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TMI Blog2024 (5) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception. From bare perusal of the order dated 13.10.2022 passed by the learned Special Judge granting remand of the applicant along with other accused has given reason wherein it has specifically stated that the present applicant has purchased coal washeries from M/s KJSL Coas Power Ltd. to M/s Maa Madwarani Coal Benefaction Pvt. Ltd. at the cost of Rs. 35 crores and other two coal washeries have been purchased and the investigation within 24 hours is not possible, therefore, the custodial remand was ordered. Whereas in the present case, the learned Special Judge has categorically rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tiwari only. The record would further reflect that several properties in the names of companies of the applicant herein viz., M/s Indermani Minerals Pvt. Ltd. M/s KJSL Coal Power Pvt. Ltd. which were acquired using proceeds of crime have been attached under Section 5(1) of the PMLA, 2002 on 09.12.2022 and 29.01.2023 and the same were subsequently confirmed by the learned Adjudicating Authority (PMLA), vide orders dated 01.06.2023 17.07.2023. Thus, the applicant is unable to fulfill the twin condition of Section 45 of the PMLA, 2002. Considering the factual legal matrix, it is quite vivid that the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail - considering the judgment of Hon ble the Supreme Court in case of SAUMYA CHAURASIA VERSUS DIRECTORATE OF ENFORCEMENT [ 2023 (12) TMI 685 - SUPREME COURT] SATYENDAR KUMAR JAIN VERSUS DIRECTORATE OF ENFORCEMENT, ANKUSH JAIN VERSUS DIRECTORATE OF ENFORCEMENT AND VAIBHAV JAIN VERSUS DIRECTORATE OF ENFORCEMENT [ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jay Ambey Group of Raipur (Suryakant Tiwari Group). In the report, it has been mentioned that during search operations on 30.06.2023 by Income Tax Department on the premises of Suryakant Tiwari and his associates, evidence was gathered related to a syndicated being operated and coordinated by Suryakant Tiwari whereby additional unauthorized cash to the tune of Rs. 25 per ton of coal was being collected over and above the legal amount against Coal Delivery Orders. It has also been alleged that pursuant to the Order F.No.4138-47/Sankhikiya/Coal bhandaran/N.Kra 2020 dated 15.07.2020 issued by the State Government the dispatch rules of coal mines by authorities have been changed from an online process to introduction of manual verification. The said notification was issued under the signatures of one Sameer Vishnoi, IAS who was the Director, Geology Mining as well as MD of CMDC. It is also case of the prosecution that it is only after the said notification Suryakant Tiwari in conspiracy with certain other persons started obtaining an illegal levy of Rs. 25 per ton of coal for issuance of delivery order for coal transportation. The handwritten diaries maintained by one Rajnikant Tiwari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess ambitions in getting close to the Government of the day, he has acted as a benami and is holding these assets for the benefit of Suryakant Tiwari. He has only blocked his capital in these assets and the remaining entire cash transactions were still done by Suryakant Tiwari only. He has also been evasive in his statements regarding his complete financial dealings. In fact, on the day of the search, he was not found at his premises and he joined the search proceedings later on with a brand-new phone, but came only after hiding his regular mobile devices. He claimed that his phone was 'stolen' from his crown farm house. several properties in the names of companies of the applicant herein viz., M/s Indermani Minerals Pvt. Ltd. M/s KJSL Coal Power Pvt. Ltd. which were acquired using proceeds of crime have been attached under Section 5(1) of PMLA, 2002, vide PAO Nos. 02/2022 dated 09.12.2022 01/2023 dated 29.01.2023 and the same were subsequently confirmed by the learned Adjudicating Authority (PMLA), vide orders dated 01.06.2023 17.07.2023 in OC No. 1874/2023 1906/2023 respectively. The prosecution complaint under Section 45 of the PMLA, 2002 has been filed before the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related to proceeds of crime and the properties connected by removing all computers and other digital devices from his office and by hiding his mobile phone in an attempt to escape the clutches of law and to frustrate further investigation under the PMLA, 2002 whereas the applicant has always cooperated with Enforcement Directorate and also recorded his statement as provided under Section 50 of the PMLA, 2002. He would further submit that due to thunder lightening in the applicant's office, many electronic devices like air conditioners, camera, DVR, desktop computers, etc. were burnt/damaged, and therefore, the same were in the process of being repaired and would submit that the applicant has already provided cash ledger, sources of funds as demanded by the ED. As such, it cannot be said that the applicant has made any attempt to suppress anything regarding purchase transaction with ED. He would further submit that there is violation of Section 19 of the PMLA, 2002 as this Section provides that arrest should be made on the basis of the material in possession , which has to be of sterling quality and unimpeachable character, which is not available in the present case. However, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akant Tiwari. He would further submit that it is not a case of the Enforcement Directorate that the applicant purchased the property using the proceeds of crime or under valued amount prize