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TMI Blog2025 (1) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly or indirectly enforcing the judgment of the foreign courts. It was held that the effect of such order of conviction would depend upon variety of facts. In the instant case also at some later stage those factors would fall for consideration in the trial of the applicant. It is positive case of the ED that the applicant under Section 50 of the Act has stated that in the year 2017, he and his brother Parvinder Singh did split as they stopped the said business. In the said split Parvinder Singh got 4250 Bitcoins. Those Bitcoins according to the ED are still in the block chain, but they could not be accessed for the want of passwords or key phrases. Search has already been made to recover those passwords and key phrases - What is being argued is that the proffer and statement under Section 50 of the Act is not a substantive piece of evidence. There admissibility is not in dispute, but their evidentiary value depends on as to whether such statement finds independent corroboration or not? Admittedly, the applicant had entered into a plea agreement in the United States. The BTC were surrendered and the applicant received the reduced sentence. The money was transmitted in the Indian a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal drug trafficking group named as the Singh DTO (Drug Trafficking Organization). That used vendor marketing sites on the dark web, numerous free advertisements on clear websites, and a network of narcotic and controlled-substance distributors and distribution cells to sell drugs. In exchange, the Singh Organization received drug trafficking proceeds in the form of crypto currency and laundered these proceeds through crypto currency wallets. The Singh Organization received the drug trafficking proceeds through the sales on dark web markets, then laundered those proceeds through crypto currency transactions. Both brothers, i.e. the applicant and Parvinder Singh, used the monikers Liston and Listonishere on a variety of dark web markets. After his arrest in India, the statement of applicant was recorded under Section 50 of the Act. The statement of Parvinder Singh was also recorded under Section 50 of the Act. 3. It is the case of the ED that in US court, the applicant was prosecuted and convicted with regard to some Bitcoins ( BTC ), which he had earned through his drug trafficking business. Before the US authorities, the applicant, as per the ED, has given a statement that he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia again. 7. Reference has been made to Article 14 sub-clause 7 of the International Covenants of Civil and Political Rights, 1966 and Section 2 of the Protection of Human Rights Act, 1993, which reads as follows:- Article 14 sub-clause 7 . No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country. Human Rights Act, 1993 2. Definition.- (1) In this Act, unless the context otherwise requires,-- .................................................................................. .................................................................................. .................................................................................. (d) human rights means the rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by courts in India. 8. Learned counsel for the applicant has also raised the following points in his submissions:- (a) The US authorities have made mutual legal assistance request to India revealing all the bank accounts, but tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments. (g) In the case of Kunal Gupta (supra), it is observed as follows:- 8. ...................................................Also, it is trite law that statement under section 50 of the PMLA cannot be treated as substantive piece of evidence and can at best lend corroboration to the material available against the accused in course of investigation. (h) In the case of Sujay Krishna Bhadra (supra), the principles of law as laid down in the case of A. Tajudeen (supra) have been followed. (i) In the case of Ganpati Overseas (supra), the Hon ble Supreme Court observed as follows:- 43.1. Mr Yashpal Sharma in his statement also stated more or less the same thing as stated by Mr Suresh Chandra Sharma. He was arrested on 15-3-1999 itself under Section 135 of the Customs Act. However, he was enlarged on bail on 30-3-1999 by the Additional Sessions Judge, Delhi subject to deposit of Rs 30 lakhs within a specified period, which he paid. It has come on record that the Additional Sessions Judge in his bail order dated 26-5-1999 had mentioned that the statement of Mr Yashpal Sharma recorded under Section 108 of the Customs Act may not have been a voluntary one. It may be mentioned that Mr Yas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for conviction. (m) In support of his averment, learned counsel for the applicant has placed reliance on the principles of law, as laid down in the No. 92-2205 United States Courts of Appeals, Tenth Circuit, in US Vs. Acosta-Ballardo, 8F.3d 1532 (10th Cir. 1993) Decided Nov 9, 1993, in which the Court observed as follows:- Statements made by a defendant in connection with a plea or an offer to plead may not be used substantively or for impeachment in any civil or criminal proceeding against the person who made the plea or offer. 