Bombay High Court
Sanjay Rajkumar Chhabriaa vs Directorate Of Enforcement And ... on 9 October, 2023
Bench: Makarand Subhash Karnik
2023:BHC-AS:30246
Darshan Patil apl-546-23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPLICATION NO. 546 OF 2023
SANJAY RAJKUMAR CHHABRIAA ..APPLICANT
VS.
1) DIRECTORATE OF ENFORCEMENT
2) THE STATE OF MAHARASHTRA ..RESPONDENTS
------------
Adv. Vibhav Krishna a/w Adv. Tahil Prande a/w Adv. Anmol
B. i/b Juris Consillis for the Applicant.
Shri Devang Vyas, Additional Solicitor General a/w Adv. H.S.
Venegavkar a/w Adv. Aayush Kedia a/w Adv. Anusha Amin
and Adv. Vaibhavi Chaudhary for Respondent No.1.
Ms. Rutuja Ambekar, APP for the State.
Mr. Kuldeep Singh, Investigating Officer is present.
------------
CORAM : M. S. KARNIK, J.
RESERVED ON : OCTOBER 05, 2023
PRONOUNCED ON : OCTOBER 09, 2023
JUDGMENT:
For ease of reference this judgment is divided into following
parts:-
reproduced from the counter
affidavit filed before the
Special Court
3 Submissions of the learned Paragraph Nos. 7 to 21
counsel for the applicant
respondent-ED
Darshan Patil apl-546-23.doc
Introduction:-
1. The applicant approached the Special Court under The
Prevention of Money-Laundering Act, 2002 ("PMLA" for
short), for default bail under Section 167(2) of the Code of
Criminal Procedure, 1973 ("Cr.P.C." for short). By the order
dated 25/08/2022, the Special Judge under PMLA rejected
the application. The applicant is accused No. 25 in the
Special Case No. 452 of 2020 under PMLA. The applicant
was arrested by CBI in R.C. No. 219/2020 E0004 dated
07/03/2020 on 28/04/2022. The applicant was in CBI
custody from 29/04/2022 till 13/05/2022. The applicant
was arrested by the respondent No. 1 - Directorate of
Enforcement (ED) and was investigated from 07/06/2022
till 17/06/2022 and thereafter remanded to jail custody. ED
filed a third supplementary prosecution complaint ("said
complaint" for short) on 04/08/2022. The period of 60 days
for continuing the remand from 07/06/2022 expired on
06/08/2022.
2. Learned counsel for the applicant fairly submitted that
there is no dispute that the said complaint was filed on the
Darshan Patil apl-546-23.doc
59th day i.e. within the period of 60 days. The applicant
preferred default bail application under Section 167(2) of
the Cr.P.C. (Exhibit 308) before the Special Court on
08/08/2022. The submission of the learned counsel for the
applicant is that the said complaint was filed by respondent
No.1 without completing the investigation only with a view
to scuttle the indefeasible right accrued in favour of the
applicant to claim the default bail. The application (Exhibit
308) for default bail was rejected by the Special Court on
25/08/2022.
3. The applicant has filed the application for regular bail
before the Special Court on 27/03/2023. The respondent
filed a reply to the regular bail application on 10/04/2023.
The Supreme Court granted default bail to the applicant in
the CBI case in Writ Petition (Criminal) No. 60 of 2023 on
26/04/2023.
4. The applicant had previously filed an application for
default bail (Exhibit 458) before the Special Court on the
basis of the judgment passed in his favour by the Supreme
Court in Writ Petition (Criminal) No. 60 of 2023. The Special
Darshan Patil apl-546-23.doc
Court by order dated 16/05/2023 permitted withdrawal of
the said default bail application as not pressed.
5. Thereafter, the application (Exhibit 308) for default
bail was filed. The grievance of the learned counsel for the
applicant is that the investigation is still pending and the
applicant continues to be detained despite the investigation
not being completed till date.
6. Before I deal with the controversy involved in this
application, it would be apposite to appreciate the
prosecution case. The prosecution case as reproduced from
the counter affidavit is thus:
A. That CBI/EO-I, New Delhi, registered an FIR
bearing No. RC 219 2020 E0004 dated 07.03.2020,
against DHFL, M/s DOIT Urban Ventures (India)
Limited, Rana Kapoor, the then Promoter Director
and CEO of M/s Yes Bank Ltd, Kapil Wadhawan,
Promoter Director of M/s Dewan Housing Finance
Limited & Ors. under Sections 120B r/w 420 of IPC &
Section 7, 12 & 13(2) r/w 13 10(d) of PC Act. 1988.
Brief fact of the FIR as follows:
I) Rana Kapoor while working as MD cum CEO of
Yes Bank had connived with Kapil Wadhawan,
Promoter Director of M/s DHFL and others with
intention to extend undue financial benefit to M/s
DHFL by Yes Bank Ltd. and to get in return undue
benefit from Wadhawans for himself and his
family members through the companies held by
them (Rana Kapoor's family). Yes Bank had
bought debentures worth Rs 3,700 Crore and
Masala Bonds of Rs.283 Crore between April 2018
Darshan Patil apl-546-23.doc
to June 2018 from DHFL while DHFL gave loan of
Rs 600 Crore to DOIT Urban Ventures Pvt. Ltd.
which is beneficially owned by Rana Kapoor and
his family. The so-called loan was sanctioned by
DHFL to DUVPL in violation of almost all the set
rules/regulations, guidelines, procedures required
to have been followed in DHFL. Apart from this,
M/s Yes Bank Ltd. also sanctioned a loan of Rs.
750 crores to M/s Belief Realtors Pvt. Ltd.
(beneficially owned by Wadhawans) for its Bandra
Reclamation Project, Mumbai but the entire
amount was siphoned off by Wadhawans to M/s
DHFL by way of layering through their other group
companies without spending a single penny for
the said project.
B. Pursuant to the aforesaid FIR, a new case
bearing ECIR No. ECIR/MBZO-1/03/2020 dated
07.03.2020 was recorded by the Directorate of
Enforcement ('ED') for investigation into suspected
commission of the offence of Money Laundering as
defined under Section 3 punishable under Section 4
of the Prevention of Money Laundering Act
(hereinafter referred to as "PMLA") 2002 against the
said accused persons & entities.