below the circle rate. He would further submit that the applicant has not purchased these properties in cash but were purchased through banking system, as such the allegation that the applicant has paid huge amount of cash to acquire properties from Suryakant Tiwari is not correct. He would further submit that the applicant has only purchased 4.616 hectare (which comes to 11.40 acres) out of a total of 22 acres as per agreement of sale dated 20.06.2022 which was executed between by KJSL and Maa Madwarani. He would further submit that the allegation made by the Enforcement Directorate that the sale of coal washeries was only a sham transaction, is not correct as after execution of the agreement of sale, the registry of property was executed and payments were made. He would further submit that before purchasing valuation report was obtained by independent valuer and not by Maa Madwarani and thereafter, the said coal washeries were purchased from Indus at Rs. 31.6 crore. However, the applicant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He would further submit that these properties were purchased by the applicant to fulfill the purpose of acquiring these properties, as mentioned in the board resolutions passed in this regard. He would further submit that the applicant owned seven coal washeries and is in the business of coal for twenty years. Hence, no question of enriching arises when somebody already has seven coal washeries. He would further submit that the ED has wrongly alleged that the applicant played an active part in layering of the extorted amounts in the purchase of two coal washeries through his company KJSL. Further, ED has also alleged that the applicant, in order to alienate the tainted assets through M/s Indermani which is sham purchase transaction and acquired properties from Suryakant Tiwari, therefore, the allegation of layering qua Sunil Kumar Agrawal cannot survive. Moreover, in terms of Section 3 of PMLA, 2002, the applicant submits that he has neither played role knowingly nor indirectly in layering of the proceeds of crime, and hence, cannot be held liable for money laundering. 11. He would further submit that new set of arguments taken with respect to arrest, grounds of arrest and remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements of KJSL Coal and Power Private Ltd. as well as Indermani Mineral India Private Ltd. and statement made by Nikhil Chandrakar before Police Station-Telibandha, Raipur to substantiate that applicant was illegally kept under custody as summon was issued only for 12.10.2022 and he was kept under custody on 13.10.2022 upto 5.30 a.m. whereas the applicant ought to have been released by 11.59 p.m. on 12.10.2022 as summon was issued to the applicant for 12.10.2022 only. Thus, he was kept under wrongful custody and illegally restrained during the period between 12 p.m. to 5.30 a.m. of 13.10.2022, as such, the arrest is nonest and illegal and the alleged ground of arrest was provided to the applicant only at 5.30 a.m. To substantiate this submission, he would refer to the judgment of Punjab and Haryana High Court in case of Pranav Gupta Vs. Union of India reported in (2023) SCC Online P H 3598 . He would further submit that the respondent has failed to communicate the ground of arrest to the applicant on actual date of arrest on 13.10.2022, as such, it is an arbitrary action and violated the mandate of arrest as provided in Section 19(1) of the PMLA, 2002. To substantiate his submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement, reported in (2018) SCC OnLine Del 8873, Ramchand Karunakaran Vs. Directorate of Enforcement another [Criminal Appeal No. 1650 of 2022, decided on 23.09.2022], Sujit Tiwari Vs. State of Gujarat, reported in (2020) 13 SCC 447, Mohammad Salman Hanif Shaikh Vs. State of Gujarat [SLP (Crl.) 5530/2022], Gopal Krishna Patra @ Gopalrusma Vs. Union of India [ Criminal Appeal No. 1169 of 2022], Shariful Islam @ Sarif V/s State of West Bengal [SLP (Crl.) No. 4173 of 2022], Nitish Adhikary @ Bapan Vs. State of West Bengal [SLP (Crl.) No. 5769 of 2022], Mohd. Muslim @ Hussain Vs. State (NCT of Delhi), Ajit Bhagwan Tiwde Vs. State of Maharashtra, reported in 2022 SCC Online Bom 4079, Ajay Thakre Vs. State of Maharashtra [Crl. Bail Application No. 515/2022], Roop Bansal Vs. Union of India [CWP-23005-2023, decided on 31.10.2023], Parvathi Kollur another Vs. State of Directorate of Enforcement [Crl. Appeal No. 1254/2022, decided on 16.08.2022], Indrani Patnaik Vs. Directorate of Enforcement [WP (C) No. 368 of 2021, decided on 03.11.2022], Adjudicating Authority (PMLA) others Vs. Shri Ajay Kumar Gupta others [Crl. Appeal No. 391-392/2018], Directorate of Enforcement Vs. M/s Obulapuram Mining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22-IT (Inv.II) dated 13.09.2022, CBDT has forwarded the copy of the above FIR No. 129/2022 dated 12.07.2022 under Sections 186, 204, 353, 384 120 (B) of IPC against Suryakant Tiwari along with a report on the investigation conducted by Income Tax Department on M/s Jay Ambey Group of Raipur (Suryakant Tiwari Group) to the Directorate of Enforcement for initiating money laundering investigation. From perusal of aforementioned O.M, it was learnt that a search and seizure action was carried out by the Income Tax Department at multiple premises of Suryakant Tiwari and his associates. During the course of search and seizure, large number of incriminating evidences were seized which are in the forms of hand written diaries, loose papers and digital devices like mobile phones, laptops etc. These evidences discloses numerous cash transactions relating to an organized syndicate being operated and