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TMI Blog2024 (9) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeds have travelled to a place outside India. For the purpose of present case, first category defined in sub-clause (i) of Section 2 (1) (ra) is of relevance, since the case of ED is that proceeds of crime have been transferred from the account of victim in U.S. to the account of petitioner/accused Vishal Moral in India. In the second category described under sub-clause (ii) of Section 2 (1) (ra) there is no confusion as the predicate offence occurs inside the territory of India, therefore, the laws mentioned in the Schedule would directly be applicable. However, the conundrum needs to be resolved in case of first category specified under sub-clause (i) of Section 2 (1) (ra) as neither the offences enumerated under Part A, nor the IPC are globally enacted provisions, rather each foreign country has its own laws inside its territory, albeit they may have similarities with the laws in other jurisdictions. There appears to be substance in the submission of respondent that the request of the U.S. Authorities in the MLA is to obtain evidence and when such a request is received, the ED is empowered to do everything required including arrest of accused post lodging of a case under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MLA - HELD THAT:- Without going into the question as to whether the proceeds from the second transaction have been obtained by way of fraud or theft or by commission of any other offence, suffice it to state that all the offences against the property under Chapter XVII of the IPC, which includes theft as well, are scheduled offences under Part C, if the same have cross border implications. Therefore, prima facie there is no force in petitioner's submission that twin conditions envisaged under Section 45 for grant of bail will not be applicable as the laundered amount is only to the extent of Rs. 80,000/- - Insofar as the contention that in the complaint the ED has not provided the basis of calculating the value of the subject matter, it may be observed that basis of calculation is a matter of trial and the same cannot be gone into while deciding the bail plea of the petitioners. Incriminating material - HELD THAT:- In view of the prima facie opinion of this Court that there is a missing link to establish that the seized amount from WazirX account of petitioner/Vishal Moral are proceeds of crime from an offence committed in U.S. which corresponds to the scheduled offence(s), mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR No. DLZO-II/15/2023 dated 07.02.2023 registered under Sections 3 4 of PMLA at P.S. E.D. Delhi Zone-II, pending before learned Special Court, PMLA, Central District, Tis Hazari Court, Delhi. 2. Since the present petitions have been filed by co-accused persons and the factual background, as well as the questions of law before this Court are on the same lines having arisen from the same complaint, all three bail petitions are being decided vide this common judgment. 3. The relevant facts giving rise to the present petitions are as follows: a. The Enforcement Directorate had received a letter dated 23.12.2022 forwarding therewith a Mutual Legal Assistance Request (hereinafter MLA ) No. CRM-182-85785 dated 04.12.2022 from the U.S. Department of Justice, Washington wherein request for legal assistance was sought. In the said MLA, it is alleged that one Mr. Vishal Moral (petitioner/accused), an Indian National, has committed an offence under Title 18, US Code, Section 1343 (Wire Fraud), Title 18, US Code, Section 1029 (Access Device Fraud), Title 18, US Code, Section 1030 (Computer Fraud) and Title 18, US Code, Section 1956 (Money Laundering). b. As per MLA, a person (victim) living in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im had downloaded and installed the Ledger Live software on 13.08.2022, the U.S. Investigators identified a compressed folder with legitimate Ledger Live installer, a file containing installation instructions and a file having a SHA1 hash that matched a known malware capable of obtaining credentials and other information such as private keys or seed phrases, from an infected computer. h. It is alleged that the said malware is known to be distributed to victims through websites that are designed to closely resemble the legitimate Ledger Live website. It is said that the U.S. Investigators have confirmed the victim had downloaded the malware from a website closely resembling the legitimate website of Ledger Live. i. After receipt of the MLA, ED was satisfied that the offences being investigated by the U.S. Department of Justice under their relevant laws correspond to Section 75 of the Information Technology Act, 2000 and Sections 420 424 IPC in India, which fall under the Schedule of the Act and therefore, recorded ECIR DLZO-II/15/2023 dated 07.02.2023 for further investigation, search, seizure, attachment and confiscation of proceeds of crime under the Act. j. During investigation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the complaint is that during investigation, stolen cryptocurrencies as mentioned in the MLA i.e. 0.48349150649972 ETH and 21.63831975 BTC were confirmed to have been received on 14.08.2022 and 15.08.2022 in the account bearing User ID 11093186 belonging to the accused/Vishal Moral. Further, it is their case that Vishal Moral has given inconsistent statements under Section 50 PMLA and has been unable to provide a legitimate source for the said amount. 