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TMI Blog2024 (4) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under the provisions of the Prevention of Money-Laundering Act, 2002 (hereinafter, "the PML Act"). These two Applicants are amongst them. It was lodged on the background of 'scheduled offence' registered at Bhandup Police Station on 30th September 2019 and subsequently, transferred to Economic Offences Wing (hereinafter, "EOW") involving these two Applicants along with others for the offences punishable under Sections 420, 467, 471, 120-B of Indian Penal Code, 1860 (hereinafter, "the IPC"). Both these Applicants came to be arrested on 17th October 2019. After carrying out the investigation, the Assistant Director filed complaint before the Special Court - PMLA - Greater Mumbai on 16th December, 2019 for the offence punishable under Section 3 read with Section 4 of the PML Act. Allegations 2. The sum and substance of the allegation against these two Applicants is, these two Applicants in their individual capacity and as promoters of the Housing Development and Infrastructure Limited (hereinafter, the "HDIL") and beneficial owner of the HDIL Group of Companies predominantly availed loan in Crores from the Punjab and Maharashtra Co-operative Bank Limited (hereinafter, the "PMC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no punishment of death prescribed under Section 436-A of the Code. So, the first requirement is satisfied. Period undergone 7. The second requirement is there should be detention for a period of one-half of the maximum period of punishment. For Section 4, maximum punishment is seven (7) years. So, the Applicants asking for bail under this provision must be in a jail for a period upto three and half years. In this case, both the Applicants came to be arrested on 17th October 2019. Certainly, they are in detention for a period more than three and half years. This condition is also satisfied. Delay in conduct of trial 8. Now, the Court has to see whether the Applicants are responsible for delaying the proceedings as contemplated in Explanation to Section 436-A of the Code. There are rival contentions. The Applicants contend that if they have filed Interim Applications before the Special Court, it does not mean that they are delaying the proceeding. Because, they contend that they were filed in exercise of a 'Constitutional Right' to protect one's own 'Personal Liberty'. As against this, Mr. Venegavkar strongly emphasized on the dilatory tactics played by the Applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Para No. 13, the trial Court noted:- The amount of misappropriation involved in EOW comes to Rs. 4,435 Crore of the Punjab and Maharashtra Co-operative Bank Ltd. Whereas, proceeds of the crime are Rs. 6,117.93 Crore as per E.D. In Para No. 15, the trial Court noted:- The right under Section 436-A is not 'absolute right' but as per Explanation, the Accused has to make out a case. In Para No. 16:- The Special Judge considered the dates of filing of the 3 complaints. They are as follows:- (i) First complaint was filed on 16th December 2019, (ii) Subsequent complaint on 16th March 2022 And (iii) Next complaint on 26th May 2023. In Para No. 17, the trial Court considered:- The provisions of Section 44(1)(c) of PML Act and its interpretation given in case of Rana Ayub v/s. Directorate of Enforcement 2023 4 SCC 357. The Special Court also noted the commitment of EOW case as per the order dated 2nd August 2023. The Special Court was conscious of simultaneous trial of the cases. The trial Court noted the conduct of Applicant - Rakesh Kumar in filing Bail Applications on medical and other grounds. This is after rejection of the first Bail Application on 14th July 2020. (Exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced before me are as follows:- (a) Order dated 20th July 2023:- Passed by the Court of Additional Chief Metropolitan Magistrate thereby committing the case to Special Court on the Application of Assistant Director. For knowing the reasons for filing this Application, even I have granted liberty to Mr. Venegavkar to file copy of that Application. He has filed it. I have perused it. Predominantly, it is filed in exercise of powers under Section 44(1)(c) of the PMLA Act. (b) It is a matter of record of EOW case that:- Scrutiny of the papers by Registry of City Civil Court is pending and as submitted on 7th February 2024 by the Investigating Officer, the scrutiny will take eight (8) weeks. Till the time these matters are closed for orders, no one on behalf of the EOW has pointed out to me that scrutiny is over. It is uncertain when the scrutiny will be over and the case of 'scheduled offences' will proceed to further stage. 13. Though Mr. Venegavkar has filed a bunch of the orders, except the order dated 23rd November, 2023 regarding filing of a 'draft charge' by Enforcement Department at Exhibit-230, none of the orders were specifically pointed out to me by him. However, curs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2022. Co-accused Waryam Singh was released under Section 88 of Cr. P.C., on executing personal bond and sureties (13th October 2022). (k) An Application under Section 88 of Cr. P.C. by Co-accused (Accused No. 26) Romy Mehra - Director of Libra Hotels Pvt. Ltd., (Accused No. 28), they were released on bail (16th March 2023). (l) The Application filed by Accused No.31 for bail and he was taken into formal custody and granted bail under Section 88 of Cr. P.C. (10th July 2023). (m) The Application at Exhibit-147B and 193 (additional ground under Section 436-A by these Applicants was rejected and judicial custody was extended under Section 309(2) of the Cr. P.C. (25th September 2023). (n) The Applicant Rakesh Kumar was released on an Interim Bail for three (3) months