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TMI Blog2024 (9) TMI 1602X X X X Extracts X X X X X X X X Extracts X X X X ..... of the syndicate running illegal mining as well as of G.M. Co., but again there is no material to substantiate that petitioner is having any relationship and/or concern as Director, Promoter or share-holder of the so-called G.M. Co. Even, the E.D has failed to show that such a company is in existence and/or registered with the Registrar of Companies; or there is any such legal entity in operation under any law? As on today, prima facie, there is no material with the E.D to substantiate that petitioner has directly or indirectly, indulged in any process or activity connected with the proceeds of crime, in any manner whatsoever and/or projected the same as untainted by any means; hence there was/is no reason to believe; nor any ground of arrest is made out against him on the premise that petitioner is guilty of an offence under the PMLA. The petitioner has not been found involved in any illegal activity, in any manner whatsoever, attracting the offence of money laundering under PMLA - there is no option, except to allow the petition - the petitioner be released forthwith, if not required in any other case - Petition allowed. - HON'BLE MR. JUSTICE MAHABIR SINGH SINDHU Present: F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Yamuna Nagar against Dilbag Singh, Rajinder Singh, Kulwinder Singh (Proprietor-PS Buildtech), Manoj Kumar Wadhwa, Angad Singh Makkar, Gurpartap Singh Mann, Raman Ojha, Rajesh Chikara, Inderpal Singh Others. Above accused persons are related to entities/firms namely Development Strategies India Pvt. Ltd., Delhi Royalty Company, Mubarikpur Royalty Company, JSM Foods Pvt. Ltd. PS Buildtech, which were involved in illegal mining. This FIR was subsumed and taken on record in the proceedings of the ECIR bearing no. ECIR/GNZO/19/2023 dated 23.09.2023. 3. Based on the information gathered from the field enquiry, it was also found that a huge number of fake e-rawana bills are being generated by these Mining groups on the portal of Mining Department showing purchase from other states and the electronic purchase has been given to various stone crushers and screening plants, through whom, on the basis of this electronic purchase, illegal mining is being done in large quantities from the surrounding areas of Yamuna Nagar, causing huge revenue loss to the state government. No mining is being done from the mining areas mentioned in the e-rawana bills generated by the groups, nor can mining be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently imposed huge penalties as mentioned below: S.No. Name of the Company/Entity Penalty imposed by the Hon ble NGT 1. M/s Development Strategies Private Limited India Rs. 2.5 crores 2. Delhi Royalty Company Rs. 4.2 crores 3. Mubarikpur Royalty Company Rs. 12 crores 7. Earlier, Income Tax Department had also conducted searches on Majha Group in 2018 and consequently assessment orders have been passed in this context. Accordingly, additional turnover to the tune of Rs. 24,22,20,646/- in the F.Y. 2016-17 and Rs. 57,52,90,238/- in the F.Y. 2017-18 were admitted by Mubarikpur Royalty Company, Development Strategies India Pvt. Ltd., Delhi Royalty Company JSM Foods Pvt. Ltd. Details of this are as follows: S.No. Names of the mining entities Additional turnover accepted on account of IT search for the F.Y. 2016-17 Additional turnover accepted on account of IT search for the F.Y. 2017-18 1. Mubarikpur Royalty Co. 169371645 34,67,60,394 2. Delhi Royalty Co. 59021640 8,95,84,718 3. Development Strategies India Pvt. Ltd. 1,38,27,361 9,25,19,234 4. JSM Foods Pvt. Ltd. 0 4,64,25,892 Additional turnover accepted on account of Income Tax search 24,22,20,646 57,52,90,238 8. During fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mining 1. M/s Development Strategies India Pvt. Ltd. Pobari Block YNR B11 09.12.2016 Terminated on 26.08.2022 12. The Hon'ble NGT has passed an order dated 18.11.2022 in respect of Delhi Royalty Company. M/s. Development Strategies (India) Pvt. Ltd. and Mubarikpur Royalty Company, wherein in para 8, the Hon'ble NGT has observed that ...compensation in case of illegal mining can be equal to the value to the mined material, apart from compensation for violation of environmental norms, we fix the same @ 10% of the lease money i.e. Rs. 2.5 crore, Rs. 4.2 crore and Rs. 12 crore in respect of Respondents No. 11 to 13 respectively. 