5. As per complaint, Vishal Moral was associated with one Jack Let and a Turkish national who ran a scamming syndicate wherein there were four teams assigned to do specific tasks. First team used to develop malicious software; the second team used to do fake clicks on competitor s ads and websites (DDOS attack); the third team used to run and promote their own ads on websites and search engines (digital marketing); and the fourth team used to drain the wallets of the victims. Jack Let used to supervise the developer and fake clicks team while doing the draining himself. Vishal Moral was responsible for digital marketing. It is also the case of the prosecution that Shivang Malkoti and Jack Let used to supply Bing Ad accounts to Vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been made available to accused persons, but as per the complaint of ED itself, assistance sought in the MLA request is limited to seizure and freezing of the WazirX accounts mentioned therein. However, ED has gone beyond the specific request in MLA by lodging the ECIR and initiating a separate investigation in India based on an offence committed abroad. 10. Relying upon the judgment of the Hon ble Supreme Court in Vijay Madanlal Choudhary Ors. vs. Union of India Ors., 2022 SCC OnLine SC 929 , he submits that it is settled law that prosecution under the Act cannot be initiated on notional basis and upon an assumption that a scheduled offence has been committed. He submits that in the present case, there is nothing on record before the learned Special Court to establish existence of a scheduled offence. He further relies on the judgment of P. Chidambaram vs. Directorate of Enforcement, (2019) 9 SCC 24 to contend that registration of a scheduled offence is a sine qua non for an offence under the Act. 11. Referring to Section 2 (1) (y) of the Act, Mr. Shukla submits that scheduled offences are only those that are listed in the Schedule of PMLA. He submits that as per the case of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice to above contention, he submits that if corresponding laws in foreign countries are construed to be included under Part C of the Schedule, then ED will have to prove the said law as a matter of fact and to further establish that provisions invoked in U.S., correspond to Indian enactments/provisions mentioned in the Schedule. He submits that in complaint, the ED has not even quoted the alleged corresponding law. Merely certain sections of a Code in the U.S. have been mentioned and it is stated that they correspond to Sections 420 and 424 of IPC as well as Section 75 of the Information Technology Act, 2000 in India. 14. He further submits that if corresponding law is interpreted to be within the ambit of the Schedule, as mooted by the prosecution, then provisions like Section 44 (1) (c) would be rendered otiose. Relying upon the decision in Rana Ayyub vs. Directorate of Enforcement, (2023) 4 SCC 357, he submits that under the said section, if the scheduled or predicate offence is being tried by a Court other than the Special Court which has taken cognizance of the offence under PMLA, then upon application, the scheduled offence may be transferred and tried alongside the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond transaction relating to Bitcoin was an act of theft. He submits that the first transaction relating to Ethereum is the only transfer that can be considered as the laundered amount, if any, whereby the total amount was first transferred to an account abroad and then a small portion came to the account of Vishal Moral. Therefore, he presses that as per the prosecution s own case, the alleged amount of US$ 959 which converts to approximately Rs. 80,000/- is the only amount which can be considered proceeds of crime, if any. 17. He submits that the second transaction, which pertains to the transfer of Bitcoins valued at approximately Rs. 4,00,00,000/- cannot, by any imagination, fall under Section 3 of PMLA. He contends that an offence under Section 3 of the PMLA consists of three steps, i.e. placement, layering and integration. He argues that any amount obtained through commission of theft or robbery cannot be termed as money laundering as the same would entail that every financial offence will attract the rigors of PMLA, which cannot be the intent of the legislature. 18. He contends that the said crypto currencies have not even come to the hands of Vishal Moral as he did not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st use of electronic signature, password or any other unique identification feature of any other person and admittedly, no such acts have been committed by the petitioners. 