C. That consequent upon investigation conducted
under PMLA, 2002, a Prosecution Complaint
registered as PMLA Special Case No. 452/2020 was
filed by ED on 06.05.2020 for the offence of money
laundering under section 3 and punishable under
section 4 of the Act has been filed before the Hon'ble
Special PMLA Court (C.R. 16), Mumbai, the
designated Special Court under the Prevention of
Money Laundering Act, 2002. The Hon'ble Court was
pleased to take cognizance of the said offence and
issued the process.
D. During the Investigation following
Supplementary PCs have also been filed
i) 1st Supplementary PC on 11.07.2020
(Kapil/Dheeraj Wadhawan & Ors).
ii) 2nd Supplementary PC on 14.03.2022 (regular PC
w.r.t. confirmation of PAO).
Darshan Patil apl-546-23.doc
iii) 3rd Supplementary PC on 04.08.2022 (Sanjay
Chhabria, Avinash Bhosale & Ors).
E. During the investigation of this case following
persons have been arrested by ED:
i) Mr. Rana Kapoor on 08.03.2020;
ii) Mr. Kapil Wadhawan on 14.05.2020;
iii) Mr. Dheeraj Wadhawan on 14.05.2020;
iv) Mr. Sanjay Chhabria ("Present Applicant") on
07.06.2022;
v) Mr. Avinash Bhosale on 28.06.2022.
F. Mr. Sanjay Chhabria ("Present Applicant") had
been arrested on 07.06.2022 for his role in the
instant case.
G. The Hon'ble Special Court was pleased to grant
custody of Mr. Sanjay Chhabria till 14th June 2022,
subsequently extended till 17 June 2022. After that
he was sent to Judicial Custody.
H. The Respondent-department filed 3rd
Supplementary Prosecution Complaint in the instant
case before the Hon'ble Special Court on 04.08.2022,
wherein the applicant has been arraigned as Accused
No. 25. The Hon'ble was pleased to take cognizance
of the said Prosecution Complaint vide its order
dated 25.08.2022. Since then, the applicant is
lodged in Arthur Road Jail.
I. The applicant had preferred an application
(Exh. 308) dated 08.08.2022 under sec. 167(2) of
Cr.P.C for default Bail before Hon'ble PMLA on the
contention of the applicant, this Hon'ble Court called
the report from the Court Registry to ascertain
whether the Prosecution Complaint was filed beyond
60 days. The Hon'ble Court in its order dated
25.08.2022 in the said Ex. 308 has recorded that the
said complaint was filed by ED on 04.08.2022 at 3
PM which was the 59th day and therefore the
supplementary complaint was filed even prior to 60
days and not beyond thereof.
J. The applicant has preferred regular Bail
Darshan Patil apl-546-23.doc
Application (Exh. 449 dated 27.03.2023) before the
Hon'ble Special Court. The arguments in the said
application from the defence as well as the
prosecution side have been completed. The Hon'ble
Spl. Court has reserved in the said Bail Application.
K. The applicant had also preferred an application
w/s 167 of Cr.P.C on 27.04.2023 before Ld. Special
Court seeking default Bail under section 167(2)
Cr.P.C relying on the judgement of the Hon'ble
Supreme Court in Ritu Chhabria vs. Union of India
WP (Crl) 60 of 2023, which was later withdrawn by
applicant on 16.05.2023. It is pertinent to mention
herein that Ritu Chhabria judgment is under
challenge before the Hon'ble Supreme Court.
4. Investigation Under PMLA Qua Applicant
4.1 Rana Kapoor the promoter of Yes Bank and
Kapil Wadhawan & Dheeraj Wadhawan Promoter
Directors of DHFL, through the companies
beneficially owned by them and/or their family
members, associates and others have fraudulently
obtained and siphoned off thousands of crore of
rupees by cheating and defrauding the Yes Bank and
DHFL by misusing their official position. From the
investigation conducted so far, the total estimated
proceeds of crime is to the tune of Rs.5333 Crore.
4.2 Rana Kapoor while working as MD cum CEO of
Yes Bank had connived with Kapil Wadhawan,
Promoter Director of M/s DHFL and others with
intention to extend undue financial benefit to M/s
DHFL by Yes Bank Ltd. and to get in return undue
benefit from Wadhawans for himself and his family
members through the companies held by them (Rana
Kapoor's family). Yes Bank had bought debentures
worth Rs 3,700 Crore and Masala Bonds of Rs.283
Crore between April 2018 to June 2018 from DHFL,
while DHFL gave loan of Rs 600 Crore to DOIT Urban
Ventures Pvt. Ltd. which is beneficially owned by
Rana Kapoor and his family.
4.3 M/s DHFL has granted loan of Rs. 600 Crore to
Darshan Patil apl-546-23.doc
DUVPL against mortgage of sub-standard property
worth only Rs. 39.66 crore by showing inflated value
as Rs. 735 crore. It is significant to mention here
that just before sanction of this loan, Yes Bank had
invested Rs. 3983 crore in DHFL. This is an obvious
case of 'quid pro quo'. Investigation has revealed
that behind the façade of DUVPL, Rana Kapoor was
the person on ground interacting with Kapil
Wadhawan for sanction of loan. Not only this, the so-
called loan was sanctioned by DHFL to DUVPL in
violation of almost all the set rules/regulations,
guidelines, procedures required to have been
followed in DHFL. Thus, there is a criminal conspiracy
between Rana Kapoor and the promoters of DHFL in
sanctioning the amount of Rs. 600 Crore.
4.4 After receipt of the public fund of Yes Bank into
DHFL to the tune of Rs.3983 Crore, Mr. Kapil
Wadhawan diverted Rs.2317 Crore to the entities of
Mr. Sanjay Chhabria in the name of development of
one of his projects namely 'Avenue-54' at Santacruz.
But Mr. Sanjay Chhabria, instead of using this fund
for development of the said project, further diverted
huge part of it for other purposes. He, in conspiracy
with Mr. Avinash Bhosale, diverted Rs.267 Crore and
Rs. 25 Crore out of this fund to his (Avinash
Bhosale's) beneficially owned entities namely M/s
Nibodh Realty LLP and M/s Abil Diary LLP
respectively. Also, as per the directions of Mr. Kapil
Wadhawan, Mr. Sanjay Chhabria (applicant) diverted
a fund of Rs.115 Crore to M/s Mentor Capital Ltd.
Apart from this, huge part of this fund was used by
Mr. Sanjay Chhabria for repayment of loans and
interest thereon with regard his other group
companies. The project for which this loan had been
disbursed by DHFL is still incomplete and the loan
has turned into NPA.
