For Applicant : Shri Arshdeep Khurana, Advocate through VC
assisted by Shri Sourabh Dangi and Shri Sajal
Kumar Gupta, Advocates
For Respondent/ED : Dr. Saurabh Kumar Pandey, Advocate
(HON'BLE SHRI JUSTICE ARVIND KUMAR VERMA)
CAV ORDER
read with Section 4 of the Prevention of Money Laundering Act, 2002.
2. Facts of the case in brief are that the applicant was absconding
till he was arrested on 06.05.2023 in ECIR/RPZO/11/2022. Search
premises and was found hiding at a hotel and he was arrested.
Chhatisgarh State police registered an FIR bearing No. 04/2024
7 & 12 of the Prevention of Corruption Act against Mr. Anil Tuteja
(retired IAS) then Joint Secretary in CG State, Anwar Dhebar, Mr.
Corporation Ltd. Mr. Vikas Agarwal @ Subbu, Mr. Sanjay Diwan and
government liquor shops resulting in an approximate loss of Rs. 2161
3. The manufacturers of country liquor in Chhattisgarh namely CG
Distilleries Ltd., M/s. Bhatia Wine Merchant Private ltd. And Welcome
Distilleries Pvt. Ltd. Are licensed to supply country liquor in the State. It
owners which is called Part -A.
4. Similarly, a new system which ran parallel to the existing system
liquor shops. The illegal sale of these duplicate holograms resulted in
money. These illicit sale took place during the years 2019-20,2020-21
and 2021-22 and is called Part-B.
5. Additionally, the collection of bribes from foreign liquor
three favoured firms of Anwar Dhebar. The license FL-10A was granted
to Mr. Sanjay Mishra and Manish Mishra of M/s. Nexgen power
Engitech Pvt. Ltd. , Mr. Atul Kumar Singh and Mr. Mukesh Manchanda
of M/s. Om Sai Beverage Pvt. Ltd. And Mr. Ashish Saurabh 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
profit of 10%. Out of this profit, 60% was given to the syndicate and the
remaining 40% was received by the license holders.
6. The FIR for the predicate offence as discussed above is
laundering investigation in file No. ECIR/RPZO/04/2024 on 11.04.2024
by the officials of Directorate of Enforcement, Raipur.
7. The Enforcement Directorate has analyzed the predicate offence
shared by the Assistant Director. During investigation, statements of
were recorded under Section 50 of the PMLA, 2002. Ont he basis of the
8. The excise policy in the State of Chhattisgarh was amended in
Chhattisgarh through its stores. The CSMCL was established with the
liquor on MRP. It established its own stores to retail the
directly and IMFL from another State PSU CSBCL.
9. It has also been revealed that with the advent of new policy in the
Chhattsigarh State Beverage Corporation Limited (CSBCL). The shops
be done by private vendors/Bank representatives.
10. Liquor was divided into two categories namely Country liquor
and Indian Manufactured Foreign Liquor (IMFL). Country Liquor was
was used by it to enforce a parallel excise department. The syndicate
excise department. In February 2019, Arun Pati Tripathi (ITS Offier)
11. It is submitted that the as part of the conspiracy, Arun Pati
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.
Dhebar and Senior IAS Officer in this operation. In furtherance of his
present applicant - Arvind Singh. Thus, the syndicate took its shape.
12. Contention of Shri Khurana, learned counsel for the applicant is
incriminating material, unaccounted ash or disproportionate assets. The
same allegations by different agencies. He submits that the said ECIR
11 and the Prosecution Complaint filed therein. The said ECIR was
13. Based upon the Prosecution Complaint filed by the Income Tax
Department bearing Ct. Case No. 1183/2022 under Sections
120-B/191/199/200/204 IPC the Ed registered an ECIR bearing No.
ECIR/RPZO/112022. The ED considered Section 120-B IPC standalone
14. It is submitted that the ED had filed the first Prosecution
an accused therein. Pertinently, the Prosecution Complaint was nothing
by the Apex Court vide order dated 08.04.2024. On 08.08.2024,
had opposed and he was remanded to ED custody. On 14.08.2024, the
applicant preferred petition bearing Cr.M.P. No. 2276/2024 which was
dismissed vide order dated 23.08.2024. On 20.08.2024, this Court had
FIR and the ECIR 04. On 30.08.2024, the ED filed supplementary
arraigned as accused. Therafter on 5.10.2024, the respondent/ED filed
arraigning the applicant as accused. The learned Special Judge
15. On 27.11.2024, the co-accused (Trilok Singh Dhillon) was
granted bail by the Apex Court in the Chhattisgarh FIR (SLP Crl.) No.
14697/2024 which shall become operative from 15.01.2025. Co-
No. 16219/2024 seeking bail in relation to the said ECIR. Thereafter on
this Court. On 7.12.2024, the applicant filed application under Section
Judge (PMLA), Raipur seeking regular bail which was dismissed.
Against which the applicant has come before this Court.
16. Contention of the learned counsel for the applicant is that the
applicant. He submits that even if the allegation is one of the grave
case. The consideration has to be made on a case to case basis on the
facts. The primary object is to secure t he presence of the accused to
stand trial. He has plaed his reliance in the matter of P.Chidambaram
Vs. ED (2020) 13 SCC 791.
days of judicial custody in relation to the alleged liquor scam. He
indefinite period. He has placed his reliance in the matter of Satender
Kumar Anitl Vs. CBI SLP 5191/2021; Krishnan Subramanian Vs.
State NCT of Delhi 2022 SCC Online Del 1384. He submits that there
material from the applicant or his family members.
18. It is submitted that as per the ED, investigation against 11
the investigating agency and the investigation is going on. Despite the
persons. Even as per allegations made in the complaint filed by the ED
role of other individuals have also been surfaced.
the scheduled offence. In the matter of Senthil Balaji Vs. Directorate
of Enforcement Crl. App. No. 4011/2024, it has been held as under:
19. The scheduled offence trial will be significantly delayed because:
20. There is no scope of the trial to commence and the proceedings
Cr.P.C. proceedings and no charges have been framed therein. He
Article 21 of the Constitution of India. He ought to have been released
from custody in relation to the Chhattisgarh FIR. He has placed his
reliance in the matter of Manish Sisodia Vs. ED, SLP Crl. No. 8781 of
54. In the present case, in the ED matter as
well as the CBI matter, 493 witnesses have
been named. The case involves thousands of
pages of documents and over a lakh pages of
digitized documents. It is thus clear that there is
not even the remotest possibility of the trial
being concluded in the near future. In our view,
keeping the appellant behind the bars for an
unlimited period of time in the hope of speedy
completion of trial would deprive his
fundamental right to liberty under Article 21 of
the Constitution. As observed time and again,
the prolonged incarceration before being
pronounced guilty of an offence should not be
permitted to become punishment without trial."
21. Similarly, in the matter of Bibhav Kumar Vs. State (NCT of
Delhi) 2024 SCC Online SC 2646, wherein the bail was granted inter
alia on the ground that he has been in custody for 100 days. It further
reads as under:
"4. It is not a matter of dispute that the
investigation is complete and the charge sheet
has been filed. Keeping that stage in mind, we
do not deem it necessary to hear learned Senior
Counsel for the petitioner or learned Additional
Solicitor General of India on the point as to
whether a prima facie case under Section 308
IPC is made out or not. That issue exclusively
falls within the domain of the Trial Court and the
parties shall be at liberty to raise their respective
contentions in this regard before the Trial Court
at an appropriate stage.
5. Adverting to the prayer made by the petitioner
for grant of bail, we find that there are more than
51 witnesses proposed by the prosecution to be
examined as can be seen from the charge
sheet, a copy whereof has been placed on
record. The conclusion of trial will, thus, take
some reasonable time. The petitioner is already
in custody for more than 100 days. In the event
of his release, the petitioner, at this stage, is not
likely to hamper or cause impediment in the
investigation which is already complete."
22. Further in the matter of Javed Gulam Nabi Shaikh Vs. State of
Maharastra, 2024 SC Online SC 1693, it has been observed as under:
7. Having heard the learned counsel appearing
for the parties and having gone through the
materials on record, we are inclined to exercise
our discretion in favour of the appellant herein
keeping in mind the following aspects:
(i) The appellant is in jail as an under-trial
prisoner past four years;
(ii) Till this date, the trial court has not been able
to even proceed to frame charge; and
(iii) As pointed out by the counsel appearing for
the State as well as NIA, the prosecution intends
to examine not less than eighty witnesses.
