Chattisgarh High Court
Manoj Kumar Soni vs Directorate Of Enforcement on 9 May, 2025
1
2025:CGHC:21801
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
ORDER RESERVED ON 15.04.2025
ORDER DELIVERED ON 09.05.2025
MCRC No. 1950 of 2025
1 - Manoj Kumar Soni S/o Sh. Narayan Prasad Soni Aged About 52
Years R/o 48, Khushi Watika, Amlidih, Raipur, Chhattisgarh 492006.
... Applicant(s)
versus
Directorate of Enforcement, Through Assistant Director, ED, Raipur
Zonal Office, Raipur, District Raipur CG
... Respondent(s)
For Petitioner(s) : Mr. Akshat Gupta, Advocate through VC
assisted by Ms. Sameeksha Gupta, Advocate
For Respondent/ED : Dr.Saurabh Kumar Pandey, Advocate
(Hon'ble Shri Justice Arvind Kumar Verma)
C A V Order
This is the second bail application on behalf of the applicant who
has come up before this Court under Section 483 of the Bhartiya Nagrik
Suraksha Sanhita [BNSS] 2023 read with Section 45 of the PMLA read
with Section 346(2) BNSS on behalf of the applicant seeking bail in
ECIR/RPZO/04/2023 dated 14.10.2023 registered with Enforcement
Directorate Office [ED] for the offence punishable under Section 3 read
with Section 4 of the Prevention of Money Laundering Act, 2002.
2. The brief facts that led to the filing of the instant application are as
follows:
i. Earlier the applicant had preferred a bail application under Section
483 of the BNSS seeking regular bail, which was dismissed by this
Court on 21.01.2025 in M.Cr.C. No. 6676 of 2024.
ii. On 24.01.2025, the applicant challenged the above order before
the Apex Court vide SLP (Cri.) No. 1300 of 2025.
iii. On 29.01.2025, subsequent to the dismissal of the bail application
of the applicant by this Court, this Court set aside the cognizance order
dated 5.10.2024 vide its judgment dated 29.01.2025 in Cr.R. No.
1326/2024.
iv. On 31.01.2025, in the SLP listed before the Apex Court, it was
brought to notice of the Apex Court and accordingly while declining to
interfere with order dated 21.01.2025, Apex court granted liberty to the
applicant to again approach the trial court in view of the aforesaid
subsequent development which reads thus:
"We do not find any ground to interfere with the
impugned order passed by the High Court.
However, liberty is given to the petitioner to move
the trial particularly taking notice of the
subsequent development."
v. Thereafter, in terms of the liberty granted by the Apex Court and in
view of the subsequent development ie. quashing and setting aside of
the cognizance order dated 5.10.2024 vide judgment dated 29.01.2025
in Cr. R. No. 1326/2024, the applicant approached the learned trial court
seeking grant of regular bail which was dismissed by the learned trial
court vide order dated 17.02.2025. Hence, the applicant has filed the
instant second bail application seeking regular bail.
3. Contention of the counsel for the applicant is that once the
cognizance order passed by the learned trial court has been quashed
and set aside by this Court, there is enquiry proceeding/trial/prosecution
pending against the applicant w.e.f. 29.01.2025. the post arrest,
detention of an accused can be authorized only under Section 167(2)
Cr.P.C. or Section 309(2) Cr.P.C. In the present case, the prosecution
complaint against the applicant stands filed by the respondent, the
detention of the applicant cannot be authorized under Section 167(2)
Cr.P.C. and since the cognizance order has been set aside, no inquiry
or prosecution would be pending and therefore detention of the
applicant cannot be authorized under Section 309(2) Cr.P.C. he submits
that the trial court does not have the power to remand the applicant to
judicial custody. He submits that in similar facts and circumstances ie.
setting aside of the cognizance order for want of sanction from the
appropriate government authority, the Apex Court in Arun Pati Tripathi
Vs. Directorate of Enforcement, Criminal Appeal No. 725/2025 vide
order dated 12.02.2025, the appellant was granted bail on the ground
that the custody of the appellant therein cannot be continued. He has
placed his reliance upon the relevant portion which is extracted below:
"4. appellant is in custody from 8th August 2024.
Order taking cognizance passed by the Special
Court has been set aside by the High Court and by
acting upon the order of the High Court, a fresh
application has been moved by the respondent for
taking cognizance. The said application is yet to be
heard by the Special Court.