4.5 From the investigation conducted, it is revealed
that Wadhawans of DHFL conspired with Mr. Sanjay
Chhabria of Radius Group and diverted Rs.2317
Crore to his Radius Group Companies in the garb of
loan. Break up of this so-called loan of Rs. 2317
Crore is as under:
Darshan Patil apl-546-23.doc
1. Rs. 1100 Crore to M/s Radius Estate Project Pvt.
Ltd.("REPPL")
2. Rs. 439 Crore to M/s Sumer Radius Realty Pvt.
Ltd. ("SRRPL") (loan sanctioned was Rs. 900 Crore in
the name of SRRPL but disbursed only Rs. 439 Crore
& out this Rs. 439 Crore, Rs. 280 was disbursed to
SRRPL and Rs. 159 Crore to REPPL)
3. Rs. 678 Crore to M/s Flag Industries (I) Pvt. Ltd.
4. Rs. 100 Crore to REPPL.
4.6 lt is also revealed that this fund has been
diverted in the name of development of "Avenue 54"
project of Radius Group. The period of diversion of
funds of Rs. 2317 Crore by DHFL is the same when
Wadhawan had obtained the said investment of Rs.
3983 Crore in DHFL from YES Bank. The fund of Rs.
2317 Crore is nothing but part of the Proceeds of
Crime (POC) of Rs. 3983 Crore received by DHFL
from the Yes Bank. The said fund of Rs. 2317 Crore
received by Radius Group of Mr. Sanjay Chhabria
from DHFL was not utilized for the declared purpose.
4.7 Project finance team of DHFL had raised
concern with regard to sanction of said loan of Rs.
2778 crore to Radius group of Sanjay Chhabria
despite that Mr. Sanjay Chhbaria conspired with Mr.
Kapil Wadhawan and got sanctioned loan of Rs. 2778
Crore from DHFL. It is also revealed that this fund
(Rs. 2317 crore) has been diverted in the name of
development of "Avenue 54" project of Radius Group.
The said fund of Rs. 2317 Crore received by Radius
Group of Mr. Sanjay Chhabria from DHFL was not
utilized for the declared purpose. This was done with
the criminal intent of illegally enjoying the public
money without providing proper collateral and
rotating the money for their own end use. Sanjay
Chhbaria with malafide intention took the loan and
diverted the fund for the purpose to evergreen of
earlier loans, repayment of loan taken from other
private entities and repayment/issuances of ICD to
other business/corporate entities.
4.8 It is revealed during the investigation that on
receiving the said so called loan of Rs. 1100 Crore in
Darshan Patil apl-546-23.doc
REPPL, Mr. Sanjay Chhabria has diverted Rs. 175
Crore to Ms Nibodh Realty LLP of Mr. Avinash
Bhosale. Out of the remaining funds, Rs. 260 Crore
was transferred to Ms Radius Enterprises and from
here Rs. 75 Crore was diverted to M/s Nibodh Realty
LLP, Rs. 13.80 Crore to Bank of Baroda as interest
payment w.r.t. loan of his another project namely
One BKC, Rs. 5.6 Crore to Yes Bank as interest
payment w.r.t. loan of his another project namely
Anantya Project & Rs. 61.70 Crore as interest on
debentures.
4.9 That out of the said so called loan of Rs. 439
Crore in SRRPL & REPPL, Mr. Sanjay Chhabria has
diverted Rs. 17.40 Crore to M/s Nibodh Realty LLP,
Rs. 25 Crore to M/s Abil Dairy LLP of Mr. Avinash
Bhosale, Rs. 20 Crore to Bank of Baroda as interest
payment w.r.t. loan of his another project namely
One BKC & Rs. 26 Crore to DHFL as interest payment
w.r.t. loan of his another project namely X BKC.
4.10 That on receiving the said so called loan of Rs.
678 Crore in Ms Flag Industries India Pvt. Ltd., Mr.
Sanjay Chhabria has diverted Rs. 115 Crore to M/s
Mentor Capital Ltd. which was further utilised for
purchase of shares of DHFL, Rs. 58.90 Crore to DHFL
as interest payment w.r.t. loan of his another project
namely X BKC, Rs. 41 Crore as ICD to SRRPL, Rs.25
Crore as ICD to one M/s Uttwani Realty, Rs. 2.6
Crore to Standard Chartered Bank as interest
payment w.r.t. loan of his another project namely
Harbour Heights, Rs. 5.60 Crore to Bank of Baroda
as interest payment.
4.11 That from the said so called loan of Rs. 100
Crore in REPPL, Mr. Sanjay Chhabria has diverted Rs.
5.6 Crore to Yes Bank as interest payment with
respect to loan of his another project namely
Anantya Project., Rs. 2.5 Crore to Standard
Chartered Bank as interest payment w.r.t. loan of his
another project namely Harbour Heights & Rs. 2.6
Crore as ICD repayments.
4.12 The Applicant/ Accused is the promoter director
of Radius Group of companies. He had entered into a
Darshan Patil apl-546-23.doc
criminal conspiracy with Kapil Wadhawan of DHFL
and illegally & fraudulently obtained huge amount of
funds in the name of loan for development of one of
his JV projects namely 'Avenue-54' at Santacruz,
Mumbai. But, instead of using the said fund for the
development of 'Avenue-54' project, he in
connivance with Mr. Kapil Wadhawan and others
diverted the entire amount for their own beneficial
uses. The said fund of Rs. 2317 Crore received from
DHFL was not utilized for the declared purpose and
was diverted for other purposes and the loan account
has turned into NPA."
Submissions of the learned counsel for the applicant:-
7. The Applicant is Accused No. 25 in prosecution filed in
ECIR No. /MBZO-1/03/2020, for offence under Section 3,
punishable under Section 4 of PMLA, and has filed the
present application against manifestly arbitrary order dated
25.8.2022 passed by the Special Court, rejecting his
application for default bail, merely because a prosecution
complaint was filed in registry on 59 th day of remand,
though admittedly before "culmination of investigation".
8. Neither in the reply to the default bail application, nor
in the impugned Order rejecting default bail, it was even
claimed that the 'investigation' was complete. However, the
opposition to default bail, and the rejection thereof was on
the ground that the 'Complaint' was complete, and that
Darshan Patil apl-546-23.doc
further investigation was permissible under the Act.
9. Even in the reply dated 11.8.2023 filed by the ED in
the present proceedings at paragraph No. 2.3 (page 40)
and at paragraph No. 4.13 (page 53), pleadings of denial
are made by the Respondent but it does not contain any
positive statement or assertion that the investigation is
completed.
