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TMI Blog2025 (3) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Rs. 2000 crores approximately and causing huge loss to the State Exchequer which otherwise would have yielded revenue for Central and State government. An analysis of section 19 of the PMLA unveils a delicate interplay between legal principles, enforcement challenges, and evolving due process standards. The judiciary's commitment to balancing prompt law enforcement with the protection of individual rights, particularly the right to receive timely notification of arrest grounds, not only adds value but also amplifies the ongoing conversation about the equitable consideration of security and justice in the context of any crime, whether financial or otherwise - the ED has shown the reason to believe that the applicant is guilty of the proceeds of crime. On the basis of statements recorded under Section 50 of the PMLA however, retraction statement is made by the co- accused persons namely Arun Pati Tripathi, Nitesh Purohit and Arvind Singh. The Apex Court in Directorate of Enforcement Vs. Aditya Tripathi [2023 (5) TMI 527 - SUPREME COURT] has held that the power to arrest under the Prevention of Money Laundering Act (PMLA) cannot be exercised on the "whims and fancies" of Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond ECIR and the first being ECIR/RPZO/11/2022 which was quashed by the Hon'ble Supreme Court vide order dated 08.04.2021 with a categorical finding that no scheduled offence is made out and there were no proceeds of crime in relation to ECIR 11 and the Prosecution Complaint filed therein. The said ECIR was registered merely 3 days after the quashing of the first ECIR on the same alleged liquor scam making the same allegations arising out of the same transactions. 3. Chhattisgarh State police registered FIR bearing No. 04/2024 dated 17.01.2024 at EOW/ACB, Raipur under Sections for the offence punishable under Sections 120-B, 420,467,468,471 of IPC and Section 7 & 12 of the Prevention of Corruption Act against Mr. Anil Tuteja (retired IAS) then Joint Secretary in CG State, Anwar Dhebar, Mr. Arunpati Tripathi (ITS) then Special Secretary, Government of Commerce and industry Department and MD CG State Marketing Corporation Ltd. Mr. Vikas Agarwal @ Subbu, Mr. Sanjay Diwan and Others for collecting commissions and supplying unaccounted liquor to government liquor shops resulting in an approximate loss of Rs. 2161 crores to the government. 4. The manufacturers of country liquor in Chha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary 2019 to June 2022 by making illegal earning of Rs. 2161 crores. 8. The FIR for the predicate offence as discussed above is registered by ACB/EOW, Raipur Chhattisgarh under Sections 120-B, 420,467 and 471 IPC and Sections 7 & 12 of the P?C Act which are scheduled offence included in Part A of the schedule to PMLA ,2002 as defined under Section 2(1)(y) of the Act. Enquiries were initiated under PMLA against the suspected persons after recording brief facts of the scheduled offence and initiating money laundering investigation in file No. ECIR/RPZO/04/2024 on 11.04.2024 by the officials of the Directorate of Enforcement, Raipur. 9. The respondent/ED has analyzed the predicate offence FIR, documents including the statements recorded under Section 50 of the PMLA, 2002 shared by the Assistant Director, Prosecution Complaint filed by IT and the date shared by the Income Tax Department. During the investigation, statement of Distillers, FL-10A licenses, manpower supplier agencies and others were recorded under Section 50 of the PMLA, 2002 and it has been established that a well planned systematic conspiracy was executed by the syndicate to earn illegal commission in the sale and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the logistics were set to be the responsibility of the present applicant - Arvind Singh. 14. In the investigation, it has been established that it has come that massive corruption has taken place in the Excise Department since 2019 to 2023 in multiple ways. The total extortion amount is around Rs. 2000 crores. This amount is nothing but rightful amount which should have gone to the State Exchequer and have been taxed and yielded revenue for Central and State government. Thus this is the proceeds of crime which ED is investigating and trying to establish money trial and trace the assets created out of these proceeds of crime. SUBMISSION ON BEHALF OF THE APPLICANT 15. Contention of Shri Khurana, learned counsel for the applicant is that the application of the applicant has been erroneously dismissed by the learned Special Judge under Section 438 of the BNSS. Apart from the recording of arguments made on behalf of the applicant, bail has been frivolously denied on the seriousness of the alleged offence and allegations against him. It has also been stated that the applicant may repeat the alleged offence while on bail as well as the mere apprehension that the applicant may influen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 980) 2 SCC 565. and Sanjay Chandra v. Central Bureau of Investigation, (2012) 1 SCC 40 that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case. Ultimately, the