coordinated by Suryakant Tiwari along with six associates and other persons wherein additional unauthorized cash was being extorted, over and above the legal amount fixed against the Coal Delivery Order issued by SECL (South Eastern Coalfields Limited), from various entities who were lifting and tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Tiwari and his associates, Indermani Group purchased all the benami properties of Suryakant Tiwari to safeguard the ill-gotten proceeds of crime and to frustrate the efforts of Enforcement Directorate to attach the proceeds of crime in future. He would further submit that all these transactions are sham transactions and in fact applicant s Indermani Group is holding these assets for Suryakant Tiwari and his benamis. He would further submit that it is clear that although the applicant is a wealthy businessman, the Enforcement Directorate has established that for getting personal benefits in terms of share in washery business and for his larger business ambitions in getting close to the Government of the day, he has acted as a benami and is holding these assets for the benefit of Suryakant Tiwari. He has only blocked his capital in these assets and the remaining entire cash transactions were still done by Suryakant Tiwari only. He has also been evasive in his statements regarding his complete financial dealings. In fact, on the day of the search, he was not found at his premises and he joined the search proceedings later on with a brand-new phone, but came only after hiding his re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence of money laundering is Rs. 540 crores approximately and in view of well settled position of law that economic offence constitutes a separate class of offence and bail should not normally be granted in such cases and would pray for rejection of bail petition. 19. To substantiate his submission, he would refer to the judgment rendered by Hon ble the Supreme Court in case of Nimmagadda Prasad Vs. CBI, reported in (2013) 7 SCC 466, State of Bihar Vs. Amit Kumar reported in (2017) 13 SCC 751, Gautam Kundu Vs. Manoj Kumar reported in (2015) 16 SCC 1, Mohd. Arif Vs. Directorate of Enforcement, Govt. of India, BLAPL No. 8882/2021 (decided on 31.05.2022), Soumya Chaurasia Vs. Directorate of Enforcement Special Leave Petition (Crl.) No. 8847/2023, Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, Department of Revenue reported in MANU/MH/1011/2010, Anirudh Kamal Shukla Vs. Union of India [Criminal Misc. Anticipatory Bail Application under Section 438 Cr.P.C. No. 307/2022, decided on 21.03.2022], Naib Singh Vs. State of Haryana [CRM-M-29466-2022, decided on 15.11.2022]. 20. I have heard learned counsel for the parties and perused the documents placed on record including ECIR with utmo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002, then only, he is at liberty to arrest. This Section further provides that the said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception. 24. Now this Court has to examine the case of the applicant vice versa case of the Enforcement Directorate whether there is compliance of Section 19 of the PMLA is done by the Enforcement Directorate or not. For considering this issue, it is expedient for this Court to extract the reason to believe dated 13.10.2022 recorded by the Enforcement Directorate. The Enforcement Directorate in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths. The very act of acquisition of two washeries for a whopping amount of Rs. 50 Crores approax and its immediate sale to company owned by Shri Sunil Kumar Agarwal clearly shows that Shri Suryakant Tiwari had layers the ill gotten proceeds of crime obtained from illegal levey collected from coal transportation in the manner discussed above in order to project them as untainted properties and that Shri Sunil Kumar Agarwal has knowingly assisted him laundering the proceeds of crime. 20. Also, as could be seen from his statements, Shri Sunil Kumar Agarwal has tried to erase the evidences related to the proceeds of crime and the properties connected by removing all computers and other digital devices from his office and by hiding his mobile phone in an attempt to escape from the clutches of law and to frustrate further investigation under PMLA, 2002. The fact that he did not lodge complaint for his purportedly lost mobile phone indicates his criminal intent in destruction of evidences. He escaped when he became aware about the impending ED searches and has actively hidden computers in his offence and is indulging in destruction of evidence. 25. Thus, there was reason to believe regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view the seriousness of the offences and the stage of the investigation, he was convinced that custodial interrogation of the accused persons was required in the present case and remanded them to the custody of the ED! The sentence It is further (sic) that all the necessary mandates of law have been complied with follows It is the case of the prosecution . and appears to be a continuation thereof, as indicated by the word further , and is not a recording by the learned Judge of his own satisfaction to that effect. 