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TMI Blog2025 (2) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Act. Six volumes of the charge-sheet is filed as compilation by Applicant. Reference to relevant documents is as per the documents appearing in the compilation. 2. Briefly stated, prosecution case is that Mumbai police registered FIR on 01.09.2023 on the basis of Complaint filed by Gopal Pandurang Lavne - EOW officer in respect of two specific Work orders issued by the Municipal Corporation of Greater Mumbai (for short "MCGM") dated 14.04.2020 and 17.04.2020 to supply cooked food (khichdi) during the COVID-19 Pandemic lock down period between March 2020 and July 2020 to the Ward Offices for distribution to the citizens. Delay in filing the complaint is prima facie evident. Work order dated 14.04.2020 was issued in favour of M/s. Vaishnavi Kitchen (Sahyadri Refreshments) and Work order dated 17.04.2020 to M/s. Force One Multi Services for supply of 300 gms of food packet (khichdi) @Rs. 33/- per packet plus GST. MCGM paid Rs.8.64 Crores to M/s. Force One Multi Services and Rs.5.93 Crores to M/s. Vaishnavi Kitchen (M/s. Sahyadri Refreshments) on completion of the above Work orders. Work orders were fully delivered and completed. Sanction of completion and satisfaction was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked food for M/s. Force One Multi Services by using his influence as a leader of the then political party in dispensation without having played any role in contributing to the supply of the cooked food despite which he received an amount of Rs.1.35 Crores into his bank account from M/s. Force One Multi Services during June 2020 to December 2020. 8. Sixth allegation is that Applicant received the alleged amount of Rs.1.35 Crores into his bank account by showing that he was a salaried employee of M/s. Force One Multi Services by relying upon two ante dated appointment letters dated 01.04.2019 and 01.04.2020 and thus is liable for having conspired in generating and layering the proceeds of crime. 9. In the above background, Mr. Mundargi, learned Senior Advocate for Applicant has made the following five submissions for seeking Applicant's enlargement on Bail. 9.1. He has drawn my attention to the FIR filed by Complainant dated 01.09.2023 appended at page No.1 of Volume-I of the Chargesheet to contend that Applicant is not named as accused therein. Next he has drawn my attention to the ECIR dated 17.10.2023 at page No.8 of the same volume to contend that Applicant is neither named ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to illegitimate practices of supplying food (khichdi) packets and pocketed illegitimate gains of 2.82 Crores and 3.68 Crores respectively and thus this amount of Rs. 6.5 Crores is the proceeds of crime under Section 2 (1) (u) in the instant case. He would draw my attention to the accusation that Applicant and his firm M/s Fire Fighters Enterprises received Rs.1.35 Crores out of the above amount and Applicant has further laundered the said amount for wrongful and illegal gain and acquired properties and assets with that amount which are liable to be confiscated. In paragraph 14, he would draw my attention to the conclusion that further investigation is pending in respect of the other named accused in the FIR "if found" to be involved in PMLA offence. Juxtaposing these 3 paragraphs, he would argue that all suspect persons in the chain have not been arrested, neither they have been made an accused in the Special Case. He would submit that merely on the basis of accused's statement which are pure confessional statements, Applicant is arrested. He would vehemently submit that such accused statements are clearly hit by the provisions of Sections 25 to 27 of the Indian Evidence Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed is seen as Force One Multi Services is, inter alia, engaged into hospitality services apart from its other services / activities. 9.3. Apart from the aforesaid factual issues, on the legal front he would draw my attention to the provisions of PMLA. While drawing my attention to Section 19 (1), he would argue that for enforcement of the said provision to arrest the Applicant, Competent Authority is required to record and form a belief of the reasons on which it desires to proceed against the Accused. He would submit to the extent that such belief ought to be recorded in writing which is not done in the present case nor Applicant is informed about the said reasons. In the same breath he would submit that before arrest applicant ought to have been conveyed the grounds of his arrest which is also not complied with as mandatorily provided under Section 50 (1) of Cr.P.C.. He would submit that if arrested after compliance of the aforesaid two statutory provisions, Applicant ought to have been produced before the Magistrate to show compliance of the aforesaid provisions which is not done in the present case. He would draw my attention to the arrest order at page No. 253 and the post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Anil Khadkiwala Vs. State (Government of NCT of Delhi) and Anr. (2019) 17 SCC 294; (vi) Vinod Kumar, IAS Vs. Union of India and Ors. 2021 SCC OnLine SC 559; (vii) Ramkripal Meena Vs. Directorare of Enforcement Special Leave to Appeal (Cri.) No(s).3205/2024 decided on 30.07.2024; (viii) Prem Prakash Vs. Union of India (2024) 9 SCC 787; (ix) Manish Sisodia Vs. Directoate of Enforcement AIR 2024 SC 4053; (x) Mahesh Pandurang Naik Vs. The State of Maha and Anr. WP(ST) No.13835 of 2024; (xi) Prabir Purkayastha Vs. State (NCT of Delhi) (2024) 8 SCC 254 : (2024) 3 SCC (Cri) 573; (xii) Vaibhav Jain Vs. Directorate of Enforcement 2024 SCC OnLine Del 7478. 