in the ECIR which has been appended with the paper book. 16. Learned counsel for the respondent-Enforcement Directorate, based upon the aforesaid ground, has submitted that it is not a fit case where the prayer for pre-arrest bail is to be granted. Analysis: 17. We have heard the learned counsel for the parties, gone across the ECIR. 18. This Court before appreciating the argument advanced on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he international community to obviate such threat are outlined below: (a) the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, to which India is a party, calls for prevention of laundering of proceeds of drug crimes and other connected activities and confiscation of proceeds derived from such offence. (b) the Basle Statement of Principles, enunciated in 1989, outlined basic policies and procedures that banks should follow in order to assist the law enforcement agencies in tackling the problem of money- laundering. (c) the Financial Action Task Force established at the summit of seven major industrial nations, held in Paris from 14th to 16th July, 1989, to examine the problem of money-laundering has made forty recommendations, which provide the foundation material for comprehensive legislation to combat the problem of money- laundering. The recommendations were classified under various heads. Some of the important heads are (i) declaration of laundering of monies carried through serious crimes a criminal offence; (ii) to work out modalities of disclosure by financial institutions regarding reportable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quivalent in value held within the country or abroad. In the explanation it has been referred that for the removal of doubts, it is hereby clarified that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. The aforesaid explanation has been inserted in the statute book by way of Act 23 of 2019. 22. It is, thus, evident that the reason for giving explanation under Section 2(1)(u) is by way of clarification to the effect that whether as per the substantive provision of Section 2(1)(u), the 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 but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.] 27. It is evident from the aforesaid provision that offence of money-laundering means whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. 28. It is further evident that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. 29. The punishment for money laundering has been provided under Section 4 of the Act, 2002. 30. Section 50 of the Act, 2002 confers power upon the authorities regarding summons, production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the Bench comprising of three Hon ble Judges of the Hon ble Supreme Court have decided the issue by taking into consideration the object and intent of the Act, 2002. The definition of proceeds of crime as under paragraph-251. 32. The interpretation of the condition which is to be fulfilled while arresting the person involved in the predicate offence has been made as would appear from paragraph-265. For ready reference, relevant paragraphs are being referred as under: 265. To put it differently, the section as it stood prior to 2019 had itself incorporated the expression including , which is indicative of reference made to the different process or activity connected with the proceeds of crime. Thus, the principal provision (as also the Explanation) predicates that if a person is found to be directly or indirectly involved in any process or activity connected with the proceeds of crime must be held guilty of offence of money- laundering. If the interpretation set forth by the petitioners was to be accepted, it would follow that it is only upon projecting or claiming the property in question as untainted property, the offence would be complete. This would undermi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the Director has been empowered to exercise the same powers as are vested in a civil Court under the 1908 Code while trying a suit in respect of matters specified in sub-section (1). This is in reference to Section 13 of the 2002 Act dealing with powers of Director to impose fine in respect of acts of commission and omission by the banking companies, financial institutions and intermediaries. From the setting in which Section 50 has been placed and the expanse of empowering the Director with same powers as are vested in a civil Court for the purposes of imposing fine under Section 13, is obviously very specific and not otherwise. 425. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression proceeding in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Neverthel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itness . A person can be a witness not merely by giving oral evidence but also by producing documents or making intelligible gestures as in the case of a dumb witness (See section 119 of the Evidence Act) or the like. To be a witness is nothing more than to furnish evidence , and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes. So far as production of documents is concerned, no doubt Section 139 of the Evidence Act says that a person producing a document on summons is not a witness. But that section is meant to regulate the right of cross- examination. It is not a guide to the connotation of the word witness , which must be understood in its natural sense, i.e., as referring to a person who furnishes evidence. Indeed, every positive volitional act which furnishes evidence is testimony, and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part. Nor is there any reason to think that the protection in respect of the evidence so procured is confined to what transpires at the trial in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormal accusation against the noticee. Such summons can be issued even to