10. To wriggle out of this settled legal position, the ED is
now taking an ex facie fallacious stand that under the
subject prosecution complaint dated 4.8.2022 filed on 59 th
day of remand, the investigation was completed qua the
petitioner. Without prejudice to the legal position that
investigation ought to be completed of the 'case', to assail
the veracity of such ex-facie fallacious stand regarding
investigation being completed qua the petitioner, attention
is invited to-
(i) Following extracts of para 6.8 & 15.4 of the subject
prosecution complaint (page 148 of the compilation) itself-
"6.8 ... Further investigation with regard to money
trail is in progress."
"15.4 Investigation is complete qua the properties
mentioned in the present complaint as well as
Darshan Patil apl-546-23.doc
related transactions mentioned therein, against the
above-mentioned accused persons. However,
investigation is still in progress in respect of other
properties/ transactions/ persons/ entities. The
Complainant craves leave of this Hon'ble Court for
conducting further investigation and as andwhen
investigation is complete in other aspects, to file
supplementary complaint(s) in due course."
(ii) Paragraph No. 7 of the ED's reply dated 10.4.2023 in
applicant's regular Bail Application(page 200 of the
compilation of the Applicant), wherein it is stated that-
"Investigation in the instant case is still going, at this
stage possibility of applicant influence the witness,
cannot be ruled out...."
11. It is thus admitted position emanating from the
alleged prosecution complaint that investigation into money
trail and against other properties, transactions and entities
of the applicant and others, which are not mentioned in the
complaint, is still in progress. The pendency of investigation
is further fortified from the stand of Respondent in above
Para 7 of their reply to regular bail application.
12. Mechanical continuation of remand by rejecting default
bail application without looking into and ascertaining this
most crucial aspect of pendency of investigation by perusing
the averments made in the alleged prosecution complaint,
Darshan Patil apl-546-23.doc
was therefore ex facie erroneous and in violation of
statutory and fundamental rights.
13. Thus, merely by filing a complaint/charge sheet of
interim nature without first completing the investigation
within the time allowed, an investigating agency cannot
curtail the fundamental and statutory right of the accused,
which accrues on default in completing investigation within
the time allowed.
14. Thus, the Applicant is entitled to default bail under
Section 167(2) Cr.P.C. which is his statutory as well as
fundamental right, accrued on account of default in
completing investigation within the maximum permissible
period of remand. Under the impugned Order, his right to be
released was wrongly denied.
15. Mere filing of an alleged chargesheet/prosecution
complaint, without first completing the investigation, do not
extinguish the right of an accused for grant of default bail,
because of statutory embargo under Section 167(2) Cr.P.C.
on grant of remand beyond 60 days during investigation.
Filing interim/ incomplete prosecution Complaint/
Darshan Patil apl-546-23.doc
Chargesheet, while the investigation being pending, is a
clever subterfuge to prevent accused from claiming his right
to default bail and cannot be countenanced. Neither there is
any presumption in PMLA or Cr.P.C. that mere filing of a
Complaint, even though admittedly without completing
investigation, would extinguish statutory right of accused
under Section 167(2), nor is any such presumption claimed
by the respondent. A right to investigate beyond 60 days
being executive function, do not override the embargo on
grant of remand u/s 167(2) Cr.P.C. beyond 60 days, which
is a judicial function, and cannot come in the way of
corresponding right to default bail.
16. The present application pertains to personal liberty of
the applicant, which is most cherished fundamental right
guaranteed under Article 21. It is settled law that technical
objections cannot come in the way of substantial justice in
the matters of violation of fundamental rights guaranteed
under Article 21 of the Constitution of India.
17. The present Application is limited to the applicants
entitlement of default Bail u/s 167(2) Cr.P.C., reserving his
Darshan Patil apl-546-23.doc
right, entitlement and liberty to pursue other remedies
available under law including on the basis of the recent
judgment dated 3.10.2023 of Hon'ble Supreme Court in
Pankaj Bansal Vs. Enforcement Directorate1.
18. Reliance is placed on the observations of the Hon'ble
Supreme Court in:-
i. M Ravindran vs Directorate of Revenue Intelligence 2
(Para 13, 17.4 and 17.6, 18.10)- (41st Law Commission
Report on abuse of process by filing preliminary police
reports to curtail right to default bail, leading to present
Cr.P.C. providing for 60 or 90 days time with object to
protect fundamental right to speedy investigation and trial
has also been extensively referred in this judgment.)
ii. Rakesh Kumar Paul vs State of Assam 3 (Para 14.19
and Para 44)
iii. Vijay Madanlal Chaudhary Vs Union of India 4 (Para
445)
iv. Enforcement Directorate v Kapil Wadhawan5 (paras 37
1 Criminal Appeal No. 3051-3052 of 2023
2 (2021) 2 SCC 485
3 (2017) 15 SCC 67
4 (2022) SCC Online 929
5 Cri Appeal No. 701-702 of 2020 reported in 2023 SCC Online SC 972
Darshan Patil apl-546-23.doc
and 52)
v. Sanjay Dutt vs State through CBI6 (Para 2, 53(2)(b))
vi. Fakhrey Alam vs State of UP7 (Para 14)
vii. Judgebir Singh Vs. NIA8 (Para 22, 29, 30, 33, 43 and
62)
19. Reliance is also placed on the observations of the
Bombay High Court in:-
i. Punjaram vs State of Maharashtra9 (paras
16,20,21,25,27)
ii. Manik Sahebrao Chaugule vs The State of
Maharashtra10 (paras 6 and 7)
iii. Sunil Vasantrao Phulbande vs State of Maharashtra 11
(paras 11, 12 and 15)
iv. In Ranjeet Manohar Macherkar v. State of
Maharashtra12, a co-ordinate bench of this Court allowed the
accused's application dated 03.04.2013 under Section
167(2) Cr.P.C. though preferred post filing of a charge sheet
dated 05.11.2012, with the following observations:
6 (1994) 5 SCC 410
8 2023 SCC Online SC 543
9 2005 SCC Online Bom 1595
10 Criminal Bail Application No. 241 of 2017 dated 23.3.2017
11 2002 (3) MhLJ 689
12 Cr. BA No. 509 of 2014-Order dated 14 July 2014
Darshan Patil apl-546-23.doc
"6. It is true that filing of a charge-sheet or a
complaint would ordinarily signify completion of
investigation. If a charge sheet or a complaint, as
the case may be has not been filed, it would be
obvious that the investigation is in progress, but the
converse may not be true. If the investigating
agency files some document or documents claiming
the same be a charge-sheet or a complaint that
would not be the end of the matter, and the crucial
aspect would be whether the investigation has, in
fact, been completed. It may be observed that the
proviso to Sub-section (2) of Section 167 of the
Code, does not speak about the filing of the charge-
sheet, but refers to the completion of investigation."
