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TMI Blog2024 (6) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... rded under Section 50 of the PMLA, the applicant has allegedly stated that he had placed orders and procured betel nuts from F.M. Food. Fourthly, there is further material to show that the applicant had credited the amounts to the accounts of M/s. Kheboto Traders and K.S. Enterprises which were eventually transferred to the account of F.M. Food - In these circumstances, prima facie, it cannot be said that the Investigating Officer had no justification to arrest the applicant. Alleged inchoate nature of predicate offences - HELD THAT:- The second submission on behalf of the applicant based on alleged inchoate nature of predicate offences deserves consideration. The fact that the CBI has registered FIR pursuant to the directions of the Division Bench in Public Interest Litigation is rather incontestable. It is not the requirement in law that the person who is accused of offence under the PMLA must also be arraigned as an accused in the predicate offence. The submission that since there has not been any effective investigation in the FIR registered by CBI and till the CBI concludes its investigation, it cannot be said that the applicant has any role in the allegations levelled in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Corruption Act, 1988, alleging, inter alia, that unscrupulous traders in connivance with various public servants were indulging in smuggling of substandard betel nuts / areca nuts of Indonesian origin by claiming falsely the same to be originating from the SAPTA-SAARC Preferential Trading Agreement based Member Countries by using fake certificates of origin, bogus and undervalued bills/invoices and forged clearance certificates and, thus, causing evasion of customs duty to the tune of Rs. 15,000 Crores annually. 2.4 On 30 September 2022, Directorate of Enforcement (ED) registered ECIR considering the offences in the aforesaid CBI FIR as predicate offences. On 1 December 2022, ED carried out searches at the residences of the applicant and his brother in law Ikram Haji Haroon Jada, Accused No. 4. From the residence of accused No. 4, cash amount of Rs. 16,50,000/- came to be recovered. 2.5 ED investigation further revealed that Abdul Hannan Ali (A2) is the proprietor of M/s. F M Food Processing and Agro Based Industries, Golaghat, Assam. (M/s. F. M. Food). Abdul Hannan Ali (A2) is a habitual offender dealing in smuggling of betel nuts from Myanmar to India via Indo Myanmar Bord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, I have perused the material on record. 4. Mr. Chaudhari, learned Senior Advocate, advanced a multi-pronged submission. Firstly, the threshold prescribed for arrest under Section 19 of the PMLA was not met. There was no justification for the arrest of the applicant. On the own showing of the ED, the applicant had appeared before the Investigating agency on 7 occasions. The applicant had rendered requisite cooperation. There was no reason for the investigating officer to believe that the applicant has been guilty of the offence punishable under this Act. 5. Mr. Chaudhri submitted that there is a distinction between the power to arrest and the necessity of arrest. In the case at hand, there was no necessity of arrest. Reliance was placed on the decisions of the Supreme Court in the cases of Vijay Madanlal Choudhary and Ors. V/s. Union of India and Ors. (2022) SCC Online SC 929 and Satender Kumar Antil V/s. Central Bureau of Investigation and Anr. (2022) 10 SCC 51. 6. Mr. Chaudhari further submitted that when the aforesaid ground of illegal and unjustified arrest was raised while seeking bail, the learned Special Judge, PMLA approached the matter from a wrong perspective to hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the ED to obtain copies of his statement, even if taken at its face, may not be construed against the applicant if he is otherwise entitled to be released on bail. 11. Mr. Chavan, learned Special PP, countered the submissions on behalf of the applicant. It was strenuously submitted that the material on record makes out a very strong prima facie case against the applicant for an offence punishable under Section 4 of the PMLA. Thus, the rigour contained in Section 45(1) of the PMLA is attracted. Resultantly, the applicant does not deserve to be enlarged on bail as, in the face of the material on record, it cannot be said that the applicant is not guilty of the offence for which he has been arraigned. 12. Joining issue, Mr. Chavan urged that the ground that the arrest was unjustified and illegal and did not meet the threshold prescribed under Section 19 of the PMLA, cannot be raised in an application for bail. The applicant ought to have raised such challenge in an appropriate proceedings questioning remand. A strong reliance was placed by Mr. Chavan on the judgment of the Supreme Court in the case of V. Senthil Balaji V/s. State represented by Deputy Director and Ors. 2023 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o commit any offence while on bail. Satisfaction of the twin conditions is the statutory requirement. Sub-section (2) of Section 45 further clarifies that the limitation on granting bail under sub-section (1) is in addition to the limitation under the Code or any other law for the time being in force for granting of bail. Are there grounds which would entitle the applicant to bail despite the aforesaid statutory restrictions? 