5. In view of these peculiar fact, custody of the
appellant cannot be continued. As there re
allegations against the appellant, appropriate
stringent terms and conditions can be imposed by
the Special Court. We direct the respondent to
produce the appellant before the Special Court
within a period of one week from today. The Special
Court shall enlarge the appellant on bail, pending
the complaint, subject to stringent terms and
conditions, including the condition of surrender of
passport. Another condition will be of appellant
furnishing undertaking to the Special Court stating
that, in case, cognizance of the complaint is taken,
he will regularly and punctually attend the Special
Court and shall cooperate with the special court for
the early disposal of the case. In the event, it is
found that, the appellant is no cooperating......"
4. He submits that it is a settled law that when the detention of an
accused itself is illegal, the arrest of the accused person, as per
provisions of Section 45 of the PMLA itself stands vitiated. He has
placed his reliance in the matters of Directorate of Enforcement Vs.
Subhash Sharma, SLP (Crl.) No. 1136/2023 dated 21.01.2025
upholding the judgment of this Court in Subhash Sharma Vs.
Directorate of Enforcement in MCRC No. 5288 of 2022 dated
21.09.2022 and in the matter of Vihaan Kumar Vs. State of Haryana.
SLP(Crl.) No. 13320 of 2024 dated 06.02.2025. The Court highlighted
that holding someone in custody indefinitely while they await trial
infringes on their fundamental right to liberty under Article 21 of the
Constitution, effectively transforming pre-trial detention into a form of
punishment.
5. He submits that the "Proceeds of Crime" being the core of the
ingredients constituting the offence of money-laundering, that
expression needs to be construed strictly, as such, all properties
recovered or attached by the respondent in connection with the criminal
activity relating to a scheduled offence under the general law, cannot be
regarded as proceeds of crime, therefore, the property must be derived
or obtained, directly or indirectly, as a result of criminal activity relating
to a scheduled offence. For being regarded as proceeds of crime, the
property associated with the scheduled offence must have been derived
or obtained by a person as a result of criminal activity relating to the
concerned scheduled offence. This apart, the applicant in the instant
case was arrested on 30.04.2024 and is in custody for more than 9
months. There is no allegation against the applicant that he is involved
in any process or activity connected with the proceeds of crime nor has
there any recovery of unaccounted cash, jewellery or assets from the
applicant. that the accused/applicant cannot be stated to be absconding
or defying summons. He further submits that the applicant is not a flight
risk and that the applicant satisfies the test for grant of bail.
6. In reply, Dr. Saurabh Pandey, learned counsel for the
Enforcement Directorate referring to the ECIR submits that the bail
application in the PMLA cases are required to be decided in the light of
twin conditions laid down in Section 45 of the PMLA. He contended that
the present applicant had a specific role who actively assisted the cop-
accused Roshan Chandrakar in collecting the extortion amount from
rice millers in Chhattisgarh from passing their custom milling and special
incentive bills. The present applicant had actively assisted in generating
and acquiring proceeds of crime which constitute the offence of money
laundering under Section 3 of the PMLA, 2002 and punishable under
Section 4 of the PMLA Act, 2002. He next submitted that the trial court
had dismissed the bail application after considering the facts and
evidence against the applicant which clearly establishes his involvement
in the offence of money laundering and therefore he has failed to satisfy
the twin conditions as per Section 45 of the PMLA Act. He further
submits that thought he investigation is complete and till date the
proceeds of crime worth Rs. 19 crores approximately, has been
attached out of total 147 crores and the investigation is underway as
such, release on bail at this juncture is not desirable for the strong
likelihood that he might try to influence the witness of this case to
hamper further investigation. To substantiate the submission, he
referred to the judgment rendered by the Apex Court in case of Vijay
Madanlal Chaudhary & others Vs. Union of India & others [2022
SCC OnLine SC 929] which has been duly upheld as under:
"60. As a matter of fact, prior to amendment of 2015,
the first proviso acted as an impediment for taking
such urgent measure even by the authorized officer,
who is no less than the rank of Deputy Director. We
must hasten to add that the nuanced distinction
must be kept in mind that to initiate "prosecution" for
offence under Section 3 of the Act registration of
scheduled offence is a prerequisite, but for initiating
action of "provisional attachment" under Section 5
there need not be a pre-registered criminal case in
connection with scheduled offence. This is because
the machinery provisions cannot be construed in a
manner which would eventually frustrate the
proceedings under the 2002 Act. Such dispensation
alone can secure the proceeds of crime including
prevent and regulate the commission of offence of
money-laundering. The authorized officer would,
thus, be expected to and, also in a given case,
justified in acting with utmost speed to ensure that
the proceeds of crime/property is available for being
proceeded with appropriately under the 2002 Act so
as not to frustrate any proceedings envisaged by the
2002 Act. In case the scheduled offence is not
already registered by the jurisdictional police or
complaint filed before the Magistrate, it is open to
the authorized officer to still proceed under Section 5
of the 2002 Act whilst contemporaneously sending
information to the jurisdictional police under Section
66(2) of the 2002 Act for registering FIR in respect of
cognizable offence or report regarding non-
cognizable offence and if the jurisdictional police
fails to respond appropriately to such information,
the authorized officer under the 2002 Act can take
recourse to appropriate remedy, as may be
permissible in law to ensure that the culprits do not
go unpunished and the proceeds of crime are
secured and dealt with as per the dispensation
provided for in the 2002 Act. Suffice it to observe
that the amendment effected in 2015 in the second
proviso has reasonable nexus with the object sought
to be achieved by the 2002 Act."