XXXX XXXX XXXX
9.Over a period of time, the trial courts and the
High Courts have forgotten a very well settled
principle of law that bail is not to be withheld as a
punishment.
10. In the aforesaid context, we may remind the
trial courts and the High Courts of what came to
be observed by this Court in Gudikanti
Narasimhulu & Ors. v. Public Prosecutor, High
Court reported in (1978) 1 SCC 240. We quote:
"What is often forgotten, and therefore
warrants reminder, is the object to keep
a person in judicial custody pending trial
or disposal of an appeal. Lord Russel,
C.J., said [R V. Rose, (1898) 18 Cox] :
"I observe that in this case bail was refused for
the prisoner. It cannot be too strongly impressed
on the, magistracy of the country that bail is not
to be withheld as a punishment, but that the
requirements as to bail are merely to secure the
attendance of the prisoner at trial."
23. The Apex Court in the cases of prolonged incarceration and delay
in trial, the Prosecution should not even oppose the bail on the ground
of seriousness of offence. He has referred to the judgment of Gulam
Nabi shaikh Vs. State of Maharastra, 2024 SCC OnLine SC1693,
wherein it has been observed that :
"19. If the State or any prosecuting agency
including the court concerned has no wherewithal
to provide or protect the fundamental right of an
accused to have a speedy trial as enshrined
under Article 21 of the Constitution then the State
or any other prosecuting agency should not
oppose the plea for bail on the ground that the
crime committed is serious. Article 21 of the
Constitution applies irrespective of the nature of
the crime."
24. It is contended that the investigating agency in the scheduled
offence has submitted that at least 3 to 4 more charge sheets are yet to
be filed in the scheduled offence. There are nearly 70 accused persons
in the Chhattisgarh FIR and the charge sheet has been filed only
against 11 persons. There are over 400 witnesses in the scheduled
offence. The Apex Court has opined that the trial is not likely to
conclude in the scheduled offence vide order dated 12.12.2024 in SLP
(Crl.) No. 16219/2024. He submits that the applicant has a
fundamental right to liberty and his liberty cannot be curtained in such a
manner indefinitely. The same is violative of Article 21 of the
Constitution. Time and again it has been reiterated by the Apex Court
that the Right to Speedy Trial is a facet of the fundamental right to life of
an accused under Article 21 of the Constitution of India. He has placed
his reliance in the matter of Manish Sisodia Vs. CBI and ED (2023)
SCC OnLine SC 1393 wherein it has been held that :
"27. However, we are also concerned about the
prolonged period of incarceration suffered by the
appellant - Manish Sisodia. In P. Chidambaram v.
Directorate of Enforcement48, the appellant
therein was granted bail after being kept in
custody for around 49 days, relying on the
Constitution Bench in Shri Gurbaksh Singh Sibbia
and Others v. State of Punjab, (1980) 2 SCC 565.
and Sanjay Chandra v. Central Bureau of
Investigation, (2012) 1 SCC 40 that even if the
allegation is one of grave economic offence, it is
not a rule that bail should be denied in every
case. Ultimately, the consideration has to be
made on a case to case basis, on the facts. The
primary object is to secure the presence of the
accused to stand trial. The argument that the
appellant therein was a flight risk or that there
was a possibility of tampering with the evidence
or influencing the witnesses, was rejected by the
Court. Again, in Satender Kumar Antil v. Central
Bureau of Investigation and Another, (2022) 10
SCC 51 this Court referred to Surinder Singh
Alias Shingara Singh v. State of Punjab (2005) 7
SCC 387 and Kashmira Singh v. State of Punjab,
(1977) 4 SCC 291 to emphasize that the right to
speedy trial is a fundamental right within the
broad scope of Article 21 of the Constitution. In
Vijay Madanlal Choudhary (supra), this Court
while highlighting the evil of economic offences
like money laundering, and its adverse impact on
the society and citizens, observed that arrest
infringes the fundamental right to life.
49 In P. Chidambaram v. Central Bureau of
Investigation, (2020) 13 SCC 337, the appellant
therein was granted bail after being kept in
custody for around 62 days.
This Court referred to Section 19 of the
PML Act, for the in-built safeguards to be adhered
to by the authorized officers to ensure fairness,
objectivity and accountability. Vijay Madanlal
Choudhary (supra), also held that Section 436A of
the Code can apply to offences under the PML
Act, as it effectuates the right to speedy trial, a
facet of the right to life, except for a valid ground
such as where the trial is delayed at the instance
of the accused himself.
In our opinion, Section 436A should not be
construed as a mandate that an accused should
not be granted bail under the PML Act till he has
suffered incarceration for the specified period.
This Court, in Arnab Manoranjan Goswami v.
State of Maharashtra and Others (2021) 2 SCC
427, held that while ensuring proper enforcement
of criminal law on one hand, the court must be
conscious that liberty across human eras is as
tenacious as tenacious can be.
29. Detention or jail before being pronounced
guilty of an offence should not become
punishment without trial. If the trial gets protracted
despite assurances of the prosecution, and it is
clear that case will not be decided within a
foreseeable time, the prayer for bail may be
meritorious. While the prosecution may pertain to
an economic offence, yet it may not be proper to
equate these cases with those punishable with
death, imprisonment for life, ten years or more
like offences under the Narcotic Drugs and
Psychotropic Substances Act, 1985, murder,
cases of rape, dacoity, kidnapping for ransom,
mass violence, etc. Neither is this a case where
100/1000s of depositors have been defrauded.
The allegations have to be established and
proven. The right to bail in cases of delay,
coupled with incarceration for a long period,
depending on the nature of the allegations,
should be read into Section 439 of the Code and
Section 45 of the PML Act. The reason is that the
constitutional mandate is the higher law, and it is
the basic right of the person charged of an
offence and not convicted, that he be ensured
and given a speedy trial. When the trial is not
proceeding for reasons not attributable to the
accused, the court, unless there are good
reasons, may well be guided to exercise the
power to grant bail. This would be truer where the
trial would take years."
25. Further he has relied upon the decisions of Satender Kumar
Antil Vs. Central Bureau of Investigation (2002) 10 SCC 561;
Surinder Singh Alias Shingara Singh Vs. State of Punjab (2005)7
SCC 387 and Kashmira Singh Vs. State of Punjab (1977) 4 SCC
291. In the matter of Manish Sisodia Vs. ED and CBI (supra), it has
been held that :
37. Insofar as the contention of the learned ASG
that since the conditions as provided under
Section 45 of the PMLA are not satisfied, the
appellant is not entitled to grant of bail is
concerned, it will be apposite to refer to the first
order of this Court. No doubt that this Court in its
first order in paragraph 25, after recapitulating in
paragraph 24 as to what was stated in the
charge-sheet filed by the CBI against the
appellant, observed that, in view of the aforesaid
discussion, the Court was not inclined to accept
the prayer for grant of bail at that stage. However,
certain paragraphs of the said order cannot be
read in isolation from the other paragraphs. The
order will have to be read in its entirety. In
paragraph 28 of the said order, this Court
observed that the right to bail in cases of delay,
coupled with incarceration for a long period,
depending on the nature of the allegations,
should be read into Section 439 Cr.P.C. and
Section 45 of the PMLA.
The Court held that the constitutional mandate is
the higher law, and it is the basic right of the
person charged of an offence and not convicted
that he be ensured and given a speedy trial. It
further observed that when the trial is not
proceeding for reasons not attributable to the
accused, the court, unless there are good
reasons, would be guided to exercise the power
to grant bail. The Court specifically observed that
this would be true where the trial would take
years. It could thus clearly be seen that this
Court, in the first round of litigation between the
parties, has specifically observed that in case of
delay coupled with incarceration for a long period
and depending on the nature of the allegations,
the right to bail will have to be read into Section
45 of PMLA.