13. As discussed in Para 7, the entities, namely Mubarikpur Royalty Co., Delhi Royalty Co., M/s. Development Strategies India Pvt. Ltd., PS Buildtech and JSM Foods Pvt. Ltd. and associated syndicate members have done illegal mining and suppressed their actual turnovers gained out of illegal mining activities, the same had been accepted by the entities while filing their revised Income Tax Returns for F.Y. 2016-17 and F.Y. 201718 before the Income Tax Department. Details of the Additional Income declared for F.Y. 2016-17 and F.Y. 2017-18 by M/s. Deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as conducted outside the allotted lease area has also been corroborated by the survey report of the mining site done by an independent technical field expert. Further, the survey report also highlights the many other violations done by the Mining company. Details of the such violations are as follows: Pobari (Sand Mine) (M/s Development Strategies (I) Pvt Ltd.):- a. On the basis of the physical survey at the site, it is revealed that the mining has been done outside the leased area also. It is confirmed from physical survey and the photographs and video recordings of the site. b. As per Letter of Intent, mining shall be restricted, within the central 3/4th width of the river, however, mining was conducted inside the restricted area of the central 3/4th width of the river. This violation is confirmed from the digital topographical survey of the river. c. As per Letter of Intent, the maximum depth of mining in the river bed shall not exceed 3m depth, however, the survey revealed has exceeded the 3m depth. It is confirmed from the physical survey done at site. d. The physical survey found few boundary pillars on one side of the site and no sign of pillars on the other three sides of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, you had declared your and your wife's shareholding in Development Strategies India Pvt. Ltd. However, during recording of statements, you tried to mislead the investigation by giving false replies to the questions pertaining to your shareholding and shareholding of your family members in M/s. Development Strategies India Pvt. Ltd. 16. Moreover, during statements, your wife and sons, who are also shareholders in M/s. Development Strategies India Pvt. Ltd., submitted that you look after the business transactions for your family members also and you were controlling business affairs of the other family members as well and one of the direct beneficiary of proceeds of crime generated by illegal mining through M/s Development Strategies India Pvt. Ltd. which was part of the mining syndicate engaged in illegal mining. Hence, it is clearly established that you, Mr. Surender Panwar, through M/s Development Strategies India Pvt. Ltd. were involved in illegal mining activities. 17. Based on material on record and investigation findings so far, it is revealed that you have received proceeds of crime to the tune of approx. Rs. 26 crores. 18. Further, you incorporated a company namely M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account, you can tell whether these transactions pertain to any loan given by him or anything else. 23. During investigation, it is also revealed that you and your family members had transactions with Delhi Royalty Co., Ganga Yamuna Mining Co., JSM Foods Pvt. Ltd., Mubarikpur Royalty Co., Northern Royalty Co.,. On being asked in statement u/s. 50 of PMLA on 11.03.2024, you submitted that these are unsecured loans which you and your family members had given to these mining companies without any interest and you do not have any loan agreement with them. 24. The above-mentioned transactions clearly depict that you were actively involved in the mining business in Yamuna Nagar and were part of the mining syndicate under which Delhi Royalty Company, JSM Foods Pvt. Ltd., Mubarikpur Royalty Company, Yamuna Infradevelopers and Routes Journeys etc. were functioning. It also shows that you were associated with these firms and were actively involved in their business activities in the guise of unsecured loans. Further, you could not produce any documentary proof to substantiate your claim that these amounts were given as loan and not as an investment. Further, you tried to mislead the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which present ECIR is registered; nor is he named in the subsequent 09th FIR No. 0021 (ibid). 3.2 Also contends that there was no specific role attributed to the petitioner in dealing with proceeds of crime while seeking remand by E.D before learned Special Judge. 3.3 Further contends that E.D has adopted pick-and-choose policy while arresting the petitioner in ECIR No. 19, as there are various accused in the present case. However, the E.D has chosen to arrest the petitioner as well as coaccused Dilbag Singh and one Kulwinder Singh. The remaining co-accused are at large and the E.D is just after the petitioner only due to the reason that he is a sitting member of Legislative Assembly from Sonipat Constituency and the elections for the same are forthcoming; therefore the timing of arrest is nothing, but an outcome of political vendetta. 