consideration has to be made on a case to case basis, on the facts. The primary object is to secure the presence of the accused to stand trial. The argument that the appellant therein was a flight risk or that there was a possibility of tampering with the evidence or influencing the witnesses, was rejected by the Court. Again, in Satender Kumar Antil v. Central Bureau of Investigation and Another, (2022) 10 SCC 51 this Court referred to Surinder Singh Alias Shingara Singh v. State of Punjab (2005) 7 SCC 387 and Kashmira Singh v. State of Punjab, (1977) 4 SCC 291 to emphasize that the right to speedy trial is a fundamental right within the broad scope of Article 21 of the Constitution. In Vijay Madanlal Choudhary (supra), this Court while highlighting the evil of economic offences like money laundering, and its adverse impact on the society and citizens, observed that arrest infringes the fundamental right to life. 49 In P. Chidambaram v. Central Bureau of Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake years." 19. Further he has relied upon the decisions of Satender Kumar Antil Vs. Central Bureau of Investigation (2002) 10 SCC 561; Surinder Singh Alias Shingara Singh Vs. State of Punjab (2005)7 SCC387 and Kashmira Singh Vs. State of Punjab (1977) 4 SCC 291. In the matter of Manish Sisodia Vs. ED and CBI (supra), it has been held that : 37. Insofar as the contention of the learned ASG that since the conditions as provided under Section 45 of the PMLA are not satisfied, the appellant is not entitled to grant of bail is concerned, it will be apposite to refer to the first order of this Court. No doubt that this Court in its first order in paragraph 25, after recapitulating in paragraph 24 as to what was stated in the charge-sheet filed by the CBI against the appellant, observed that, in view of the aforesaid discussion, the Court was not inclined to accept the prayer for grant of bail at that stage. However, certain paragraphs of the said order cannot be read in isolation from the other paragraphs. The order will have to be read in its entirety. In paragraph 28 of the said order, this Court observed that the right to bail in cases of delay, coupled with incarceration for a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itably relaxed to afford conditional liberty to the petitioner. Ordered accordingly." 44. The learned Special Judge and the learned Single Judge of the High Court have considered the applications on merits as well as on the grounds of delay and denial of right to speedy trial. We see no error in the judgments and orders of the learned Special Judge as well as the High Court in considering the merits of the matter. In view of the observations made by this Court in the first order, they were entitled to consider the same. However, the question that arises is as to whether the trial court and the High Court have correctly considered the observations made by this Court with regard to right to speedy trial and prolonged period of incarceration. The courts below have rejected the claim of the appellant applying the triple test as contemplated under Section 45 of the PMLA. In our view, this is in ignorance of the observations made by this Court in paragraph 28 of the first order wherein this Court specifically observed that right to bail in cases of delay coupled with incarceration for a long period should be read into Section 439 Cr.P.C. and Section 45 of the PMLA. 20. Further it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of liberty 'a matter of grave concern and permissible only when the law authorizing it is reasonable, even-handed and geared to the goals of community good and State necessity spelt out in Art. 19. Indeed, the considerations I have set out as criteria are germane to the constitutional proposition I have deduced. Reasonableness postulates intelligent care and predicates that deprivation of freedom- by refusal of bail is not for punitive purpose but for the bi-focal interests of justice- to the individual involved and society affected." 23. Next contention of the learned counsel for the applicant is that the applicant shall be severely prejudiced and prejudged if he is continually remanded to custody. It is imperative for the proper and effective defence of the applicant and as a step to ensure the fair trial of the applicant that he be released on bail unless there are overwhelming considerations otherwise. He contended that over 70 witnesses have been named in the prosecution complaint itself filed by the ED. As per settled law, since the further investigation is going on in the instant case, no charges can be framed and the trial cannot commence in the near future because as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being relied upon by the ED, it is submitted that the same has been derived from the devices which have been accessed by various authorities at various instances without any intimation to the applicant and without due process and thus the possibility of tampering with the same cannot be denied. 