XXXX XXXX XXXX
39. A Division Bench of this Court in the case of
Ramkripal Meena v. Directorate of Enforcement5
was considering an application of the petitioner
therein who was SLP(Crl.) No. 3205 of 2024
dated 30.07.2024 to receive a bribe of rupees five
crore and from whom, an amount of
Rs.46,00,000/- was already recovered. In the said
case, the petitioner was arrested on 26th January
2022 in connection with FIR No. 402/2021
registered against him for the offences punishable
under Sections 406, 420, 120B of IPC and
Section 4/6 of the Rajasthan Public Examination
(Prevention of Unfair Means) Act, 1992. He was
released on bail by this Court vide order dated
18th January 2023. Thereafter, the petitioner was
arrested by the ED on 21st June 2023. The Court
observed thus:
"7. Adverting to the prayer for grant of
bail in the instant case, it is pointed out
by learned counsel for ED that the
complaint case is at the stage of
framing of charges and 24 witnesses
are proposed to be examined. The
conclusion of proceedings, thus, will
take some reasonable time. The
petitioner has already been in custody
for more than a year. Taking into
consideration the period spent in
custody and there being no likelihood of
conclusion of trial within a short span,
coupled with the fact that the petitioner
is already on bail in the predicate
offence, and keeping in view the
peculiar facts and circumstances of this
case, it seems to us that the rigours of
Section 45 of the Act can be suitably
relaxed to afford conditional liberty to
the petitioner. Ordered accordingly."
44. The learned Special Judge and the learned
Single Judge of the High Court have considered
the applications on merits as well as on the
grounds of delay and denial of right to speedy
trial. We see no error in the judgments and orders
of the learned Special Judge as well as the High
Court in considering the merits of the matter. In
view of the observations made by this Court in the
first order, they were entitled to consider the
same. However, the question that arises is as to
whether the trial court and the High Court have
correctly considered the observations made by
this Court with regard to right to speedy trial and
prolonged period of incarceration. The courts
below have rejected the claim of the appellant
applying the triple test as contemplated under
Section 45 of the PMLA. In our view, this is in
ignorance of the observations made by this Court
in paragraph 28 of the first order wherein this
Court specifically observed that right to bail in
cases of delay coupled with incarceration for a
long period should be read into Section 439
Cr.P.C. and Section 45 of the PMLA.
26. It is well settled that the object of bail is neither punitive nor
preventative. 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. in the
matter of Manish Sisodia 3 (2024) SCC OnLine SC 920, it has been
held as under:
"54. In the present case, the appellant is having
deep roots in the society. There is no possibility
of him fleeing away from the country and not
being available for facing the trial. In any case,
conditions can be imposed to address the
concern of the State.
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."
27. 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."
28. In the matter of Javed Gulam Nabi Shaikh Vs. State of
Maharashtra, 2024 SCC OnLine SC 1693, it has been held as under:
10. In the aforesaid context, we may remind
the trial courts and the High Courts of what
came to be observed by this Court in Gudikanti
Narasimhulu & Ors. v. Public Prosecutor, High
Court reported in (1978) 1 SCC 240. We
quote:
"What is often forgotten, and
therefore warrants reminder, is the
object to keep a person in judicial
custody pending trial or disposal of
an appeal. Lord Russel, C.J., said [R
v. Rose, (1898) 18 Cox] :
"I observe that in this case bail was
refused for the prisoner. It cannot be
too strongly impressed on the,
magistracy of the country that bail is
not to be withheld as a punishment,
but that the requirements as to bail
are merely to secure the attendance
of the prisoner at trial."
11. The same principle has been reiterated by
this Court in Gurbaksh Singh Sibba v. State of
Punjab reported in (1980) 2 SCC 565 that the
object of bail is to secure the attendance of the
accused at the trial, that the proper test to be
applied in the solution of the question whether
bail should be granted or refused is whether it
is probable that the party will appear to take his
trial and that it is indisputable that bail is not to
be withheld as a punishment.
29. He contended that the applicant shall be severely prejudiced and
prejudged if he is continually remanded to custody. It is imperative for
the proper and effective defence of the applicant and as a step to
ensure the fair trial of the applicant, he be on bail unless there are
overwhelming considerations otherwise. It is submitted that there are
over 70 witnesses named in the prosecution complaint filed by the ED
in the said ECIR. It has been four months since the arrest of the
applicant in the present case and over two months since the date of
filing of the prosecution complaint against the applicant. He submits
that the arrest of applicant is completely malafide and he cannot be
arrested twice for the same alleged offence. The applicant has already
been subjected to illegal custody of the ED in relation to the same set of
allegations and alleged transactions for a period of over 2.5 months.
Since the Prosecution complaint against the applicant stood filed in the
first ECIR there was no necessity of any arrest or custodial
interrogation of the applicant and the applicant could not have been
arrested in the same for the allegations for a second time.
30. It is contended by the learned counsel for the applicant that the
ED had relied upon the same inadmissible material including some
whatsapp chats which was not enough to make the applicant an
accused in the Prosecution Complaint filed in ECIR 11. The series of
facts clearly demonstrates that there was no necessity to arrest the
applicant and he was not arraigned as an accused in the prosecution
Complaint dated 19.06.2024 solely to keep alive the prospects of arrest
of the applicant in the said ECIR and deny him the benefit of the law
laid down by the Apex Court in the matter of Tarsem Lal Vs.
Enforcement Directorate, 2024 SCC Online SC 971. he submits that
the only material relied upon by the ED while affecting the arrest of the
applicant was the material collected during an illegal investigation which
has been quashed by the Apex Court on 08.04.2024. He submits that
the statements recorded in the ECIR 11 and being relied upon in the
ECIR 04 apart from being quashed by the Apex Court have also been
retracted by multiple individuals as the officers of the ED in ECIR 11
had coerced, threatened and made them sign pre-typed statements. He
contended that the arrest under PMLA can be effected only when an
accused is considered to be guilty of the ofence under Section 3 of the
PMLA and guilt can only be established on admissible material.
31. Next contention of the counsel for the applicant is that there has
been no recovery of any unaccounted money or disproportionate asset
from the applicant despite conducting investigation by the
respondent/Agency. It is settled law that mere apprehension of the
agency without any basis cannot be a ground to reject bail. More so
when the accused has been in custody for long period and charge
sheet has been filed. He has placed his reliance in the matter of P.
Chidambaram Vs. Directorate of enforcement (2020) 13 SCC 791,
wherein it has been observed as under:
26. Section 3 of PMLA stipulates "money-
laundering" to be an offence. Section 3 of PMLA
states that 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 the crime and projecting it as untainted
property shall be guilty of the offences of money
laundering. The provisions of the PMLA including
Section 3 have undergone various amendments.
The words in Section 3 "with the proceeds of
crime and projecting" has been amended as
"proceeds of crime including its concealment,
possession, acquisition or use and projecting or
claiming" by the Amendment Act 2 of 2013 (w.e.f.
15.02.2013).
27. Section 4 of PMLA deals with punishment for
money laundering. Prior to Amendment Act 2 of
2013, Section 4 provided punishment with
rigorous imprisonment for a term which shall not
be less than three years but which may extend to
seven years and the fine which may extend to
Rs.5,00,000/-. By Amendment Act 2 of 2013,
Section 4 is amended w.e.f. 15.02.2013 vide S.O.
343(E) dated 08.02.2013. Now, the punishment
prescribed under Section 4 of PMLA to the
offender is rigorous imprisonment for a term
which shall not be less than three years but which
may extend to seven years and the offender is
also liable to pay fine. The limit of fine has been
done away with and now after the amendment,
appropriate fine even above Rs.5,00,000/- can be
imposed against the offender.
29. The term "reason to believe" is not defined in
PMLA. The expression "reason to believe" has
been defined in Section 26 of IPC. As per the
definition in Section 26 IPC, a person is said to
have "reason to believe" a thing, if he has
sufficient cause to believe that thing but not
otherwise. The specified officer must have
"reason to believe" on the basis of material in his
possession that the property sought to be
attached is likely to be concealed, transferred or
dealt with in a manner which may result in
frustrating any proceedings for confiscation of
their property under the Act. It is stated that in the
present case, exercising power under Section 5
of the PMLA, the Adjudicating Authority had
attached some of the properties of the appellant.
Challenging the attachment, the appellant and
others are said to have preferred appeal before
the Appellate Tribunal and stay has been granted
by the Appellate Authority and the said appeal is
stated to be pending.
30. As rightly submitted by the learned Solicitor
General, sufficient safeguards are provided under
the provisions of PMLA. Under Section 5 of
PMLA, the Director or any other officer not below
the rank of Deputy Director authorised by the
Director for the purposes of Section 5 who
passed the impugned order is required to have
"reason to believe" that the properties sought to
be attached would be transferred or dealt with in
a manner which would frustrate the proceedings
relating to confiscation of such properties.
Further, the officer who passed the order of
attachment is required to record the reasons for
such belief. The provisions of the PMLA and the
Rules also provide for manner of forwarding a
copy of the order of provisional attachment of
property along with material under sub-section (2)
of Section 5 of PMLA to the Adjudicating
Authority.