"7. ....Obviously, therefore, the investigation was
incomplete; and collection on evidence on the most
vital aspect of the prosecution case was still going on
on 03.04.2013, the date on which the applicant
made a prayer for bail."
"8. The applicant was therefore, entitled to be
released on bail, in view of the first proviso to
Section 167(2) of the Code, as modified by Sub-
section (4) of Section 36A of the N.D. P.S. Act...."
20. Vide the judgment dated 13.02.2023, the High Court
of J & K Ladakh in the matter of Gopal Krishan v. UT of
J&K13, observed that-
"10. Firstly, the Court of learned Sessions Judge,
Udhampur evaded to refer to its own observation on
record that the first police report so filed against the
petitioners was an empty formality. If that was the
state of the purported police report/challan then that
would have meant only one thing in the eyes of law
which is that the presentation of said police report
was a pseudo police report/challan aimed with sole
objective to cover up the default on the part of the
Police Station, Udhampur to complete the
13 Bail Application No. 12 of 2023
Darshan Patil apl-546-23.doc
investigation within the time given so as to
checkmate the petitioners becoming entitled to
default bail. ...."
21. The present application pertains to personal liberty of
the Applicant, which is most cherished fundamental right
guaranteed under Article 21. It is settled law that technical
objections cannot come in the way of substantial justice in
the matters of violation of fundamental rights guaranteed
under Article 21 of the Constitution of India.
Arguments of the respondent-ED
22. That the investigation of the respondents in ECIR No.
with respect to the present applicant has been completed.
23. That, the petitioner contends that as per the
prosecution complaint, the investigation in the said ECIR is
still pending and reliance has been placed on paragraph No.
15.4 already reproduced hereinbefore. In paragraph
No.15.4, emphasis is placed on the first sentence, which
states that the investigation in relation to the applicant has
already been completed. That would mean to say that the
role of the accused, with respect to the said offence has
been investigated and the prosecution complaint (akin to a
chargesheet) has already been filed. The reason for leave to
Darshan Patil apl-546-23.doc
conduct further investigation is in relation to the crime as a
whole and not the accused in specific. The further
investigation as stated is for the larger offence of money
laundering, since there are several layers to the offence that
takes place, and hence the investigation is for the other
properties, entities etc, which are part of the larger fraud.
The respondent's investigation is to investigate the further
trail of the proceeds of crime/crime money and other
persons involved as well. Reliance is placed on the
judgment of Vijay Madanlal Choudhary Vs Union of India
(supra) and Section 44 of PMLA. Further, there are several
situations in offences under the Indian Penal Code, where
upon submission of the final report, the Magistrate is not
satisfied with the investigation and directs re-investigation,
that would not extend the right of default bail under Section
167(2) to the other co-accused, against whom the
chargesheet has been filed and accepted by the court.
24. Reliance was placed on paragraph No. 7 of the reply
filed by the respondent before the Special Court, which is
quoted hereinbefore. It is stated that these general
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statements are made to oppose the bail application of an
applicant on merits because after bail he can
influence/intimidate the witnesses. Further, it is also further
clarified that the there is no statement made by the
respondent that the investigation against the applicant is
being conducted. This is a vast money laundering case
which involves many layers of fund trails and investigation
to unearth the same is in progress and to trace the further
flow of money trail.
25. The Applicant placed reliance on the judgment of the
Hon'ble Supreme Court where Mr. Kapil Wadhawan was
granted relief in his plea under Section 167(2). The said
relief was granted, since the prosecution complaint filed was
delayed and filed beyond the prescribed period of 60 days.
However, in this case, the said complaint has been filed on
the 59th day, which has been observed by the Special
Court, while rejecting the first default bail application of the
applicant. Hence, in the present case, the decision in Kapil
Wadhawan (supra) cannot be relied upon.
Darshan Patil apl-546-23.doc
26. That, the applicant in the present case, was arrested
by the respondent on 07/06/2022, and the said complaint
was filed on 04/08/2022, i.e. on the 59 th day. However,
cognizance of the said complaint was taken only on
25/08/2022. Hence, the indefeasible right to default bail
expires upon the filing of the said complaint i.e. on
04/08/2022.
27. That the applicant argued that the indefeasible right of
the applicant would arise under Section 167(2) in the
following two circumstances:
i. When the said complaint has been filed beyond
the period of 60 days and
ii. When the said complaint has been filed within 60
days, but the investigation qua the accused is
incomplete.
In the present case, the accused does not fall under the
first circumstance. Additionally, as paragraph No. 15.4 of
the said complaint explicitly states that the investigation
with respect to the Applicant has been completed, in the
present case the Applicant does not fall under the second
criteria either.
Darshan Patil apl-546-23.doc
Consideration:-
28. I have perused the copy of the application, order
passed by the Special Judge rejecting the application for
default bail and materials placed on record.
29. I have heard Shri Vibhav Krishna learned counsel for
the applicant and learned Senior Advocate Shri Vyas,
Additional Solicitor General (ASG) for respondent - ED.
30. The case of the applicant is that the indefeasible right
to default bail under Section 167(2) of the Cr.P.C. would
arise when the complaint has been filed beyond 60 days
and; that though the complaint has been filed within a
period of 60 days but the investigation qua the accused is
incomplete and hence the right to default bail is accrued.
The entire argument of learned counsel for the applicant is
that though the so-called complaint was filed on the 59 th
day, the investigation is incomplete on the showing of the
ED itself. Learned counsel for the applicant laid much
emphasis on paragraph No. 15.4 of the complaint which
reads thus:-
"15.4 Investigation is complete qua the properties
mentioned in the present complaint as well as
related transactions mentioned therein, against the
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above-mentioned accused persons. However,
investigation is still in progress in respect of other
properties /transactions /persons /entities. The
complainant craves leave of this Hon'ble Court for
conducting further investigation and as and when
investigation is complete in other aspects, to file
supplementary complaint(s) in due course."
31. It is the submission that factually the investigation is
ongoing and hence pursuant to the filing of the piecemeal
complaint on the 59th day, the applicant filed the application
for default bail under Section 167(2) of the Cr.P.C. thereby
availing his indefeasible statutory right to default bail on
08/08/2022.