22. He further submits that it is the admitted position of the prosecution, as well as the U.S. Authorities, that the petitioners at no point of time have ever interacted with the victim based out of USA or had made any representations in any manner to him to cause any kind of deceit or fraud by any means, therefore, there cannot be a question of the petitioners having cheated the victim. He submits that admittedly, the petitioners were not involved in either development of the malicious software, or fake clicks on competitor s ad website, or running advertisements on the websites/search engines, or draining the wallets/accounts of victims. 23. He submits that the allegation of the prosecution that Shivang Malkoti was responsible for running crypto ads on Bing search engine has no merit inasmuch as Bing does not permit advertisements relating to cryptocurrencies and cryptocurrency related products including, but not limited to initial coin offerings, cryptocurrency exchanges and cryptocurrency wallets. He points ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l s other activities, and the prosecution has not recovered any formal account statements or digital wallet ledgers, let alone any proceeds to show that he is a beneficiary to the alleged offence. He submits that the entire investigation rests upon the WhatsApp chats. He places reliance on the judgments in Pooja Singh vs. Directorate of Enforcement, 2023 SCC OnLine Del 5285 and Pinky Irani vs. State (NCT of Delhi), 2023 SCC OnLine Del 6722 to contend that this Hon ble Court, at the stage of bail, is only required to examine whether the accused/petitioners were possessed of the requisite mens rea. 27. He submits that with respect to the hawala activities alleged to have been performed by Adnan Nisar, it would only amount to commercial activities as the case of the prosecution is that he merely received crypto currency IDs sent by traders to Vishal Moral. Without prejudice, he submits that even if it is assumed as per the allegations of prosecution, that Adnan Nisar has received proceeds of crime to the tune of Rs.1,70,000/-, since there are no allegations of money laundering against him apart from receipt of the said financial benefit, it would be a perversity of justice to continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose would be served by further incarceration of the petitioners. He submits that the constitutional right to a speedy trial must be protected in view of the fact that trial is likely to take a long time. 31. Per contra, Mr. Zoheb Hossain, learned Special Counsel for the respondent opposes the contention of the learned counsel for the petitioners that there is no scheduled offence in the present case. During the course of arguments, he handed over a copy of the MLA Request in a sealed cover. Taking the Court through the contents of the MLA, Mr. Hossain submits that the said document mentions at several places that the U.S. Attorney s Office for the District of Kansas is investigating Vishal Moral for the offences enumerated therein. Moreover, in the first paragraph of the MLA itself, it is stated that the assistance requested is to obtain evidence for use in a criminal investigation and any related proceedings. He submits that investigation, across the world, is a corollary to registration of a complaint and requisite provisions having been triggered. 32. He submits that a seizure warrant has also been issued by the United States District Court for the District of Kansas in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above contention, he further invites the attention of the Court to Section 2 (1) (ra) of PMLA which provides for two separate scenarios in respect of offences of cross border implications. First, when the offence has been committed outside India and the proceeds therefrom have been transferred to India and second, when the offence has been committed in India and the proceeds have travelled outside India. 36. Mr. Hossain controverts the argument of the petitioners that the phrase corresponding law has been used in the PMLA only under those sections that relate to attachment and not Sections 3 4. In addition to the above, he submits that the request of the U.S. Authorities in the MLA is to obtain evidence and when such a request is received, the ED is empowered to do everything required to gather all evidence that may be available. He submits that arrest is an inherent part of investigation for the purpose of collection of evidence and in support places reliance in the judgements of H.N. Rishbud vs. State (Delhi Admn.), (1954) 2 SCC 934 and P. Chidambaram (supra). 37. Without prejudice to the aforestated contentions, he submits that once a scheduled offence is brought to the at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submits that merely by way of filing belated applications for retraction, the said statements cannot be resiled from and such a retraction is a matter of trial. At this stage, a mini trial cannot be conducted. 