3.4 While emphasizing on the word may occurring in Section 19 (1) of the PMLA, learned Senior counsel contends that the officer authorized under the PMLA, on the basis of material in his possession and reasons to believe (recorded in writing) that any person is guilty of an offence punishable under PMLA, may arrest such person and shall as soon as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and detention for 09 days at a stretch which was extended for 03 days thereafter; shows that the arrest of the petitioner is actually with malafide intentions to ruin his prospects of contesting and winning the upcoming State Assembly Elections. 3.11 In support of the above contentions, learned Senior counsel has also relied upon the following judicial pronouncements:- (i) V. Senthil Balaji Versus State Represented by Deputy Director and others, 2023 SCC Online SC 934; (ii) Pankaj Bansal Versus Union of India and others, 2023 SCC Online SC 1244; (iii) Ram Kishore Versus Directorate of Enforcement, 2023 SCC Online SC 1682; (iv) Arvind Kejriwal Versus Directorate of Enforcement, 2024 INSC 512 and; (v) Vijay Madanlal Choudhary and others Versus Union of India and others, 2022 SCC Online SC 929. ON BEHALF OF RESPONDENT 4. Per contra, learned counsel for E.D submits that present petition is not a bail application under Section 45 of the PMLA; rather petitioner lays challenge to his arrest as well as the remand orders passed by the Special Court; therefore, this Court has very limited power of judicial review to quash arrest and remand order. 4.1 Further submits that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Sections 7 15 of the Act, 1986 which is a scheduled offence under the PMLA. 4.8 Still further submits that from the material on record and investigation done so far, it transpires that petitioner received proceeds of crime to the tune of Rs.26 crore (approximately). 4.9 Lastly submitted that as per the observations made in Arvind Kejriwal s case (supra), arrest of a person can be made for preventing him from committing further offence; or for restraining him from tampering with the evidence as envisaged under Section 41(1)(ii) (a), (c), (d) and (e) of Cr.P.C. In the present case, petitioner was perpetually committing the offence of illegal mining in the disguise of his company DSPL and there were high chances of tampering with the evidence by the petitioner being the member of Legislative Assembly; thus, his arrest is fully justified. 4.10 In support of his contentions, learned counsel for the respondent has relied upon various judicial pronouncements and which are as under:- (i) Arvind Kejriwal s case (supra); (ii) Pankaj Bansal s case (supra); (iii) Vijay Madanlal Choudhary s case (supra); (iv) Senthil Balaji s case (supra); (v) Ram Kishore (supra); (vi) Y. Balaji Versus K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t E.D has not placed on record any material to the contrary in this regard. As the Director Master Information (P-8) is a public document, therefore, it would be per se admissible, unless proved otherwise. As already observed, E.D has failed to show any material to the contrary in this regard; thus, there is no hesitation to observe that w.e.f 07.11.2013, petitioner has ceased to be the Director of DSPL. 7. Of course, the NGT had imposed a penalty of Rs.2.5 crore against DSPL, vide order dated 18.11.2022, but that will not hold the petitioner liable under the PMLA for the reasons that: - i. As already observed, there is no material produced on record by the E.D; or disclosed in the grounds of arrest that petitioner is the Director or a person in-charge of the affairs of DSPL; rather the information gathered from the website of Ministry of Corporate Affairs (P-8) clearly proves that petitioner ceased to be the Director w.e.f 07.11.2013 of the said company and having no role in its affairs. ii. Apart that, the order of NGT was challenged before Hon ble the Supreme Court and that has already been stayed, subject to payment of 60% of the penalty amount vide order dated 13.03.2023. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar of Companies; or there is any such legal entity in operation under any law? 9. Primarily, as per the grounds of arrest , the allegation(s) against the petitioner is/are of illegal mining and/or supplying the illegally mined material vide fake e-rawana bills; therefore, the foundation of case is illegal mining and rest of the allegations in all the nine FIRs are peripheral, relatable to illegal mining . Of course, illegal mining is an offence under Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short MMDR Act ), but neither illegal mining ; nor the MMDR Act has been included under the Schedule attached with the PMLA. In other words, illegal mining is not a scheduled offence under the PMLA; hence, prima facie, petitioner cannot be prosecuted on that count. 10. As per the case of E.D itself, petitioner was issued notice/summons under Section 50 of PMLA and in pursuance thereof, he duly appeared in the Zonal Office of E.D at Gurugram on 19.07.2024 at 11:00 a.m and he was constantly interrogated uptill 1:40 a.m (20.07.2024) for 14 hours and 40 minutes, which is not heroic on the part of E.D; rather it is against the dignity of a human being. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end certain enactments for decriminalizing and rationalizing offences to further enhance trust-based governance for ease of living and doing business. BE it enacted by Parliament in the Seventy-fourth Year of the Republic of India as follows: 1. (1) This Act may be called the Jan Vishwas (Amendment of Provisions) Act, 2023. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint; and different dates may be appointed for amendments relating to different enactments mentioned in the Schedule. 2. The enactments mentioned in column (4) of the Schedule are hereby amended to the extent and in the manner mentioned in column (5) thereof. 3. The fines and penalties provided under various provisions in the enactments mentioned in the Schedule shall be increased by ten per cent. of the minimum amount of fine or penalty, as the case may be, prescribed therefor, after the expiry of every three years from the date of commencement of this Act. 4. The amendment or repeal by this Act of any enactment shall not affect any other enactment in which the amended or repealed enactment has been applied, incorporated or referred to; and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any means; hence there was/is no reason to believe; nor any ground of arrest is made out against him on the premise that petitioner is guilty of an offence under the PMLA. 14. No doubt, learned counsel for E.D raised a plea that once the initial arrest has been sanctified by the judicial orders dated 20.07.2024 29.07.2024 (P-2 P-4, respectively), petitioner cannot challenge the legality of the arrest later on. However, the contention is liable to be rejected in view of the old legal maxim, i.e. Sublato Fundamento Cadit Opus ; which means that once foundation is removed, the superstructure will also fall. 15. In the present case, initial arrest as well as grounds of arrest have been found to be unsustainable in law; hence in view of the law laid down by Hon ble the Supreme Court in Chairman-cum-Managing Director Coal India Limited and others Versus Ananta Saha and others (2011) 5 SCC 142, impugned orders passed by learned Special Judge shall not validate the arrest of the petitioner. For reference, the relevant paragraphs 32 33 thereof are reproduced as under:- 32. It is a settled legal proposition that if initial action is not in consonance with law, subsequent proceedings would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be informed. The file, including the documents, must be produced before the Court. Thereupon, the Court should examine the request and if they find justification, a portion of the reasons to believe and the document may be withheld. This requires consideration and decision by the Court. (ii) Pankaj Bansal s case (ibid) is a reiteration of the dictum of law that grounds of arrest have to be supplied to the arrestee and that reasons to believe that person is guilty of the offence have to be recorded. (iii) In Vijay Madan Lal s case (supra), it was held by Hon ble the Supreme Court that (i) there must be material in possession with the Authority before arresting a person; (ii) there should be reason to believe that the person being arrested is guilty of the offence punishable under PMLA; (iii) reasons to believe must be reduced in writing; (iv) Arrestee has to be informed of the grounds of arrest . (iv) In V. Senthil Balaji s case (supra), it was again reiterated that grounds of arrest have to be supplied to the accused; (ii) the authorized officer shall immediately send a sealed envelope, containing material in possession to adjudicating authority. (v) In Ram Kishore (supra); wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar; Daxaben and; Rameer Upadhyay s cases (supra), it was held that if an information is lodged at the Police Station and an offence is registered, the mala fide of the informant would be of secondary importance if the investigation produces unimpeachable evidence disclosing the offence. (xiv) In Amanatullah Khan s case (supra), Delhi High Court held that an MLA or a public figure is not above the law of the land. There is no quarrel with this proposition. (xv) In Pavana Dibbur; Vijay Madan Lal Choudhary; Aditya Tripathi; P. Rajendran s cases (supra), it was held that even if a person is not named in the FIR forming scheduled offence, that will not affect proceedings against him under the PMLA. The proposition of law is not disputed by any one. (xvi) H.N. Rishbud s case; P. Chidambaram and Naser Bin Abu Bakr Yafai s cases (supra) were cited to emphasize the fact that arrest is part of the investigation. In other words, arrest has to be mandatorily made for doing proper investigation. However, the issue with regard to need and necessity to arrest has been referred to a larger Bench by Hon ble the Supreme Court in Arvind Kejriwal s case (supra). (xvii) In Anil Sharma s case (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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