32. The question is whether the applicant can be
permitted to furnish the bail bonds under section 167(2) of
Cr.P.C. and whether the said complaint can be said to an
incomplete complaint filed only to defeat the indefeasible
right accrued in favour of the applicant. To appreciate the
submissions canvassed on behalf of the parites, reference
to the relevant statutory provisions is important.
33. Section 167(2) of the Cr.P.C. reads thus:-
"167 Procedure when investigation cannot be
completed in twenty-four hours-
(2) The Magistrate to whom an accused person is
forwarded under this section may, whether he has or
Darshan Patil apl-546-23.doc
has not jurisdiction to try the case, from time to
time, authorise the detention of the accused in such
custody as such Magistrate thinks fit, for a term not
exceeding fifteen days in the whole; and if he has no
jurisdiction to try the case or commit it for trial, and
considers further detention unnecessary, he may
order the accused to be forwarded to a Magistrate
having such jurisdiction:
Provided that--
(a) the Magistrate may authorise the detention of the
accused person, otherwise than in custody of the
police, beyond the period of fifteen days, if he is
satisfied that adequate grounds exist for doing so,
but no Magistrate shall authorise the detention of the
accused person in custody under this paragraph for a
total period exceeding
(i) ninety days, where the investigation relates to an
offence punishable with death, imprisonment for life
or imprisonment for a term of not less than ten
years;
(ii) sixty days, where the investigation relates to any
other offence, and, on the expiry of the said period
of ninety days, or sixty days, as the case may be, the
accused person shall be released on bail if he is
prepared to and does furnish bail, and every person
released on bail under this sub-section shall be
deemed to be so released under the provisions of
Chapter XXXIII for the purposes of that Chapter;
(b) no Magistrate shall authorise detention of the
accused in custody of the police under this section
unless the accused is produced before him in person
for the first time and subsequently every time till the
accused remains in the custody of the police, but the
Magistrate may extend further detention in judicial
custody on production of the accused either in
person or through the medium of electronic video
linkage;
(c) no Magistrate of the second class, not specially
empowered in this behalf by the High Court, shall
Darshan Patil apl-546-23.doc
authorise detention in the custody of the police.
Explanation I.--For the avoidance of doubts, it is
hereby declared that, notwithstanding the expiry of
the period specified in paragraph (a), the accused
shall be detained in custody so long as he does not
furnish bail.
Explanation II.--If any question arises whether an
accused person was produced before the Magistrate
as required under clause (b), the production of the
accused person may be proved by his signature on
the order authorising detention or by the order
certified by the Magistrate as to production of the
accused person through the medium of electronic
video linkage, as the case may be.
Provided further that in case of a woman under
eighteen years of age, the detention shall be
authorised to be in the custody of a remand home or
recognised social institution."
(emphasis supplied by me)
34. Sections 3, 4 and 44 of PMLA read thus:-
"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 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 offence of money-
laundering if such person is found to have directly 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
Darshan Patil apl-546-23.doc
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."
"4. Punishment for money-laundering - Whoever
commits the offence of money-laundering shall be
punishable with rigorous imprisonment for a term
which shall not be less than three years but which
may extend to seven years and shall also be liable to
fine:
Provided that where the proceeds of crime involved
in money-laundering relates to any offence specified
under paragraph 2 of Part A of the Schedule, the
provisions of this section shall have effect as if for
the words "which may extend to seven years", the
words "which may extend to ten years" had been
substituted."
"44. Offences triable by Special Courts - (1)
Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974),--
(a) an offence punishable under section 4 and any
scheduled offence connected to the offence under
that section shall be triable by the Special Court
constituted for the area in which the offence has
been committed:
Provided that the Special Court, trying a scheduled
offence before the commencement of this Act, shall
Darshan Patil apl-546-23.doc
continue to try such scheduled offence; or;
(b) a Special Court may, upon a complaint made by
an authority authorised in this behalf under this Act
take 3[cognizance of offence under section 3,
without the accused being committed to it for trial;
(c) if the court which has taken cognizance of the
scheduled offence is other than the Special Court
which has taken cognizance of the complaint of the
offence of money-laundering under sub-clause (b), it
shall, on an application by the authority authorised to
file a complaint under this Act, commit the case
relating to the scheduled offence to the Special Court
and the Special Court shall, on receipt of such case
proceed to deal with it from the stage at which it is
committed.
(d) a Special Court while trying the scheduled
offence or the offence of money-laundering shall hold
trial in accordance with the provisions of the Code of
Criminal Procedure, 1973 (2 of 1974) as it applies to
a trial before a Court of Session.
Explanation.--For the removal of doubts, it is clarified
that,--
(i) the jurisdiction of the Special Court while dealing
with the offence under this Act, during investigation,
enquiry or trial under this Act, shall not be
dependent upon any orders passed in respect of the
scheduled offence, and the trial of both sets of
offences by the same court shall not be construed as
joint trial;
(ii) the complaint shall be deemed to include any
subsequent complaint in respect of further
investigation that may be conducted to bring any
further evidence, oral or documentary, against any
accused person involved in respect of the offence, for
which complaint has already been filed, whether
named in the original complaint or not.
Darshan Patil apl-546-23.doc
(2) Nothing contained in this section shall be deemed
to affect the special powers of the High Court
regarding bail under section 439 of the Code of
Criminal Procedure, 1973 (2 of 1974) and the High
Court may exercise such powers including the power
under clause (b) of sub-section (1) of that section as
if the reference to "Magistrate" in that section
includes also a reference to a Special Court
designated under section 43."
(emphasis supplied by me)
35. It will also be important to bear in mind the
observations of the Hon'ble Supreme Court, in the context
of section 167(2) of Cr.P.C. in the following cases.
(A) In a recent judgment dated 27.03.2023, in
Enforcement Directorate v. Kapil Wadhawan (supra), a three
judges bench has inter-alia observed that-
"34. ..... Pertinently, there is no fixed end point
within which, the police or investigation authorities
are required to complete the investigation. However,
if the investigation is not completed and chargeheet
is not filed within 60 or 90 days, a right of default
bail accures to the accused....".
(B) In Para 445 of Vijay Madanlal Choudhary Vs Union of
India (supra), Their Lordships observed that on 'culmination
of investigation' complaint is to be filed.