witnesses in the inquiry so conducted by the authorised officials. However, after further inquiry on the basis of other material and evidence, the involvement of such person (noticee) is revealed, the authorised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection under Article 20(3) of the Constitution. However, if his/her statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence. 434. It is, thus, clear that the power invested in the officials is one for conducting inquiry into the matters relevant for ascertaining existence of proceeds of crim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that he is not likely to commit any offence while on bail Sub-section (2) thereof puts limitation on granting bail specific in sub- section (1) in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail. The explanation is also there as under sub-section (2) thereof which is for the purpose of removal of doubts, a clarification has been inserted that the expression Offences to be cognizable and non-bailable shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973, and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section. 37. The fact about the implication of Section 45 has been interpreted by the Hon ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.(supra) at paragraphs-371-374 . For ready reference, the said paragraphs are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Criminal Procedure Code, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section.] 372. Section 45 has been amended vide Act 20 of 2005, Act 13 of 2018 and Finance (No. 2) Act, 2019. The provision as it obtained prior to 23.11.2017 read somewhat differently. The constitutional validity of Sub-section (1) of Section 45, as it stood then, was considered in Nikesh Tarachand Shah. This Court declared Section 45(1) of the 2002 Act, as it stood then, insofar as it imposed two further conditions for release on bail, to be unconstitutional being violative of Articles 14 and 21 of the Constitution. The two conditions which have been mentioned as twin conditions are: (i) that there are reasonable grounds for believing that he is not guilty of such offence; and (ii) that he is not likely to commit any offence while on bail. 373. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act. For ready reference, paragraph-17 of the said judgment reads as under: 17. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisions of Section 65 and also Section 71 of PMLA. Section 65 requires that the provisions of CrPC shall apply insofar as they are not inconsistent with the provisions of this Act and Section 71 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 CrPC would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 CrPC. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money-laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant. For ready reference, paragraph-30 of the said judgment reads as under: 30. The conditions specified under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act. 18. The submission of learned Counsel Mr. Luthra to grant bail to the appellant on the ground that the other co-accused who were similarly situated as the appellant, have been granted bail, also cannot be accepted. It may be noted that parity is not the law. While applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration. It is not disputed in that the main accused Sh. Kewal Krishan Kumar, Managing Director of SBFL, and KMP of group companies and the other accused Devki Nandan Garg, owner/operator/controller of various shell companies were granted bail on the ground of infirmity and medical grounds. The co-accused Raman Bhuraria, who was the internal auditor of SBFL has been granted bail by the High Court, however the said order of High Court has been challenged by the respondent before this Court by filing being SLP (Crl.) No. 9047 of 2023 and the same is pending under consideration. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of stage of Section 19(1) has been taken that the same is not available the moment the ECIR has been prepared. This Court is not impressed with such argument due to the reason that the provision of Section 19(1) of the Act, 2002 if will be considered there is no stage of applying the stipulation so made in Section 19(1) rather the same is only the conferment of power for making arrest if there is reason to believe that the reason for such belief to be recorded in writing that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. The aforesaid provision specifies that the power of arrest has been conferred at any stage even after completion of ECIR since there is no stipulation to that effect that after completion of ECIR, the power to make arrest under Section 19(1) of the Act, 2002 cannot be exercised rather while arresting such person, the conditions is required to be followed, i.e., the reason to believe that any person has been guilty of an offence punishable under this Act and the aforesaid reason is to be recorded in writing, as soon as may be, inform him o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the Hon ble Apex Court in the case of Pankaj Bansal vs. Union of India and Ors. (supra) has not been followed since there is no written communication said to be served informing the reason for arrest prior to such arrest and as such, the prayer for bail has been sought for. But the Hon ble Apex Court going to the facts of the said case wherein the petitioner was arrested in the month of June, 2023 while the judgment of Pankaj Bansal vs. Union of India and Ors. (supra) has come in the month of October, 2023, hence, relying upon the law laid down by the larger bench of the Hon ble Apex Court since the reason was communicated to the petitioner within 24 hours and hence, the prayer for regular bail of the petitioner was rejected. Thus, it is evident that Section 19(1) of