7. He further submits that the applicant with proceed of crime and
having deep roots in the society, is in a position to influence witnesses.
He submits that the applicant was arrested in compliance of Section 19
of the PMLA. So far as the order of this Court in Cr. R. No. 1326/2024
dated 29.01.2025 is concerned, the cognizance order against the
applicant has been set aside by the Special Court on 5.10.2024 in
relation to the prosecution complaint dated 28.06.2024 filed in
connection with ECIR bearing No.ECIR/RPZO/04/2023 dated
14.10.2023. No adverse remarks were made on the prosecution
complaint and it is still active and therefore the claim of the applicant
that no enquiry/proceeding/trial is pending against him is factually and
legally incorrect. Though in the order, it has been held by this Court that
liberty is granted to the Enforcement Directorate to proceed further in
line of taking of cognizance once prosecution sanction would have been
granted in the said matter. The competent authority in the case of the
present applicant is State of Chhattisgarh for granting prosecution
sanction under Section 197 Cr.P.C. and vide its order bearing No.
08/15-,/2025/21-d (vfHk;kstu) dated 05.02.2025 has accorded the
prosecution sanction in the present case for prosecution of the accused
under Section 3 read with Section 4 of the PMLA Act, 2002. In view of
the liberty granted by this Court vide judgment dated 29.01.2025 and
after considering the judgment of the Apex Court in the case of
Enforcement Directorate Vs. Bibhu Prasad Acharya, 2024 SC
OnLine SC 3181, application has been filed by the complainant before
this Court to take the prosecution sanction order dated 05.02.2025
against the applicant on record and to resume the proceedings from the
stage where it was before the judgment of the Hight Court. He further
denied the contention of the applicant with regard to non-existence of
cognizance order and that in the present case, cognizance order dated
22.03.2025 is already in the record. It has been held in catena of
judgments that the validity of the prosecution sanction is to be decided
by the trial court during trial. The same has been substantiated by the
judgment of the Apex Court in the case of P.K.Pardhan V. State of
Sikkim, (2001) 6 SCC 704. Similarly, in the case of Fulleshwar Gope
Vs. UOI and Others, SLP (Crl.) NO. 4866 of 2023, while interpreting
the law given under Section 465 of the Cr.P.C. has observed as follows:
"17. The aforecited authorities point to only
one conclusion which is that sanction through
should be challenged t the earliest possible
opportunity, it can be challenged at a later stge
as well. These judgments, although not
specifically in the context of laws such a UAPA,
posit a generally acceptable rule that a right
available to the accused, which may provide
an opportunity to establish innocence, should
not be foreclosed by operation of law, unless
specifically provided within the statutory text. At
the same time, challenging validity of sanction
cannot and should not be a weapon to slow
down or stall otherwise valid prosecution.
Other legislation such as the CrPC provide
mechanisms for the sanction and subsequent
actions to be save from being invalidated due
to any irregularity etc." Section 465 Cr.P.C.
provides for the possibility that a sanction
granted under Section 197 Cr.P.C can be
saved by its operation. Similarly, a sanction
under the PC Act, if found that there was any
error, omission or irregularity would not be
vitiated unless the same has resulted in failure
of justice.
18. ...... In the attending facts and
circumstances of the present case, keeping in
view the submission made at the a bar that the
trial is underway and numerous witnesses (113
out of 125) already stand examined, we refrain
from returning any finding on the challenge to
the validity of the sanction qua the present
appellant and leave it to be raised before the
Trial Judge, who shall, if such a question is
raised decide, it promptly."