31. In order to ensure the safeguards, in exercise
of power under Section 73 of PMLA, the Central
Government has framed "The Prevention of
Money-Laundering (The Manner of Forwarding a
Copy of the Order of Provisional Attachment of
Property along with the Material, and Copy of the
Reasons along with the Material in respect of
Survey, to the Adjudicating Authority and its
period of Retention) Rules, 2005". Rule 3 of the
said Rules provides for manner of forwarding a
copy of the order of provisional attachment of
property along with the material under sub-
section (2) of Section 5 of the Act to the
Adjudicating Authority. Rule 3 stipulates various
safeguards as to the confidentiality of the sealed
envelope sent to the Adjudicating Authority.
32. Section 17 of PMLA deals with the search
and seizure. Section 17 which deals with search
and seizure states that where the Director or any
other officer not below the rank of Deputy
Director authorised by him for the purposes of
this section on the basis of the information in his
possession has "reason to believe" (reason for
such belief to be recorded in writing) that any
person has committed an offence which
constitutes the money laundering or is in
possession of any proceeds of crime involved in
money laundering etc. may search building, place
and seize any record or property found as a
result of such search. Section 17 of PMLA also
uses the expression "reason to believe" and
"reason for such belief to be recorded in writing".
Here again, the authorised officer shall
immediately on search and seizure or upon
issuance of freezing order forward a copy of the
reasons so recorded along with the material in his
possession to the Adjudicating Authority in a
"sealed envelope" in the manner as may be
prescribed and such Adjudicating Authority shall
keep such reasons and material for such period
as may be prescribed. In order to ensure the
sanctity of the search and seizure and to ensure
the safeguards, in exercise of power under
Section 73 of PMLA, the Central Government has
framed "The Prevention of Money-Laundering
(Forms, Search and Seizure or Freezing and the
Manner of Forwarding the Reasons and Material
to the Adjudicating Authority, Impounding and
Custody of Records and the period of Retention)
Rules, 2005"."
32. It has been contended by the counsel for the applicant that bail
can be granted even if there is a ground to believe that trial would not
conclude in near future. The Court does not have to wait for 436-A
Cr.P.C. As has been held in the matter of Manish Sisodia Vs.ED SLP
(Crl.) No. 8781 of 2024,
"28. Detention or jail before being pronounced
guilty of an offence should not become
punishment without trial. If the trial gets protracted
despite assurances of the prosecution, and it is
clear that case will not be decided within a
foreseeable time, the prayer for bail may be
meritorious. While the prosecution may pertain to
an economic offence, yet it may not be proper to
equate these cases with those punishable with
death, imprisonment for life, ten years or more
like offences under the Narcotic Drugs and
Psychotropic Substances Act, 1985, murder,
cases of rape, dacoity, kidnaping for ransom,
mass violence, etc. Neither is this a case where
100/1000s of depositors have been defrauded.
The allegations have to be established and
proven. The right to bail in cases of delay, coupled
with incarceration for a long period, depending on
the nature of the allegations, should be read into
Section 439 of the Code and Section 45 of the
PML Act. The reason is that the constitutional
mandate is the higher law, and it is the basic right
of the person charged of an offence and not
convicted, that he be ensured and given a speedy
trial. When the trial is not proceeding for reasons
not attributable to the accused, the court, unless
there are good reasons, may well be guided to
exercise the power to grant bail. This would be
truer where the trial would take years."
33. Next contention of the counsel for the applicant is that the arrest
under PMLA can be effected only when an accused is considered to be
guilty of the offence under Section 3 of the PMLA and guilt can only be
established on admissible material. He submits that the only material
available with the ED while effecting arrest of the applicant was the
material collected during an illegal investigation which has been
quashed by the Apex Court on 08.04.2024. A comparison of the
grounds of arrest in the first ECIR and first Prosecution complaint vis-a
vis grounds of arrest in second ECIR and second Prosecution
complaint shows that the basis of arresting the applicant in both the
ECIRs is identical. There is no new material which has been relied
upon by the ED in the second ECIR necessitating the arrest of the
applicant. He submits that a departmental enquiry was also conducted
by the Excise Department which concluded that there was no offence
committed and the entire sale of liquor was carried out in a legal
manner. It is contended that no new statement has been relied upon in
the grounds of arrest. In the second ECIR, investigating the same
offence is completely illegal and tenable in law. The arrest of the
accused is amenable to judicial review and arresting a person without
the need and necessity of arrest would render it to be illegal. It is further
contended that there has been no recovery of any unaccounted money,
incriminating material, illegal liquor bottles or counterfeit holograms
from the applicant or any other individual to implicate the present
applicant. It is contended that 115 properties have alleged POC of 105
crores attached and confirmed by the Adjudicating Authority. The said
attachment has been challenged before the Appellate Tribunal. Thus,
the material relied upon by the ED is inadmissible as the whole case of
the ED essentially stems upon the statements made by certain co-
accused persons under Section 50 of the PMLA and certain whatsapp
chats collected by the IT department during the course of raids
conducted in the year 2020. It is contended that the applicant satisfies
the twin conditions under Section 45 of the pMLa. Section 45 of the
PMLA is not even applicable in the instant case given the prolonged
period of incarceration of the applicant. He has placed his reliance in
the matter of Manish Sisodia Vs. ED, SLP Crl. No. 8781 of 2024,
wherein it has been held as under:
49. We find that, on account of a long period of
incarceration running for around 17 months and
the trial even not having been commenced, the
appellant has been deprived of his right to
speedy trial.
50. As observed by this Court, the right to
speedy trial and the right to liberty are
sacrosanct rights. On denial of these rights, the
trial court as well as the High Court ought to
have given due weightage to this factor.
XXXX XXXX
XXXX
53. The Court further observed that, over a
period of time, the trial courts and the High
Courts have forgotten a very well-settled
principle of law that bail is not to be withheld as
a punishment. From our experience, we can say
that it appears that the trial courts and the High
Courts attempt to play safe in matters of grant of
bail. The principle that bail is a rule and refusal
is an exception is, at times, followed in breach.
On account of non-grant of bail even in straight
forward open and shut cases, this Court is
flooded with huge number of bail petitions
thereby adding to the huge pendency. It is high
time that the trial courts and the High Courts
should recognize the principle that "bail is rule
and jail is exception".
54. In the present case, in the ED matter as well
as the CBI matter, 493 witnesses have been
named. The case involves thousands of pages
of documents and over a lakh pages of digitized
documents. It is thus clear that there is not even
the remotest possibility of the trial being
concluded in the near future. In our view,
keeping the appellant behind the bars for an
unlimited period of time in the hope of speedy
completion of trial would deprive his
fundamental right to liberty under Article 21 of
the Constitution. As observed time and again,
the prolonged incarceration before being
pronounced guilty of an offence should not be
permitted to become punishment without trial."
34. In the matter of Vijay Nair Vs. Directorate of Enforcement SLP
Crl. Diary No. 22137 of 2024, it has been observed as under:
"7.The materials on record indicate that one
Dinesh Arora who was arrayed as an accused in
the case and who thereafter turned approver, in
his 12th statement had implicated the accused
petitioner but in all his previous statement(s)
given under Section 50 of the Act, there was no
implication for the petitioner. The Directorate of
Enforcement has submitted as many as 9
prosecution complaints, one after the other and
in the meantime, the petitioner has been in
custody for about 22 months. As earlier noted, in
the event of conviction, the maximum sentence
that can be imposed on the petitioner is 7 years.
XXXX XXXX XXXX
9. 9. Mr. S.V. Raju would further place
reliance on the three-judge bench decision of
this Court in Vijay Madanlal Choudhary v. Union
of India2 to argue that stringent conditions of
Bail under Section 45 of the Act have to be
satisfied before granting Bail. However, this
Court in a series of decisions has held that the
rigours under Section 45 can be relaxed if the
custody is for a considerable period of time and
there is no likelihood of conclusion of trial within
a short span."
35. It is contended that the ED has relied entirely on the statements
of co-accused which are not substantive piece of evidence and the
prosecution cannot start with such evidence to establish a case. He has
relied upon the decision of Prem Prakash Vs. ED, SLP (Crl.) No. 5416
of 2024, wherein it has been held as under:
"37. Being a co-accused with the appellant, his
statement against the appellant assuming there
is anything incriminating against the present
appellant will not have the character of
substantive evidence. The prosecution cannot
start with such a statement to establish its case.