26. He further contended that the applicant satisfies the twin conditions for grant of bail in terms of Section 45 of the PMLA. In terms of Section 45 of the PMLA, two conditions are to be satisfied before a person is granted bail for offence under Section 3 of the PMLA ie. firstly the public prosecution is given an opportunity to oppose the application and second if public prosecutor opposes it, the court is satisfied that there are reasonable grounds for believing that he is not guilty of offence of money laundering. The applicant unequivocally and stoutly refutes all allegations levelled against him. The applicant is not involved in the commission of or in any activity relating to the alleged offences. The applicant was never posted in the Excise Department and has never processed any filed or dealt with any matter related to excise/liquor. Since he was not involved in the functioning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Haricharan Kurmi Vs. State of Bihar, AIR 1964 SC 1184, wherein it has been held that: "13. As we have already indicated. this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co- accused person. in dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach to adopt is to consider the other evidence against such an accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right. As was observed by Sir Lawrence Jenkins in Emperor v. Lalit Mohan Chuckerbutty(1) a confession can only be used to "lend assurance to other evidence against a co- accused". In In re. Peryaswami Noopan, (2) Reilly J. observed that the provision of s. 30 goes not further than this : "where there is evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Privy Council in Bhuboni Sahu's(2) case has been cited with approval. 16. Considering the evidence from this point of view, we must first decide whether the evidence other than the confessional statements of the co- accused persons, particularly Ram Surat, on whose confession the High Court has substantially relied, is satisfactory and tends to prove the prosecution case. It is only if the said evidence is satisfactory and is treated as sufficient by us to hold the charge proved against the two appellants, that an occasion may arise to seek for an assurance for our conclusion from the said confession. Thus considered, there can be no doubt that the evidence about the discovery of blood stains on which the prosecution relies is entirely insufficient to justify the prosecution charge against both the appellants. In our opinion, it is impossible to accede to the argument urged before us by Mr. Singh that the said evidence can be said to prove the prosecution case. In fact, the judgment of the High Court shows that it made a finding against the appellants substantially because it thought that the confessions of the co- accused persons could be first considered and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er/distiller/cash collection agency etc. has been cancelled. No action under Section 8 of the Prevention of Corruption Act has taken against these individuals by the prosecuting agency and the liquor trade has been continuing as usual. He submits that even otherwise, any apprehension regarding the applicant being a flight risk or tampering with evidence or influencing witnesses can be taken care of by imposing suitable conditions on the applicant while granting bail. He contended that the there is no material on record to suggest that the applicant does not satisfy the triple test as there is no allegation that he would either tamper with any evidence or influence any witness if granted bail. Mere apprehension of the investigating agency without any substantial basis for the same cannot be a ground for denying bail to the applicant. In the matter of P. Chidambaram Vs. Central Bureau of Investigation (2020) 13 SCC 337, wherein it has been observed as under: "31. It is to be pointed out that the respondent - CBI has filed remand applications seeking remand of the appellant on various dates viz. 22.08.2019, 26.08.2019, 30.08.2019, 02.09.2019, 05.09.2019 and 19.09.2019 etc. In these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar bail in ECIR/RPZO/04/2024 dated 11.04.2024 registered by the Enforcement Directorate under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002. SUBMISSION ON BEHALF OF THE RESPONDENT/ED 32. It has been contended by Dr. Saurabh Pandey, learned counsel for the respondent/ED that the applicant was a promotee IAS officer who retired in the year June 2023. He was the most powerful bureaucrat in Chhattisgarh, wielding enough power to control the police, mining, environment and liquor departments by placing the individuals of his choice in key position. The applicant was the chief architect of the liquor scam. He was strongly associated with co-accused Anwar Dhebar, the main perpetrator of the illegal collection. From the strong support of the State executives for extortion of money from the liquor manufacturers, the applicant controlled the postings of all the IAS-IPS and other government officials. From the investigation it has bee revealed that he was the one who placed Arunpati Tripathi as the MD of CSMCL. The real power which allowed Anwar Dhebar to run this extortion syndicate was the present applicant's undue and over arching influence. Investigation has also revea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3 of the PMLA, 2002 punishable under Section 4 of the PMLA, 2002. 