the Act, 2002 does not carve out any bifurcation by carving out the stages by restricting the power of the authorities not to arrest. For granting bail, the twin conditions as per the law laid down by the Hon ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) followed in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court is being quoted hereunder:- 111. No inflexible guidelines or straitjacket formula can be provided for grant or refusal of anticipatory bail. We are clearly of the view that no attempt should be made to provide rigid and inflexible guidelines in this respect because all circumstances and situations of future cannot be clearly visualised for the grant or refusal of anticipatory bail. In consonance with the legislative intention the grant or refusal of anticipatory bail should necessarily depend on the facts and circumstances of each case. As aptly observed in the Constitution Bench decision in Sibbia case [(1980) 2 SCC 565 : 1980 SCC (Cri) 465] that the High Court or the Court of Session has to exercise their jurisdiction under Section 438 CrPC by a wise and careful use of their discretion which by their long training and experience they are ideally suited to do. In any event, this is the legislative mandate which we are bound to respect and honour. 112. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail: (i) The nature and gravity of the accusation and the exact role of the accused must be pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slature in its wisdom has entrusted the power to exercise this jurisdiction only to the Judges of the superior courts. In consonance with the legislative intention we should accept the fact that the discretion would be properly exercised. In any event, the option of approaching the superior court against the Court of Session or the High Court is always available. 51. In Sushila Aggarwal v. State (NCT of Delhi) reported in (2020) 5 SCC 1 the Constitution Bench of the Hon ble Apex Court has reiterated that while deciding applications for anticipatory bail, Courts should be guided by factors like the nature and gravity of the offences and the role attributed to the applicant and the facts of the case. 52. The Hon ble Supreme Court, in catena of decisions, has categorically held that the judicial discretion of the Court while considering the anticipatory bail shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case. Reference in this regard may be taken from the judgment rendered by the Hon ble Apex Court in the case of Central Bureau of Investigation Vs Santosh Krnani and Another reported in 2023 SCC OnLine SC 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., to provide an opportunity to the public prosecutor before passing an order either under Section 439 or 438 of Cr.P.C. 54. Sub-section (1)(ii) of Section 45 of the Act, 2002, provides that if 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, meaning thereby, the parameter which is to be followed by the concerned court that satisfaction is required to be there for believing that such accused person is not guilty of such offence and is not likely to commit of offence while on bail. 55. The aforesaid fact can only be ascertained from the material surfaced in course of enquiry based upon which the ECIR is to be prepared. The curtailment of the power of public prosecutor appearing for the Enforcement Directorate cannot be said to be acceptable since the same is on the basis of the cardinal principle to provide an opportunity to the public prosecutor to make opposition. The further purpose of such opportunity is that the Court may come to a conclusive finding after hearing the accused and the public prosecutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 13 .] Nevertheless, in a situation where there is ambiguity in the meaning of the text, the courts must also give due regard to the consequences of the interpretation taken. 57. Such settled law is for the purpose that if the act provides a thing to be done, the same is to be done in accordance with the provision. Reference in this regard be made to the judgment rendered by the Hon'ble Apex Court in State of Uttar Pradesh vs. Singhara Singh and Ors., reported in AIR (1964) SC 358, wherein, it has been held at paragraph-8 as under: 8. its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted. In the case of Babu Verghese and Ors. vs. Bar Council of Kerala and Ors., reported in (1999) 3 SCC 422 , wherein, it has been held at paragraph nos. 31 32 as under: 31. It is the basic principle of law long settled that if the manner of doing a particular act is pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 60. This Court, in order to come to a conclusive finding as to whether the petitioner is fulfilling these criteria/grounds, needs to refer herein the evidence collected in course of preparation of ECIR which are as followed: 5. Investigation of the offence involved under PMLA: 5.2 During investigation, while tracing the illicit funds acquired by V K Ram during his tenure, it has been found that huge amounts have been received in the bank accounts of the wife and father of Veerendra Kumar Ram, firstly in the joint account (2577257010412) of Rajkumari Veerendra Kumar Ram to the tune of Rs. 9.30 crore approximately during the period FY 2014-15 to FY 2018-19, and then in the account of his father Genda Ram to the tune of Rs. 4.5 crores in a span of 31- 32 days from 21.12.22 till 23.01.23, said amount was transferred from the bank accounts of the employees/relatives of one Delhi-based CA Mukesh Mittal (accused). Such dummy bank accounts (belonging to the relative and employee of Mukesh Mittal), transferred the funds into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled and used by Mukesh Mittal for laundering of money to integrate the proceeds of crime earned by Veerendra Kumar Ram into the bank