We hold that, in such a situation, the law laid
down under Section 30 of the Evidence Act by
this Court while dealing with the confession of
the co-accused will continue to apply."
36. The applicant is not involved in the commission of or in any
activity relating to the alleged offences. Most of the statements relied
upon by the ED have been retracted by those individuals admitting to
the fact that the same were extracted by means of coercion and
threats. It is contended that the investigation conducted by the ED was
in a pick and choose manner. The manner in which the investigation
has been carried out by the ED in a selective and pick and choose
manner in its investigation clearly shows the targeted nature of the
investigation conducted by it. He submits that no attachment of property
against accused persons ie. the distillers despite quantifying the same
at over 238 crores. No proceedings under Section 8 of the PC Act was
initiated against them. The Excise Officers against who there is
incriminating material have not been made accused.
37. It is next contended that the applicant satisfies the triple test for
grant of bail. The applicant is neither a flight risk nor would influence
any witness or tamper with any evidence. The entire material is
documentary and is in the custody of the Court. The applicant does not
have the propensity to evade the process of law and no such allegation
has been made against the applicant seeking police/judicial custody.
He contended that in catena of judgments including the recent one of
P.Chidambaram Vs. CBI 2020 13 SCC 337, that while dealing with the
bail application it is not in dispute that 'three factors' or the 'triple test'
must be seen /satisfied viz. (I) flight risk; (ii) likelihood of tampering with
evidence and (iii) likelihood of influencing witnesses. Pertinently all the
three facts are satisfied by the applicant and as such the applicant may
be granted bail.
38. Dr.Sourabh Pandey, in reply to the above contentions of the
learned counsel for the applicant, it is submitted by learned counsel for
the respondent/ED that that applicant acted as strongman who ran the
liquor syndicate for his political benefactors and in association with the
topmost bureaucrat Anil Tuteja. Both of them orchestrate the entire
liquor scam by using the vantage of Anil Tuteja (retired IAS). The
applicant posted officials of his choice in the Excise Department and
thus became the de facto Excise Minister. He ran the entire bribe
collection racket for Part-A, C and FL-10A license holders. He ran the
unprecedented scam of selling unaccounted illicit liquor from the State
run shops. The applicant through his political affiliations and with the
active support of Anil Tuteja, Arun Pati Tripathi and Niranjan Das,
controlled all the limbs of liquor trade to run the manufacture and sale
of illicit country liquor that too, from State run shops. All the accused
persons in the Chhattisgarh Liquor scam ran this racket for 2 years
selling more than 40 lakh cases of illicit liquor with active connivance of
distillers, hologram makers, bottle suppliers, transporters, shop
keepers, cash collection agencies, District Excise officials etc. without
registration of even a single FIR. This racket came to end only after the
raids by the Income Tax Department in June 2022 and subsequent
action by answering respondent ie. Enforcement directorate. The
audacity and brazeness of the scam and losses to Chhattisgarh
Exchequer are staggering. This shows that such a same of selling
illegal liquor from State run shops can be run only with the concurrence
and the active support of then biggest political authority of the State of
Chhattisgarh. The applicant apart from being responsible for the
acquisition of proceeds of crime worth more than 2100 crores, was also
responsible for layering the proceeds of crime and concealing them.
39. The applicant is responsible for selecting and hiring ground level
members of the liquor syndicate. He himself is affiliated with political
outfit and is the brother of Aijaz Dhebar (Mayor of Raipur). The
applicant is the one who sponsored the name of co-accused Arunpati
Tripathi as the Managing Director, CSMCL to Anil Tuteja. He along with
his associates Arvind Singh and Vikas Agarwal @ Subbu ensured
strong control over the scheme of illegal commission from collection in
the sale of liquor. The applicant used to provide logistical support, cash
collection and cash delivery services for the syndicate. There are
various whatsapp chats between the applicant and Vikas Agrawal @
Subbu and Arvind Singh related to the commission collected and sale
of Part-B liquor.
40. Further allegation against the applicant is that the applicant
ensured the commission paid by the liquor suppliers timely. Apart from
collecting commission on sale of accounted liquor (Part-A) and sale of
unaccounted liquor (Part-B) also charged quid pro quo bribes from
main distillers so that they can form a cartel and divide the entire
market share among themselves. This was known as Part C earnings.
This was an annual commission which was paid the main distillers for
getting fixed share in the market purchase of CSMCL. Kedia Group got
52% share, Bhatia Group got 30% and Welcome Group go 18% share
which was paid on percentage basis of the market share allotted to
them.
41. From the investigation conducted by the respondent/Agency it
was also revealed that the role of M/s. AJS Agro Pvt. Ltd. Which is
associated with the applicant was used by the applicant to earn
commission in banking channel. As part of the modus operandi the
distillers purchased grians through the M/s. AJS Agro Trade Pvt. Ltd.
and commission was paid to the applicant. This was done to generate
accounted money which could be used to make more investments and
large cash could be layered into those deals and was in continuous
process of acquiring new proceeds of crime and layering and
concealing the earned ill gotten cash.
42. It is alleged that the applicant and co-accused Anil Tuteja were
receiving almost 15% of the revenue generated by the syndicate out of
the sale of Part-B liquor. Asper the investigation conducted so far, a
total of Rs. 40.67 lac cases of Part-B liquor have been found to be
supplied to syndicate which implied that amount of Rs. 120 crores was
earned illegally out of the sale of unaccounted liquor. Digital evidences
show the payments to the tune of Rs. 14.41 crores from the present
applicant and therefore it can be held that Rs. 105 crores out of the sale
proceeds of Part-B liquor was lying with the applicant. The applicant
utilized the proceeds of crime in acquiring assets in his name and in the
name of his family members.
43. It is contended by the counsel for the respondent that the
mandatory twin conditions of Section 45 of the PMLA are not being
satisfied and one of the conditions prescribed by the Section pertains to
a finding by the court that the accused is not guilty of the offence of
Money Laundering an that he is not likely to commit any offence while
on bail to this, it is submitted that the possibility of accused being "not
guilty of the offence of money laundering" is highly unlikely. In fact the
applicant was evading summons under Section 50 of the PMLA in
ECIR/RPZO/11/2022 and therefore the previous actions of the applicant
has not been conducive with the due process of law. In the backdrop
of these circumstances, it cannot be ruled that the applicant if released
of bail, repeat his previous actions again. It is submitted that in the light
of judgment dated 22.07.2022 of the Apex Court in Vijay Madanlal
Choudhary & Others Vs. Union of India and Others, SLP (Crl.) No.
4634 of 2014, it is no longer res integra that the twin conditions under
Section 45 of the PMLA have to be met before grant of bail. Relevant
observation is as under:
135. We are conscious of the fact that in
paragraph 53 of the Nikesh Tarachand Shah,
(2018) 11 SCC 1 the Court noted that it had
struck down Section 45 of the 2002 as a whole.
However, in paragraph 54, the declaration is only
in respect of further (two) conditions for release
on bail as contained in Section 45(1), being
unconstitutional as the same violated Articles 14
and 21 of the Constitution. Be that as it may,
nothing would remain in that observation or for
that matter, the declaration as the defect in the
provision [Section 45(1)], as existed then, and
noticed by this Court has been cured by the
Parliament by enacting amendment Act 13 of
2018 which has come into force with effect from
19.4.2018. We, therefore, confined ourselves to
the challenge to the twin conditions in the
provision, as it stands to this date post
amendment of 2018 and which, on analysis of the
decisions referred to above dealing with
concerned enactments having similar twin
conditions as valid, we must reject the challenge.
Instead, we hold that the provision in the form of
Section 45 of the 2002 Act, as applicable post
amendment of 2018, is reasonable and has direct
nexus with the purposes and objects 642 Supra
at Footnote No.3450 sought to be achieved by
the 2002 Act to combat the menace of money-
laundering having transnational consequences
including impacting the financial systems and
sovereignty and integrity of the countries."
44. Further, in Sajjan Kumar Vs. Directorate of Enforcement, 2022
SCC Online Del. 1769, it has been held that:
"27. In matter of regular bail, 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 the 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."
45. Learned counsel for the respondent submits that the applicant
applied for bail in ACB/EOW case before this Court vide M.Cr.C. No.
3455/2024 on medical condition and was granted bail. However, it was
challenged by the State of CG before the Apex Court vide SLP (Crl) No.
9395/2024 and it was ordered that independent medical scrutiny of the
applicant be conducted at AIIMS Raipur and no substantial medical
issues were found with the applicant.