35. Next contention of learned counsel for the respondent/ED is that the mandatory provisions of Section 45 of the PMLA are not being satisfied. One of the conditions prescribed by the Section pertains to a finding by the Court that the accused is "not guilty of the offence of Money Laundering" and that he is not likely to commit any offence while on bail. Thus, in view of the facts putforth, the possibility of the applicant being "not guilty of the offence of Money Laundering" is highly unlikely. In the light of the judgment of the Apex Court in the in Vijay Madanlal Chouhdary and Others Vs. Union of India and Others Special leave Petitioner (Criminal) No. 4634 of 2014 has held that it is no longer res integra that the twin conditions under Section 45 of the PMLA have to be met before grant of bail under PMLA. The relevant observation of the Hon'ble Court is as under: "135. We are conscious of the fact that in paragraph 53 of the Nikesh Tarachand Shah642, the Court noted that it had struck down Section 45 of the 2002 as a whole. However, in paragraph 54, the declaration is only in respect of further (two) cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minality,. Economic offenders are only concerned with their personal gain even at the cost of irreparable and serious loss to society. "40.... Criminal acts committed by such persons are creating a serious challenge before criminal justice system; It is difficult to identify whether crime was committed, when it is identified that crime was committed, it is difficult to find out clues and thereby evidences; when evidences are available, nature of evidences is completely different as not possible to be collected by simple investigating presented by prosecution agency and ultimately to convict and sentence; when sentenced simple sentence is not effective to deal with such modern criminals and their criminality. A criminal of such modern criminality are respected and influential persons with position, status, standing and means thereby they are always in situation to influence proceeding in investigation and prosecution, taper with the evidences and pressurize witnesses. 42. .... Usually socio economic offenders abscond to some other country and after that it becomes difficult to bring them back and complete the criminal proceeding against them. Further, their monetary sound condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court in paragraphs 34 & 35 has held as under:- "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." 39. Next contention of the counsel for the applicant is that the investigation conducted by the ED is mala fide and fictitious. The right to fair trial and investigation is a facet of the right to life and liberty under Article 21 of the Constitution of India. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of money laundering and investigation against the applicant is complete but the investigation on money trial and identification of remaining proceeds of crime and the persons involved therein. It has been submitted that the trial in the PMLA is at appearance Stage and the next date of hearing is scheduled for 22.03.2025. the delay in trial is no ground for claiming bail. It is submitted that there are only 35 witnesses in the Prosecution Complaint filed by the Directorate and since there are less witnesses it would considerably take less time during trial. 43. Another contention of the applicant that the arrest of the applicant is completely malafide and ill founded, to this it is submitted by the ED that the applicant was the chief architect of liquor scam in the State of Chhattisgarh. During investigation, it has been gathered that Rs. 14.41 crores has been received by the applicant out of proceeds of crime. In the matter of Sajjan Kumar Vs. Directorate of Enforcement, MANU/DE/2155/2022, it has been held that "in matter of regular bail, the Court must consider aspects, including but not limited to, the larger interest of the State or public-another factor relevant would be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2024. Thus, from the perusal of the material on record, the arrest and subsequent order of remand passed by the learned Magistrate or the Special Judge is non-violative of any of the provisions of the PMLA Act or the Cr.P.C. The Apex Court in the matter of State of Orissa Vs. Mahimanda Mishra 2018 (10) SCC 516, has held that "It is by now well settled that at the time of considering an application for ail, the Court must take into account certain factors such as the existence of a prima facie case against the accused, the gravity of the allegations, position and status of the accused, the likelihood of the accused fleeing from justice and repeating the offence, the possibility of tampering with the witnesses and obstructing the courts as well as the criminal antecedents of the accused. It is also well settled that the Court must not go into deep into merits of the matter while considering an application for bail. All that needs to be established from the record is the existence of a prima facie case against the accused." 46. Lastly, it is submitted that grant of bail on medical ground is concerned, as per the law laid down in the matter of Amrutbhai Bholidasbhai Patel Vs. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the respondent and it is submitted that role of the applicant in the offence of money laundering is clearly established. The applicant was found to have committed the criminal activities related to the scheduled offence and thereby generating and possessing the proceeds of crime as defined under Section 2 (i)(u) of PMLA, 2002. The IO had reasons to believe on the basis of matter in his possession that the applicant was involved in money laundering activity and had acquired proceeds of crime in relation to liquor scam and the investigating officer deemed his arrest necessary on multiple counts which includes: i) to prevent the destruction of evidence ii) to confront him with various persons who are involved in these activities. Iii) to trace out proceeds of crime acquired by him during his custodial interrogation. iv) to prevent him from influencing the witnesses. v) to identify other persons involved in the syndicate during his custodial interrogation 48. It is thus, contended by the learned counsel for the respondent/ED that the ED has substantive evidences to prove the guilt of the accused in the trial and prima facie in the investigation, the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of arrest. 52. The judiciary's interpretative role in shaping due process within the PMLA represents a significant stride. Emphasizing the written communication of arrest grounds is vital for transparency and accountability. However, this positive development raises practical questions for the ED. The nuanced compromise between oral communication and subsequent provision of written grounds reflects the judiciary's understanding of law enforcement challenges. 53. An analysis of section 19 of the PMLA unveils a delicate interplay between legal principles, enforcement challenges, and evolving due process standards. The judiciary's commitment to balancing prompt law enforcement with the protection of individual rights, particularly the right to receive timely notification of arrest grounds, not only adds value but also amplifies the ongoing conversation about the equitable consideration of security and justice in the context of any crime, whether financial or otherwise. On perusal of the records, I found that the ED has shown the reason to believe that the applicant is guilty of the proceeds of crime. On the basis of statements recorded under Section 50 of the PMLA howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcement Vs. Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on 12.05.2023 has held as under:- 6. At the outset, it is required to be noted that respective respondent No. 1 - accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered. Section 45 of the PML Act, 2002 reads as under: - "45. Offences to be cognizable and non-bailable. - (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 an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re concerned, merely because other accused are acquitted/discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1. An enquiry/investigation is going on against respective respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation for the scheduled offences itself is sufficient at this stage. 6.3 From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that charge sheet has been filed against respective respondent No. 1 - accused and therefore, the investigation is completed. However, the High Court has failed to notice and appreciate that the investigation with respect to the scheduled offences under the PML Act, 2002 by the Enforcement Directorate is still going on. Merely because, for the predicated offences the charge sheet might have been filed it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002. Investigation for the predicated offences and the investigation by the Enforcement Directorate for the scheduled offences under the PML Act are different and distin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a long period, depending on the nature of the allegations, should be read into Section 439 of the Code of Criminal Procedure and Section 45 of the PML Act. 58. Thus, it is held that after examining the entire documents, it is revealed that there is substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. There were documents and evidences that reflected the involvement of the applicant who is the key conspirator and beneficiary from the said scam. Records show that the grounds of arrest was communicated to the applicant by the ED in writing. Thus, without giving any observation as to whether the statement recorded under Section 50 of the PMLA are admissible in evidence, but their thorough consideration should be reserved for the trial court. It emphasized that at the bail stage, these statements can be examined to ascertain whether there are reasonable grounds to believe that the applicant is not guilty. There is a difference between the admissibility of a statement of an accused recorded under Section 50 of the Prevention of Money Laundering Act (PMLA) and its evidentiary value. 59. In the specific facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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