9. On the other hand, learned counsel for the ED would submit that at this stage, the Court is not required to determine the guilt or otherwise of the applicant. The Court is considering bail application. At this stage, a mini trial may not be conducted. He would submit that at this stage, the genuineness of the case may be examined. He would refer to the judgment in the case of Vijay Madanlal Choudhary (supra), and in the case of CBI Vs. Vijay Sai Reddy, (2013) 7 SCC 452. In the case of Vijay Madanlal Choudhary (supra), the Hon ble Supreme Court observed that in the case of Vijay Said Reddy (supra), the Hon ble Supreme Court observed:- 401 We are in agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 8131 BTC, which he had. In United States, the applicant has been prosecuted and convicted with regard to 3838 BTC, which he had surrendered. (ii) Before the US authorities, the applicant had given a statement that he had split his illegal business with his brother Parvinder Singh and 4250 BTC were transferred to Parvinder. It is argued that this act of transferring or splitting BTC, per se, amounts to offence under Section 3 read with 2(ra) of the Act. (iii) It is argued that even if for the sake of argument if we assume that the applicant has been convicted by the US court for the offences, still he can be tried in Indian Courts. He would refer to the judgment in the case of Jitendra Panchal Vs. Narcotic Control Bureau, (2009) 3 SCC 57. In the case of Jitendra Panchal (supra), the Hon ble Supreme Court observed as follows:- 42. While the first part of the charges would attract the provisions of Section 846 read with Section 841 of Title 21 USC (Controlled Substances Act), the latter part, being offences under the NDPS Act, 1985, would be triable and punishable in India, having particular regard to the provisions of Sections 3 and 4 of the Penal Code read with Section 3(38) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22-13.sxw considered view that, no hard and fast rule can be laid for that purpose. The Courts and authorities, while exercising their judicial and quasi-judicial powers will have to take a call on the facts and circumstances of each case and take a decision as to what is the effect of such judgment and order of conviction. The question No.(1)(b) is answered accordingly. (v) Any case pertaining to crypto currency may be determined where a person or company, who owns it is domiciled. He would refer to the judgment in the High Court of Justice Business and Property Courts of England Wales Commercial Court (QBD) No. CL-2020-000840 in the case of Ion Science Limited Duncan John. V. Persons Unknown Binance Holdings Limited, Payment Ventures Limited (unreported [2020] (Comm), in which it is observed that, the second of those aspects is on the basis that the lex situs of a cryptoasset is the place where the person or company who owns it is domiciled. That is an analysis which is supported by Professor Andrew Dickinson in his book Cryptocurrencies in Public and Private Law at para.5.108. There is apparently no decided case in relation to the lex situs for a cryptoasset. Nevertheless, I am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssist in the transfer to U.S. Government crypto currency wallets, all of the 8,131.80350145 BTC; 8,199.31047036 BCH;8,131.80114469 BSV;8,131.80312935 Bitcoin Gold (BTG); and 8,131.801,544.42 eCash (XEC), and currently stored on the lock-chain, remote or cold storage devices, and/or at the above listed public addresses which constitute the ill-gotten gains from the offences described in Counts One and Three of the Indictment. 15. The statement of facts with plea agreement records that To conceal the proceeds from the distribution and importation of controlled substances, and to promote the distribution and importation of controlled substances, SINGH and his co-conspirators engaged in a conspiracy to launder the drug proceeds by conducting wire transfers, transferring cryptocurrency, and shipping U.S. currency and controlled substances in the mail, from outside of the United States to the Southern District of Ohio and elsewhere. 16. On this ground, on behalf of the ED it is being argued that the applicant engaged in conspiracy to launder the drug proceeds by conducting wire transfers, transferring cryptocurrency, and shipping U.S. currency and controlled substances in the mail, from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the reference which has already been quoted hereinabove. According to the settled law now that judgment and order of conviction of a foreign court for the offence committed in that country can be noticed/looked into and recognized by judicial and quasi judicial authorities in India. But, it has been held in the case of Prabodh (supra) that if the judgment of the foreign court is held binding on the courts and authorities in India, it would amount to directly or indirectly enforcing the judgment of the foreign courts. It was held that the effect of such order of conviction would depend upon variety of facts. In the instant case also at some later stage those factors would fall for consideration in the trial of the applicant. 21. It is positive case of the ED that the applicant under Section 50 of the Act has stated that in the year 2017, he and his brother Parvinder Singh did split as they stopped the said business. In the said split Parvinder Singh got 4250 Bitcoins. Those Bitcoins according to the ED are still in the block chain, but they could not be accessed for the want of passwords or key phrases. Search has already been made to recover those passwords and key phrases. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering. It may be presumed under Section 23 of the Act. Section 23 of the Act is as follows:- 23. Where money-laundering involves two or more interconnected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under Section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transaction form part of such inter-connected transaction. 25. Admittedly, the applicant had entered into a plea agreement in the United States. The BTC were surrendered and the applicant received the reduced sentence. The money was transmitted in the Indian accounts during that period only. In the request for assistance sought by the United States Department of Justice, the United States authorities have informed the Indian authorities that during investigation, the US authorities identified several Pay Pal, Money Gram and Western Union accounts (Collectively, the funnel accounts) used by the Singh DTO to receive proceeds on drug trafficking. The money was transferred accordingly in the India accounts. It is also true that under Section 60 (2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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