46. He next contended that the applicant is suffering from long
incarceration to which it has been stated that the applicant has been
arrested in the present case on 08.08.2024 and he has been arraigned
as an accused in the Prosecution Complaint dated 15.10.2024 filed by
the ED. The applicant has to satisfy the conditions provided in Section
45 of the PMLA prior to grant of bail. That looking into the period of
custody, it seems that the applicant does not qualify the conditions
mentioned in Section 436-A of the Cr.P.C, and cannot take the benefit
under the said Section.
47. Reply to the next submission of the counsel for the applicant that
there is long delay in trial is misconceived and denied. It is submitted
that the PMLA Court, Raipur has taken the cognizance of all the PCs
dated 19.06.2024, 20.08.2024 and 5.10.2024 and the trial has
commenced. ED had demonstrated the modus operandi adopted by the
applicant for commission of offence of money laundering and
investigation against the applicant is complete but the investigation in
money trial and identification of remaining proceeds of crime and the
persons involved therein is still going on. He submits that the trial in the
PMLA is at the appearance stage and next date of hearing is scheduled
for 22.03.2025. He contended that the investigation is going on and the
Special Court has issued summons to the accused after taking
cognizance upon the prosecution complaint and 35 witnesses in the
Prosecution Complaint has been filed by the ED. It is also contended
that there is no iota of doubt that the Right to Speedy Trial is a
foundational facet of the The Right to life and Personal Liberty given
under Article 21 of the Constitution of India. However, if the accused is
enlarged on bail, then being a very influential person there would be a
chance that he would induce the witnesses and tamper with the
evidences and the trial would further get delayed. Therefore to ensure
the fundamental right to speedy trial, the applicant may not be granted
bail.
48. Next contention of the learned counsel for the respondent/ED is
that the applicant was arrested in two different ECIRs ie.
ECIR/RPZO/11/2022 and ECIR/RPZO/04/2024 and it is within the
ambit of law. It is submitted that the applicant had filed SLP No.
12153/2024 against the order dated 20.08.2024 in Cr.M.P. No.
860/2024 and 1186/2024 of this Court wherein the applicant had raised
allegation of double arrest, illegality of the ECIRs and malafide
investigation but since there is no merit in the averment and not
sustainable in the eye of law, he withdrew the petition on 6.12.2024.
49. Learned counsel for the respondent next contended that from the
conduct of the applicant,it appears that he has been trying to delay the
proceedings before the agency as well as before the court. In the
matter of Pankaj Grover Vs. ED, Criminal Misc. Anticipatory Bail
application under Section 438 Cr.P.C. No. 7661 of 2021, it has
clearly been held that the accused in economic offences/PMLA cases
are in possession of huge proceeds of crime and may use those to
influence witnesses. It has also been held that since such offences are
committed mostly be influential persons, there is high likelihood of their
using influence to tamper with the evidence and influence witnesses.
Relevant observation of the court is as follows:is as under:
"38.... Crimes are now committed by influential
persons belonging to upper class in organized
manner after well planning by use of modern
gadgets in course of performance of their official,
professional, business activities in which they have
expertise. Criminal Acts committed by professionals,
businessmen and public servants, it is very difficult to
identify whether sober and civilized activity was
committed or criminal act was committed. Such
criminals have no criminal self image, further by
societal members there is no labelling which affect
seriously pursuits to cope with crime and criminality,.
Economic offenders are only concerned with their
personal gain even at the cost of irreparable and
serious loss to society.
"40.... Criminal acts committed by such persons are
creating a serious challenge before criminal justice
system; It is difficult to identify whether crime was
committed, when it is identified that crime was
committed, it is difficult to find out clues and thereby
evidences; when evidences are available, nature of
evidences is completely different as not possible to
be collected by simple investigating presented by
prosecution agency and ultimately to convict and
sentence; when sentenced simple sentence is not
effective to deal with such modern criminals and their
criminality. A criminal of such modern criminality are
respected and influential persons with position,
status, standing and means thereby they are always
in situation to influence proceeding in investigation
and prosecution, taper with the evidences and
pressurize witnesses.
42. .... Usually socio economic offenders abscond to
some other country and after that it becomes difficult
to bring them back and complete the criminal
proceeding against them. Further, their monetary
sound condition particularly proceed of crime
obtained not by honest working but by deceiving
others causes more prone situation for influencing
witnesses and other evidences. Furthermore, status
and position of offender provides opportunity to
influence investigation and prosecution."
50. Thus, it is submitted by the learned counsel for the respondent
that there is a high likelihood that the applicant if released on bail might
attempt to frustrate the present proceedings by influencing witnesses or
tampering with crucial evidences. Therefore in the present case, which
pertains to the offence of money laundering to the tune of more than R.
2100 crores should not be granted bail. In catena of judgments, it has
been held by the Court that economic offences constitute a separate
class of offence and bail should normally not be granted in such cases.
In Mohd. Arif Vs. ED 2020 SCC OnLine Ori. 544, it has been
described that the impact of the offence of Money laundering has
called the 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
Apex Court of denial of bail in cases of economic offences. Relevant
observation 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 country but
also 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 generis 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."
51. The economic offences constitute a class apart and need to be
visited with different approach, therefore in Y.S. Jagan Mohan Reddy
Vs. Central Bureau of Investigation; (2013) 7 SCC 439, wherein
Hon'ble the Apex Court in paragraphs 34 & 35 has held as under:-
"34. Economic offences constitute a class apart
and need to be visited with a different approach
in the matter of bail. The economic offences
having deep-rooted conspiracies and involving
huge loss of public funds need to be viewed
seriously and considered as grave offences
affecting the economy of the country as a whole
and thereby posing serious threat to the financial
health of the country.
35. While granting bail, the court has to keep in
mind the nature of accusations, the nature of
evidence in support thereof, the severity of the
punishment which conviction will entail, the
character of the accused, circumstances which
are peculiar to the accused, reasonable
possibility of securing the presence of the
accused at the trial, reasonable apprehension of
the witnesses being tampered with, the larger
interests of the public/State and other similar
considerations."
52. Furthermore, in the matter of 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.
53. In view of the above legal grounds, it is submitted by the learned
counsel for the respondent that the bail application filed on behalf of the
applicant may be dismissed. Learned counsel for the respondent
further submits that the role of the applicant in the present case
established the guilt of the applicant in the commission of the offence
of money laundering. It is also reiterated that satisfaction of triple test is
not sufficient for persons arrested under PMLA, 2002 as this triple test
stage will come when the applicant satisfy the twin conditions given
under the Section 45 of the PMLA, 2002. The Apex Court in the case of
Gudikanti Narasimhulu and Others Vs. Public Prosecutor, High
Court of Andhra Pradesh (1978) 1 SCC 240, has observed that the
objective to keep a person in judicial custody pending trial or disposal of
an appeal is to secure the attendance of the prisoner at trial. Moreover,
he submits that the delay in trial is no ground for bail keeping in view
the fact that the ED is working in a timely manner as per the due
process of law. The Special Court had issued summons to the accused
after taking cognizance upon the Prosecution Complaint. There is no
iota of doubt that the Right to Speedy Trial is a foundational facet of the
Right to Life and Personal Liberty given under Article 21 of the
Constitution of India. However, if the accused be enlarged on bail, then
being such a influential person, there would be a chance that he would
induce the witnesses and tamper with the evidence and consequently,
the trial would further get delayed. Therefore to ensure/secure the
fundamental right to speedy trial of the applicant he may not be
granted bail. In the matter of State of Bihar Vs. Amit Kumar (2017) 13
SCC 751, the Apex Court has held that :
"11. Although there is no quarrel with respect to
the legal propositions canvassed by the learned
counsels, it should be noted that there is no
straight jacket formula for consideration of grant
of bail to an accused. It all depends upon the
facts and circumstances of each case. The
Government's interest in preventing crime by
arrestees is both legitimate and compelling. So
also is the cherished right of personal liberty
envisaged under Article 21 of the Constitution.
Section 439 of The Code of Criminal Procedure,
1973, which is the bail provision, places
responsibility upon the courts to uphold
procedural fairness before a person's liberty is
abridged. Although 'bail is the rule and jail is an
exception' is well established in our
jurisprudence, we have to measure competing
forces present in facts and circumstances of
each case before enlarging a person on bail.
