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TMI Blog2024 (10) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of a final report. In the present case, there is substance in the contention raised on behalf of the applicant that the offence which is treated as the predicate offence, is a peculiar offence, the principal ingredient of which is failure of the accused to satisfactorily account for the assets in question and thereafter, it can be said that specific assets could be categorized as disproportionate assets or assets disproportionate to the known sources of income of the accused. In the present case, the CBI has not even filed a chargesheet and if the applicant is able to satisfactorily account for the assets alleged to be disproportionate to his known sources of income, the CBI may not have any occasion to file the chargesheet against the applicant - The investigation still remaining pending in the predicate offence, in the facts of this case and the nature of offence alleged against the applicant, shows that what could be termed as proceeds of crime is yet in a flux and indeterminate, due to which this Court finds substance in the aforesaid contention raised on behalf of the applicant. This Court is of the opinion that the applicant has indeed satisfied the stringent twin tes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as never arrested. It is also an admitted position that even the chargesheet has not been filed till date in the said FIR. 3. Subsequently, on 13.12.2022, Enforcement Case Information Report (ECIR) bearing No. ECIR/MBZO-I/69/2022 was registered by the Directorate of Enforcement, Mumbai Zonal Unit, Mumbai (ED) i.e. respondent No. 1 herein. The aforesaid FIR was treated as the scheduled or the predicate offence and it was recorded that the applicant had illegally amassed assets disproportionate to the tune of 204% of the known and legal sources of his income and that of his family members. On 27.06.2023, the applicant was arrested in connection with the aforesaid ECIR. In August 2023, the respondent No. 1 filed complaint under Section 45 of the PMLA before the City Civil and Additional Sessions Judge, Greater Bombay (hereinafter referred to as the designated Court). In the said complaint, apart from giving the details of the material found during the course of investigation in connection with the said ECIR, gist of the statements recorded under Section 50 of the PMLA was also given. The proceedings are pending before the designated Court. 4. Mr. Ashok Mundargi, the learned senior cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n only in respect of offences under Sections 3 and 4 of the PMLA and it cannot presume that the predicate offence has been committed. In this regard, reliance was placed on the judgment of the Supreme Court in the case of Vijay Madanlal Choudhary and others vs. Union of India and others (2022 SCC OnLine SC 929), judgments of the Delhi High Court, in the cases of M/s. Prakash Industries Limited vs. Union of India and another (judgment and order dated 24.01.2023 passed in Writ Petition (C) No. 13361 of 2018) and Harish Fabiani and others vs. Enforcement Directorate and others (judgment and order dated 26.09.2022 passed in Writ Petition (Crl) No.408 of 2022) and judgment of Madras High Court in the case of R.K.M. Powergen Private Limited vs. the Assistant Director, Directorate of Enforcement and another (judgment and order dated 08.06.2022 passed in Writ Petition No. 24700 of 2021). (d) It was submitted that arrest order in the present case was vitiated, as contents of the remand application would show that there was hardly any material with respondent No. 1 to record the reasons to believe for arresting the applicant. The applicant was arrested on 27.06.2023 and remand application wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the applicant will remain languishing in jail, with no possibility of the trial even commencing. In that context, the learned senior counsel for the applicant placed reliance on the judgments and orders passed by the Supreme Court in the case of Ramkripal Meena vs. Directorate of Enforcement (judgment and order dated 30.07.2024 passed in SLP (Crl) No. 3205 of 2024) and Manish Sisodia vs. Directorate of Enforcement (judgment and order dated 09.08.2024 passed in Criminal Appeal arising out of SLP (Criminal) No.8781 of 2024), to contend that the applicant having already undergone incarceration for more than 1 year and 3 months, he may be released on bail. The learned senior counsel for the applicant also relied upon a recent order dated 23.08.2024 passed by the Supreme Court in Writ Petition (Civil) No. 406 of 2013 (In re - Inhuman Conditions in 1382 Prisons), whereby the Supreme Court directed immediate implementation of Section 479 of the Bharatiya Nyaya Suraksha Sanhita, 2023 (BNSS) for releasing the accused undertrials on bail, who have completed or 1/3rd of the period of imprisonment. 5. On the other hand, Mr. Shreeram Shirsat, the learned counsel appearing for respondent No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working as a police official in a relatively lower rank in the Protection Unit of Maharashtra Police and hence, none of them have any significant legal sources of income to justify the aforementioned assets. (d) Much emphasis was placed on answers given by various persons, who were questioned during the course of investigation, including the father of the applicant, the applicant s driver and an associate of the applicant named Shashi Prabha Chauhan and others. By referring to the responses given to specific questions put to the said persons, it was claimed that no explanation was forthcoming about transfer of considerable cash amounts into the accounts of family members of the applicant, which were then used for purchasing movable and immovable properties. Even the statement of the applicant did not lead to any satisfactory explanation pertaining to the assets, which could be said to be amassed through proceeds of crime. (e) It was submitted that in the present case, the applicant had undergone incarceration for only about 1 year and 3 months, thereby indicating that he cannot claim that the law laid down by the Supreme Court, in the context of long incarceration and remote possib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any person on his behalf, is in possession of or has, at any time during the period of his office, been in possession of pecuniary resources or property disproportionate to his known sources of income which the public servant cannot satisfactorily account for. Explanation 2. - The expression known sources of income means income received from any lawful sources. (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine. 9. A perusal of the above-quoted provisions shows that the essential ingredient