55. Insofar as the apprehension given by the
learned ASG regarding the possibility of
tampering the evidence is concerned, it is to be
noted that the case largely depends on
documentary evidence which is already seized
by the prosecution. As such, there is no
possibility of tampering with the evidence.
Insofar as the concern with regard to
influencing the witnesses is concerned, the
said concern can be addressed by imposing
stringent conditions upon the appellant."
21. In the matter of Jainam Rathod Vs. State of Haryana 2022
22. In the case of Sujay U Desai Vs. SFIO, 2022 SCC OnLine
"7. Having duly considered the provisions of
Section 212(6) of the Companies Act, 2013,
we are of the view that in the facts of the
present case, the appellant ought to be
granted the benefit of bail under Section 439
of the Code of Criminal Procedure 1973 since
the right to an expeditious trial is protected
under Article 21 of the Constitution. We
accordingly, direct that the appellant shall be
released on bail subject to such terms and
conditions as may be imposed by the
Sessions Judge, Kanpur in connection with
Sessions Trial No. 577 of 2020."
23. He submits that it is well settled that the object of bail is neither
punitive nor preventive. The primary purpose of bail in a criminal case is
to ensure that the accused will submit to the jurisdiction of the court and
be in attendance whenever his presence is required. Deprivation of
liberty must be considered punishment unless it can be required to
ensure that an accused person will stand trial when called upon.
Punishment can only begin after conviction and necessity is the
operative test. He has referred to the judgment in the matter of
Gudikanti Narasimhulu Vs. Public Prosecutor, High Court of
Andhra Pradesh (1978) 1 SCC 240 it has been held as under:
The significance and sweep of Art. 21 make
the deprivation 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."
24. It has been contended by the learned counsel for the applicant
that even if the allegation is one of the 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. He
has referred to the case of P. Chidambaram Vs. ED (2020) 13 SCC
791, wherein it has been held as under:
21. Thus from cumulative perusal of the judgments
cited on either side including the one rendered by
the Constitution Bench of this Court, it could be
deduced that the basic jurisprudence relating to
bail remains the same inasmuch as the grant of
bail is the rule and refusal is the exception so as to
ensure that the accused has the opportunity of
securing fair trial. However, while considering the
same the gravity of the offence is an aspect which
is required to be kept in view by the Court. The
gravity for the said purpose will have to be
gathered from the facts and circumstances arising
in each case. Keeping in view the consequences
that would befall on the society in cases of
financial irregularities, it has been held that even
economic offences would fall under the category of
"grave offence" and in such circumstance while
considering the application for bail in such matters,
the Court will have to deal with the same, being
sensitive to the nature of allegation made against
the accused. One of the circumstances to consider
the gravity of the offence is also the term of
sentence that is prescribed for the offence the
accused is alleged to have committed. Such
consideration with regard to the gravity of offence
is a factor which is in addition to the triple test or
the tripod test that would be normally applied. In
that regard what is also to be kept in perspective is
that even if the allegation is one of grave
economic offence, it is not a rule that bail should
be denied in every case since there is no such bar
created in the relevant enactment passed by the
legislature nor does the bail jurisprudence
provides so. Therefore, the underlining conclusion
is that irrespective of the nature and gravity of
charge, the precedent of another case alone will
not be the basis for either grant or refusal of bail
though it may have a bearing on principle. But
ultimately the consideration will have to be on
case to case basis on the facts involved therein
and securing the presence of the accused to stand
trial."
25. Shri Otwani, learned counsel for the applicant is that there is no
evidence that the applicant is guilty of money laundering. The crux of the
allegation against the applicant is that he played a role of facilitating and
helping in running the illegal liquor syndicate and no substantive
evidence is there against the applicant. The only evidence/material
against the applicant is the statements recorded under Section 50 by the
ED. The investigation against the applicant in the said ECIR filed by the
respondent ED on 30.08.2024 is over and the custody of the applicant
is no longer required for the purpose of investigation. The applicant has
cooperated with the investigation.
26. Further contention of the learned counsel for the applicant is that
the applicant cannot be arrested twice for the same offence under the
PMLA and it can be affected only when an accused is considered to be
guilty of the offence under Section 3 of the PM:A and guilt can only be
established on admissible material. The applicant was already arrested
in the same case and had undergone the ED custody of 14 days and
the ED is relying upon the same material which was collected during the
course of investigation carried out in the first ECIR.
27. It is contended by learned counsel for the applicant that the
applicant has no role to pay in the allege liquor scam and he is not guilty
of the offence of money laundering. The applicant is an employee of
Bhilai Steel Plant and he is never a part of the alleged liquor scam. He is
neither involved in the collection of cash amount from any of the shop
nor collected any kind of hologram. The allegation that the applicant
arranged unaccounted bottles to the distilleries with the company and in
the name of his nephew and wife, he has no knowledge about the same.
He submits that on 3.10.2023, the truck containing 800 boxes of illegal
liquor was caught by the police which was supplied by the M/s.
Chhattisgarh Distillery to Bastar with duplicate holograms on bottles and
was handed over to the Excise Commissioner. These duplicate
holograms were already used by M/s. Welcome Distillery. This clearly
shows that the distillers are in habit of supplying unaccounted liquor in
connivance with low level excise officers for financial gain and have
concocted a complete false story to implicate other individuals and save
themselves.
28. It is submitted that as per ED, it is alleged that liquor scam is of
Rs. 2161 crores. As per EOW the liquor scam is of Rs. 1660 crores. As
per the STF, the liquor same is of Rs. 3200 crores. All this established
that the investigation is being conducted by different agencies and
calculating different numbers which is baseless. Further the alleged
chats being relied upon is of February 2020 and the allegations are
made for the period between April 2019-February 2023. it is contended
that the allegation of the ED that the collection of bribe by sale of Part-B
liquor is on the basis of assumptions and have tried to implicate the
officer by using chats and by recording false statements by threatening
the persons with arrest. There is no seizure of illegal liquor or holograms
and bottles and the Ape Court has opined that prima facie there are no
proceeds of crime in the instant case. It is submitted that according to
the statement of erstwhile Secretary of the Excise Department, no loss
has been caused to the State Exchequer and the liquor trade had taken
place as per law. There was no recovery of any unaccounted money,
incriminating material, illegal liquor bottles or counterfeit holograms from
the applicant or any other persons to implicate the applicant.
29. He contended that there is no admissible material in support of the
bogus allegations of the ED and the statements being relied upon by the
ED are coerced and completely inadmissible in law. However, it is
settled law that the same cannot be considered at the stage of bail in as
much as no opportunity to cross-examine is given to the applicant at
such stage. He has referred to the decision of Paras Mal Lodha Vs. ED
(2017) SCC OnLine Del 8676, wherein it has been observed as under:
"8. Admitted position is that the premises where
raid was conducted on 10.12.2016 i.e. R-89,
Greater Kailash part-I, New Delhi, did not
belong to the petitioner. It is also admitted that
at the time of recovery of `2.62 crores in the
denomination of `2000 currency notes, the
petitioner was not present in the said premises.
On being asked whether the currency Rs. 2.62
crores recovered from Rohit Tandon's premises
belonged to the petitioner, learned Senior
Counsel, on instructions, emphatically denied if
the said currency belonged to the petitioner.
Learned Standing Counsel for the respondent
fairly admitted that no other recovery of any
cash was effected at petitioner's instance either
at his residence or any other place. When
specifically enquired as to how the money
recovered from Rohit Tandon's premises was
connected with the petitioner, the learned
counsel informed that statements of co-accused
Rohit Tandon and his employees have been
recorded and they have disclosed in their
statements that the currency belonged to the
petitioner. These statements are to be tested
during trial. Status report reveals that Vijay
Kumar @ Kant Mishra has claimed ownership of
the new currency recovered from the spot
before Income Tax Department. No credible
evidence is on record to infer as to whom the
money belonged and how the petitioner was
beneficiary."