17. The first ground strenuously urged by Mr. Chaudhari was the absence of material which would justify the belief that the applicant may be guilty of an offence under the PMLA. Taking the Court through the averments in the prosecution complaint and the material on record, an endeavour was made to urge that there was no justification for arrest. As a corollary, Mr. Chaudhari submitted that the said factor ought to have weighed with the learned Special Judge, PMLA in considering the entitlement for bail. Attention of the Court was invited to Paragraph 25 of the judgment of the Supreme Court in the case of Satender Kumar Antil (supra), wherein it was enunciated that while considering the application for enlargement on bail, the Courts will have to satisfy themse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertained, in the latter the only remedy available is to seek a relief statutorily given. In other words, a challenge to an order of remand on merit has to be made in tune with the statute, while non-compliance of a provision may entitle a party to invoke the extraordinary jurisdiction. In an arrest under Section 19 of the PMLA, 2002 a writ would lie only when a person is not produced before the Court as mandated under sub-section (3), since it becomes a judicial custody thereafter and the concerned Court would be in a better position to consider due compliance. ... 95. Summation of Law : i. When an arrestee is forwarded to the jurisdictional Magistrate under Section 19 (3) of the PMLA, 2002 no writ of Habeus Corpus would lie. Any plea of illegal arrest is to be made before such Magistrate since custody becomes judicial. ii. Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such non-compliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002. iii. An order of remand has to be challenged only before a higher forum as provided under the CrPC, 1973 when it depicts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of Section 3 of the PMLA. 16. In a given case, if the prosecution for the scheduled offence ends in the acquittal of all the accused or discharge of all the accused or the proceedings of the scheduled offence are quashed in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 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. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the Charge-sheets filed in the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant is allegedly one of the traders in Nagpur, Delhi and Varanasi. Referring to the money trail (paragraph 10.1.4), Mr. Chaudhari would submit that the entire amount was transferred by the applicant through banking channel. That reflects the bona fide transaction in the trade. 27. In opposition to this, Mr. Chavan, learned Special PP, submitted that there are concomitant circumstances which indicate that the applicant was fully aware of the smuggled and adulterated nature of the betel nuts which the applicant had received and dwelt in. The circumstances of search and seizure of the smuggled and adulterated betel nuts, reports of analysis indicating that those betel nuts were of Indonesian origin, the seizure of cash from the applicant and Ikram Haji Haroon Jada (A4), layering of the funds through intermediate fictitious entities, coupled with the statements of the applicant and the transporter Manoj Kothari, which indicate that the applicant had entered into transaction with Abdul Hanan (A2) and Kuhoje K. Achumi (A3), were pressed into service to draw home the point that the applicant was very much involved in the money laundering. 28. Prima facie, the aforesaid material may jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied) 30. It would be contextually relevant to note, in paragraph 11.2, it is alleged, Abdul Hanan Ali (A2) has directly indulged in the process of activities connected with the proceeds of crime to the tune of Rs. 113.40 Crores. It needs no emphasis that Abdul Hannan Ali (A2) was allegedly the principal character in the alleged offences of smuggling betel nuts without the payment of the customs duty and the resultant offence of money laundering. Nor it requires an elaborate analysis to discern that the role attributed to Abdul Hannan Ali (A2) is far pervasive and grave than that of the applicant. To put in other words, Abdul Hannan Ali (A2) would find place in each of the four circles in the pictorial representation, extracted above. 31. Abdul Hannan Ali (A2) was not arrested. He preferred an application for his release under Section 88 of the Code. The order passed by the learned Special Judge, PMLA, on 11 October 2023 records that the application of Abdul Hannan Ali (A2) was opposed by ED on the following grounds : a. Accused is involved in a serious offence of money laundering. b. Accused has not cooperated the investigation. c. In spite of issuing summons on 27.04.2023, 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed betel nuts, is behind the bars. The decision to arrest or not to arrest is undoubtedly within the domain of the investigating agency. However, the role attributed to Abdul Hannan Ali (A2), extracted above, stares in the face. Therefore, in my considered view, the applicant deserves the same dispensation as has been extended to Abdul Hannan Ali (A2). 34. The submission of Mr. Chavan that the applicant has not rendered necessary co-operation when he was summoned by the ED, is required to be appreciated in the light of the fact that the applicant appeared before the Investigating Officer on seven occasions. In contrast, Abdul Hannan Ali (A2) never appeared before the Investigating Officer. The question as to whether the applicant rendered necessary co-operation in the investigation when he appeared before the Investigating Officer is, in a sense, by and large subjective one. 35. It is true, the allegations that the applicant attempted to bribe the contractual employee to obtain the copies of his statement are of serious nature. Yet the context of the matter is required to be kept in view and, in the totality of the circumstances, where the principal accused is at liberty, in the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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