as per the order of Hon'ble Supreme Court (10th November, 2023). The Court recorded, none of the 38 Accused have filed discharge Applications and the 'draft charge' filed by the Enforcement Department was taken on record at Exhibit-230. (23rd November 2023). (o) All the Accused were directed to remain present for framing of charge and matter was adjourned to 7th December, 2023. (Order dated 23rd November, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order refusing bail. 17. When a person is arrested and liberty is curtailed as per the procedure established by the law, he has got every right to take appropriate steps for getting the facilities inside the jail premises. (That is discretionary). He has got every right to take care of his health. He has got every right to pray for bail. At the same time, the Investigation Agency has got every right to interrogate the Applicants in other offences and it is also the bounden duty of the Court to grant a liberty for investigation in other offences. All these steps and actions cannot be labelled as steps or actions taken for delaying the trial. The ultimate outcome may be delay of trial but unless some mala fide is shown by the Enforcement Department, one can't label them as steps undertaken for delaying the conduct of the trial. These steps are taken by both the sides in legitimate exercise of their rights recognized to them by existing law. 18. Now, I will come to the contention of Mr. Venegavkar that benefit under Section 436-A of the Code cannot be granted when allegations are serious in nature. Nature of Allegations 19. It is true that ECI Report is filed on the basis of 'sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also recorded. Mrs. Rebecca Solomon is DGM (Audit) of PMC Bank. She was mainly involved in the audit and correspondence with Reserve Bank of India (hereinafter "RBI") and making compliances. It discloses that few of the Accounts wherein loan was outstanding was hidden and not disclosed to RBI and it was on the instructions of the Managing Director - Joy Thomas. Similar are the statements of Chief Manager - Credit Monitoring Department of the Bank Shri. Sunil Dalvi. Then, statement of Chartered Accountant Mr. Ketan Lakdawala. Statement of DGM (Credit) of the Bank Mrs. Karmen Rebello. Even the statement of Co-accused Waryam Singh - Chairman of the PMC Bank was also recorded. 23. They have further revealed that real estate was a core business of HDIL and thereafter, the business expanded in hoteling, media ventures etc. The Bank is a Multi-State Co-operative Bank having 137 branches in States of Maharashtra, Goa, Karnataka, Gujarat, Madhya Pradesh and Delhi. The borrowers are the members / shareholders of the Bank and they are having influence on lending policy of the Bank. There were many non reported accounts. They have further revealed that the PMC Bank and officials have ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces by the same Court shall not be construed as joint trial. The judgments dealing with the provisions of Section 436-A of the Code of Criminal Procedure, 1973 27. Tarun Kumar v/s. Assistant Director Directorate of Enforcement 2023 SCC OnLine SC 1486 Bail was refused in an offence involving PMLA Act by the High Court of Delhi and it was also confirmed by Hon'ble Supreme Court. The observations in Para No. 419 in case of Vijay Madanlal Choudhary v/s. Union of India 2022 SCC OnLine SC 929 were reproduced. Giving a benefit under Section 436-A of the Code will depend upon the facts of that case and relief can be considered on a case to case basis. What we can gather is, even though Section 436-A provides a separate right, ultimately whether benefit can be given or not depends upon the facts and circumstance of the case. Though this judgment is cited on behalf of the Applicants, Mr. Venegavkar emphasized on this observation and submitted that 'no benefit can be granted to these Applicants'. 28. Manish Sisodia v/s. Central Bureau of Investigation 2023 SCC OnLine SC 1393 When there was an assurance given on behalf of the Prosecution to conclude the trial within a specific time limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a No. 272 wherein, Hon'ble Supreme Court has dealt with a threat of money-laundering to the financial system and observed:- (iii) "......Thus, the onus on the Government and the people to identify and seize such money is heavy. If there are any proactive steps towards such a cause, we cannot but facilitate the good steps. However, passions aside we must first balance the law to be able to save the basic tenets of the fundamental rights and laws of this country ". (Para No. 272). (D) Further, Mr. Venegavkar invited my attention to observations in Para No.395. The contention raised that money-laundering is less heinous offence than offence of terrorism was rejected. The object behind enacting PML Act was reiterated. The recommendation of the Law Commission in 47th Report increasing the punishment was also referred. The material observations are:- (iv) "Further, the quantum of punishment for money-laundering offence, being only seven years, cannot be the basis to undermine the seriousness and gravity of this offence. The quantum of sentence is a matter of legislative policy. The punishment provided for the offence is certainly one of the principles in deciding the gravity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further observed:- "However, such an exercise of power is expected to be undertaken sparingly being an exception to the general rule. The only caveat as furnished by the Explanation being the delay in the proceeding caused on account of the accused to be excluded." The observations by Hon'ble Supreme Court in case of Bhim Singh v/s. Union of India (2015) 13 SCC 605, are also reproduced. Finally, depending upon