30. In yet another decision Chandra Prakash Khandelwal Vs. ED
(2023) SCC OnLine Del 1094, it has been held as under:
34. Considering the submission of the petitioner,
viz. the petitioner's claim he did not have
knowledge if the funds of M/s. PACL were tainted in
any manner on account of an order dated
28.11.2003 of Rajasthan High Court in PACL India
Ltd. vs. Union of India as also an order dated
26.02.2013 in SEBI vs. PACL India Ltd. in CA
6753-54/2004 wherein, the Hon'ble Supreme Court
refused to classify M/s.PACL as CIS but had only
directed the SEBI on 22.08.2014 to look into its
affairs and that there was no embargo for 18 years
upon M/s.PACL on its operation. Admittedly the
petitioner was a downstream investor of funds
hence his submission he did not knowingly became
a party to money laundering cannot be brushed
aside lightly. Even otherwise he allegedly was a
nominee non-executive director since 11.09.2012 in
M/s.DDPL and M/s.Unicorn and prior to 11.09.2012
had nothing to do with these companies; further
substantial amount received in the companies of
petitioner was returned in the manner alleged
above and even Gurmeet Singh's statement would
show the petitioner represented the 25 companies
were not associated with M/s.PACL. What weigh
the statements under Section 50 of PMLA would
carry at the end of trial cannot be tested at the
stage of bail, more importantly when the
intermediary companies were never made an
accused in the present ECIR. The ultimate effect of
their non-inclusion would be seen at the conclusion
of trial. Further considering the order dated
03.09.2020 wherein all remaining co-accused in
this ECIR were admitted to bail, this Court has
every reason to say the petitioner has passed the
test of broad probabilities. Admittedly twin
conditions of Section 45 (supra) does not put an
absolute restraint on grant of bail or require a
positive finding qua guilt."
31. He contended that there is absolutely no material to corroborate
the false statements of these individuals who have been arraigned as
co-accused persons in the instant case. It is well settled law that the
statement of co-accused person is extremely weak piece of evidence
and cannot be treated as substantive evidence as against the other co-
accused persons. Therefore all the statements under Section 50 of the
PMLA sought to be relied upon by the ED to substantiate its allegations
against the applicant are inadmissible and does not form the basis for
denial of bail. He has relied upon the judgment 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 against
the co-accused sufficient, if,. believed, to support
his conviction, then the kind of confession
described in s. 30 may be thrown into the scale as
an additional reason for believing that evidence."
In Bhuboni Sahu v. King(1) the Privy Council has
expressed the same view. Sir. John Beaumont
who spoke for the Board observed that a
confession of a co-accused is obviously evidence
of a very weak type. It does not indeed come
within the definition of "evidence" contained in s. 3
of the Evidence Act. It is not required to be given
on oath, nor in the presence of the accused, and it
cannot be tested by cross-examination. It is a
much weaker type of evidence than the evidence
of an approver, which is not subject to any of those
infirmities. Section 30, however, provides that the
Court may take the confession into consideration
and thereby, no doubt, makes it evidence on which
the court may act; but the section does not say
that the confession is to amount to proof. Clearly
there must be other evidence. The confession is
only one element in the consideration of all the
facts proved in the case, it can be put into the
scale and weighed with the other evidence." It
would be noticed that as a result of the provisions
contained in s. 30, the confession has no doubt to
be regarded as amounting to evidence in a
general way, because whatever is considered by
the court is evidence; circumstances which are
considered by the court as well as probabilities do
amount to evidence in that generic sense. Thus,
though confession may be regarded as evidence
in that generic sense because of the provisions of
s. 30, the fact remains that it is not evidence as
defined by s. 3 of the Act. The result, therefore, is
that in dealing with a case against an accused
person, the court cannot start with the confession
of a co-accused person; it must (1) (1911) I.L.R.
38 Cal. 559 at p. 588.
(2) (1913) I.L.R. 54 Mad. 75 at p. 77.
(3) (1949) 76 I.A. 147 at p. 155.
begin with other evidence adduced by the
prosecution and after it has formed its opinion with
regard to the quality and effect of the said
evidence, then it is permissible to turn to the
confession in order to receive assurance to the
conclusion of guilt which the judicial mind is about
to reach on the said other evidence. That, briefly
stated, is the effect of the provisions contained in
s. 30. The same view has been expressed by this
Court in Kashmira Singh v. State of Madhya
Pradesh(1) where the decision 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 the
rest of the evidence could be treated as
corroborating the said confessions. We are,
therefore, satisfied that the High Court was not
right in confirming the conviction of the two
appellants under S. 396 ,of the Indian Penal
Code."
32. In the matter of Sanjay Jain Vs. ED. 2024 SCC OnLine SC 656,
it has been held that :
"62. Thus, the confessional statement of a co-
accused under Section 50 of the PMLA is not a
substantive piece of evidence and can be used only
for the purpose of corroboration in support of other
evidence to lend assurance to the Court in arriving at
a conclusion of guilt."
33. He contended that the none of them had admitted to the fictitious
liquor scam in their statement under Section 131 (1A) It Act before the IT
Department which is as much a judicial proceeding as the statement
recorded under Section 50 of the PMLA. Nothing has been mentioned
about the payment of commission or Part A, B or C liquor before the IT
department by any individual as alleged by the respondent. The distillers
who have given false statements before the respondent had denied
making any payment of bribe or of the existence of the imaginary liquor
syndicate.
34. 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 right can be taken away by
procedure established by law which must be just, fair and reasonable.
He has referred to Babubhai Vs. State of Gujarat and Others (2010)
12 SCC 254 and Gangadhar Vs. State of Madhya Pradesh (2020) 9
SCC 202.
35. It is settled law that investigating agencies must be insulated from
extraneous influence even of the controlling executive" while conducting
their investigation. He had referred to the decision of Vineet Narain Vs.
Union of India (1998) 1 SC 226. It has been observed by the Apex
Court that "being a premier investigating agency, charged with the
onerous responsibility of curbing the debilitating economic offence of
money laundering in our country, every action of the ED in the course of
such exercise is expected to be transparent,above board an conforming
to pristine standards of fair paly in action. ED, mantled with far reaching
powers under the stringent Act of 2002, is not expected to be vindictive
in its conduct and must be seen to be acting with utmost probity and with
the highest degree of dispassion and fairness."
36. Learned counsel for the applicant submits that the manner in
which the investigation has been carried out by the respondent/Agency
is malafide and against the basic notions of fair investigation. It has
proceeded in a selective and pick and choose manner in its investigation
which clearly shows the targeted nature of the investigation conducted
by it. He further contended that none of the district Excise Officers have
been made accused in the instant case. Various other stakeholders are
being protected by the different agencies with the aim and hope of
extracting false statements. He submits that the allegation of multi crore
syndicate that has caused huge loss to the State exchequer has been
made by the ED but despite change in government, neither any change
has been brought in the existing liquor policy nor any license of any
hologram manufacturer/distiller/cash collection agency have been
cancelled and no action has been taken under Section 8 of the PC Act
against these individuals by any investigating agency. He submits that
the liquor trade has been continuing as usual in the State of
Chhattisgarh despite the passage of nearly 10 months since the new
government came into power. This shows that either the new
government is also complicit and part of the alleged liquor syndicate or
the entire set of allegations made by the ED are fictitious and imaginary
and therefore the pick and choose manner of investigation entitles the
applicant to bail.
37. 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 applications, there
were no allegations that the appellant was trying to
influence the witnesses and that any material
witnesses (accused) have been approached not to
disclose information about the appellant and his
son. In the absence of any contemporaneous
materials, no weight could be attached to the
allegation that the appellant has been influencing
the witnesses by approaching the witnesses. The
conclusion of the learned Single Judge "...that it
cannot be ruled out that the petitioner will not
influence the witnesses directly or indirectly......" is
not substantiated by any materials and is only a
generalized apprehension and appears to be
speculative. Mere averments that the appellant
approached the witnesses and the assertion that
the appellant would further pressurize the
witnesses, without any material basis cannot be the
reason to deny regular bail to the appellant; more
so, when the appellant has been in custody for
nearly two months, co-operated with the
investigating agency and the charge sheet is also
filed.
