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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 ..... y 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 was recorded at P.S. Pratap Nagar, 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 gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P was found crossing the prescribed depth for mining...." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Pvt. Ltd. is as under: S.N. Name of the mining contractor Mining block allotted Date of start of mining operations Present status 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 Ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any M/s. Development Strategies (India) Pvt. Ltd. During investigation, it is also revealed that mining on the unauthorised land was done during the period between 2016-2022. The fact that mining was 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur sons namely Sh. Rahul Panwar and Lalit Panwar are shareholders in Development Strategies India Pvt. Ltd. which is part of the mining syndicate. Even in Election Affidavit filed by you i.e. Surender Panwar, for the Haryana Assembly Elections, 2019, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y submitted that all these companies are of their father's known (Known to Surender Panwar) and that these payments were done on the instructions of their father, Sh. Surender Kumar Panwar and only you deal with all the financial matters. Further, on being asked about these transactions, you stated that only after seeing his 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 fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in with other persons, for identification of Proceeds of Crime." It is note-worthy that the gist of the "reasons to believe" dated 20.07.2024 is also on similar lines as that of the "grounds of arrest". 3. CONTENTIONS ON BEHALF OF THE PETITIONER 3.1 Learned Senior Counsel contends that petitioner was neither named in the alleged 08 FIRs on the basis of 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 politica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 minutes, but nothing incriminating was elicited by the E.D. 3.10 Lastly contends that third application dated 01.08.2024 (P-6) was moved by E.D seeking remand of petitioner, however the same was declined, vide order 01.08.2024 (P-7) and this fact demolishes the case of E.D. Learned Special Judge observed that there has not been any extraordinary investigation after the arrest of 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase from other States and the electronic purchase was given to various stone crushers and screening plants. On the basis of the same, "illegal mining" was being done in large quantities from the surrounding areas of Yamuna Nagar, causing huge revenue loss to the State exchequer. 4.7 Further relied upon the NGT order dated 18.11.2022 whereby fine of Rs.2.5 crore was imposed upon DSPL for violating the provisions 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner was not an accused. In 9th FIR also, he has not been named; rather E.D has tried to implicate him on the premise that he is the Director of DSPL, but there is no material to substantiate that petitioner is either the Director of said company; or a person in-charge of the affairs of the company; rather the information obtained from the website of Ministry of Corporate Affairs clearly indicates that petitioner ceased to be the Director of DSPL w.e.f. 07.11.2013. It is specifically observed that 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 " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site can be taken and filed. If required, satellite images will also be filed. Re-list in the month of February, 2024." 8. Although, E.D tried to justify the arrest on the premise that petitioner is a beneficiary 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? 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 Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Section 7 Penalty for discharging environmental pollutants etc., in excess of prescribed standards. 15 read with Section 8 Penalty for handling hazardous substances without complying with procedural safeguards." (B) MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 11th, August, 2023/SRAVANA 20, 1945 (Saka) The following Act of Parliament received the assent of the President on the 11th August, 2023 and is hereby published for general information:- THE JAN VISHWAS (AMENDMENT OF PROVISIONS) ACT, 2023 No. 18 of 2023 (11th August, 2023) An Act to amend 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prevention of Money laundering Act, 2002 (15 of 2003) as specified in column (5) against serial number 34 of the Schedule to the said Act, shall come into force." 12.1 Thus, there remains no doubt that Paragraph No.25 of the Schedule under the PMLA which relates to the offences under the Act of 1986, is no longer in existence; hence, prosecution on that count also would be unwarranted. 13. In view of the above, 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. 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 Fundame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RESPONDENT SIDE:- 17.1 Learned counsel for E.D while citing various judicial precedents tried to justify the arrest of petitioner, but the same are not helpful for the following reasons:- (i) In Arvind Kejriwal's case (supra), Hon'ble the Supreme Court while making a reference to the larger Bench opined that (i) "reasons to believe" that person to be arrested is guilty of an offence are to be recorded; (ii) The arrestee, as soon as may be, must be informed of "grounds of arrest"; "reasons to believe" should be furnished to the arrestee. However, at the same time, Hon'ble the Supreme Court issued a caveat that "where the non-disclosure of the "reasons to believe" with redaction is justified and claimed, the Court 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 perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not invalidate his subsequent detention. The case in hand does not entail this issue for the reason that as on today, petitioner is not found indulged in any illegal activity under the PMLA. (xi) In Tasneem Rizwan Siddiquee's case (supra), it was held that police custody in pursuance to judicial order cannot be challenged by way of petition of habeas corpus. Here, the issue is entirely different as this is not a habeas corpus petition. (xii) In Sunil Godhwani's case (supra), the order passed by Special Court refusing custody of accused to E.D was challenged before Delhi High Court. The Court, on facts of the case, dealt with the same and allowed the application of E.D. (xiii) In J.A.C. Saldanha; P.P. Sharma; Ishwar PirajiKalpatri; Prakash Singh Badal; Monica Kumar (Dr.); Umesh 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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