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TMI Blog2024 (8) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... The Court observed that such situations will have to be examined on a case-to-case basis. This Court in Vijay Madanlal Choudhary anticipated the myriad situations that may arise in the recording of the Section 50 statement and discussed the parameters for dealing with them. In Rajaram Jaiswal vs. State of Bihar [ 1963 (4) TMI 68 - SUPREME COURT ], a judgment quoted in extenso in Vijay Madanlal Choudhary, this Court observed that the expression police officer in Section 25 of the Evidence Act is not confined to persons who are members of the regularly constituted police force. In the facts of the present case, we hold that the statement of the appellant if to be considered as incriminating against the maker, will be hit by Section 25 of the Evidence Act since he has given the statement whilst in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency. Taken as he was from the judicial custody to record the statement, it will be a travesty of justice to render the statement admissible against the appellant. There are no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 023. By the said judgment, the High Court dismissed the bail application of the appellant. The appellant sought for regular bail in connection with ECIR Case No. 5 of 2023 in ECIR-RNZO/10/2023 (hereinafter referred to as ECIR Case No. 5 of 2023) registered for the offence under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as PMLA ) and pending before the Court of Special Judge, PMLA, Ranchi. Brief Facts 3. The predicate offence on the basis of which ECIR No. 5 of 2023 was recorded on 07.03.2023 is an FIR bearing Sadar P.S. Case No. 399 of 2022 registered on 08.09.2022 for offences punishable under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34 of the Indian Penal Code, 1860 (for short IPC ). The appellant was not named as an accused there. 4. In view of Section 420 and 467 of IPC, being Scheduled Offences, ECIR No. 5 of 2023 was registered and investigation under the PMLA was initiated. Even here the appellant was not named though the ECIR did mention certain unknown persons being involved. It is alleged that the investigation revealed falsification of the original records in the Circle Office, Bargain, Ranchi and the Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re transferred from Shiva Fabcons (Proprietorship firm of Punit Bhargava) to Rajesh Rai although the consideration amount was Rs. 1,78,55,800/- and it was shown to have been paid in the sale deed; that out of the aforesaid sum of Rs. 25 lakhs, an amount of Rs. 18 lakhs were transferred from the Bank account of Rajesh Rai to the Bank account of Green Traders (Partnership firm under the control of Md. Saddam Hussain); that Rs. 7 lakh cash was withdrawn through cheques by Rajesh Rai; that on the directions of the appellant, mutation of the property was done in the name of Punit Bhargava, who was an accomplice of the appellant; that Punit Bhargava sold the property to the Bishnu Kumar Agarwal within a span of two months for Rs. 1.80 crore; that an amount of Rs.56,62,600/- was paid from the account of M/s Chalice Real Estate (Company of Bishnu Kumar Agarwal) on 05.04.2021 to Punit Bhargava s bank account and on 24.06.2021 an amount of Rs. 1,01,57,400/- was transferred from the account of Adarsh Heights Pvt Ltd (Company of Bishnu Agarwal) to Punit Bhargav s bank account; that the entire payment was made in the month of April and June, 2021 but the registration was done on 1st April, 2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees, may 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. In Vijay Madanlal Choudhary and Ors. Vs Union of India and Ors. reported in (2022) SCC OnLine SC 929, this Court categorically held that while Section 45 of PMLA restricts the right of the accused to grant of bail, it could not be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. Para 131 is extracted hereinbelow:- 131. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of India and that prolonged incarceration before being pronounced guilty ought not to be permitted to become the punishment without trial. In fact, Manish Sisodia (II) (Supra) reiterated the holding in Manish Sisodia (I) Vs. Directorate of Enforcement (judgment dated 30.10.2023 in Criminal Appeal No. 3352 of 2023) where it was held as under:- 28. Detention or jail before being pronounced guilty of an offence should not become punishment without trial. If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be proper to equate these c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 45 impose absolute restraint on the grant of bail. The discretion vests in the court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under section 45 of the 2002 Act. While dealing with a similar provision prescribing twin conditions in MCOCA, this court in Ranjitsing Brahmajeetsing Sharma (supra), held as under: 44. The wording of section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the Legislature. Section 21(4) of the MCOCA, therefore, must be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. Similarly, the court will be required to record a finding as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 of the 2002 Act are reasonable grounds for believing which means the court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. (emphasis supplied) Importance of the foundational facts-under Section 24 PMLA 14. In Vijay Madanlal Choudhary (supra) dealing with Section 24 of the PMLA, the three-Judge Bench held as under : - 97. Be that as it may, we may now proceed to decipher the purport of section 24 of the 2002 Act. In the first place, it must be noticed that the legal presumption in either case is about the involvement of proceeds of crime in money-laundering. This fact becomes relevant, only if, the prosecution or the authorities have succeeded in establishing at least three basic or foundational facts. First, that the criminal activity relating to a scheduled offence has been committed. Second, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity. Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeds of crime. In any case, in terms of section 114 of the Evidence Act, it is open to the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. Considering the above, the provision under consideration [section 24(a)] by no standards can be said to be unreasonable much less manifestly arbitrary and unconstitutional. ( Emphasis supplied ) Importance of the counter to the bail application filed in the original Court 15. In view of the importance of the three basic foundational facts that the prosecution needs to establish, the counter/response to the bail application in the original Court is very significant in PMLA bail matters. In cases where the Public Prosecutor takes a considered decision to oppose the bail application, the counter affidavit of the Investigating Agency should make out a cogent case as to how the three foundational facts set out hereinabove are prima facie established in the given case to help the Court at the bail application stage to arrive at a conclusion within the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relies on the statements under Section 50 of the PMLA of Afshar Ali, Rajdeep Kumar, Md. Saddam Hussain, Punit Bhargava and of the appellant himself. They also rely on the call detail records of the other accused, namely, Afshar Ali and Rajdeep Kumar. They also alleged that the appellant, with the help of another accused person Chhavi Ranjan, by influencing the circle officials got the land mutated and hence, according to the prosecution, the role of the appellant is pivotal. 18. Learned ASG for the respondent has taken us through summary of the statements of the persons mentioned hereinabove, as adverted to in the complaint, filed by the Enforcement Directorate. Admissibility of the Statement of the Appellant 19. In the oral submissions and also as elaborated in the detailed written submissions by the respondent-Enforcement Directorate, reliance is sought to be placed on the statements of the appellant. This is stoutly resisted on the side of the appellant by contending that the appellant was in custody from 25th August 2022 in ECIR No. 4/2022; that his arrest was shown in the present case on 11th August 2023 and it is submitted that statements recorded while in custody (although ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was sold to Bishnu Kumar Agarwal at a consideration of Rs. 1.78 crore. The statement, as summarized, taken as it is does not prima facie make out a case of money laundering against the appellant. It also does not point to the involvement of the appellant prima facie in the forgery. 21. Independent of the above, there is one important issue which arises in this case. It has to be pointed out that the appellant has been in judicial custody from 25.08.2022 in connection with another ECIR, namely, ECIR No. 4 of 2022 and while in judicial custody his arrest was shown in the current ECIR, namely, ECIR No. 5 on 11.08.2023. The statements of the appellant were recorded on 03.08.2023, 04.08.2023, 11.08.2023, 12.08.2023, 14.08.2023, 15.08.2023 and 30.08.2023. 22. The question that arises is when a person is in judicial custody/custody in another case investigated by the same Investigating Agency, whether the statements recorded (in this case the statements dated 03.08.2023, 04.08.2023, 11.08.2023) for a new case in which his arrest is not yet shown, and which are claimed to contain incriminating material against the maker, would be admissible under Section 50? 23. In Vijay Madanlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 25 of the Evidence Act is not confined to persons who are members of the regularly constituted police force. Further, setting out the test for determining whether an officer is a police officer for the purpose of Section 25 of the Evidence Act, this Court in Rajaram Jaiswal (supra) held (quoted from para 165 of Vijay Madanlal Choudhary (supra) 165(ii) It may well be that a statute confers powers and imposes duties on a public servant, some of which are analogous to those of a police officer. But by reason of the nature of other duties which he is required to perform he may be exercising various other powers also. It is argued on behalf of the State that where such is the case the mere conferral of some only of the powers of a police officer on such a person would not make him a police officer and, therefore, what must be borne in mind is the sum total of the powers which he enjoys by virtue of his office as also the dominant purpose for which he is appointed. The contention thus is that when an officer has to perform a wide range of duties and exercise correspondingly a wide range of powers, the mere fact that some of the powers which the statute confers upon him are analogous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 161 enables the police to examine the accused during investigation. The prohibitive sweep of Article 20(3) goes back to the stage of police interrogation- not, as contended, commencing in court only. In our judgment, the provisions of Article 20(3) and Section 161(1) substantially cover the same area, so far as police investigations are concerned. The ban on self-accusation and the right to silence, while one investigation or trial is under way, goes beyond that case and protects the accused in regard to other offences pending or imminent, which may deter him from voluntary disclosure of criminatory matter. We are disposed to read compelled testimony as evidence procured not merely by physical threats or violence but by psychic torture, atmospheric pressure, environmental coercion tiring interrogative prolixity, overbearing and intimidatory methods and the like not legal penalty for violation. So, the legal perils following upon refusal to answer, or answer truthfully, cannot be regarded as compulsion within the meaning of Article 20(3). The prospect of prosecution may lead to legal tension in the exercise of a constitutional right, but then, a stance of silence is running a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle laid down there on is applicable. In fact, the three-Judge Bench in Vijay Madanlal Chaudhary (supra), in the para extracted hereinabove, expressly refers to Section 25 of the Evidence Act while dealing with statements recorded when the person is in custody. 