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TMI Blog2025 (2) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 50 of Cr.P.C were provided save and expect an arrest memo. It is prima facie seen that Applicant before me has fully co-operated with the investigation and made all disclosures which is evident from the prosecution complaint appended at page No. 54 of the Application. Prosecution Compliant is filed on 15.09.2023. The sole allegation against the Applicant is that he signed and approved fabricated invoices based on falsified attendance sheets of staff records thereby facilitating alleged fraudulent activities and generation of proceeds of crime. The Applicant held his position for only five months and verified 15 bills / invoices, one of the bill / invoice is appended at page Nos. 494 and 495 of the Application. There is no impediment or provision in EOI guidelines that mandated Dean of Jumbo Covid Centres to physically verify deployment of staff, their attendance or doctor to patient ratio which has been brought to my notice prima facie since that is one of the allegation in the prosecution complainant. Instead, designated staff members performed this duty and reported to the Dean - If at all it is prosecution case that Applicant aided fraudulent activities of M/s. Life ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.
Conclusion - Given the incarceration of Applicant and the absence of any foreseeable conclusion of the trial, continued detention would violate the Applicant's fundamental right under Article 21 of the Constitution, which guarantees a speedy trial and personal liberty. The primary allegation relates to the Applicant's temporary position which no longer persists, mitigating concerns of tampering with the evidence. Any such apprehension can be addressed through appropriate conditions. Continued incarceration of the Applicant would be unwarranted and would amount to punitive detention prior to the establishment of guilt.
Applicant is granted bail subject to the fulfilment of conditions imposed - bail application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices and generated fabricated bills for medical services purportedly provided to and in regard with the Jumbo Covid Centre and swindled approximately Rs. 38 Crores of public money. It is alleged that Applicant in his capacity as the Dean of Dahisar Jumbo Covid Center is alleged to have received monthly kickbacks to verify and forward the fabricated bills based on fake / fabricated attendance sheets of staff record facilitating these fraudulent activities. 6. Briefly stated prosecution case is as follows:- 7. Primary allegation is that M/s. Lifeline Hospital Management Services did not fulfill its contractual obligation under the contract as there was under-employment of staff members and provisions contrary to EOI conditions which were shown through fabricated attendance sheets and staff records at Dahisar Jumbo Covid Center and public money received from the MCGM against those bills / invoices which were fraudulently transferred to Service Provider Firms namely M/s. M.S. Consultancy of Ravikant Singh and M/s. Elegant Multiservices of Sanjay Parab which were created at the instance of Partners of M/s. Lifeline Hospital Management Services. 8. Second allegation is that M/s. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED he is named as Accused No. 2. He would submit that Applicant was arrested by ED on the basis of ECIR. 13.2. He would submit that Applicant was solely arrested on the basis of statement of the co-accused for hatching criminal conspiracy, facilitating misappropriation of public money and receiving proceeds of crime. He would submit that prosecution has relied upon the statements of other Accused persons as witnesses solely for arrest of Applicant which is completely arbitrary in nature. He would submit that initially offence under Section 304A of IPC was levelled but in supplementary chargesheet it was removed and no offence under the Prevention of Corruption Act, 1988 was instituted. He would submit that there is nothing on record to show that Applicant directly or indirectly obtained any property i.e. in cash or kind in relation to the Scheduled Offence. Hence, Applicant cannot be termed as beneficiary of any proceeds of crime. 13.3. He would submit that first leg of allegation is in respect to Applicant failing to discharge his duties as Dean and his purported role in facilitating fraudulent activities for wrongful gain. He would submit that Applicant was appointed only for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.09.2020 to 09.10.2020 amounting to Rs. 84,04,200/- was appended at page No. 495 of the Application. 13.7. He would submit that merely on the basis of Accused statements which are purely confessional statements, Applicant has been arrested. He would submit that such statements are hit by Sections 25 to 27 of the Indian Evidence Act, 1872 without being corroborated with any evidence. He would submit that if it is prosecution case that Applicant aided fraudulent activities of M/s. Lifeline Hospital Management Services for financial gain then Dean Dr. Harshvardhan Tikle at Worli - NSCI Jumbo Center performed similar duties as stated in his statement appended at page No. 195 but Applicant alone is singled out for arrest. 13.8. He would submit that the second leg of allegation is in respect of the contract allotted to M/s. Lifeline Hospital Management Services wherein Applicant has no role to play in availing the tender / contract as he was empaneled and in service of MCGM and had no cause to grant or favour M/s. Lifeline Hospital Management Services in availing the tender / contract. Attention is drawn to EOI appended at page No. 216 of the Application wherein it is stated in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d full cooperation and all disclosures have been made by him. Chargesheet has been filed on 28.04.2023, however conclusion of trial in the foreseeable future is doubtful. He would submit that Applicant is not an accused either in the predicate offense or ECIR and keeping in view the aforementioned peculiar facts and circumstances rigors of Section 45 of the PMLA be suitably relaxed to afford conditional liberty to Applicant as his further incarceration is unwarranted in such facts and he should be released on bail. 14. Mr. Venegavkar, learned Special PP alongwith Mr. Kedia, learned Advocate appearing on behalf of the Prosecution in reply to the Applicant's case for grant of bail has made the following submissions:- 14.1. He would submit that Applicant is involved in and has committed the offence of money laundering as stated in the FIR and ECIR. He would submit that Applicant was heading a team as Dean at Dahisar Jumbo Covid Center during July 2020 to December 2020. He was required to ensure proper functioning of the Center but he failed to do so. Applicant allowed / approved the fabricated bills which were prepared by showing requisite deployment of medical personnel in line wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet is filed on 07.10.2023. He would submit that prosecution desires to examine 82 witnesses as stated in the chargesheet and would persuade the Court to consider his submissions to oppose the Application for grant of bail to the Applicant. 