32. The appellant is not a "flight risk" and in view of
the conditions imposed, there is no possibility of his
abscondence from the trial. Statement of the
prosecution that the appellant has influenced the
witnesses and there is likelihood of his further
influencing the witnesses cannot be the ground to
deny bail to the appellant particularly, when there is
no such whisper in the six remand applications filed
by the prosecution. The charge sheet has been
filed against the appellant and other co-accused on
18.10.2019. The appellant is in custody from
21.08.2019 for about two months. The co-accused
were already granted bail. The appellant is said to
be aged 74 years and is also said to be suffering
from age related health problems. Considering the
above factors and the facts and circumstances of
the case, we are of the view that the appellant is
entitled to be granted bail."
38. 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 has further referred to the judgment of
Bibhav Kumar Vs. State of NCT of Delhi in SLP (Crl.) No. 9817 of
2024, it has been held that :
"6. Learned Additional Solicitor General of India as
well as learned counsel for the complainant-victim
have vehemently argued that owing to the official
status, which the petitioner has been enjoying in the
past, and his political clout, he is likely to influence
the private vulnerable witnesses whose versions will
have material bearing on determining the nature
and manner of occurrence that took place on
13.05.2024. It is, thus, urged that the prayer for bail
may be deferred till such time the vulnerable
witnesses are examined by the Trial Court."
39. He submits that the ground of arrest and the reason to believe do
not meet the threshold of Section 19 PMLA and are grossly insufficient
and there can be no necessity of arrest in the in the instant case. It is
trite law that the provisions of Section 19 are mandatory and the
compliance of the said provisions is a solemn function of the arresting
authority which brooks no exception. He further submits that since all the
material is illegal and nullity in law and the prosecution complaint filed by
the respondent/ED in relation to ECIR 11 has been quashed, no reasons
to believe that the applicant is guilty of the offence under Sections 3 read
with 4 of the PMLA can be reached at the by respondent. He submits
that the entire basis on which the custody of the applicant was sought by
the ED in ECIR 04 and the allegations made in the application seeking
remand, grounds of arrest and the reasons to believe was the same as
that in the ECIR 11/prosecution complaint. He submits that the
respondent/ED is cognizant of the fact that if the applicant was made an
accused in the main prosecution complaint without his arrest, he could
not be taken into custody in terms of the law laid down by the Apex
Court in Tarsem lal Vs. Enforcement Directorate, 2024 SCC OnLine
SC 971, which clearly shows the wanton and malafide abuse of powers
by the ED.
40. Lastly, he submits that the applicant has been questioned on
various occasions by the ED in the second ECIR while he was in
custody of the ACB and it has been alleged that the applicant was
evasive during the course of such interrogation and therefore the same
cannot be a ground for arrest in terms of settled law. He has referred to
the matter of Pankaj Bansal Vs. Union of India and Others, 2023 Scc
OnLine SC1244. Mere arrest in a scheduled offence cannot be a ground
for arrest under Section 19 of the PMLA. The ingredients of the offences
under the alleged FIRs and PMLA are completely distinct and separate
and thus the ED cannot rely upon the same to substantiate its case. It
has been held in catena of decisions that refusal to make self
incriminating statements cannot be equated to give evasive replies and
does not amount to non-cooperation. He submits that the second ECIR
is based solely on the CG FIR. As per settled law, no case under the
PMLA can continue without an underlying scheduled offence. He
therefore prays that the applicant may be granted regular 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
41. Contention of Shri Pandey, learned counsel for the respondent/Ed
is that the CG State police registered FIR bearing No. 04/2024 dated
17.01.2024 in EOW/ACB, Raipur under Sections 420,467,471 and 120-
B IPC and 7 & 12 of the PC Act, 1988 against Anit Tuteja (Retired IAS)
the then Joint Secretary in CG State, Anwar Dhebar, Arunpati Tripathi
(ITS) the then Special Secretary, Government of Commerce and
Industry Department and MD, CG State Marketing Corporation Ltd.,
Vikas Agrawal @ Subbu, Sanjay Diwan and others for collecting
commissions and supplying unaccounted liquor to government liquor
shops in an approximate loss of Rs. 2161 crores to the Government. As
per the FIR,
(a) the manufacturer of country liquor in the State of Chhattisgarh
namely CG Distilleries Ltd., M/s. Bhatia Wine Merchant Private Ltd. and
Welcome Distilleries Pvt. Limited are licensed to supply country liquor in
the State.
(b) that accused Anwar Dhebar took advantage of his political influence
and family relations with another accused Anil Tuteja and in association
with one Arun Pati Tripathi, the Managing Director of CSMCL lead to
increase the rate of liquor production and supply and in return, gained
illegal commission amounting to lacs of rupees from the distillery
owners. This mechanism is called Part -A.
(c) Similarly a new system which run parallel to the existing system of
selling country liquor through government shops was created without
any records from distillery operators which involved constructing
duplicate holograms and selling them separately through government
liquor shops. The illegal sales of these duplicate holograms resulted in
earning worth crores of rupees. Various persons were implicated in this
scheme including distillery owners, bottle supplying agencies, duplicate
hologram supplier agencies, agencies involved in the collection of
money from these type of illicit sale which took place during the years
2019 to 2022.
(d) During the tenure of one Niranjan Das, Secretary who collected
bribes from foreign liquor manufacturers FL-10A license was
implemented which was granted to three favoured firms of Anwar
Dhebar. The license FL-10A was granted to Sanjay Mishra and Manish
Mishra of M/s.Nexgen Power Engitech Pvt. Ltd. Atul Kumar Singh and
Mukesh Manchanda of M/s. Om Sai Beverage pvt. Ltd., Ashish Sourabh
Kedia of M/s. Dishita Ventures Pvt. Ltd. These license holders were
granted tender for the supply of foreign liquor through a conspiracy. All
the three license holding firms procured liquor from foreign liquor
manufacturing companies and made it available to the government
making a profit of 10%. Out of this profit, 60% was given to the
syndicate and the remaining 40% was received by the license holders.
(e) the liquor syndicate of Anil Tuteja, Arun Pati Tripathi and Anwar
Dhebar was working under the aegis of retired Indian Administrative
officer Vivek Dhand. He was also a beneficiary of the scam.
(f) The syndicate received commission from the distillery owners by
increasing parallel manufacturing and supplying duplicate liquor through
the FL-10A license and between February 2019 to June 2022,
approximately Rs. 2161 crores has been made in the illegal earnings.
42. The excise policy in the State of Chhattisgarh was amended in the
year 2017 The excise policy in the State of Chhattisgarh was amended
in the year 2017 and CSMCL in February, 2017, was thus created with
the responsibility to exclusively retail liquor in the State of Chhattisgarh
through its stores. The CSMCL was established with the vision to
provide genuine liquor, to stop sale of illegal Liquor, to provide liquor on
MRP. It established its own stores to retail the liquor/beer/wine/country
liquor after procuring liquor from manufacturers directly and IMFL from
another State PSU CSBCL.
43. It has also been revealed that with the advent of new policy in the
State, CSMCL was incorporated and it established its own stores to
retain the liquor/beer/wine/country liquor after procuring country liquor
directly from manufacturers and IMFL was procured from suppliers and
stored in warehouses of another Stte Public Sector Undertaking,
Chhattsigarh State Beverage Corporation Limited (CSBCL). The shops
were supposed to be run by outsourced staff and cash collected was to
be done by private vendors/Bank representatives.
44. Liquor was divided into two categories namely Country liquor and
Indian Manufactured Foreign Liquor (IMFL). Country Liquor was
produced in the State of Chhattisgarh through three distilleries :
I) M/s. Chhattisgarh Distilleries Ltd.
ii) M/s. Bhatia Wines and Merchants Pvt. Ltd.
iii) M/s. Welcome Distilleries Pvt. Ltd.
The CSMCL became the tool in the hands of the syndicate which
was used by it to enforce a parallel excise department. The syndicate
comprises of senior bureaucrats of State, politicians and officials of
excise department. In February 2019, Arun Pati Tripathi (ITS Offier) was
chosen by the syndicate to lead the CSMCL and later on he was made
the Managing Director of the organization at the behest of accused
Anwar Dhebar.