28. Whereas in the present case, the learned Special Judge has categorically recorded its reason and satisfaction while granting the remand of the applicant to the Enforcement Directorate. Thus, there is compliance of Section 19 of the PMLA, 2002 and the order dated 13.10.2022 passed by the learned Special Judge is inconformity with the law laid down by Hon ble the Supreme Court in case of Pankaj Bansal (supra). Therefore, the contention raised by learned Senior counsel for the applicant that there is non-compliance of Section 19 of the PMLA, 2002 vitiating the entire proceedings, applicant is entitled to be released on bail, deserves to be rejected. Accordingly, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Saumya Chourasiya Vs. Directorate of Enforcement [Criminal Appeal No. 3840 of 2023, decided on 14.12.2023], wherein Hon ble the Supreme Court has held at paragraph 18 19 as under:- 18. The object of the PMLA hardly needs to be delineated. The said Act has been enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for the matters connected therewith and incidental thereto. As per Section 2(1)(p), Money Laundering has the meaning assigned to it in Section 3. The offence of Money Laundering has been defined in Section 3, which is punishable under Section 4 of the said Act. Section 45 makes the offences under the PMLA to be cognizable and non bailable. As regards the twin conditions for the grant of bail contained in Section 45(1), it has been held by the Three-Judge Bench in Vijay Madanlal (supra) that the underlying principles and rigours of Section 45 of the Act must come into play and without exception ought to be reckoned to uphold the objectives of the Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money laundering. 19. Though it is true that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well taken during the trial. Even the trial Court while granting remand has recorded its finding that within 24 hours of arrest, the applicant has been produced before the Court and there is no material to rebut the said finding recorded by the learned trial Court, as such the contention that the accused was remained in illegal custody from 12 a.m. to 5.30 a.m. deserves to be rejected and accordingly, it is rejected. 32. The submissions made by learned Senior counsel for the applicant that the coal washeries were purchased after due process getting approval from the Directors of the companies, proper valuation has been done and thereafter the property has been purchased as such, it cannot be said that he was involved in commission of offence of layering the proceeds of crime, are all are his defence, which can be considered during the trial only. 33. Further contention of learned counsel for the applicant that the applicant is remained in custody for one year and five months, therefore, he should be released on bail, cannot be considered in view of the gravity of offence and prima facie involvement of the applicant in the commission of offence. Hon ble the Supreme Court in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court cannot be brushed aside merely because the said declarations were deemed to be void under Section 193 of the Finance Act, 2016. The said proceedings clearly substantiates the case of the respondent ED as alleged in the Prosecution Complaint under the PMLA. 30. Having regard to the totality of the facts and circumstances of the case, we are of the opinion that the appellants have miserably failed to satisfy us that there are reasonable grounds for believing that they are not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that they are prima facie guilty of the alleged offences. 31. Though Ms. Arora had faintly sought to submit that the so-called inadvertent mistake committed by the ED with regard to the figures mentioned in the Prosecution Complaint in respect of the role of the appellants Ankush Jain and Vaibhav Jain should not be permitted to be corrected, which otherwise show that the allegations against the appellants were vague in nature, we are not impressed by the said submission. We are satisfied from the explanation put forth in the affidavit filed on behalf of the respondent-ED that it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. [(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in [* * *] sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. 35. From bare perusal of ECIR with regard to the allegations leveled against the present applicant, it is quite vivid that the the present applicant has played specific role and he is kingpin of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail. Hon'ble the Supreme Court in case of Directorate of Enforcement Vs. Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on 12.05.2023 has held at paragraph 6 7 as under:- 6. At the outset, it is required to be noted that respective respondent No. 1 accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered. Section 45 of the PML Act, 2002 reads as under:- 45. Offences to be cognizable and non-bailable. (1) [Notwithstanding a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheduled offence(s) and/or that all the other accused are discharged/acquitted in so far as the predicated offences are concerned, merely because other accused are acquitted/discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1. An enquiry/investigation is going on against respective respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation for the scheduled offences itself is sufficient at this stage. 6.3 From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that chargesheet has been filed against respective respondent No. 1 accused and therefore, the investigation is completed. However, the High Court has failed to notice and appreciate that the investigation with respect to the scheduled offences under the PML Act, 2002 by the Enforcement Directorate is still going on. Merely because, for the predicated offences the chargesheet might have been filed it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002. Investigation for the predicated offences and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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