15. Mr. Haldankar, learned APP appearing on behalf of the State has adopted the submissions made by Mr. Venegavkar and persuaded me to take cognizance of the said submissions for the State. 16. Heard Mr. Mundargi, appearing for the Applicant, Mr. Venegavkar, appearing for Respondent No. - ED and Mr. Haldankar, learned APP appearing for the State. I have perused the record placed before me and the submissions made by the learned Advocates have received due consideration of the Court. 17. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished. It is seen that M/s. Lifeline Hospital Management Services received acceptance letters issued by MCGM. It is seen that M/s. Lifeline Hospital Management Services received contract for two Jumbo Covid Centers one at Worli-NSCI and other at Dahisar. I have perused the EOI and it is pertinent to note that under clause 'E' an Evaluation Committee was setup for scrutinizing documents of bidders / service providers hence the allegation of prosecution regarding allotment of contract on fraudulent basis falls to the ground and hence it dispels any doubt or suspicion regarding the Applicant's involvement in allotment of the said tender / contract. Infact Applicant was empaneled as Dean of the Centre for the period of 5 months only. 21. The material on record indicates that the prosecution's case in the predicate FIR and ECIR primarily pertains to M/s. Lifeline Hospital Management Services. Veracity of the Partnership Deed of Lifeline Hospital Management Services is a matter of trial. The sole allegation against the Applicant is that he signed and approved fabricated invoices based on falsified attendance sheets of staff records thereby facilitating alleged fraudulent activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fteen (15) invoices placed before me that before it is signed by the Applicant the invoice is first verified by a Medical Officer who had the duty to prepare invoices on behalf of the Vendor as seen from the signature appended on the left side of the invoice. Subsequently it was the duty of the Dean to verify and forward the same to the Accounts Officer of MCGM as seen from the signature appended on the right side of the invoice before clearance. Additionally, there is material placed on record to show that M/s. Lifeline Hospital Management Services continued to be a service provider during the second wave of Covid-19 pandemic at the Worli-NSCI and Dahisar Jumbo Covid Centres. It is seen that Applicant is not named as an accused in the predicate offence. On the contrary Audit Report dated 23.08.2022 appended at page No. 420 concluded that no MCGM Officers, including the Applicant, could be prosecuted under the Epidemic Diseases Act and Disaster Management Act, as no criminality was found on their part. Consequently, in the supplementary chargesheet, the charge under Section 304A IPC was removed. This fact prima facie militates against the prosecution case on the face of record. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in *** sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail." 23. As delineated and observed herein above and also while recording submissions made by the Learned Advocates appearing for the parties it is seen that Applicant is not made an accused in predicate offence or in the ECIR. Chargesheet has been filed in predicate offence, however charges are yet to be framed. Trial is not likely to commence hence trial in PMLA offence cannot commence. Applicant is incarcerated for 1 year 6 months 25 days after duly co-operating with the investigation. 24. In this regard, attention is drawn to the observations made by the Supreme Court in paragraph Nos. 24 to 28 of the decision in the case of V. Senthil Balaji Vs. The Deputy Director, Directorate of Enforcement AIR 2024 SC 4760. Paragraph Nos. 24 to 28 read as under:- "24. There are a few penal statutes that make a departure from the provisions of Sections 437, 438, and 439 of the Code of Criminal Procedure, 1973. A higher thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inued for an unreasonably long time, the provisions may be exposed to the vice of being violative of Article 21 of the Constitution of India. 27. Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. The minimum sentence is higher when the scheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45(1)(ii) does not confer power on the State to detain an Accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the Accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for compensation." 25. Offence of money-laundering has been defined under Section 3 of the PMLA and existence of proceeds of crime is the condition precedent for the offence under Section 3. Proceeds of crime has been defined in Section 2(1)(u) of the PMLA. Section 2(1)(u) and Section 3 of PMLA read as under:- "2. Definitions: - (1) ...... (a) ...... (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad];" "3. Offence of money-laundering - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the 1[proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering. [Explanation.--For the removal of doubts, it is hereby clarified that,-- (i) a person shall be guilty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessor attached to various Government Hospitals. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case appropriate conditions can be imposed if that be the case to address the concern of the State. The Supreme Court in the case of Gudikanti Narasimhulu & Ors. Vs. Public Prosecutor, High Court of Andhra Pradesh 1978(1) SCC 240 has reiterated the same principle. Keeping the aforesaid principle in mind and the facts of the present case, it is prima facie seen that the present case would largely depend upon documentary evidence which is already seized by the prosecution and is made part of the Chargesheet. As such there is no possibility of tampering with the evidence. 28. In the case of Prem Prakash v. Union of India through the Directorate of Enforcement AIR 2024 SC 4286, the Supreme Court reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act by holding as follows:- "11....All that Section 45 of PMLA mentions is that certain conditions are to be satisfied. The principle that, "bail is the rule and jail is the exception" is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases of rape, dacoity, kidnaping for ransom, mass violence, etc. Neither is this a case where 100/1000s of depositors have been 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." It is in this background that Section 45 of PMLA needs to be understood and applied. Article 21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict. (emphasis supplied) 29. The present case in hand is restricted to grant of bail on account of incarceration of the under trial accused / Applicant having fully co- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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