40. With respect to the admissibility of the WhatsApp/Telegram chats, he submits that the said chats have been retrieved from the mobile phone of Vishal Moral during search at his residence and extraction from the said mobile phone was carried out by the cyber lab of ED. Panchnama was duly drawn and the same have now been sent for forensic analysis. He further submits that it is well settled law that at the stage of bail, this Court does not have to go into the credibility or reliability of the evidence. He submits that at this stage, this Court need only consider whether based on the material available on record, there are reasonable grounds for believing that the person may not be guilty of the offence. He places reliance in the judgment of Gurcharan Singh Ors., vs. State (Delhi Administration), (1978) 1 SCC 118, Mohan Singh vs. Union Territory, (1978) 2 SCC 366, Satish Jaggi vs. State of Chhattisgarh, (2007) 11 SCC 195, Vijay Madanlal (supra), CBI vs. V. Vijay Sai Reddy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial on record. 47. The point wise analysis of the rival contentions of the learned counsel for the parties is as under: OFFENCE UNDER FOREIGN LAW AS SCHEDULED OFFENCE 48. The registration of a scheduled offence with the jurisdictional police and/or pending investigation or trial, including by way of criminal complaint before the competent forum, is a sine qua non for prosecution of any person under the PMLA. The authorities under the PMLA cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed [Vijay Madanlal Choudhary (supra)] . 49. It is the case of the respondent/ED that scheduled offence in the present case has been committed in the United States of America and the ED had received a Mutual Legal Assistance (MLA) request from the U.S. Department of Justice, Washington, stating that the petitioner/accused Vishal Moral, an Indian national has committed an offence under the U.S. statutes mentioned therein, which according to the ED, correspond to Section 75 of IT Act, 2000 and Sections 420 and 424 of IPC. 50. It is also the case of the ED that the victim of the offence was navigated to a malicious website closely resembling t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated proceedings thereunder. 54. At this juncture, apposite would it be to refer to Part C of the Schedule, the relevant extract of which reads thus: PART C An offence which is the offence of cross border implications and is specified in, (1) Part A; or * * * * * (3) the offences against property under Chapter XVII of the Indian Penal Code (45 of 1860). (4) The offence of wilful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015). 55. A bare reading of Part C of the Schedule shows that it encompasses offences specified under Part A, if the said offences have cross border implications. Further, all the offences against property under Chapter XVII of IPC having cross border implications also become scheduled offences under the Act. In other words, some of the offences included under Chapter XVII, which are though not included in Part A like theft, will become scheduled offences by virtue of Part C, if they have cross border implications. [Pavna Dibbur (supra)]. 56. In the second category described under sub-clause (ii) of Section 2 (1) (ra) there is no confusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the offences specified under Part C of the PMLA and it has cross border implications in the sense that the proceeds of such crime has travelled to India. 59. Therefore, there is no substance in the submission of Mr. Amit Shukla, the learned counsel for the petitioner/accused Vishal Moral that expression corresponding law has been used only in relation to the provisions providing for attachment to enable the relevant authority in India to seize and protect the proceeds of crime of an offence committed abroad till the investigation and trial in the foreign country is concluded, and the same is not to be read in the context of initiating penal action in India under Sections 3 and 4 of the PMLA. 60. This Court also does not find merit in the contention of Mr. Shukla that since the trial of the alleged predicate offence is being held in the Court at Kansas, U.S.A. and the same cannot be transferred to the Special Court in India, therefore, the provisions of Section 44 (1) (c) would become redundant in such a situation, which cannot be the intent of legislature. The Hon ble Supreme Court in Vijay Madanlal Choudhary (supra) has held that the provision of Section 44 (1) (c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of a treaty entitled On Mutual Legal Assistance in Criminal Matters (hereinafter Treaty ). The preamble of Treaty reads as under: The Government of the Republic of India and the Government of the United States of America, hereinafter referred to as the Contracting Parties, desiring to improve the effectiveness of the law enforcement authorities of both states in the investigation, prosecution, prevention and suppression of crimes, including those relating to terrorism, narcotics trafficking, economic crimes, and organized crime, through cooperation and mutual legal assistance in criminal matters, Have agreed as follows: 65. Article I of the Treaty which deals with the scope of assistance that is to be provided by the contracting parties, reads as under: Article 1 Scope of Assistance 1. The Contracting Parties shall provide the widest measure of mutual assistance to each other, in accordance with the provisions of this Treaty, in connection with the investigation, prosecution, prevention and suppression of offenses, and in proceedings related to criminal matters. 