accounts of Rajkumari. (ii) Veerendra Kumar Ram (Accused Number 1) in his statement recorded under section 50 of PMLA 2002 stated that he used to carry cash to Delhi by train in a lot of Rs 25-50 lakhs from 2015 to 2020 and give it to Mukesh Mittal (Accused Number 5) who after deducting his commission transferred the remaining amount in his aforesaid joint bank account held with his wife Rajkumari (Accused Number 3). Against the said cash, Mukesh Mittal (Accused Number 5) used to arrange the entries in the bank account of his wife Rajkumari. Shri V.K. Ram also stated that the said money was the commission received by him from various contractors against the allocation of tenders. Further, during the aforesaid period, it is seen that Veerendra Kumar Ram has travelled to Delhi multiple times. (iii) During PMLA investigation, Veerendra Kumar Ram stated u/s 50 of PMLA that in 2013-14, one Mr. Tiwari, CA introduced him to CA Mittal; He further stated that Mr. Tiwari was then working under CA Mittal; Further, he stated that Jawahar Lal Singh, Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was received by late Babu Lal Mittal (father of Mukesh Mittal)/Mukesh Mittal or by Vijay Pal (husband of Reena Pal) in their absence. The entries were provided through the bank accounts of M/s R K Investment and Consultancy, Prop Rakesh Kedia, a relative of Mukesh Mittal and bank a/c of M/s RP Investment and Consultancy, prop Reena Pal, wife of employee of Mukesh Mittal. (xiv) Fund Received From Bank Account Of Manish: During the course of investigation, it is ascertained that from the Canara bank account no 127000590839 of Manish, fund to the tune of Rs. 1,87 crores has been transferred in the bank account of Genda Ram, which was utilised for the purpose of purchasing property at Satbari, Saket, New Delhi by Genda Ram F/o VK Ram. He had also transferred Rs 5 lakhs from his account to Genda Ram's another bank account bearing number 110089477752. Search was conducted at the residence of Manish who was found to be the son of Mukesh Mittal's driver namely Kishan. He in his statement recorded u/s 17 of PMLA on 21.02.2023 inter alia stated that he is the student of B. Com 3rd year; his father is driver of Mukesh Mittal; he is unaware of any of his such ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , his (Mukesh Mittall assets worth Rs 35,77,117.94/-as detailed below were attached provisionally by this Directorate vide Provisional Attachment Order Number 04/2023 on 03.08.2023 under Section 5 (1) of PMLA, 2002 and this directorate prays for the confiscation of the same u/s 8(5) of the PMLA, 2002. S.No. Description of Property Value Name of Owner 1. Rs. 32,62,187/- of Term Deposit in the name of Mukesh Mittal bearing account no. 140080982035 maintained with Canara Bank. Rs. 32,62,187/- Mukesh Mittal 2. Rs. 1,94,363.27/- in the account of Mukesh Mittal bearing account no. 50100084763092 maintained with Canara Bank Rs. 1,94,363.27/- Mukesh Mittal 3. Rs. 1,20,567.67/- in the account of Mukesh Mittal bearing account no. 4138132000001 maintained with Canara Bank. Rs. 1,20,567.67/- Mukesh Mittal Total Rs. 35,77,117.94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the aforesaid material which has been surfaced in course of preparation of ECIR that the petitioner is not only involved rather his involvement is direct. Further, it has come that part of the proceeds of crime acquired in the form of commission/bribe in lieu of allotment of tenders by the accused Veerendra Kumar Ram, a public servant and the said bribe money was getting routed by a Delhi based CA Mukesh Mittal (petitioner) to the bank accounts of family members of Veerendra Kumar Ram with the help of bank accounts of Mukesh Mittal's employees/ relatives. It is further evident that Veerendra Kumar Ram used to give cash to the present petitioner who with the help of other entry provider used to take entries in the bank accounts of his employees and relatives and then such fund was transferred by the petitioner (Mukesh Mittal), into the bank accounts of the co-accused Rajkumari (wife of Veerendra Kumar Ram) and Genda Ram (father of Veerendra Kumar Ram). Further, it is also evident that some bank accounts opened (at Delhi) on the basis of forged documents were also being used in such routing of funds. It reveals that accused Tara Chand used to collect cash from the Ram Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involvement of the petitioner in the alleged offence. It is evident that the petitioner happens to be a Chartered Accountant and he used to divert the money which has been obtained by way of illegal means. 64. The ground has been taken that once the investigation has been completed, then why the petitioner is to be arrested. In order to strengthen his argument, reference of the judgement rendered by the Hon'ble Apex Court in Satender Kumar Antil vs. CBI and Anr. (supra) has been made. 65. The Larger Bench of the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.(supra) has taken into consideration while dealing with the issue of anticipatory bail by taking aid of the judgement rendered by the Hon'ble Apex Court in P. Chidambaram vs. Directorate of Enforcement, (2019) 9 SCC 24 wherein it has been observed at paragraph-409 which reads as under: 409. In P. Chidambaram, this Court observed that the power of anticipatory bail should be sparingly exercised in economic offences and held thus: 77. After referring to Siddharam Satlingappa Mhetre and other judgments and observing that anticipatory bail can be granted only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate claims to have certain specific inputs from various sources, including overseas banks. Letter rogatory is also said to have been issued and some response have been received by the Department. Having regard to the nature of allegations and the stage of the investigation, in our view, the investigating agency has to be given sufficient freedom in the process of investigation. Though we do not endorse the approach of the learned Single Judge in extracting the note produced by the Enforcement Directorate, we do not find any ground warranting interference with the impugned order. Considering the facts and circumstances of the case, in our view, grant of anticipatory bail to the appellant will hamper the investigation and this is not a fit case for exercise of discretion to grant anticipatory bail to the appellant. (emphasis supplied) 66. It is evident from the reference so made in the case of P. Chidambaram vs. Directorate of Enforcement (supra) which has been taken note by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.