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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 ..... ioner (Appeals), Lucknow CGST and CX Zone, when FIR dated 30.06.2022 was registered by the ACB, Mumbai against the applicant for offences under Sections 13 (2) read with Section 13 (1) (e) of the Prevention of Corruption Act, 1988 (PC Act) and Section 13 (2) read with Section 13 (1) (b) of the PC Act as amended in the year 2018, as also Section 109 of the Indian Penal Code, 1860. It was alleged in the FIR that during the check period between 12.01.2011 and 31.08.2020, the applicant had amassed assets disproportionate to his known sources of income, to the extent of about 2.45 crores. Anonymous information was received Rs. by the Central Bureau of Investigation (CBI) and on this basis, the ACB, Mumbai caused the FIR to be registered. It is pertinent to note that while investigation was undertaken in pursuance of the FIR, the applicant was 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 aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nown sources of income of the applicant in the FIR, were indeed disproportionate assets and proceeds of crime in their entirety. It was only if the applicant was unable to satisfactorily account for such assets that the occasion would arise to register the ECIR and to proceed for investigation under the provisions of the PMLA, by treating only such assets which were not satisfactorily accounted for, as the proceeds of crime. (c) The CBI not having filed the chargesheet in connection with the said FIR and before it could be concluded that the applicant had failed to satisfactorily account for the assets, the respondent No. 1 could not have proceeded to investigate into the matter, as doing so amounts to encroaching upon the province of the CBI as the investigating authority in respect of the FIR. Respondent No. 1 can carry out the investigation 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the applicant recorded under the provisions of the PMLA, is equally misplaced. Reliance was specifically placed on judgment of the Supreme Court in the case of Prem Prakash vs. Union of India (judgment and order dated 28.08.2024 passed in Criminal Appeal arising out of SLP (Crl) No.5416 of 2024), wherein the Supreme Court clarified the position of law that such statement of the accused recorded when he is already arrested, cannot be considered, as it would be hit by Section 25 of the Evidence Act. (g) It was submitted that in the present case, when even chargesheet has not been filed in the predicate offence, there is absolutely no possibility of the trial being commenced against the applicant. It was emphasized that the stage of moving an appropriate application under Section 44 (1) (c) of the PMLA is yet to arise and therefore, it is evident that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money. It was evident that the applicant had routed ill-gotten money through his family members in cash amounts to purchase assets, thereby indicating that a strong prima facie case is clearly made out against the applicant. Much emphasis was placed on the details of cash amounts that came to light during the course of investigation. (c) It was submitted that in the present case, at least 4 specific instances of placement, layering and integration were evident. These included a flat purchased at Sanpada, Navi Mumbai, thereafter, a flat purchased in Adarsh Co-operative Society, Dadar, Mumbai as also a vehicle i.e. Ford Endeavour and in order to amass such assets, using bank accounts of family members. It was emphasized that the father of the applicant was a retired ASI from Mumbai Police, having his pension as the only source of income. The brother of the applicant is 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 cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income. Explanation- For the purposes of this section, "known sources of income" means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant." 8. Section 13 (1) (b) and Section 13 (2) of the PC Act, post amendment in the year 2018, reads as follows: "13. Criminal misconduct by a public servant: (1) A public servant is said to commit the offence of criminal misconduct- (a) xxxx (b) if he intentionally enriches himself illicitly during the period of his office. Explanation 1. - A person shall be presumed to have intentionally enriched himself illicitly if he 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with the proceeds of crime. It is in this context that the contention raised on behalf of the applicant that the respondent has encroached upon the province of the investigating authority i.e. CBI for offences under the PC Act, needs to be appreciated. There cannot be any quarrel with the proposition laid down by this Court in the case of Badshah Majid Malik vs. Directorate of Enforcement, Mumbai (supra), but the observations made in the said order have to be appreciated in the factual matrix concerning the said case. The allegations in the said case pertained to smuggling on the basis of forged documents and the predicate offence was registered under the provisions of the Customs Act, 1962 by the Directorate of Revenue Intelligence. The Directorate of Enforcement in that case, had invoked the provisions of the PMLA, in the context of specific material, the value of which was determined, being smuggled illegally on the basis of 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 cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. In the present case, property derived as a result of criminal activity relating to scheduled offence or predicate offence, would be prima facie ascertained only when the investigating agency i.e. CBI in the present case, finds that the applicant has not satisfactorily accounted for particular assets, after completion of investigation. The fact that the investigation as regards the predicate offence under the provisions of the PC Act, is yet to be completed and chargesheet is yet to be filed, demonstrates that the investigation conducted by respondent No. 1 in the present case and the presumption that the entire amount of assets mentioned in the FIR are "proceeds of crime", can be prima facie said to be unsustainable. 14. In this context, reliance placed on behalf of the applicant on the judgment of the Supreme Court in the case of State of Haryana and others vs. Bhajan Lal and others (supra) appears to be appropriate. In the said judgment, 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty i.e. the CBI conducting the investigation in the predicate offence under Section 13 of the PC Act. 16. In this backdrop, when the contents of the ECIR and the remand application are perused, it becomes evident that respondent No. 1 has proceeded on the presumption that the entire extent of assets recorded in the FIR in the predicate offence, are proceeds of crime. Respondent No. 1 has proceeded to conduct the investigation and to record statements in order to itself reach a conclusion that the applicant has failed to satisfactorily account for the assets recorded in the FIR and the entire alleged disproportionate assets to the extent of 204% of the known sources of income, have been treated as proceeds of crime. It is relevant to note that when the applicant was arrested on 27.06.2023, the only material available with respondent No. 1 was the material on the basis of which the FIR in the predicate offence in the first place, was registered. Considering 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has been able to satisfactorily account for the assets acquired during the check period. This aspect considerably blunts the effect of statements recorded during the course of investigation by respondent No. 1 in the context of the ECIR. 18. There is substance in the contention raised on behalf of the applicant that respondent No. 1 cannot rely upon the contents of the statement of the applicant himself recorded by respondent No. 1. Such a statement was admittedly recorded when the applicant was already arrested and he was in custody. The Supreme Court in the case of Prem Prakash vs. Union of India (supra) has specifically held that the statements of the accused recorded in such a manner, when they are already in custody, to the extent that the contents thereof can be considered incriminating against the makers of such statements, are hit by Section 25 of the Evidence Act. Thus, at this stage, this Court will not even look at the contents of the statement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be ignored. 22. In view of the above, this Court is of the opinion that the applicant has indeed satisfied the stringent twin test contemplated under Section 45 of the PMLA, as he has made out a prima facie case on merits to satisfy the first limb of the test and the second limb is also satisfied in the facts and circumstances of the present case. Even otherwise, the aforementioned position of law clarified by the Supreme Court, in the context of period of incarceration suffered by the applicant and remote possibility of the trial being completed within a reasonable period of time, inures to the benefit of the applicant and the present application deserves to be allowed. 23. In view of the above, the application is allowed in the following terms: (i) The applicant shall be released on bail in connection with Special Case No. 1282 of 2023, arising out of ECIR/MBZO-I/69/2022 of Directorate of Enforcement, Mumbai Zonal Unit, Mumbai, on furnishing PR Bond of 50,000/- and one or two sureties in the like Rs. 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 Z ..... X X X X Extracts X X X X X X X X Extracts X X X X
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