9.6. He would finally submit that Applicant has been in custody for more than one year and taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, Applicant having fully co-operated with the prosecution, investigation having been completed, Applicant not being framed as an accused either in the predicate offense or ECIR and keeping in view the aforementioned peculiar facts and circumstances of this case, rigors of Section 45 of the PMLA be suitably rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the same under the Work order. On the factual front, he would finally submit that both the aforesaid entities supplied under weighing food packets of 100 grams instead of the prescribed 300 grams under the said Work orders thus illegally profiteering and unjustly enriching them by crores of rupees and out of this amount of Rs. 1.35 Crores was routed to the bank account of Applicant without Applicant playing any role whatsoever in supply of food packets to MCGM. He would submit that the aforesaid amount of Rs. 3.64 Crores has been surreptitiously misappropriated by M/s. Force One Multi Services and investigation is on in the matter at present and if found guilty, other accused will also be implicated in accordance with law. 10.2. On the legal front, he would draw my attention to the relevant provisions of IPC and PMLA Act and would submit that it is not necessary for any person to be an accused in the Scheduled Offences to be implicated in PMLA. He would refer to the provisions of Section 2 (u) "proceeds of crime" and Sections 3 and 4 regarding money laundering under PMLA and after reading them in elaborate detail would persuade me to juxtapose the same with Section 19 (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the learned Advocates have received due consideration of the Court. 13. At the outset, the statutory legal position as applicable is required to be considered and stated. Chapter III of the Constitution of India enumerates the fundamental rights which have been time and again construed to be inherent and any law which abrogates and abridges such fundamental rights would be violative of the basic structure doctrine including right of protection imposed against arrest and detention in certain cases contemplated under Article 22 of the Constitution of India. Article 22 (1) and (2) read thus:- "22. Protection against arrest and detention in certain cases - (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. (2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the court of the magistrate and no such person shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dhanraj Shetty, Sai Palace, Vaishnavi Kitchen - Bala Kadam, Force One Multi Services, Sundeep Hotels, Iskon Pankaj Singh, Classic Fast Food - Shetty, Amini Industries, Sheetal Ashish Hotel Pvt Ltd - Bhola Yadav, Shetty Brothers (Link View), Sheetal Ashish Hotels Pvt Ltd, Hotel Prasad International Dahisar Check Naka, Laxman Yadav Kitchen, Dinesh N. Shetty, SHG N Ward, Shetty Dinesh & Pravin Shetty all throughout Mumbai. 15.1. From the above, it is seen that Vaishnavi Kitchen - Bala Kadam and Force One Multi Services have been issued one Work order each. Material has been placed before me to show the application made by them in the prescribed format giving all such details appended thereto along with licenses issued by the Food and Drug Administration, Maharashtra State and the Health Department of the Municipal Corporation which are appended in Volume -I at page Nos. 1 to 50 of the Chargesheet. Licenses appended are all valid licenses issued in the name of M/s. Sneha Caterers and Decorators and M/s. Golden Star Banquet Hall & Catering Services with whom M/s. Force One Multi Services has a sub-contract and leave and license agreement details of which are reflected in the Chargeshe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads as under:- "45. Offences to be cognizable and non-bailable - (1) 1[Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless--] (i) the Public Prosecutor has been given a opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, 3[or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees] may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by-- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustration, we may refer to Section 45 (1) (ii) of PMLA, proviso to Section 43D (5) of the Unlawful Activities (Prevention) Act, 1967 and Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (for short, 'NDPS Act'). The provisions regarding bail in some of such statutes start with a non-obstante Clause for overriding the provisions of Sections 437 to 439 of the Code of Criminal Procedure. The legislature has done so to secure the object of making the penal provisions in such enactments. For example, the PMLA provides for Section 45 (1) (ii) as money laundering poses a serious threat not only to the country's financial system but also to its integrity and sovereignty. 