the nature of punishment, directions are given to grant bail to Accused, if he is in jail for a particular period. However, it was clarified that person accused of NDPS offences will not be benefited by this order. At the same time, the discretion under Section 37 of NDPS Act was not affected. These are all the observations reproduced in Para No.88 from the judgment in case of Legal Aid Committee v/s. Union of India. While dealing with economic offences, it was observed in Para No. 19 in Satender Kumar Antil (supra) that :- "The Code of Criminal Procedure, despite being a procedural law, is enacted on the inviolable right enshrined under Article 21 and 22 of the Constitution of India. The provisions governing clearly exhibited the aforesaid intendment of the Parliame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l these judgments, though pronounced in different matters, the cases were instituted for 'scheduled offence' as well as offence under the PML Act. The parties are the same. There were discharge Applications filed. They were rejected and that is why, the matter went before the High Court. After considering the provisions of PML Act, it was observed in Para No.52 that even though the trial for both these offences may start, still the Special Court should wait for the decision in a trial involving the 'scheduled offence'. It was argued that the first trial of 'scheduled offence' will be conducted and then, trial of PMLA offence will be conducted. They want to suggest that if the trial will be conducted in such a manner, there is no assurance when the trial for PMLA offence will start and that is how, they have taken it as an additional ground for bail under Section 436-A of the Code. Whereas, Mr. Venegavkar emphasized that the Special Court is constituted for trying PMLA offence and hence, PMLA trial will start first. 36. It is true that the Explanation to Section 44 lays down two issues. They are:- (a) Jurisdiction of a Special Court is not depending upon any order passed in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Prosecution and hearing the respective Accused persons. If there are discharge Applications, the Special Court is required to decide them. There are in all 38 Accused persons. One does not know when this pre-charge formalities will be completed. It is true that all these complaints consist of thousands of pages and there will be number of witnesses. So, the trial will be going to take its own time. The issue is, whether the Applicants can be detained in jail just because the allegations are serious in nature ? The answer is 'No'. 41. Because it is not certain when the trial will start and it will be over. Furthermore, even if trial of both the cases will start simultaneously, still the judgement in PMLA case will not be pronounced till the time, the judgement in trial involving 'scheduled offence' will be pronounced. I have taken this view on the basis of interpretation given by various High Courts and Supreme Court in case of Vijay Madanlal Choudhary's case (supra). Statistics 42. With this view in mind, I have asked learned Registrar General of this Court to call the report from the trial Court on certain aspects that is in respect of the pendency (of PMLA and scheduled o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics received by me, it is uncertain when the trial will start. Hence in such a situation we cannot deprive a person of his personal liberty. 46. It is no doubt true that E.D., has filed 'draft charge'. Same time, it is also true that framing a charge is not an empty formality. The Special Judge has to satisfy himself that ingredients of an offence are prima facie satisfied. Both the parties need to be heard. At the same time, this Court has noticed that Accused have a tendency to file meritless discharge Applications. Even there is a tendency to file meritless discharge Revisions challenging refusal prayers. Ultimately, Court seized of the matter (either trial Court or this Court) is required to deal with the issues raised confidently and more important, sternly. 47. In this exercise, there is also onerous responsibility on the prosecuting Agency by remaining vigilant. If their case is not progressed (due to pendency), they are not remedy-less. They can request the head of that establishment (i.e. Principal Judge) to assign the case to another Court. Ultimately, running of a system is collective responsibility. The defense Counsels have also a role to play. On one hand, they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Registrar General, the City Civil Court administration may be boosted to deal with huge pendency for scheduled and PMLA offence. 53. With these observations, I pass the following Order:- ORDER (i) Both Bail Applications i.e. Bail Application No. 3377 of 2023 and Bail Application No. 3867 of 2023 are allowed. (ii) Applicant-Sarang Wadhawan and Applicant-Rakesh Kumar Wadhawan arrested in connection with ECIR No. ECIR/MBZO-I/09/2019 dated 3rd October 2019 registered with Enforcement Directorate - Mumbai for the offence punishable under Sections 3 and 4 of PML Act, 2002 in proceeding PMLA Special Case No. 8 of 2019 and now pending before Designated Special Court under the PML Act, 2002 be released on bail on furnishing Personal Bond and Surety Bond of Rs. 5,00,000/- (Rupees Five Lakhs Only) each. (iii) They are directed not to leave the State of Maharashtra unless any justifiable reason is there and that too, with taking prior permission of trial Court. (iv) They are directed not to threaten the Prosecution witnesses and allure them in any manner. (v) They are directed to attend the trial Court punctually. (vi) They are directed to surrender the passport to the EOW/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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