32. We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice. 33. We also draw support from the way Section 50 is structured. Section 50 reads as under:- Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc. (1) The Director shall, for the purposes of section 13, have the same powers as are vested in a civil court under the Code of Civil P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (3) shall be deemed to be in judicial proceeding. A person in judicial custody being not a free person cannot be summoned and any statement to be recorded will be after obtaining the permission of the Court which has remanded him to the judicial custody in the other case. 34. In view of the above and keeping the salutary principle of Article 21 in mind, we hold that since the words procedure established by law occurring in Article 21 has to be a reasonable and valid procedure, the statement of the appellant under Section 50 cannot be read upon in ECIR No. 5 of 2023 even though the appellant was at that point in custody in ECIR No. 4 of 2022. Statement of Afshar Ali - Co-accused 35. The appellant was not named in FIR No. 399 of 2023. It appears from the complaint of the respondent-Enforcement Directorate at para 6 that Afshar Ali, Saddam Hussain, Imtiaz Ahmad were arrested on 14.04.2023 in ECIR/RNZO/18/2022 though in the summary of the statements at para 8.12 it is mentioned that Afshar Ali was arrested on 14.04.2023 read with prayer (c) of the complaint it appears that the arrest that is referred to in para 8.12 is the arrest in ECIR/RNZO/18/2022. 36. Accused Afshar Ali was arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r evidence and thus fortify himself in believing what without the aid of the confession he would not be prepared to accept. Hence, insofar as Afshar Ali s statement is concerned, the Investigating Agency will have to first marshal the other evidence and can at best look at the statement for lending assurance. Independently, the statement of Afshar Ali does not prima facie indicate anything about the role of the appellant in the forgery of sale deed and other documents or being involved in the offence of money laundering. Statement of Rajdeep Kumar 38. We have perused the statement, as summarized in the complaint, of Rajdeep Kumar. Rajdeep Kumar merely states that he worked for the appellant and has met Afshar Ali after the appellant introduced him at the house of the appellant regarding dealing of a land situated at Cheshire Home. He further states that he has met Saddam Hussain at the house of the appellant on the above stated land. He further adds that he has also seen Imtiaz Ahmed and Bharat Prasad, close associates of Afshar Ali and Saddam Hussain. Prima facie, we conclude that there is hardly any evidence to implicate the appellant for the offence under Section 3 and 4 of PMLA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Prem Prakash. 41. The statement mentions that apart from 25 lakhs, six post-dated cheques were also given. Thereafter, it only speaks of the appellant advising the purchase and sale of the land. Prima facie, they do not detract from the reasonable grounds of belief that we entertain to the effect that the appellant is not guilty of the offence under Section 3 and 4. Bishnu Kumar Agarwal (A9) on bail Order has attained finality 42. We, prima facie, find that from the statements of the appellant and also from the other statements and other material relied upon by the investigating agency, there is nothing to indicate that the petitioner was involved in the creation of the forged deed nor had any knowledge of the forged sale deed of 1948. In the order enlarging Bishnu Kumar Agarwal on bail it was observed that-it was a plausible view to hold that Bishnu Kumar Agarwal was a bonafide purchaser of the property concerned in the present matter. It has also been held therein that no criminality could have been found against Bishnu Kumar Agarwal in the making of the sale consideration later and registration of the sale earlier. Support has been drawn from Section 54 of the Transfer of Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has already been in custody for over one year. The Trial is yet to commence. There is a reference to one more ECIR which the Investigating Agency refers to in their counter, namely, ECIR/RNZO/18/2022 but nothing is available from the record as to whether any proceedings have been taken against the appellant. Allegation of misuse of Jail facilities by the Appellant 47. Elaborate contentions have been made on the conduct of the appellant about certain facilities having been extended to him in jail. We do not comment on them and if at all there is any violation of the prison Rules, the Investigating Agency ought to take up with the higher officials of the Jail. On the facts of the present case, they are not reasons enough to deny the appellant his liberty. 48. For the reasons stated above, while allowing the appeal, we set aside the judgment dated 22.03.2024 of the High Court of Jharkhand at Ranchi in B.A. No. 9863 of 2023. We clarify that the observations made in this judgment are only for the purpose of disposing of the bail application and they shall not influence the Trial Court, which would proceed in accordance with law and on the basis of the evidence on record. Conclusion 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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