45. It is submitted that the as part of the conspiracy, Arun Pati Tripathi
was assigned with the task to maximize the bribe commission collected
on liquor procured by M/s.CSMCL and to make necessary arrangement
for sale of non-duty paid liquor in the CSMCL run shops. Arun Pati
Tripathi was supported by Anwar Dhebar and Senior IAS Officer in this
operation. In furtherance of his plans, Anwar Dhebar gave the task of
cash collecting to Vikas Agrawal @ Subbu and the logistics were set to
be the responsibility of the present applicant - Arvind Singh.
46. 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.
47. He further contended that during course of investigation, digital
evidence has been gathered from multiple sources primarily being the
Income Tax Authorities. It is submitted that the IT authorities had first
conducted a search in the matter in the year February 2020 and
collected multiple mobile devices and digital records. These records
have been shared with the Directorate and have been discussed in
detail in the main prosecution complaint. However, in order to bring out
the role played by the accused, some of the important facts which shows
the direct role fo the accused in the predicate offence and earning out of
the same.
48. Shri Pandey, counsel for the respondent has contended that from
the investigation conducted by the police during the predicate offence,
the applicant was part of the liquor syndicate. It has also been revealed
that the applicant was an integral part of the syndicate running the illegal
liquor business. He contended that the income tax authorities laid hand
on the mobile phone of co-accused Anwar Dhebar, who is the main
accused in the case and during analysis, it was gathered that he was in
touch with the present applicant. Some of the incriminating chats are
taken into record which shows the role of the applicant and when
confronted he ha acknowledged that the chats belong to him and the co-
accused Anwar Dhebar. From the chats, it is seen that the details of
produce including Part-B of the three country liquor manufacturers in
Chhattisgarh. He submits that the applicant along with one Vikas
Agrawal had earned Rs. 40 crores from Part-B liquor sale. He was the
key player in the syndicate and convenor of meeting of the distillers and
Anwar Dhebar about introduction of Part- A commission. The applicant
was supported by his nephew Amit Singh in this whole operation and
their main role included logistics related to sale of Part-B liquor. The
applicant and his nephew were also responsible for the transportation of
Part-B liquor supply of duplicate hologram, supply of empty bottles for
Part-B liquor. It is further contended by the counsel for the respondent
that the applicant in association with his nephew had also considerable
amount of proceeds of crime which is relatable aspects including
transportation of Part-B liquor and supply of un invoiced empty bottles
from Part-B sale. He further contended that the applicant and his
nephew used to control the logistics of liquor business by way of his
immediate relatives. He further contended that the applicant was also
involved in collection of Part-B sale proceeds. He submits that the
applicant along with his nephew set up two fronts ie. the entities M/s.
ADIP Empire and M/s. ADIP Agrotech Pvt. Ltd. for laundering and
earning proceeds of crime.
49. He submits that the multiple instances of use of cash on the part
of the applicant has been noticed, whether it be the use of cash for
purchase of land or availing bank entries. The entities were used by the
applicant to obtain invoices over and above the market value and some
times even bogus bills were used. He submits that it is clear from the old
farm owner who claimed much less earnings in their past ownership of
the firm. He submits that the applicant had also helped in commission of
the offence of money laundering by arranging bank entries and loans in
the bank account of M/s. Top Security and Facility Management against
cash. He had played a key role in getting the bank entry worth 60 crore
to Anwar Dhebar against cash.
50. Next contention of the counsel for the respondent is that the
applicant was in possession of the Proceeds of crime and an amount of
about Rs. 20 crores has been acquired by him out of the sale proceeds
of Part-B liquor which has been utilized by him in acquiring properties in
their name and in the name of their family member. The ash payments
over and above the consideration amount was made to purchase these
properties. Vide PAO No. 04/2024 dated 02.05.2024, the properties
worth Rs. 13 crores was purchased by the applicant in the name of his
wife and her companies/firms which have been attached. It is contended
that the accused/applicant had layered his POC with the business
income of his entities, M/s. ADIP Empire and M/s. ADIP Agrotech Pvt.
Ltd. and utilized in the purchase of immovable properties. He submits
that the investigation had also revealed that M/s. ADIP Agrotech Pvt. Ltd.
was also incorporated in the name of the family members of the
applicant and was utilized to purchase the assets by using the services
of his associates namely Nagendra Singh, who provided bank entry
against cash and which was ultimately utilized in purchase of assets
That M/s. ADIP Agrotech Pvt. Ltd. received around Rs. 2.39 crores from
Nagendra Singh and his family member and these funds were ultimately
utilized in purchase of assets in the name of company.
51. Shri Pandey contended that the applicant had adopted the
concept of over invoicing the services and obtained direct commission
fro the distillers. He had set up firms like M/s. Jagdamba Enterprises
and collected commission from distillers in the name of transportation of
liquor. The payment so collected was utilized by the family of the
applicant and the commission received in the bank accounts of M/s.
Jagdamba Enterprises was also transferred to the members of the
syndicate and for purchase of properties.
52. It is contended that during investigation, it has been revealed that
the applicant leveraged his influence to enter the business of supplying
bottles to the liquor syndicate and to facilitate this, he established a firm
named M/s. ADIP empire under the name of his wife. This firm was
involved in supplying bottles to M/s. Welcome Distilleries Ltd. The firm
was also involved in the transportation however later switched its profile
to trading of bottles. The investigation has thus revealed that the actual
supply of bottles was carried out by M/s. Anurag Traders while M/s. ADIP
Empire merely raised invoices for the transactions.
53. He submits that the investigation has also revealed that the bills
raised before the distillers were highly over invoiced to the tune of 20%
to accommodate the Part-B liquor. As a result, M/s. Adip Empire played
a role in committing the criminal activity related to the scheduled offence
by serving as the intermediary for over invoicing which allowed for extra
supply of bottles and additionally profited from the margin included in the
invoices it raised. This margin related to the scheduled offence as
proceeds of crime under the explanation provided in Section 2(1)(u) of
the PMLA, 2002. Thus, the profit made by M/s. ADIP empire was merely
acting as an intermediary by issuing invoices for bottles that were
actually supplied by M/s. Anurag Traders to M/s. Welcome Distilleries
Ltd. and out of Rs. 13.34 crores received in the bank account
maintaining with the HDFC Bank amount totaling to Rs. 6,04 crores was
transferred by M/s. ADIP Empire to its another bank account maintained
with Canara Bank, Risali, Bhilai.
54. Shri Pandey next contended that the investigation conducted by
the police during the predicate offence has revealed that the applicant
was part of the liquor syndicate. It was also revealed that his whatsapp
chat with accused Anwar Dhebar reveals that he was have strong
association with him. The applicant along with Vikas Agrawal had earned
Rs. 40 crores approximately from Part-B liquor sale for providing
logistics which is evidence from the fact that Sumit Malloo adjusted his
old dues with Vikas Agrawal by selling his property to the applicant. This
property was registered in the name of the wife of the applicant.
55. He contended that the applicant was the key player in the
syndicate. He was also the convenor of meeting of distillers and Anwar
Dehbar in the introduction of Part-A commission. He submits that the
applicant was well supported by his nephew in the logistic supplying
operation. The applicant and his nephew had earned considerable
amount of proceeds of crime related to predicate offence as well. He
submits that during investigation it has also been revealed that the
relatives of the applicant were involved in collection of Part-B sale
proceeds. The role of the applicant as a key player can also be
deciphered from the fact that his nephew Abhishek Singh was also one
of the directors in FL-10A licensee company.
56. It is contended that the applicant had also set up companies to
earn commission and transportation related to Part-B. The fund trial
investigation has also revealed funds from M/s. Jagdamba Enterprises
for purchase of assets related to the wife of the applicant. The applicant
has also helped in commission of the offence of money laundering by
arranging bank entries and loans in the bank account of M/s. Top
Security and Facility Management against cash. The applicant has also
played a key role in getting bank entry worth Rs. 60 crores to accused
Anwar Dhebar. He has also arranged bank entry of Rs. 2 crores against
cash in the bank account of his wife for investing in the share market. In
this manner, the proceeds of crime has been used by the applicant and
profit made by the wife of the applicant has been freezed.