(supra) taking the principle to be applied for consideration of pre-arrest bail under Section 438 of Cr.P.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime. Thus, the existence of proceeds of crime is sine qua non for the offence under Section 3 of the PMLA. At paragraph-13, it has observed that Clause (x) of subsection (1) of Section 2 of the PMLA defines schedule . Clause (y) thereof defines scheduled offence , which have been quoted and referred above. At paragraph-14, it has observed by referring the decision rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.(supra) that the condition precedent for the existence of proceeds of crime is the existence of a scheduled offence. At paragraph-15 the finding has been given therein that on plain reading of Section 3 of the Act, 2002, an offence under Section 3 can be committed after a scheduled offence is committed. By giving an example, it has been clarified that if a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime, in that case, he can be held g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s schedule . Clause (y) thereof defines scheduled offence , which reads thus: 2. Definition (1) In this Act, unless the context otherwise requires, .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . (y) scheduled offence means (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or (iii) the offences specified under Part-C of the Schedule. 14. The condition precedent for the existence of proceeds of crime is the existence of a scheduled offence. On this aspect, it is necessary to refer to the decision of this Court in the case of Vijay Madanlal Choudhary. In paragraph 253 of the said decision, this Court held thus: 253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 453, 454 and 455 of the said decision. The contention before this Court was that even minor offences have been included in the Schedule, and even compoundable offences form part of the Schedule. It was submitted that the offences which do not have cross-border implications have been included in the Schedule. At paragraph-19, definition of criminal conspiracy as defined under Section 120-A of IPC has been taken note thereof. At paragraph-20, it has been observed that many of the offences, which may generate proceeds of crime, have not been included in the Schedule and for illustrating the same, some of offences have been referred therein, which are as follows: a. Section 263A of IPC, which deals with the offence of making or possessing fictitious stamps is not a part of the Schedule; b. Though offences punishable under Sections 392 to 402 regarding robbery and dacoity have been included in part A of the Schedule, the offence punishable under Section 379 of committing theft and the offence punishable under Section 380 of theft in a dwelling house are not made a part of parts A and B of the Schedule. The theft of both categories can be of a very large amount running ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph-22, it has been observed on the argument advanced on behalf of the learned Additional Solicitor General that as Section 120B of IPC is included in Part A to the Schedule, even if the allegation is of making a criminal conspiracy to commit an offence which is not a part of the Schedule, the offence becomes a scheduled offence, that many offences under Chapter XVII of IPC are not included in Parts A and B. They become scheduled offences only if the same have cross-border implications. Thus, the offences of dishonest misappropriation of property or criminal breach of trust or theft can become a scheduled offence, provided they have cross-border implications. At paragraph-23, it has been observed that penal statutes are required to strictly construed and penal laws must be construed according to the legislative intent as expressed in the enactment. At paragraph-24, it has been observed that if two reasonable interpretations can be given to a particular provision of a penal statute, the Court should generally adopt the interpretation that avoids the imposition of penal consequences. In other words, a more lenient interpretation of the two needs to be adopted. At paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the offences may be non-cognizable offences under the concerned legislation or regarded as minor and compoundable offences, yet, the Parliament in its wisdom having perceived the cumulative effect of the process or activity concerning the proceeds of crime generated from such criminal activities as being likely to pose threat to the economic stability, sovereignty and integrity of the country and thus, grouped them together for reckoning it as an offence of money-laundering, is a matter of legislative policy. It is not open to the Court to have a second guess at such a policy. 