25. Considering the gravity of the offences in such statutes, expeditious disposal of trials for the crimes under these statutes is contemplated. Moreover, such statutes contain provisions laying down higher threshold for the grant of bail. The expeditious disposal of the trial is also warranted considering the higher threshold set for the grant of bail. Hence, the requirement of expeditious disposal of cases must be read into these statutes. Inordinate delay in the conclusion of the tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction Under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45 (1) (ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials Under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:-- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]" 16.1. Perusal of the above statutory provisions clearly depict that existence of the Scheduled Offence is a sine qua non for alleging the existence of proceeds of crime. Property derived or obtained, directly or indirectly, by a person as a result of criminal activity relating to a Scheduled Offence constitutes proceeds of crime. Thus existence of proceeds of crime at the time of trial of the offence under Section 3 of the PMLA can be proved only if the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. & P. 799; King v. Fortier [1902] 13 Quebec K.B. 251. This distinction is reflected in sections 496 and 497 of the Criminal Procedure Code which treat respectively of the grant of bail in cases of what are described in the phraseology of the Indian Legislature as bailable and non-bailable offences. 15. The substance of the matter is that the discretionary power of the Court to admit to bail is not arbitrary, but is judicial, Manikam v. Queen [1882] 6 Mad. 63, and is governed by established principles. The object of the detention of the accused being to secure his appearance to abide the sentence of law, the principal enquiry is, whether a recognizance would effect that end. In seeking an answer to this enquiry, Courts have considered the seriousness of the charge, the nature of the evidence, the severity of the punishment prescribed for the offence, and in some instances, the character, means and standing of the accused: see R. v. Bennett [1907] 49 L.T. 387; R. v. Atkins [1907] 49 L.T. 421; R. v. Manniny [1888] 5 T.L.R. 139; R. v. Wood [1845] 9 Ir. L.R. 71; R. v. Gallagher [1855] 7 W.C.L. 19; R. v. Stewart [1900] 4 Canada Cr. Cas. 131." 17.1. From the above, it is seen that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en defrauded. The allegations have to be established and proven. The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Code and Section 45 of the PML Act. The reason is that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted, that he be ensured and given a speedy trial. When the trial is not proceeding for reasons not attributable to the Accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years." 20. Since the case before me is restricted to grant of bail on account of long incarceration of the under-trial accused / Applicant before me after he having fully co-operated in the investigation and made all disclosures, I refrain to comment on any of the merits of the matter. Any comment made above on the merits is cursory and only to the extent of considering the Applicant's case for grant of bail and is not an opinion expressed by the Court so as to influence the trial which may be noted. 21. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry month on the third Saturday between 10:00 a.m. to 12:00 noon for the first three months and thereafter as and when called; (iii) Applicant shall co-operate with the conduct of trial and attend the Court on all dates unless specifically exempted and will not take any unnecessary adjournments, if he does so, it will entitle the prosecution to apply for cancellation of this order; (iv) Applicant shall not leave the State of Maharashtra without prior permission of the Trial Court. He shall deposit his passport, if any, with the Special Court under the PMLA at Mumbai within one week after his release from prison on bail; (v) Applicant shall not influence any of the witnesses or tamper with the evidence in any manner; (vi) Applicant shall keep the Investigating Officer informed of his current address and mobile contact number and / or change of residence or mobile details, if any, from time to time; (vii) Any infraction of the above conditions shall entail the prosecution to seek cancellation of this order. 24. It is clarified that observations made in this order are limited for the purpose of granting Bail only and they are not to be construed as an expression of opinion b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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