57. the reply to the contention of the applicant that the applicant has
already been arrested by the same agency for the same offence on
same facts and therefore the second arrest of the applicant is illegal in
terms of law, to which it has been contended by Shri Pandey, learned
counsel for the respondent that he was arrested in the first ECIR
RPZO11/2022 on 14.06.2023 and got bail on 02.04.2024 though the
Apex Court had advised to grant only interim bail. Relevant part of the
order of the Supreme Court in WP No. 153/2023 is reproduced below:
" A reading of the aforesaid order, prima facie, gives rise
to a scenario that the High Court ought to have
continued the interim bail order to await the order to be
passed by this Court. The High Court's order rejecting
the petition for bail and vacating the interim bail has
resulted in the issuance of the NBW. Reply may be filed
by the Enforcement Directorate within three weeks.
Rejoinder, if any, be filed within two weeks thereafter.
List it after six weeks. In the meantime, the petitioner (s)
would continue on interim bail and the order issuing
NBW is stayed."
58. In the IA filed in WP No. 153/2023, the relief for quashing of
ECIR/RPZO/11/2022 was prayed for by the other co-accused Anil Tuteja
however, the said relief was not granted to him. In some other
connected petitions also the prayer for quashing the ECIR even though
it was made in the petition as well as vehemently pressed by the
petitioner before this Court, no such order was accepted by this Court.
The investigation had already taken place under the ECIR which can be
used in recording a subsequent ECIR and therefore there was no relief
granted with regard to quashing of the ECIR.
"8. We may note that the petitioners in Writ Petition
(Crl.) No.153/2023 and the petitioner in Writ
Petition (Crl.) No.217/2023 have not been shown
as accused in the complaint. Only the second
petitioner in Writ Petition (Crl.) No.208/2023 and
the petitioner in Writ Petition No.216/2023 have
been shown as accused in the complaint. In the
case of those petitioners who are not shown as
accused in the complaint, it is unnecessary to
entertain the Writ Petitions since the complaint itself is
being quashed.
9. Hence, we pass the following order:
(i) Writ Petition (Crl.) Nos.153/2023 and
217/2023 are disposed of;
(ii) The complaint based on
ECIR/RPZO/11/2022, as far as the second
petitioner (Anwar Dhebar) in Writ Petition
(Crl.) No.208/2023 is concerned, is hereby
quashed. The Writ Petition is, accordingly,
partly allowed;
(iii) The complaint based on
ECIR/RPZO/11/2022, as far as the petitioner
(Arun Pati Tripathi) in Writ Petition (Crl.)
No.216/2023 is concerned, is hereby
quashed.
The Writ Petition is, accordingly, allowed;
(iv) There will be no order as to costs; and
(v) Pending applications, including those seeking
impleadment, are disposed of accordingly.
10. At this stage, the learned ASG stated that,
based on another First Information Report, which,
according to him, involves a scheduled offence,
criminal proceedings under the PMLA are likely to
be initiated against the petitioners. It is not
necessary for us to go into the issue of the legality
and validity of the proceedings that are likely to be
initiated at this stage. Therefore, all the contentions
in that regard are left open to be decided in
appropriate proceedings.
59. It is submitted that the ECIR/11/2022 recorded on 18.11.2022 on
the basis of Income Tax Complaint filed before the Tiss Hazari Court,
Delhi while ECIR/04/2024 was recorded on the basis of FIR No. 04/2024
dated 17.01.2024 registered by EOW/ACB, Raipur, Chhattisgarh Police
under Sections 420,46,7,468,471 and 120-B IPC and 7 & 12 of the PC
Act, Sections 120-B, 420,467 and 471 of IPC and 7 & 12 of the PC Act
which are the schedule offences included in para 1 & 8 of the schedule
to PMLA 2002 as defined under Section 2(1)(y) of the Act. It is further
submitted the present investigation is based on the new ECIR bearing
No. ECIR/RPZO/04/2024 which is recorded on 11.04.2024 on the basis
of FIR registered by the CG State Police at EOW/ACB, Raipur. The
applicant was arrested by the ED on 01.07.2024 and the Special Court
PMLA, Raipur vide orders dated 02.07.2024 and 06.07.2024 had
granted ED custody of the accused till 11.07.2024 and subsequently has
been remanded to judicial custody. Further It is submitted that the
present arrest was made only after recording of reasons to believe in
writing. The arrest of the applicant was performed completely in
accordance with the provisions of sub section 1, 2 and 3 of Section 19 of
the PMLA, 2002. All the safeguards as provided under the law have
been duly complied with.
60. The next submission of the applicant that the investigation
agencies have been acting in Tandem with each other to elongate the
pre-trial incarceration of the applicant, to this it has been contended by
the counsel for the respondent that the arrest of the applicant is
completely based on his role in PMLA case and in accordance with the
provisions of Sub-Section 1, 2 and 3of Section 19 of PMLA 2002.
61. It is submitted that the ED has filed a supplementary prosecution
complaint on 30.08.2024 in respect of applicant and other accused.
The special Court has taken cognizance of the same on 5,.10.2024
therefore it is submitted that any reference to old ECIR may not be
considered while deciding bail in the instant case. Further if the applicant
was apprehended by other investigating agencies and remained in their
custody/judicial remand that cannot be attributed to the ED.
62. Next contention of the applicant that the applicant has suffering
long period of pre-trial custody and the trial has not yet commenced and
is not likely to conclude, to this it has been submitted by learned counsel
for the respondent that the Special Court (PMLA) has already taken
cognizance of the PC filed by the department on 5.10.2024 and issued
summons to the applicant to appear in the court on 23.11.2024 which
shows that the trial is going to commence very soon. Further the trial
proceedings will take time cannot be a ground to grant bail. In this
regard reliance has been placed in the decision of the Apex Court in the
matter of Gurwinder Singh Vs. State of Punjab & Another in
SPECIAL LEAVE PETITION (CRIMINAL) No.10047 of 2023, it has
been held as under:
"32. The Appellant's counsel has relied upon the
case of KA Najeeb (supra) to back its contention
that the appellant has been in jail for last five
years which is contrary to law laid down in the
said case. While this argument may appear
compelling at first glance, it lacks depth and
substance. In KA Najeeb's case this court was
confronted with a circumstance wherein except
the respondent-accused, other co-accused had
already undergone trial and were sentenced to
imprisonment of not exceeding eight years
therefore this court's decision to consider bail
was grounded in the anticipation of the
impending sentence that the respondent-
accused might face upon conviction and since
the respondent-accused had already served
portion of the maximum imprisonment i.e., more
than five years, this court took it as a factor
influencing its assessment to grant bail. Further,
in KA Najeeb's case the trial of the respondent-
accused was severed from the other co-
accused owing to his absconding and he was
traced back in 2015 and was being separately
tried thereafter and the NIA had filed a long list
of witnesses that were left to be examined with
reference to the said accused therefore this
court was of the view of unlikelihood of
completion of trial in near future. However, in the
present case the trial is already under way and
22 witnesses including the protected witnesses
have been examined. As already discussed, the
material available on record indicates the
involvement of the appellant in furtherance of
terrorist activities backed by members of
banned terrorist organization involving
exchange of large quantum of money through
different channels which needs to be deciphered
and therefore in such a scenario if the appellant
is released on bail there is every likelihood that
he will influence the key witnesses of the case
which might hamper the process of justice.
Therefore, mere delay in trial pertaining to grave
offences as one involved in the instant case
cannot be used as a ground to grant bail.
Hence, the aforesaid argument on the behalf the
appellant cannot be accepted."