455. Needless to underscore that the 2002 Act is intended to initiate action in respect of money-laundering activity which necessarily is associated with the property derived or obtained by any person, directly or indirectly, as a result of specified criminal activity. The prosecution under this Act is not in relation to the criminal activity per se but limited to property derived or obtained from specified criminal activity. Resultantly, the inclusion of criminal activity which has been regarded as non-cognizable, compoundable or minor offence under the concerned legislation, should have no beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the Schedule. We are referring to only a few of such offences only by way of illustration: a. Section 263A of IPC, which deals with the offence of making or possessing fictitious stamps is not a part of the Schedule; b. Though offences punishable under Sections 392 to 402 regarding robbery and dacoity have been included in part A of the Schedule, the offence punishable under Section 379 of committing theft and the offence punishable under Section 380 of theft in a dwelling house are not made a part of parts A and B of the Schedule. The theft of both categories can be of a very large amount running into crores. The said two offences become scheduled offences by virtue of clause (3) of part C of the Schedule only if the offences have cross-border implications; c. The offence punishable under Section 403 of dishonest misappropriation of property does not form part of the Schedule. The said offence becomes a scheduled offence by virtue of clause (3) of part C of the Schedule only if the offence has cross-border implications; d. The offence under Section 405 of criminal breach of trust, which is punishable under Section 406, is not a part of the Schedule The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. If the argument of the learned Additional Solicitor General is accepted, if there is a conspiracy to commit offences under Section 403 or Section 405, though the same have no cross-border implications, the offence under Section 120B of conspiracy to commit offences under Sections 403 and 405 will become a scheduled offence. Thus, if any offence is not included in Parts A, B and C of the Schedule but if the conspiracy to commit the offence is alleged, the same will become a scheduled offence. A crime punishable under Section 132 of the Customs Act is made a scheduled offence under Part B, provided the value involved in the offence is Rupees One Crore or more. But if Section 120B of IPC is applied, one who commits such an offence having a value of even Rs.1 lac can be brought within the purview of the PMLA. By that logic, a conspiracy to commit any offence under any penal law which is capable of generating proceeds, can be converted into a scheduled offence by applying Section 120B of the IPC, though the offence is not a part of the Schedule. This cannot be the intention of the legislature. 23. The penal statutes are required to be strictly construed. It is true that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the PMLA and, in particular, Section 3 will be invoked by simply applying Section 120B. If we look at Section 120B, only because there is a conspiracy to commit an offence, the same does not become an aggravated offence. The object is to punish those involved in conspiracy to commit a crime, though they may not have committed any overt act that constitutes the offence. Conspiracy is an agreement between the accused to commit an offence. If we look at the punishments provided under Section 120B, it becomes evident that it is not an aggravated offence. It only incorporates the principle of vicarious liability. If no specific punishment is provided in the Statute for conspiracy to commit a particular offence, Section 120B treats a conspirator of the main accused as an abettor for the purposes of imposing the punishment. The interpretation suggested by the ED will defeat the legislative object of making only a few selected offences as scheduled offences. If we accept such an interpretation, the statute may attract the vice of unconstitutionality for being manifestly arbitrary. It cannot be the legislature's intention to make every offence not included in the Schedule a scheduled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accused in the PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. 71. It is further evident from the discussion so made in both the judgments as would appear from paragraph-27 of the judgment rendered in Pavana Dibbur vs. The Directorate of Enforcement (supra) that the issue of whether the appellant has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial. 72. The offence becomes schedule offence by virtue of clause-3 of Part-C of the Schedule if the offence has crossed border implication as per the offence included in Part- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Kumar Ram has been invested by this petitioner in the capacity of chartered accountant not only that he has also withdrawn the money from different fake accounts and transferred it into the account of the accused persons. 76. Here, in the instant case, prima-facie it appears that the present petitioner is involved in concealment and diversification of the property/money of Veerendra Kumar Ram as would appear from the ECIR which is having cross-border implication since the money was concealed and diversified in Delhi which has been procured by Veerendra Kumar Ram while working as Engineer in Jamshedpur in the State of Jharkhand. 77. This Court, in view of the aforesaid material available against the petitioner, is of the view, that in such a grave nature of offence, which is available on the face of the material, applying the principle of grant of anticipatory bail wherein the principle of having prima facie case is to be followed, the nature of allegation since is grave and as such, it is not a fit case of grant of anticipatory bail. 78. For the foregoing reasons, having regard to facts and circumstances, as have been analysed hereinabove, the applicant failed to make ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
