9911796707
TMI Blog2024 (7) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... availed but vehicles were not delivered to the borrowers and money was used elsewhere by accused persons. Allegations are made that an amount about Rs. 14.93/- crores public money of bank was misappropriated by cheating and forgery. Applicant was granted anticipatory bail on 07.07.2020 in M.Cr.C. No. 6644/2020. Thereafter applicant co-operated in investigation. Charge sheet was filed on 18.12.2019 and six persons were charge sheeted. Later on, Enforcement Directorate (hereinafter referred to as 'ED') took over the investigation in respect of offences under Sections 3 and 4 of Prevention of Money Laundering Act (in short as 'PMLA, Act'), 2002. ED filed complaint on 13.03.2024. 3. Learned counsel appearing for applicant prays for grant of bail on the ground that mandatory provisions of PMLA, 2002 is not followed by ED. It is submitted that there is non-compliance of Section 19 of PMLA, 2002. Reasons were not recorded by prosecution for arrest of applicant. It is further submitted that Section 50 of the PMLA, 2002 was also not complied with. No evidence and material was collected by ED. Reliance was placed upon the material which has been collected by CBI. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Section 2(1)(u) in The Prevention of Money-Laundering Act, 2002 "proceeds of crime" which means any 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 county, then the property equivalent in value held within the country or abroad. Section 2(1)(j) "material" for the purpose of sub-section (2) of section 17 of the Act means the material in possession of the authority referred to in clause (d) of sub-rule (1) of rule 2, after search and seizure, under sub-section (1) of section 17 of the Act, including- (i) a report forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974) in relation to an offence under paragraph 1 of Part A and Part B of the Schedule' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a [Special Court or] [Inserted by Finance Act, 2018 (Act No. 13 of 2018) dated 29.3.2018.] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: 45. Offences to be cognizable and nonbailable. ( 1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] [Substituted by Act 20 of 2005, Section 7, for certain words (w.e.f. 1.7.2005).] shall be released on bail or on his own bond unless] (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assistant Director or a Deputy Director shall not (a) impound any records without recording his reasons for so doing; or (b) retain in his custody any such records for a period exceeding three mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in 13 loan accounts, Company has denied manufacturing of vehicles. Amount of Rs. 14,93,67,500/- is said to have been received and funds have been diverted in respect of about Rs. 10.73 Crores. Some amount has been withdrawn in cash and other amount is said to have been transferred in accounts of other persons. After filing of charge-sheet, enforcement department has taken investigation and filed it's complaint on 11.02.2024. 9. On aforesaid factual background, arguments made by counsel appearing for applicant and non-applicant are to be appreciated. Perused the arrest order dated 13.01.2024 passed by Assistant Director. In order, it has been mentioned that applicant has been arrested exercising power under Section 19(1) of Prevention of Money Laundering Act, 2002. On what basis and material, reason to believe regarding guilt of applicant was formed, is not mentioned in the order. Order is accompanied by grounds of arrest. Most of the grounds of arrest are based on investigation done by CBI and on statement of applicant and other witnesses recorded under Section 17 of PMLA 2002. It is mentioned in grounds that during recording of statement, applicant did not cooperate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief are in writing and clearly spelt out in arrest order. There is a thread running between Section 19 & Section 45 of PMLA, 2002. Rights of liberty of a person may be jeopardized, if reason of belief of guilt under Act is not in writing in arrest order, as condition for grant of bail is rigorous under PMLA, 2002. In such conditions, Court while considering the bail application has to see that arrest has been made by complying with provisions of Section 19 of the Act. In this case, provisions of Section 19 of the Act has not been complied with. Total sum, which is said to have been diverted is Rs. 10.93 Crores according to the report of CBI though allegations were made in respect of about Rs. 14,93,67,500/-. Enforcement Department is making allegation in respect of Rs. 4377.94 Lacs. Search has been conducted. In complaint, it has been mentioned that there is non-cooperation by applicant and he tried to hide facts, therefore, he was arrested under Section 19 of the PMLA, 2002 but reason of belief of guilt under the Act for arrest is not stated in complaint nor in arrest order. Assets and properties of applicant have been seized by authorized officer. Applicant is i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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