63. It is submitted that the Special Court after going through the
prosecution complaint dated 30.08.2024 has stated that the offence
prima facie exists and the accused in involved in money laundering
activity on the basis of facts and appreciated the gravity and nature of
offence committed by the applicant as well as evidences gathered
against him in the investigation. The Apex Court in the case of Gautam
Kundu Vs. Directorate of Enforcement,(2015) 16 SC 1, The relevant
para from the above mentioned judgment is produced as under :
"28. Before dealing with the application for bail on
merit, it is to be considered whether the
provisions of Section 45 of the PMLA are binding
on the High Court while considering the
application for bail under Section 439 of the Code
of Criminal Procedure. There is no doubt that
PMLA deals with the offence of money laundering
and the Parliament has enacted this law as per
commitment of the country to the United Nations
General Assembly. PMLA is a special statute
enacted by the Parliament for dealing with money
laundering. Section 5 of the Code of Criminal
Procedure, 1973 clearly lays down that the
provisions of the Code of Criminal Procedure will
not affect any special statute or any local law. In
other words, the provisions of any special statute
will prevail over the general provisions of the
Code of Criminal Procedure in case of any
conflict.
29. Section 45 of the PMLA starts with a non
obstante clause which indicates that the
provisions laid down in Section 45 of the PMLA
will have overriding effect on the general
provisions of the Code of Criminal Procedure in
case of conflict between them. Section 45 of the
PMLA imposes following two conditions for grant
of bail to any person accused of an offence
punishable for a term of imprisonment of more
than three years under Part-A of the Schedule of
the PMLA: (i) That the prosecutor must be given
an opportunity to oppose the application for bail;
and (ii) That the Court must be satisfied that there
are reasonable grounds for believing that the
accused person is not guilty of such offence and
that he is not likely to commit any offence while
on bail.
30. The conditions specified under Section 45 of
the PMLA are mandatory and needs to be
complied with which is further strengthened by
the provisions of Section 65 and also Section 71
of the PMLA. Section 65 requires that the
provisions of Cr.P.C. shall apply in so far as they
are not inconsistent with the provisions of this Act
and Section 71 provides that the provisions of the
PMLA shall have overriding effect notwithstanding
anything inconsistent therewith contained in any
other law for the time being in force. PMLA has an
overriding effect and the provisions of Cr.P.C.
would apply only if they are not inconsistent with
the provisions of this Act. Therefore, the
conditions enumerated in Section 45 of PMLA will
have to be complied with even in respect of an
application for bail made under Section 439 of
Cr.P.C. That coupled with the provisions of
Section 24 provides that unless the contrary is
proved, the Authority or the Court shall presume
that proceeds of crime are involved in money
laundering and the burden to prove that the
proceeds of crime are not involved, lies on the
appellant."
64. It is relevant to submit that the application has to be looked into
from the prism of the twin conditions laid down in the statute itself under
Section 45 of the PMLA, 2002. These twin conditions are in addition to
what limitations has already been described for grant of bail in Cr.PC,
1973. That even stands substantiated by the ruling of Hon'ble Ape Court
in the matter of Vijay Madanlal Choudhary Vs. Union of India SLP
(Crl.) No. 4634 of 2014, which is reproduced as under:
133. This Court has been restating this position in
several decisions, including Gautam Kundu639 and
Amit Kumar640. Thus, while considering the
application for bail under Section 45 of the 2002 Act,
the Court should keep in mind the above mentioned
principles governing the grant of bail. The limitations
on granting bail as 638 Supra at Footnote No.255
639 Supra at Footnote No.207 640 Supra at
Footnote No.258 prescribed under Section 45 of the
2002 Act are in addition to the limitations under the
1973 Code."
65. Further 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 gravity of alleged offence and /or nature of allegations levelled-
Economic offences constitute a class apart and need to be visited with a
different approach, given their severity and magnitude."
66. It is contended that the investigation against the applicant is
complete and the prosecution complaint in the ECIR 11 has already
stood filed thus there is no necessity for the continued incarceration of
the applicant in reply to this contention of the applicant, Shri Pandey
submits that the ECIR/11/2022 was recorded on 18.11.2022 on the basis
of Income Tax complaint filed before the Tiss Hazari Court Delhi while
ECIR/04/2024 was recorded on the basis of FIR No. 04/2024 dated
17.01.2024 registered by EOW/ACB Raipur, Chhattisgarh Police under
Sections 420,46,7,468,471 and 120-B IPC and 7 & 12 of the PC Act,
Sections 120-B, 420,467 and 471 of IPC and 7 & 12 of the PC Act which
are the schedule offences included in para 1 & 8 of the schedule to
PMLA 2002 as defined under Section 2(1)(y) of the Act. It is submitted
that the present investigation is based on the new ECIR bearing No.
ECIR/RPZO/04/2024 which is recorded on 11.04.20-24 on the basis of
the FIR registered by the Chhattisgarh State Police at EOW/ACB,
Raipur. It is submitted that the economic offences fall in the category of
the offences which travel far ahead of personal or private wrongs having
the potential to usher in economic crisis. In the matter of Alok Agrawal
Vs. Directorate of Enforcement bearing M.Cr.C. No. 6533 of 2019,
decided on 03.01.2021, it has been discussed about the seriousness of
the offences of money laundering and their impact on the economy of
the country. In the said judgment it has been categorically stated that
allegations in the Enforcement Case Information Report/Prosecution
Complaint is a matter of final outcome of the trial, but the burden of proof
under Section 24 of the PMLA 2002 with regard to the said money is not
proceeds of crime is always on the accused person. Relevant para is
produced herein:
"6....It is true that at present there may or may not be
direct or indirect attempts to indulge the applicant in
any process of activity connected with the proceeds
of crime, there is no attempt on the part of the
applicant to disclose the source of the large sums of
money handled by him. There is no denying the fact
that allegations have been made that the said money
was the proceeds of crime and by depositing or
investing the same in his wife's account and in the
business of his wife and brother, the applicant has
attempted to project the same as untainted money.
The said allegations may be the subject matter of
final outcome of the trial, but having been made, the
burden of proof that the said money is not the
proceeds of crime and, therefore, shifted to the
applicant under Section 24 of the PML Act, 2002. For
the sake of reference, Sections 3 and 24 of the PML
Act are extracted herein below :-
"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 4[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."
"24. Burden of Proof. - In any proceeding relating to
proceeds of crime under this Act, (a) in the case of a
person charged with the offence of money-
laundering under Section 3, the Authority or Court
shall, unless the contrary is proved, presume that
such proceeds of crime are involved in money-
laundering; and (b) in the case of any other person
the Authority or Court, may presume that such
proceeds of crime are involved in money-
laundering."
....9. Taking into consideration the entire
circumstances of the case, judicial pronouncement of
Supreme Court in Rohit (supra) gravity of offence
and further considering the fact that the applicant is a
Government Servant (Incharge Executive Engineer,
Water Resources Department) and the manner in
which the public money is alleged to have been
laundered by the applicant, I am not inclined to
release him on bail...."
65. Shri Pandey, learned counsel for the respondent submits that
the applicant was arrested in the old ECIR/RPZO/11/2022 wherein
prosecution complaint has already been quashed by the Supreme
Court therefore that period cannot be counted as ED custody while
deciding the instant bail application. The applicant was arrested in a
separate case this time on 01.07.2024 in ECIR/RPZO/04/2024
which is based on different set of scheduled offence.
66. It is submitted that if the applicant is released on bail, he
may tamper the evidence and influence the witnesses which many
not only hamper the investigation but also result in further layering
and concealment of proceeds of crime therefore the bail application
filed by the applicant may be dismissed. It is submitted that the
applicant had played a very crucial role in the liquor scam. He along
with Vikas Agrawal had earned approximately Rs. 40 crores from
Part B liquor sale and the applicant was the key player in the
syndicate eho convenes the meeting of distillers and accused
Anwar Dhebar. The Special Court (PMLA), Raipur vide its order
dated 5.10.2024 has taken cognizance of the above said
prosecution complaint which shows that there is prima facie case of
money laundering against the applicant. The present applicant was
involved in the scam which involves money laundering of proceeds
of crime of more than Rs. 2,000 crores approximately. As such the
accused is involved in a grave and heinous financial crime and the
present application is liable to be rejected. It has been held by the
Orissa High Court in the matter of Mohd. Arif Vs. ED , BLAPL No.