2. Assistance shall include: a) taking the testimony or statements of persons; b) providing documents, records, and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said account with WazirX. 68. At this stage, it would also be relevant to refer to Section 60 of the PMLA, which provides for attachment, seizure and confiscation of property in contracting State of India. The provision reads as under: 60. Attachment, seizure and confiscation, etc., of property in a contracting State or India. (1) XXXX XXXX XXXX (2) Where a letter of request is received by the Central Government from a court or an authority in a contracting State requesting attachment, seizure, freezing or confiscation of the property in India, derived or obtained, directly or indirectly, by any person from the commission of an offence under a corresponding law committed in that contracting State, the Central Government may forward such letter of request to the Director, as it thinks fit, for execution in accordance with the provisions of this Act. (2A) XXXX XXXX XXXX (3) The Director shall, on receipt of a letter of request under section 58 or section 59, direct any authority under this Act to take all steps necessary for tracing and identifying such property. (4) The steps referred to in sub-section (3) may include any inquiry, investigation or survey in respect of any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrest is under preventive detention laws. 73. In the backdrop of this legal position, there appears to be substance in the submission of Mr. Hossain that the request of the U.S. Authorities in the MLA is to obtain evidence and when such a request is received, the ED is empowered to do everything required including arrest of accused post lodging of a case under section 3 and 4 of the PMLA, to gather all evidence that may be available. 74. Even otherwise, once ED, on the basis of MLA request and other material collected, was satisfied that the offences being investigated by the U.S. Department of Justice under the relevant U.S. laws correspond to offences falling under Schedule of the PMLA and the proceeds of crime have found its way to India, it was well within its power to register an offence under Sections 3 and 4 of the PMLA, irrespective of the nature of request in the MLA. This view finds support from the decision of the Hon ble Supreme Court in Vijay Madanlal Choudhary (supra) wherein it has been held that the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence is committed outside India; and it is the grant of sanction that would enable such offence to be enquired into or tried in India. [Sartaj Khan vs. State of Uttarakhand, (2022) 13 SCC 136.]. 79. Clearly, the predicate offence has been committed in U.S. and the same is being tried there though it has cross border implications. It is only the offence under PMLA that is being tried in India. Since the proceeds of crime related to the predicate offence have travelled to India, the offence under PMLA being a standalone offence, has been committed in India in its entirety, therefore, no sanction as mandated under proviso to Section 188 CrPC is required for the said offence. JUDICIAL NOTICE OF CORRESPONDING LAW 80. In the MLA request it is alleged that the petitioner/accused Vishal Moral, an Indian national has committed an offence under the U.S. statutes mentioned therein viz., (i) Title 18, United States Code, Section 1343 (Wire Fraud); (ii) Title 18, United States Code, Section 1029 (Access Device Fraud); (iii) Title 18, United States Code, Section 1030 (Computer Fraud) and; (iv) Title 18, United States Code, Section 1956 (Money Laundering). 81. The provisions of U.S. statutes und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely on the same (see Mogha's Law of Pleadings, 13th Edn., p. 22). In Guaranty Trust Co. of New York v. Hannay Co. it was held that: Foreign law is a question of fact to an English court the opinion of an expert on the fact, to be treated with respect, but not necessarily conclusive. In Beatty v. Beatty it was held that the American law in English courts must be proved by the evidence of experts in that law. In Lazard Bros. and Co. v. Midland Bank, Ltd. Their Lordships of the Privy Council observed that what the Russian Soviet law is, is a question of fact, of which the English court cannot take judicial cognizance, even though the foreign law has already been proved before it in another case. The court must act upon the evidence before it in that actual case. The statement of law by Halsbury in Laws of England (3rd Edn., Vol. 15, para 610 at p. 335) is that the English courts cannot take judicial notice of foreign law and foreign laws are usually matters of evidence requiring proof as questions of fact. (emphasis supplied) 83. Likewise, this Court in the case of Mundipharma AG vs. Wockhardt Ltd., 1990 SCC OnLine Del 269 had also articulated the above legal position. The questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact. The opinion of an expert on the