of the offence is failure on the part of the public servant to satisfactorily account for property disproportionate to his known sources of income. The explanations appended to the above-quoted provisions specifically clarify the purport of the expression known sources of income . Thus, a prima facie case for offence under the said provision can be said to be made out, when the explanation given by the public servant, alleged to be holding property disproportionate to his known sources of income, is found unsatisfactory. Chargesheet i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forged documents. The proceeds of crime and the manner in which they were subsequently utilized, were the subject matter in the said case. It is in the context of such facts that reliance was placed on the judgment of the Supreme Court in the case of Vijay Madanlal Choudhary and others vs. Union of India and others (supra), to hold that the offence of money laundering was not dependent on the date on which the predicate offence was committed, but the relevant date was the date on which the accused indulged in the activities connected with the proceeds of crime. 12. In the present case, there is substance in the contention raised on behalf of the applicant that the offence which is treated as the predicate offence, is a peculiar offence, the principal ingredient of which is failure of the accused to satisfactorily account for the assets in question and thereafter, it can be said that specific assets could be categorized as disproportionate assets or assets disproportionate to the known sources of income of the accused. In the present case, the CBI has not even filed a chargesheet and if the applicant is able to satisfactorily account for the assets alleged to be disproportionate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference was made to pari materia provisions of the PC Act, 1947 pertaining to the offence of possessing assets disproportionate to the known sources of income. In paragraph No.76 of the said judgment, the Supreme Court held as follows: 76. The gravamen of the accusation is that Shri Bhajan Lal has amassed huge assets by misusing his ministerial authority earlier to 1986 which assets are disproportionate to his known and licit sources of income. It has been repeatedly pointed out that mere possession of any pecuniary resources or property is by itself not an offence, but it is the failure to satisfactorily account for such possession of pecuniary resources or property that makes the possession objectionable and constitutes the offence within the ambit of Section 5 (1) (e) of the Act. Therefore, a police officer with whom an investigation of an offence under Section 5 (1) (e) of the Act is entrusted should not proceed with a preconceived idea of guilt of that person indicted with such offence and subject him to any harassment and victimisation, because in case the allegations of illegal accumulation of wealth are found during the course of investigation as baseless, the harm done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the peculiar nature of the predicate offence in the facts and circumstances of the present case, the applicant has made out a strong prima facie case in his favour that he could not have been arrested merely on the basis of such material. It is in this backdrop that the applicant can be said to have made out a prima facie case to claim that respondent No. 1 failed to apply any objective test to the material available with it, before proceeding under Section 19 of the PMLA, to exercise its power to arrest. A perusal of the law laid down by the Supreme Court in the cases of Arvind Kejriwal vs. Directorate of Enforcement (supra), V. Senthil Balaji vs. The State (supra) and Pankaj Bansal vs. Union of India and others (supra), would show that respondent No. 1 cannot proceed merely on the basis of suspicion to exercise power under Section 19 of the PMLA to arrest the accused person. In the present case, when the applicant was arrested on 27.06.2023, the only material available with respondent No. 1 was in the form of allegations made in the FIR concerning the predicate offence under Section 13 of the PC Act, which, at the most, could be termed to be material giving rise to some suspi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the applicant recorded by respondent No. 1. Hence, reliance placed on the same on behalf of respondent No. 1, while opposing the present bail application, is wholly misplaced. 19. There is also substance in the contention raised on behalf of the applicant that the manner in which respondent No. 1 has proceeded in the present case, shows that an attempt is made to even foreclose the defence of the applicant in the context of the predicate offence. Statements of probable witnesses concerning the predicate offence under the PC Act, are recorded and sought to be relied upon by respondent No. 1, while opposing the present bail application. The same cannot be permitted in the facts and circumstances of the present case. 20. It is a matter of fact that insofar as the predicate offence is concerned, the investigation by CBI is yet to be completed and the final report has not been filed. Therefore, the stage of moving an appropriate application under Section 44 (1) (c) of the PMLA is yet to arrive. If at all the chargesheet is filed against the applicant, upon the investigation authority in the predicate offence reaching a conclusion that the applicant has failed to satisfactorily ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- and one or two sureties in the like ₹ amount to the satisfaction of the designated Court. (ii) The applicant, upon being released on bail, shall report to the office of the Directorate of Enforcement, Mumbai Zonal Unit, Mumbai, on first Monday of every alternate month between 10:00 a.m. and 12:00 noon during the pendency of the proceedings before the designated Court. (iii) Upon release, within one week, the applicant shall inform the Investigating Officer as well as the designated court about his contact number and residential address and update the same in case of any change. (iv) The applicant shall co-operate with the designated Court in completing the proceedings expeditiously and attend the proceedings before the designated Court on each and every date, unless specifically exempted; (v) The applicant shall not tamper with the evidence of the prosecution in any manner. He shall not undertake any action that may influence the informant, witnesses and other persons concerned with the case. 24. The applicant shall be liable to face proceedings for cancellation of bail, in the event any of the aforesaid conditions are violated. 25. It is also clarified that the obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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