(C) Further, in Senthil Balaji14, which is also in the context
of PMLA, it was observed that-
14 2023 SCC Online 34
Darshan Patil apl-546-23.doc
"71. It is to protect the interest of an accused person
by restricting the period of investigation, a failure of
which would entitle an arrestee to be released. This
again is yet another facet of Article 21 of the
Constitution of India....."
(D) In Satender Kumar Antil vs CBI15, issue of default bail
is extensively dealt with in paragraph Nos. 38 to 41, and in
paragraph Nos. 39 and 41, it was held as follows-
"39. Section 167(2) was introduced in the year 1978,
giving emphasis to the maximum period of time to
complete the investigation. This provision has got a
laudable object behind it, which is to ensure an
expeditious investigation and a fair trial, and to set
down a rationalised procedure that protects the
interests of the indigent sections of society. This is
also another limb of Article 21. Presumption of
Innocence is also inbuilt in this provision. An
investigating agency has to expedite the process of
investigation as a suspect is languishing under
incarceration. Thus, a duty is enjoined upon the
agency to complete the investigation within the time
prescribed and a failure would enable the release of
the accused. The right enshrined is an absolute and
indefeasible one, inuring to the benefit of suspect."
"41. As a consequence of the right flowing from the
said provision, courts will have to give due effect to
it, and thus any detention beyond this period would
certainly be illegal, being an affront to the liberty of
the person concerned. Therefore, it is not only the
duty of the investigating agency but also the courts
to see to it that an accused gets the benefit of
Section 167(2)."
(E) In S.Kasi v. State16 Their Lordships observed that-
15 (2022) 10 SCC 51
16 MANU/SC/0491/2020
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"18.......The right of prosecution to carry on
investigation and submit a charge sheet is not akin
to right of liberty of a person enshrined under Article
21 and reflected in other statutes including Section
167, CrPC."
36. The respondent is investigating the case of money
laundering vide ECIR/MBZO-I/03/2020. During the course
of the investigation, the role of the applicant was revealed.
The applicant came to be arrested on 07/06/2022 under
Section 19 of the PMLA. The said complaint was filed before
the special court of PMLA on 04/08/2022 i.e. on the 59 th
day. The special court vide its order dated 25/08/2022 took
cognizance of the said complaint. An application was filed
by the applicant for availing of his indefeasible statutory
right under section 167(2) of Cr.P.C. prior to the special
court taking cognizance of the complaint. As indicated
earlier much emphasis is placed on the averment made in
paragraph No. 15.4 quoted hereinbefore to urge that
investigation is still in progress and without completing the
investigation the said complaint has been filed in a
piecemeal manner only to scuttle the indefeasible right
accrued in favour of the applicant under section 167(2) of
Cr.P.C.
Darshan Patil apl-546-23.doc
37. On the other hand, the learned Additional Solicitor
General urged that the complaint has to be construed in its
entirety in the context of the ongoing investigation and not
just by taking a line or two from the complaint to
presuppose that the investigation is incomplete with respect
to the properties mentioned in the said complaint as well as
related transactions mentioned therein, against the
applicant. It must be taken note that a reading of Section
44 of PMLA would reveal that a complaint filed under
Section 44 of the PMLA shall be deemed to include any
subsequent complaint in respect of further investigation
that may be conducted to bring any further evidence, oral
or documentary, against any accused person involved in
respect of offence for which the complaint has already been
filed whether named in the original complaint or not. The
applicant was remanded on 07/06/2022. The said complaint
was filed on 04/08/2022, on the 59th day before the
expiration of 60 days.
38. Let me consider whether the said complaint is an
incomplete one filed on a piecemeal basis to scuttle the
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indefeasible right which was to be accrued in favour of the
applicant and as to whether the investigation qua the
applicant is incomplete. The offence of money laundering
involves multiple interconnected transactions and the same
demands cumbersome investigation. The investigating
officer is well within his power to conduct further
investigation. The applicant undoubtedly has the right to a
fair trial which is a dimension of the right to life and
personal liberty under Article 21 of the Constitution of India.
Likewise, it is also the duty of the respondent to conduct a
comprehensive and complete investigation as regards the
offence.
39. The concept of further investigation and
supplementary report is dealt with under Section 173(8)
Cr.P.C. The earlier Code of Criminal Procedure, 1898, did not
contain a provision regarding the concept of 'further
investigation' in its ambit. It was in 1969, for the first time,
that 'The Law Commission of India' in its 41 st report
recommended adding a provision relating to 'further
investigation' under the Cr.P.C. within its ambit. The Code
Darshan Patil apl-546-23.doc
of Criminal Procedure, 1898, did not contain a provision to
deal with the situation wherein the police officer had
submitted the police report to the Magistrate who had taken
cognizance and what happens if thereafter upon the police
report under Section 190(1)(b) of the earlier Code of
Criminal Procedure, 1898, some other relevant facts or
evidence were later discovered in relation to the same
offence. The respondent is investigating an economic
offence which demands in-depth and detailed investigation.
The concept of further investigation is well-defined in the
procedure under the Cr.P.C.
40. I am in agreement with the submission of learned ASG
when it is submitted that the crime of money laundering is
characterized by its intricate nature, involving numerous
interconnected transactions and conspiracies. Money
laundering refers to the process of making illegally obtained
money appear legitimate or "clean" in order to disguise its
illicit origins. Typically, this is done to conceal the source of
funds acquired through criminal activities like drug
trafficking, corruption, fraud, or organized crime. The
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ultimate goal of money laundering is to integrate illicit funds
into the lawful financial system, making it challenging for
authorities to trace and seize the proceeds. The process of
money laundering consists of three primary stages:
placement, layering, and integration. In the placement
stage, illegal funds are introduced into the financial system,
often through methods such as cash deposits, smurfing
(breaking down large amounts into smaller ones), or
utilizing front businesses. The subsequent layering stage
involves the movement of funds through multiple
transactions, accounts, and jurisdictions to obscure their
origin. This may include numerous transfers, conversions
between different currencies, and complex financial
maneuvers. Finally, during the integration stage, the
laundered money is reintroduced into the legitimate
economy, giving the appearance of lawful funds. This can be
accomplished through investments, acquiring assets like
real estate or luxury goods, or blending illicit funds with
legal business activities. In summary, money laundering
involves intricate processes designed to obfuscate the origin
Darshan Patil apl-546-23.doc
of illegally obtained funds. The placement, layering, and
integration stages collectively enable criminals to
successfully integrate their illicit proceeds into the
legitimate financial system, making it difficult for law
enforcement agencies to uncover and seize the unlawfully
obtained assets.