subject has to be tested by cross-examination. When at an interim stage only an affidavit is to be relied upon this affidavit has to be complete in all respects. The affidavit must show the qualification and experience of the expert. It must state if the law on the subject is codified and must also refer to judicial precedents in support of his views. It may perhaps be said that if the law is codified, opinion is not necessary on the subject. But sometimes in such cases also court would like to have the opinion of an expert as to what interpretation has been put on the law in the courts in the foreign country concerned. The opinion of the expert must be clear and cogent. I find the opinion of Ms. Werner on the question of foreign law quite obscure. It is more like a certificate. I will not, therefore, take any notice of this affidavit. Thus, there is nothing on record to show as to what is the swiss law on the subject of restraint of trade. (emphasis supplied) 84. It is in the backdrop of above legal position that Mr. Hossain s submission that the MLA request received by the ED is a certified copy, therefore, the same may only be required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the burden will not shift on petitioners/accused to convince the Court in terms of Section 45 that they are not guilty of an offence of money-laundering under the Act. NON-SPEAKING ORDER OF COGNIZANCE 89. A submission has also been made by Mr. Shukla, the learned counsel appearing on behalf of petitioner/accused Vishal Moral, that the order taking cognizance does not reflect any application of mind. The order dated 01.08.2023 vide which cognizance was taken by the learned Special Court reads thus: The Court has heard SSP (ED). The Court has also perused the file. The Court is taking cognizance of offence under Section 3 read with Section 4 of PML Act. The accused persons be summoned for 16.08.2023. 90. Elaborating on his submission Mr. Shulka contends that the ED in the complaint has not disclosed or placed on record (i) the identity of the victim; (ii) the complete contents of MLA; (iii) a complaint of the predicate offence in the US; (iv) communications between the US Central Authority and the Indian Central Authority; and (v) the communication between the Central Government and the ED. Therefore, there was no material before the learned Special Court with regard to commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail plea of the petitioners. INCRIMINATING MATERIAL (i) Petitioner/accused -Vishal Moral 96. The incriminating material pressed into service by the ED against petitioner/Vishal Moral is in the form of (i) statements of petitioner/Vishal Moral recorded under Section 50 of the PMLA; (ii) the WhatsApp/Telegram Chats; and (iii) seizure of cryptocurrency from Vishal Moral s account on the basis of MLA request. 97. In the present case, the ED has recorded as many as 12 statements of petitioner/accused Vishal Moral under Section 50 of the PMLA on various dates viz., 29.03.2023, 26.04.2023, 28.04.2023, 29.04.2023, 30.04.2023, 01.05.2023, 02.05.2023, 03.05.2023, 04.05.2023, 05.05.2023 06.05.2023 and 07.05.2023. 98. It is the case of ED itself that the petitioner/Vishal Moral was arrested on 26.04.2023. Clearly, except two statements of Vishal Moral recorded on 29.03.2023 and 26.04.2023, all remaining 10 statements have been recorded post his arrest. 99. The crux of the statement of petitioner/Vishal Moral recorded on 29.03.2023 has been stated in the complaint filed by the ED and the same reads thus: On being asked, Vishal Moral stated that he started working as freelancer digital marketer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant therein was in custody in another case ECIR. Thus, the argument put forth by the ED was that the appellant was not in custody in the concerned case when his statement under Section 50 of the PMLA was recorded. In this factual backdrop, the Hon ble Supreme Court formulated the following question and then referring to its various earlier decisions observed as under: 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? XXXX XXXX XXXX 27. 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 trav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retracted by the said accused persons, as well as, the same WhatsApp/Telegram chats which have been pressed into service by the ED against co-accused/Vishal Moral. 107. Notably, petitioner/accused Adnan Nisar retracted his statement under Section 50 of PMLA by filing an application on 16.08.2023. Though petitioner/accused Shivang Malkoti in his statement under Section 50 of PMLA has stated that he was maintaining temporary Telegram account with pseudo name of Raman Kohli and WhatsApp number in the name of Raman Sharma but this statement has been subsequently retracted by the petitioner/Shivang by filing an application that was taken on record by the learned Special Court vide order dated 16.09.2023. 108. The proceedings under Section 50 of the PMLA may be judicial proceedings for the limited purpose mentioned therein but a confession made by an accused in his statement under Section 50 of the PMLA is not a judicial confession. 