2607 of 2020, describing the impact of the offence of money
laundering has called money laundering as an act of financial
terrorism not only posing a serious threat to the financial system of
the country but also to the integrity and sovereignty of a nation and
reiterated the view of the Supreme Court of denial of Bail in cases
of economic offences. The relevant observation of the Court is as
under:
22. The offence of Money Laundering is nothing but
an act of financial terrorism that poses a serious
threat not only to the financial system of the country
but also to the integrity and sovereignty of a nation.
The International Monetary Fund estimates that
laundered money generates about $590 billion to
$1.5 trillion per year, which constitutes approximately
two to five percent of the world's gross domestic
product. The Supreme Court of India has
consistently held that economic offences are sui
geneis in nature as they stifle the delicate economic
fabric of a society. These offences permeate to
human consciousness posing numerous questions
on the very integrity of the business world. The
offences, such as this, are committed with a
deliberate design with an eye on personal profit and
often shown to be given scant regard for a sordid
residuum left behind to be borne by the unfortunate
"starry eyed" petty investors. The perpetrators of
such deviant "schemes,"including the petitioner
herein, who promise utopia to their unsuspecting
investors seem to have entered in a proverbial
"Faustian bargain" and are grossly unmindful of
untold miseries of the faceless multitudes who are
left high and dry and consigned to the flames of
suffering."
67. The economic offences constitute a class apart and need to be
visited with different approach therefore in the mater of Y.S.Jagn
Mohan Reddy Vs. CBI(2013) 7 SCC 439, the Apex Court 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 offence having deep
rooted conspiracies and involving huge loss of public
funds needs 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."
68. In yet another decision of the Apex Court ie. State of Gujarat Vs.
Mohanlal Jitamalji Porwal & Others, (1987) 2 SCC 364, it has been
specifically held that :
"...5. The Community or the State is not a person-
non-grata whose cause may be treated with
disdain. The entire Community is aggrieved if the
economic offenders who ruin the economy of the
State are not brought to books. A murder may be
committed in the heat of moment upon passions
being aroused. An economic offence is committed
with cool calculation and deliberate design with an
eye on personal profit regardless of the
consequence to the Community.
69. Contention of Shri Pandey, learned counsel for the
respondent is that the applicant being an influential person close to
the then ruling dispensation in the State of Chhattisgarh he may
influence the witnesses and if released on bail there is a high
likelihood that the petitioner would seek to frustrate the proceedings
under the Act. The Apex Court in the matter of Neeru Yadav Vs.
State of U.P.; (2016) 15 SCC 422, Hon'ble the Apex Court has held
as under :-
"11. It is a well settled principle of law that while
dealing with an application for grant of bail, it is
the duty of the Court to take into consideration
certain factors and they basically are; (i) the
nature of accusation and the severity of
punishment in cases of conviction and the nature
of supporting evidence, (ii) reasonable
apprehension of tampering with the witnesses for
apprehension of threat to the complainant, and
(iii) Prima facie satisfaction of the court in support
of the charge.
[See Chaman Lal v. State of U.P.; (2004) 7 SCC
525]
70. In reply to the contention to the contention of the counsel for the
applicant that the departmental enquiry report conducted by the
Commercial Tax (Excise) Department observed no wrongdoing in the
liquor trade in the State of Chhattisgarh, it has been argued by the
learned counsel for the respondent that this vitiates the procedure of
law,. The department which is under the scrutiny, where senior officer
like Excise Secretary and excise Minister were being summoned for
their role in the scam, has conducted its own in house enquiry and
claimed that there was no wrongdoing in the Excise Department. The
findings of the investigation of the directorate, evidences collected and
facts presented were not paid heed to and everyone involved was given
a clean chit. It is a sham report and does not have any bearing on the
subject case.
71. The contention of the counsel for the applicant that the investigation
conducted by the Ed is completely malafide, to this, learned counsel for
the respondent submits that the investigation by the Directorate is being
carried out in an impartial manner and are free from any prejudice. Iti s a
settled position of aw particularly in criminal matters that if an action is
justified and based on material then malafide is of no consequence. In
the present case, the arrest of the applicant is based on material in
possession of the IO and not based on any extraneous grounds or mala
fides. With regard to pick and choose contention of the applicant it is
submitted that the investigation in liquor case is still going on and it is
not correct to say that none of the district Excise Officers have been
made accused. Regarding the previous excise police and old practice is
being continued, to this, it is submitted that the period of enquiry in the
case is from April 2019 to June 2022 prior to the formation of new
government.
72. Next contention of the learned counsel for the applicant is that the
applicant satisfied the triple test for grant of bail. To this, it has been
stated by learned counsel for the respondent that vide prosecution
complaint dated 30.08.2024, cognizance has been taken by the Special
Court dated 5.10.2024 and had demonstrated the complete modus
operandi adopted by the applicant for commission of the offence of
money laundering and investigation against the applicant is complete
but the investigation with respect to the identification of remaining
proceeds of crime and the persons involved therein is still going on.
However, the delay in trial is no ground for claiming bail. The applicant
has to satisfy the rigors provided in Section 45 of the PMLA prior to grant
of bail. It is likely that if granted bail, the applicant would further launder
or alienate the proceeds of crime which would frustrate the further
proceedings. It is reiterated that satisfaction of triple test is not sufficient
for persons arrested under PMLA,2002 and that the twin conditions
imposed by Section 45 of the PMLA, 2002 have to be satisfied.
73. Next contention is that the averments made by the counsel for the
applicant that the grounds of arrest and the reasons to believe do not
meet the threshold of Section 19 of the PMLA an are grossly insufficient
and there an be no necessity of arrest in the case is strongly denied by
the learned 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
74. Lastly, it is submitted by Shri Pandey, learned counsel for the
respondent that the arrest of the applicant was performed completely in
accordance with the provisions of Sub-Section 1,2 and 3 of Section 19
of the PMLA, 2002 and all the safeguards as provided under the law
have been complied with. Thus, in view of the above detailed reply made
on behalf of the respondent, the applicant in the present matter may not
be granted bail. Shri Pandey contended that the fund trial investigation
has been done and it has been established that the initial background of
the applicant was that of a low level employee with a salary of Rs.
30,000/- per month at the time of leaving the company in the year 2019-
20 and after joining the syndicate, he earned commission of more than
Rs. 20 crores. The ED has unearthed and attached 33 illegal properties
worth Rs. 13,00,59,236/- in different entities registered in the name of
his family members vide PAO dated 02.05.2024. Further it has been
contended that M/s. ADIP Empire was having ledger account in the
name of Deepak Duary (associated with Part-B collection) and funds
have also been transacted with the present applicant and his family
members ie. Amit Singh and Abhishek Singh.
75. Lastly, it has been contended that the applicant is actually involved
in all the activities connected with the offence of money laundering ie.
use or acquisition possession, concealment and projecting or claiming
as untainted property as defined under Section 3 of the PMLA, 2002 and
therefore the applicant is guilty of the offence of money laundering under
Section 3 of the PMLA, 2002 and punishable under Section 4 of the
PMLA.
CONSIDERATION OF THE APPLICATION FOR BAIL
76. Heard learned counsel for the parties at length and perused the
records as well as the documents annexed with utmost circumspection.
77. In the present case, the applicant was involved in the criminal acts
of the syndicate and is in possession of the proceeds of crime and that
he received commission from the liquor suppliers. The applicant was
the key player in the syndicate and convenor of meeting of the distillers
and Anwar Dhebar about introduction of Part- A commission. However,
no recovery of unaccounted money has been made in this regard. From
the details of the whatsapp chats annexed with the charge sheet prima
facie shows the involvement of the applicant in the present case has
been established as massive corruption had taken place in the Excise
Department by way of extorting amount of Rs. 2000 crores
approximately and causing huge loss to the State Exchequer which
otherwise would have yielded revenue for Central and State
government.
78. After careful analysis of the material available on record which
goes to show that there is prima facie involvement of the applicant in
the crime in question and the charge sheet has been filed. Since, the
allegations against the applicant are serious in nature and there was
material to infer his involvement in serious crimes. However,the Apex
Court has held that the power of ED to arrest must be based on
objective and fair consideration of material against a person. Under the
PMLA, ED officers can arrest a person if they have reasons to believe
based on the material in their possession that the individual is guilty. It
has been held by the Apex Court that PMLA allowed arrests on the
subjective opinion of ED officer, the court said an officer's "reasons to
believe" that a person was guilty an deserved arrest should not be
based on mere suspicion. "Suspicion requires a lower degree of
satisfaction and does not amount to belief. Belief is beyond speculation
or doubt.... Existence and validity of the 'reasons to believe' goes to the
root of the power to arrest. The subjective opinion of the arresting
officer must be founded and based upon fair and objective
consideration of the material, as available with them on the date of
arrest.