14. Further we cannot lose sight of the fact
that the investigating agency is going to file
additional charge sheet. Therefore, the
respondent's presence in the custody may be
necessary for further investigation. Furthermore
we cannot approve the order of the High Court,
in directing the concerned investigating authority
to file the charge sheet within a month, as the
case involves almost 32 accused and a complex
modus operandi."
54. It is next contended by the learned counsel for the respondent
that the applicant was arrested in a completely legal manner under
Section 19 of the PMLA. The claim of the applicant that he was
arrested twice, to this it is submitted that the applicant was arrested in
two different ECIRs. Oit is submitted that the applicant filed application
before this Court wherein he has also alleged about the same however,
the same was dismissed by the Division Bench vide its order dated
23.08.2024 in Cr.M.P. No. 2276/2024 holding that:
"15. We have perused the order dated
08.08.2024 passed by the Special Judge (PMLA).
The ED had filed an application under Section
167 Cr.P.C. and prayed for 7 days custodial
remand against the petitioner-Anwar Dhebar and
one co-accused Arunpati Tripathi on the ground
that the investigation was incomplete. The true
copy Registrar (Judicial) order dated 08.08.2024
passed by the learned Special Judge, PMLA is
quite detailed one and it has assigned the
reasons for allowing. The petitioner had taken a
plea before the learned Special Judge that the
ECIR/RPZO/11/2022 was already quashed by the
Hon'ble Supreme Court and as such, the second
ECIR was not maintainable on the basis of some
materials. This issue has also been dealt with by
this Court in Cr.M.P. No. 721/2024."
55. It is further submitted that this Court after considering the facts
and circumstances of the present case has passed the order wherein
various facts were challenged. Relevant extracts are as under:
"140. According to the petitioners, the
ECIR/RPZO/04/2024 is a second ECIR in
relation to the same alleged transaction and has
been registered on the basis of the same
underlying schedule offence for a second time
and all proceedings and investigation in relation
tot he same are thus liable to be quashed.
ECIR/RPZO/11/2022 was registered on the basis
of prosecution complaint filed by the ITD before
learned ACMM Court, Tis Hazari New Delhi.
However, the new ECIR bearing No.
ECIR/RPZO/04/2024 has been recorded on the
basis of FIR bearing No. 04/2024 registered by
ACB/EOW Raipur. In the first ECIR, the
scheduled offence was Section 120-B IPC and in
the second ECIR, the scheduled offence is
420,467,468,471 and 120-B IPC, 7& 12 of the
PC Act, 1988. Therfore, shcedule offence in both
the ECIRs is different from each other. The
Supreme Court inWP(CR) No. 153/2023 was
apprised about the recording of new ECIR on the
basis of FIR. In this regard, Supreme Court did
not bar the ED from recording of new ECIR."
"143. ... ED has been conducting a detailed
investigation into the subject ECIR and the role
of the petitioners have been clearly brought out
in the case. Investigation conducted has
revealed that the assets purchased in the name
of entities controlled by petitioners and in the
name of their family members during relevant
period were procured out of proceeds of crime.
Thus, in light of strong evidences, there is no
scope of mala fide in the whole investigation.
Digital evidence, flow of funds and statements of
multiple entities under Section 50 of the PMLA,
2002 collected during the course of investigation
clearly established the role of petitioner."
56. Further, Apex Court in the case of State of Orissa Vs.
Mahimandanda Mishra 2018 (10) SCC 516 arising out of Criminal
Appeal No. 1175 of 2018 while referring to Anil Kumar Yadav Vs.
State (NCT) of Delhi, 2017 has stated that the court must not go into
the merits of the case while considering the bail applications. Relevant
portion is as under:
"It is by now well settled that at the time of
considering an application for ail, the Court
must take into account certain factors such as
the existence of a prima facie case against the
accused, the gravity of the allegations, position
and status of the accused, the likelihood of the
accused fleeing from justice and repeating the
offence, the possibility of tampering with the
witnesses and obstructing the courts as well as
the criminal antecedents of the accused. It is
also well settled that the Court must not go into
deep into merits of the matter while considering
an application for bail. All that needs to be
established from the record is the existence of a
prima facie case against the accused."
57. It is contended that the proceeds of crime to the tune of about
105 crores was attached and the same has been confirmed by the
Adjudicating Authority vide order dated 7.10.2024 in OC No. 2318/2024.
It is submitted that detailed modus operandi used by the applicant for
generation and use of proceeds of crime is mentioned in the
Prosecution Complaint dated 5.10.2024 along with money trial
investigation. It is further submitted that the statements were recorded
without any threat, fear, force or coercion and under CCTV surveillance.
From the evidence it is clear that the applicant is involved in the
Chhattisgarh Liquor Scam case. The fact that there is no recovery of
unaccounted money, incriminating material, counterfeit holograms etc.
from the applicant, to this it is submitted that there are multiple
properties belonging to the applicant which are found to be proceeds of
crime and hence attached. The seizure made by ACB/EOW of half burnt
counterfeit holograms from the premises are linked to the applicant.
58. Further contention of the learned counsel for the respondent is that
there are 3 prosecution complaints filed till date and whom to arrest and
when to arrest are sole prerogative of investigating agency which are
determined on the basis of specific circumstances of each case and are
done only in the interest of concluding the investigation with optimum
usage of resources and within the reasonable time frame. Lastly, it has
been contended by the learned counsel for the respondent that
conditions of triple test are in addition to the twin conditions mentioned
in Section 45 of the PMLA. It is submitted that the applicant has been an
accused in the money laundering offence and the twin conditions have
not been satisfied by the applicant. The respondent has substantive
evidences which will prove the guilt of the accused in the trial and
therefore it the applicant be released on bail at this stage, there are high
chances that the accused will tamper with the evidence and influence
the witnesses.
ANALYSIS
59. Heard learned counsel for the parties at length and perused the
records as well as the documents annexed with utmost circumspection.
60. In the instant case, there are nearly 70 accused persons while
charge sheet has only been filed against 11 persons. There are 457
witnesses in the scheduled offence and the trial is not likely to conclude
in the near future. Section 45(1) of the PMLA, reverses the presumption
of innocence at the stage of bail as an accused. According to him, the
accused at this stage can never show that he is not guilty. It is also
maintained that these are disproportionate and excessive conditions for
a bail. The twin condition is in violation of Article 21 of the Constitution
by virtue of the nature of the offence under PMLA. It is stated that
presumption of innocence is a cardinal principle of Indian criminal
jurisprudence.
61. Prima facie, it appears that 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 acted as a strongman who ran the liquor syndicate for his
political benefactors in association with the topmost bureaucrat Anil
Tuteja. The applicant ran the entire bribe collection racket for Part-A,C
and FL-10A license Holders and the unprecedented scam of selling
unaccounted liquor from the State run shops. This apart, he was
responsible for acquisition of process of crime and concealing them.
62. 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. The provision for bail under Section 45 of PMLA lays down
two essentials which are to be fulfilled for grant of bail. These
conditions are called the 'twin conditions'. The two conditions that are
to be established are that firstly, there are reasonable grounds for
believing that the accused is not guilty of such offence and secondly,
the accused is not likely to commit an offence while on bail.
63. In Nikesh Tarachand Shah Vs. Union of India (Tarachand),
the Apex Court decided on the constitutionality of section 45 of PMLA,
2002 and the twin-conditions of bail attached to it. It held the same to
be unconstitutional in the light of article 21 of the Constitution which
stipulates for "no person shall be deprived of his life or personal liberty
except according to the procedure established by the law"; essentially
holding that constitutional provisions prevail over laws such as PMLA.
In Vijay Madanlal Choudhary Vs. Union of India (Vijay Madanlal) case
of 2022, three judge bench of the Supreme Court decided on the
constitutionality of various provisions of PMLA including section 45, as
revived in 2018. The court arrived at the conclusion that even though
the provision is very stringent and that it goes against the principle of
bail being a rule, it is perfectly valid.
64. The inference from this verdict leads us to the fact that the court
viewed section 45 of PMLA to be a provision that aims to achieve the
purpose of the legislation; that is, to prevent the serious crime of money
laundering. Essentially, the court views this provision from a narrow
lens of 'seriousness of the crime' rather than the wider constitutional
validity. Though it is within the power of the court to deem a provision
unconstitutional through judicial review, it can be inferred that the
legislature was dissatisfied with the order. The amendment emphasized
on the point that the bail conditions should be followed with uniformity
for all offences. The legislature intends to follow a zero-tolerance policy
towards money laundering. This is pertinently so because of the fact
that offences pertaining to money laundering are deemed to be of high
seriousness besides being complex offences that involve a threat not
only to the financial institutions but also to the sovereignty and integrity
of the nation as enunciated in the statement of objects and reasons of
the Act itself.