8 Even with regard to the retraction of judicial confession, the Hon ble Supreme Court in Bhagwan Singh Ors. vs. State of M.P., (2003) 3 SCC 21 has observed that when such a confession is found to be not voluntary and more so when it is retracted, the convic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its reliability . It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the Cestat and the court finds it to be in consonance with the settled legal position in this regard. 59. In the present case as well, the question is not regarding the admissibility but the reliability. The statements had concretely named the applicant. However, in their subsequent retraction the reliability of the statements themselves become doubtful. Statements of employees of SBFL, accommodation entry operators (Devki Nandan Garg and Ashok Kumar Goel) are a cut copy paste job with even the punctation marks of commas, full stops not differing. 60. Prima facie in view of the retraction, the reliability of these statements is questionable. The retracted statements cannot form the basis of the guilt of the applicant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accused/Vishal Moral. Likewise, no evidence has been brought to the notice of Court to show that co-accused Shivang Malkoti was having any knowledge as to the nature of activities which accused/Vishal Moral was indulging into at the relevant time. The WhatsApp/Telegram Chats on the basis of which knowledge of Vishal Moral s activities could be ascribed to co-accused/Shivang Malkoti are under pseudo/dummy names. As already observed, such chats are to be proved during trial and at this stage co-accused/Shivang Malkoti cannot be tied to such chats. Besides, the first statement of Shivang Malkoti dated 05.05.2023 under Section 50 of the Act in which he was confronted with the chats has already been retracted. Thus, prima facie it cannot be said that the petitioner/Adnan Nisar or Shivang Malkoti were possessed of requisite mens rea. 116. In any case, the role ascribed to co-accused Adnan Nisar and Shivang Malkoti is subsidiary to that of main accused/Vishal Moral, therefore, all the factors discussed in favour Vishal Moral in the scheme of broad probabilities shall enure to their benefit as well. DELAY IN TRIAL 117. Section 45 of the PMLA provides that no bail in relation to offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions is that certain conditions are to be satisfied. The principle that, bail is the rule and jail is the exception is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individual is always a Rule and deprivation is the exception. Deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure. Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied. (emphasis supplied) 118. It was observed by the Hon ble Supreme Court in Prem Prakash (supra) that Article 21 being a higher constitutional right, statutory provisions must align themselves to the said higher constitutional edict. 119. Incidentally, in Manish Sisodia (supra), the Hon ble Supreme Court considering the custody period of 17 months of the appellant therein and the likely dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no further recovery is to be made from the petitioners. It is also not the case of the ED that the petitioners have a criminal record or any criminal case is pending against them. Therefore, petitioners/accused are not likely to commit any offence while on bail. 124. Thus, the petitioners have made out a case for grant of regular bail. Accordingly, the petitioners are enlarged on bail subject to the following conditions : a. Petitioner/Vishal Moral will furnish a Personal Bond in the sum of Rs. 2,00,000/- and one surety of the like amount to the satisfaction of the learned Special Court/learned Trial Court/CMM/Duty Magistrate; b. Petitioner/Adnan Nisar will furnish a Personal Bond in the sum of Rs. 50,000/- and one surety of the like amount to the satisfaction of the learned Special Court/learned Trial Court/CMM/Duty Magistrate; c. Petitioner/Shivang Malkoti will furnish a Personal Bond in the sum of Rs. 50,000/- and one surety of the like amount to the satisfaction of the learned Special Court/learned Trial Court/CMM/Duty Magistrate; d. Petitioners shall not leave the country during the bail period without prior permission of this Court. e. Petitioners shall appear before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be transmitted to a contracting State under this Chapter shall be transmitted to a contracting State or, as the case may be, sent to the concerned Court in India and in such form and in such manner as the Central Government may, by notification, specify in this behalf. 4. Section 57 Facts of which Court must take judicial notice. The Court shall take judicial notice of the following facts: (1) All laws in force in the territory of India; (2) xxxxx ... (13) xxxxx ... 5. Section 24 - Burden of proof.- In any proceeding relating to proceeds of crime under this Act,- (a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering. 6. Prem Prakash (supra) 7. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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