79. Before adverting to the facts of the case, it is expedient for this
Court to extract Section 45 of the PML Act, 2002, which reads as
under:-
"Section 45 of PMLA, 2002- 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 court is satisfied that there are
reasonable grounds for believing that he is not
guilty of such offence and that he is not likely to
commit any offence while on bail:
Provided that a person, who, is under the age of
sixteen years, or is a woman or is sick or infirm [or
is accused either on his own or along with other
co-accused of money- laundering a sum of less
than one crore rupees], may be released on bail, if
the Special Court so directs:
Provided further that the Special Court shall not
take cognizance of any offence punishable under
Section 4 except upon a complaint in writing made
by--
(i) the Director; or
(ii) any officer of the Central Government or a
State Government authorised in writing in this
behalf by the Central Government by a general or
special order made in this behalf by that
Government.
[(1-A) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974), or
any other provision of this Act, no police officer
shall investigate into an offence under this Act
unless specifically authorized, by the Central
Government by a general or special order, and,
subject 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."
80. Considering the judgment rendered by Hon'ble Division Bench of
Madras High Court in N.Umashankar Vs. The Assistant Director,
Directorate of Enforcement, reported in MANU/SCOR/25324/2022,
wherein Hon'ble Division Bench of Madras High Court has examined
Section 45 of the PMLA, 2002 and has held at paragraph 18 as under:-
"18. It is also brought to the notice of this Court
by the respondent in the counter affidavit that
the documents collected would prima facie
disclose that all the accused have committed
acts of money laundering under Section 3 of the
Prevention of Money Laundering Act and
punishable under Section 4 of the said Act and
the petitioners, during police custody also, did
not co-operate with them and despite the
complaint has been filed, further investigation is
also in progress. Even before the Hon'ble
Supreme Court in S.L.P. (Crl.) Nos. 7563-7565
of 2021, the respondent submitted that the
petitioners are not co-operating during the
investigation. Even before this court the learned
Special Pubic Prosecutor appearing for the
respondent submitted that the petitioners never
co-operated for the investigation and therefore,
the petitioners should not be enlarged on bail. It
is also brought to the notice of this Court by the
learned Special Pubic Prosecutor that even after
the registration of the criminal complaint against
the petitioners, they have indirectly started new
Companies by using other names. 19. In view of
the past conduct of the petitioners, this court
does not believe that the petitioner are not guilty
of the alleged offences and in such
circumstances, this court cannot give a finding
that the petitioners are not likely to commit
offence while on bail. It is also alleged that if the
petitioners are enlarged on bail, there is every
likelihood that the petitioners may flee the
jurisdiction of this Court to avoid the process of
law. In these circumstances, we are not inclined
to grant bail to the petitioners.
In the result, the Criminal Original Petitions are
dismissed. No costs"
81. Against the said judgment passed by Madras High Court, the
applicant preferred SLP No. 620/2022 before the Apex Court, which has
been dismissed on 25.02.2022 which reads as under:
"We are not inclined to interfere in these Special
Leave Petitions. The Special Leave Petitions are
dismissed accordingly. However, we direct the
prosecution/Investigating Agency to ensure that the
trial is concluded with utmost expedition. Pending
applications, if any, stand disposed of."
82. The Apex Court in the matter of Directorate of Enforcement 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 court is
satisfied that there are reasonable
grounds for believing that he is not
guilty of such offence and that he is not
likely to commit any offence while on
bail:
Provided that a person, who, is under the age of
sixteen years, or is a woman or is sick or infirm
[or is accused either on his own or along with
other co-accused of money- laundering a sum of
less than one crore rupees], may be released on
bail, if the Special Court so directs:
Provided further that the Special Court shall not
take cognizance of any offence punishable under
Section 4 except upon a complaint in writing
made by--
(i) the Director; or
(ii) any officer of the Central
Government or a State Government
authorised in writing in this behalf by
the Central Government by a general or
special order made in this behalf by
that Government.
[(1-A) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974), or
any other provision of this Act, no police officer
shall investigate into an offence under this Act
unless specifically authorised, by the Central
Government by a general or special order, and,
subject 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." By the impugned judgment(s)
and order(s) and while granting bail, the High
Court has not considered the rigour of Section 45
of the PML Act, 2002he Supreme Court on July
12 held that the power to arrest under the
Prevention of Money Laundering Act (PMLA)
cannot be exercised on the "whims and fancies"
of Directorate of Enforcement (ED) officers.
6.1 Even otherwise, the High Court has not at all
considered the nature of allegations and
seriousness of the offences alleged of money
laundering and the offences under the PML Act,
2002. Looking to the nature of allegations, it can
be said that the same can be said to be very
serious allegations of money laundering which
are required to be investigated thoroughly.
6.2 Now so far as the submissions on behalf of
the respective respondent No. 1 that respective
respondent No. 1 were not named in the FIR with
respect to the scheduled offence(s) and/or that all
the other accused are discharged/acquitted in so
far as the predicated offences are 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
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
chargesheet 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 distinct. Therefore, the High Court
has taken into consideration the irrelevant
consideration. The investigation by the
Enforcement
Directorate for the scheduled offences under the
PML Act, 2002 is till going on.
7. As observed hereinabove, the High Court has
neither considered the rigour of Section 45 of the
PML Act, 2002 nor has considered the
seriousness of the offences alleged against
accused for the scheduled offences under the
PML Act, 2002 and the High Court has not at all
considered the fact that the investigation by the
Enforcement Directorate for the scheduled
offences under the PML Act, 2002 is still going on
and therefore, the impugned orders passed by
the High Court enlarging respective respondent
No. 1 on bail are unsustainable and the matters
are required to be remitted back to the High Court
for afresh decision on the bail applications after
taking into consideration the observations made
hereinabove."
84. The Apex 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 Directorate of Enforcement (ED) officers.
The court wondered if the ED even had a consistent, uniform and "one-
rule-for-all" policy on when they should arrest people. It said the ED's
power to arrest must be based on objective and fair consideration of
material against the accused.
85. It is prima facie clear that on the one hand, it is claimed that the
matter is of a huge economic loss to the State Exchequer and the
offence is of highly serious nature and on the other hand, the distillers
who are allegedly supplying illegal liquor causing huge financial loss to
the State exchequer, have not been made accused despite the fact that
their names have been mentioned in the complaint made by the ED as
member of the syndicate. Prima facie it appears that the prosecution
has adopted an inconsistent stance being both hot and cold in its
approach and has acted in a pick and choose manner in investigation.
CONCLUSION
86. After going through the records and the rivals submissions on
behalf of the parties, it has been revealed that in the investigation
conducted by the police during the predicate office, the applicant was
part of the liquor syndicate and was involved in money laundering and
proceeds of crime along with other co-accused therefore, even if it is
presumed that no predicate offence has been levelled against him,
therefore, the applicant is entitled to get bail under PMLA, 2002, is not
acceptable and deserves to be rejected and also considering the
material placed on record, which prima facie shows involvement of the
applicant in the crime in question, therefore, considering entirety of the
matter, this Court is of the opinion that the applicant is unable to satisfy
twin conditions for grant of bail under Section 45 of the PMLA, 2002, as
such, it is not a fit case for grant of bail to the applicant for the reasons
mentioned hereinabove.
35. Accordingly, the prayer for bail made by the applicant under
Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 ('BNSS')
read with Section 45 of the PMLA, for the alleged offence punishable
under Sections 3 & 4 of the PMLA, 2002 is hereby rejected.
Sd/-
(Arvind Kumar Verma)
Judge
SUGUNA SUGUNA DUBEY
DUBEY Date: 2025.02.10
13:08:50 +0530