65. It is true that money laundering that is connected to terror
financing and other such serious offences ought to be treated with great
caution and stringency but there are offences which are not as serious
as the former. While the fight against terror funding is a step in the right
direction by the legislature, there are several cases where the rights of
the accused are being violated due to the actions of a few outliers.
66. There exists a need to move from the current one-size-fits-all
approach towards an approach that underscores the differences
between the offences on the basis of their gravity and seriousness. The
SC, in the case P. Chidambaram v. Directorate of Enforcement of 2019,
stated that in determining whether to grant bail both the seriousness of
the crime, and the severity of the punishment are to be taken into
account. In the case, bail was granted on the following grounds - firstly,
the allegations against the accused were not severe; secondly,
possibility of the accused tampering with evidence was low; and thirdly,
humanitarian grounds like the health of the accused were considered.
67. A provision like section 45, being as rigid as it is, does not allow
for such an analysis. In the interest of upholding the fundamental rights
of the citizens, the legislature must relax the provision to provide wiggle
room to the courts to determine bail on a more case-to-case basis.
This would prevent minor bail cases reaching the apex court as the
lower courts are hesitant to oppose the inflexible provision.
Nevertheless, the court should also recognize the legislature's wariness
towards money laundering and pass orders such that it balances
caution with liberty.
68. A balanced approach which harmonizes judicial interpretations
and legislative intent must be adopted without compromising on justice,
fairness and liberty. The balance can be achieved by undertaking
thorough research for collocation or stratification of money laundering
offences based on their gravity and seriousness. The court has to rely
on a preliminary assessment of merits, without a deep dive into the
evidence, balancing considerations of potential flight risk, and ensuring
a separate evaluation from the final trial outcome.
69. 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.
70. The judiciary's interpretative role in shaping due process within the
PMLA represents a significant stride. Emphasizing the written
communication of arrest grounds is vital for transparency and
accountability. However, this positive development raises practical
questions for the ED. The nuanced compromise between oral
communication and subsequent provision of written grounds reflects the
judiciary's understanding of law enforcement challenges.
71. An analysis of section 19 of the PMLA unveils a delicate interplay
between legal principles, enforcement challenges, and evolving due
process standards. The judiciary's commitment to balancing prompt
law enforcement with the protection of individual rights, particularly the
right to receive timely notification of arrest grounds, not only adds
value but also amplifies the ongoing conversation about the equitable
consideration of security and justice in the context of any crime,
whether financial or otherwise. On perusal of the records, it is found
that the ED has shown the reason to believe that the applicant is guilty
of the proceeds of crime. On the basis of statements recorded under
Section 50 of the PMLA however, retraction statement is made by the
co-accused persons namely Arun Pati Tripathi, Nitesh Purohit and
Arvind Singh.
72. The confessional statement of a co-accused under Section 50 of
the PMLA is otherwise, not a substantive piece of evidence and can be
used only for the purpose of corroboration in support of other evidence
to impart assurance to the Court in arriving at a conclusion of guilt.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."
73. 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
authorized 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." 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
charge sheet has been filed against respective
respondent No. 1 - accused and therefore, the
investigation is completed. However, the High
Court has failed to notice and appreciate that the
investigation with respect to the scheduled
offences under the PML Act, 2002 by the
Enforcement Directorate is still going on. Merely
because, for the predicated offences the charge
sheet might have been filed it cannot be a ground
to release the accused on bail in connection with
the scheduled offences under the PML Act, 2002.
Investigation for the predicated offences and the
investigation by the Enforcement Directorate for
the scheduled offences under the PML Act are
different and 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."
74. 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.
CONCLUSION
75. Thus, from the documents and submissions of the counsel for the
applicant, it appears that the applicant had actively participated in the
commission of predicate offence; had acquired proceeds of crime and
had substantial share in proceeds of unaccounted liquor cannot be
ignored. The investigation against 11 persons including the applicant
is complete and three prosecution complaints against 11 accused
persons spanning to nearly 20,000 pages with over 30 witnesses and
250 documents have been filed by the investigating agency and the
investigation is going on. Despite the alleged huge scam, prosecution
complaint has been filed against 11 persons. Even as per allegations
made in the complaint filed by the ED, role of other individuals have
also been surfaced.+There is no attachment of property
againstaccused persons being distillers despite quantifying the same
at over 200 crores and no proceedings under Section 8 of the PC Act
has been initiated against them. Though it is true that the applicant has
suffered long period of incarceration and the trial has not yet
commenced and is not likely to conclude but the right to bail in cases
of delay, coupled with incarceration for a long period, depending on the
nature of the allegations, should be read into Section 439 of the Code
of Criminal Procedure and Section 45 of the PML Act. there is
substantial material indicating a strong nexus between the applicant
and the other accused persons in the commission of the crime. There
were documents and evidences that reflected the involvement of the
applicant who is the key conspirator and beneficiary from the said
scam. Records show that the grounds of arrest was communicated to
the applicant by the ED in writing. Thus, without giving any observation
as to whether the statement recorded under Section 50 of the PMLA
are admissible in evidence, but their thorough consideration should be
reserved for the trial court. It emphasized that at the bail stage, these
statements can be examined to ascertain whether there are
reasonable grounds to believe that the applicant is not guilty. There is
a difference between the admissibility of a statement of an accused
recorded under Section 50 of the Prevention of Money Laundering Act
(PMLA) and its evidentiary value.
76. In view of the aforesaid, it can be foreseen that while the High
Court in the specific facts and circumstances (where there was prima
facie material against the petitioner) came to the conclusion that mere
possession of proceeds of crime and upholding such proceeds as
untainted would be sufficient to invoke the provisions of PMLA,
however, the ratio of the said judgment may have the potential to have
an unintended fallout in a different set of facts. Depending on the facts
of the case, such an interpretation may include persons who might
have no genuine knowledge and connection with the predicate offence
and/ or the tainted money circulated by the actual accused persons
and may have to go through the rigours of trial for no fault. A balanced
pragmatic interpretation/ view of the provisions of the Act would help in
minimizing instances where there is an element of no genuine/ actual
knowledge. the Supreme Court in Vijay Madanlal (supra) judgment
interprets Section 3 in a manner to conclude that knowledge may not
be a necessary ingredient, however, the said view may not be entirely
correct in certain circumstances. Mens rea is a critical ingredient for
any criminal offence and therefore requires its presence in any action
or consequence which arises out of or in relation to an offence. It is
important that to prosecute someone for mere possession of purported
proceeds of crime, there should be an equal burden on the
prosecution to prove at least a prima facie link to the proceeds of
crime as defined under the Act.
77. The Supreme Court have further gone on to state that property
indirectly obtained would mean property derived or obtained from the
sale proceeds or in lieu of or in exchange of the "property" directly
derived or obtained as a result of criminal activity relating to a
scheduled offence. It was further held that the Explanation added in
2019 does not travel beyond the intent of tracking and reaching up to
the property derived or obtained directly or indirectly as a result of
criminal activity relating to a scheduled offence and the explanation is
only a clarification and not to increase the width of the main definition
"proceeds of crime". It was further stated that every crime property
need not be termed as "proceeds of crime" but the converse may be
true. It was held that if some other property is purchased or derived
from the "proceeds of crime" then even such subsequently acquired
property must be regarded as tainted property and actionable under
the PMLA.
78. Money laundering is understood to encompass a scenario in
which an individual commits an offense outlined in the PMLA
schedule, leading to the generation of property. This property
subsequently qualifies as the proceeds of the crime. Furthermore, the
individual engaged in activities such as concealment, possession, or
utilization of said proceeds of crime, shall be deemed to have
committed the offense of money laundering.
79. Therefore, the quantification of the Proceeds of Crime involves a
multifaceted approach. It begins with the identification of initial assets
stemming from criminal activity, subsequently encompassing any
assets obtained through these initial proceeds.
80. It is thus held that in the investigation conducted during the
predicate offence, the applicant being the orchestrator of the entire
liquor scam in the State of CG, was involved in money laundering and
proceeds of crime along with other co-accused therefore, the
entitlement of the applicant to get bail under PMLA, 2002, is not
acceptable and considering the 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.
81. 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 DUBEY
DUBEY Date:
2025.02.28
17:06:47 +0530