41. The complexity of a money laundering case is
determined by the intricacy and sophistication of the
methods used to disguise the illicit funds. In simpler cases,
the money laundering process may involve a
straightforward series of transactions, with minimal
attempts to conceal the source of the funds. These cases
often have a limited number of steps and are relatively
easier to investigate and understand. On the other hand,
complex money laundering cases, such as the one at hand,
encompass multiple levels of transactions. These cases
typically involve intricate schemes and techniques aimed at
creating numerous layers of obfuscation, making it
challenging for investigators to unravel the true nature of
the illicit funds. Complex cases may include a wide range of
Darshan Patil apl-546-23.doc
methods, such as the use of offshore accounts, shell
companies, international transfers, and intricate financial
structures.
42. The money laundering case in question originated
from a conspiracy involving Rana Kapoor, the former CEO of
YES Bank, and the Wadhawans, the founders of DHFL
(Dewan Housing Finance Corporation Limited). As part of a
quid pro quo arrangement, Rana Kapoor and the
Wadhawans colluded to carry out illicit financial
transactions. In this scheme, Rana Kapoor, in his capacity at
YES Bank, facilitated an investment of Rs. 3,983 crore in
DHFL. In return, DHFL provided a loan of Rs. 600 crore to
DOIT Urban Ventures Pvt. Ltd., a company beneficially
owned by Rana Kapoor and his family. Additionally, YES
Bank sanctioned a loan of Rs. 750 crore to Belief Realtors
Pvt. Ltd., a company beneficially owned by Mr. Dheeraj
Wadhawan, without it being utilized for its intended
purpose. Subsequent investigation revealed that following
the receipt of these substantial funds from YES Bank, Kapil
Wadhawan, one of the key figures in DHFL, diverted Rs.
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2,317 crore to entities owned by Mr. Sanjay Chhabria, who
is the present applicant in this case. The diverted funds
were purportedly meant for the development of the
"Avenue-54" project in Santacruz. However, instead of
utilizing the funds for the intended project, Mr. Sanjay
Chhabria further redirected a significant portion of the
money for other undisclosed purposes. In collaboration with
Mr. Avinash Bhosale, Mr. Sanjay Chhabria diverted Rs. 267
crore and Rs. 25 crore to entities owned by Mr. Avinash
Bhosale, namely M/s Nibodh Realty LLP and M/s Abil Diary
LLP, respectively. Moreover, as per the instructions of Kapil
Wadhawan, Mr. Sanjay Chhabria redirected Rs. 115 crore to
M/s Mentor Capital Ltd. Furthermore, a substantial portion
of these diverted funds was utilized by Mr. Sanjay Chhabria
to repay loans and interest associated with his other group
companies. The project for which DHFL disbursed the loan
remained incomplete, and as a result, the loan has become
non-performing. In summary, it is the accusation that the
money laundering case involves a conspiracy wherein Rana
Kapoor and the Wadhawans engaged in fraudulent financial
Darshan Patil apl-546-23.doc
transactions, diverting significant sums of money for
personal gain. Mr. Sanjay Chhabria, as the present
applicant, played a crucial role in diverting the funds and
misusing them for various undisclosed purposes, including
repayment of loans and interests.
43. In paragraph No.15.4 of the complaint, it has been
specifically stated that the investigation is complete qua the
properties mentioned in the said complaint in respect of the
applicant as well as related to the translation mentioned
therein. It is further mentioned that the investigation is still
in progress in respect of other properties / transactions /
persons/ entities. No doubt, it is further mentioned that the
investigation is still in progress with other properties /
transactions/ persons/entities. However, it is obvious that
the role of the applicant with respect to the said offence has
been investigated and hence the said complaint akin to a
chargesheet has been filed. The leave of the Special Court
to conduct further investigation obviously has to be
understood to be in relation to the crime as a whole and not
the accused in specific. The further investigation is for the
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larger offence of money laundering, since there are several
layers to the offence that takes place and hence it is in that
context the investigation is for the other properties, entities,
etc. which are part of the larger fraud. I find substance in
the contention that it is for this reason leave of the Special
Court was sought for conducting further investigation and
that as and when the investigation is complete in other
aspects, to file supplementary complaint(s) in due course.
44. In my opinion, reading paragraph No.15.4 in the
manner in which the learned counsel for the applicant wants
this Court to be read would defeat the very object of a fair
and complete investigation into the offence under PMLA.
The investigation related to the offence of money laundering
is complex in nature and involves numerous interconnected
transactions and conspiracies. It is the specific case of the
respondent that the investigation is still in progress with
respect to other properties/transactions/persons/entities,
and in any case the explanation (ii) below Section 44 of the
PMLA ordains that the complaint shall be deemed to include
any subsequent complaint in respect of further investigation
Darshan Patil apl-546-23.doc
that may be conducted to bring any further evidence, oral
or documentary, against any accused person in respect of
the offence, for which the complaint has already been filed,
whether named in the original complaint or not. There are
no restrictions on the investigating agency from fulfilling its
duties under the provisions of PMLA. The averment made in
paragraph No.15.4 of the said complaint seeking leave to
conduct further investigation and the stand that the
investigation is still in progress has to be understood in the
larger context of the ongoing investigation into the crime. A
specific stand has been taken by the respondent-ED that
the investigation regarding the applicant is complete. There
is no embargo for conducting any further investigation in
the case by the respondent to bring any further evidence,
oral or documentary, against any accused person involved
in respect of the offence, against which the complaint is
already been filed, whether named in the original complaint
or not. The averment of the respondent, in the reply filed
by them to the regular bail application filed by the applicant
before the Special Court, in paragraph No.7 that "as the
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investigation in the instant case is still going, at this stage
the possibility of influencing witnesses can not be ruled out"
had to be read in the context afore discussed. It is material
to note that even the Special Court has taken cognizance of
the said complaint, albeit after the application for default
bail is filed.
45. I do not find any merit in the submission of learned
counsel for the applicant that the said complaint qua the
applicant is piecemeal, incomplete or made with the intetion
of defeating the indefeasible right to seek default bail. I am
more than satisfied with the stand of the respondent that
paragraph No. 15.4 of the said complaint cannot be read in
isolation dehors the contents of the said complaint and the
statutory provisions governing the indefeasible right to
default bail under Section 167(2) of the Cr.P.C. I do not find
any error committed by the Special Court in dismissing the
application (Exhibit 308) preferred by the applicant for
default bail.
46. The application is rejected.
(M. S. KARNIK, J.)
Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 11/10/2023 21:53:07