8. In the case of Shantaben Bhurabhai Bhuriya Vs. Anand
Athabhai Chaudhari (2022) 15 SCC 228, has some relevant in the
present situation and the same is reproduced as under:
"15. Now, so far as the observation made by the
High Court that in view of bar under Section 197 of
the Code of Criminal Procedure and no sanction
was obtained is concerned, the aforesaid also
cannot be ground to quash criminal proceedings in
exercise of powers under Section 482 of the Code
of Criminal Procedure. Looking to serious
allegations against the Police Officers of misuse of
powers and it is alleged that innocent persons
residing in the society were beaten and even in the
earlier day the phone call was made by the
complainant / victim informing that thieves have
come in the society and complaint was made that
nothing is being done despite repeated such
incidents and the alleged incident in the present
case is in the midnight when again Police Officers
along with additional police staff went to the village
and the allegation against the accused are with
respect to second incident, it is very debatable
whether power under Section 197 of the Code of
Criminal Procedure would apply and the acts which
are alleged to have been done by the accused /
Police Officers can be said to be part of official
duties. Therefore, at this stage, to quash the entire
criminal proceedings in exercise of powers under
Section 482 of the Code of Criminal Procedure is
impermissible. Even assuming that the High Court
was right that in absence of sanction under Section
197, the proceedings are vitiated, in that case, the
High Court could have directed the authority to take
sanction and then proceed, instead of completely
quashing the entire criminal proceedings."
9. He has further placed his reliance in the matter of State Rep. By
the Deputy Superintendent of Police, Vigilance and Anti corruption
Chennai City-1, Department Vs. G. Easwaran, Criminal Appeal No.
1405 of 2019 decided on 26.03.2025 wherein it has been held as
under:
"14. Thus, there is no doubt that the High Court
committed an error in quashing the prosecution
on the ground that the sanction to prosecute is
illegal and invalid. In conclusion, we find that
the objections raised in the revision petition
against the Special Court's order dismissing
the discharge application were identical to the
grounds raised in the petition under Section
482 Cr.P.C., from which the present appeal
arises. Second, apart from being congruent
and overlapping, the respondent could not
demonstrate any material change in facts and
circumstances between the dismissal of the
revision petition by the High Court and the
filing of the quashing petition under Section
482 Cr.P.C. Third, the validity of the sanction
can always be examined during the course of
the trial and the problems due to the
typographical error as 14 (2015) 16 SCC 163.
alleged by the State could have been
explained by producing the file at the time of
trial. Fourth, it is settled that a mere delay in
the grant of sanction for prosecuting a public
authority is not a ground to quash a criminal
case."
10. Lastly, he contends that the factual matrix of the case of Arun
Pati Tripathi V. Directorate of Enforcement in Cr.A. No. 725 of 2023
which has been relied upon by the learned counsel for the applicant in
the present case is completely different because during the hearing of
the present case, the Special Court has already taken re-cognizance
against the applicant. He has placed his reliance in the case of Tarun
Kumar Vs. Assistant Directorate of Enforcement (SLP (Crl.)
No.9431 of 2023), the Apex Court observed as under:
"18..... It may be noted that parity is not the law.
While applying the principle of parity, the Court is
required to focus upon the role attached to the
accused whose application is under
consideration."
11. He submits that during investigation, the role of the applicant has
surfaced as one of the prime accused in collecting the extortion
amounts and the applicant has not putforth any new and existing
substantial facts which entitle him to be enlarged on bail. Since there is
no change in the factual situation present bail application may be
dismissed.
12. Heard, learned counsel for the parties and considered the rival
contentions and also perused the record.
13. From the perusal of the abovementioned facts, it is clear that
prima facie the Enforcement Directorate has collected evidence of
offence of money laundering against the present applicant though its
correctness is required to be adjudicated during trial. The submission of
learned counsel for the applicant that the applicant is in custody since
30.04.2024 i.e. about one year, therefore, he should be released on bail
on account of long incarceration period. Earlier bail application filed by
the applicant has been dismissed by this court on 21.01.2025 in M.Cr.C.
No. 6676/2024 and the applicant had preferred SLP against the said
order before the Apex Court vide SLP (Crl.) No. 1300/2025. On
31.01.2025, when the matter was listed before the Apex Court a
subsequent development was brought to the notice and the Apex Court
declined to interfere with the order of the High Court dated 21.01.2025
and has granted liberty to the applicant to again approach the trial court
in view of the subsequent development.
14. Since the offence pertains to money laundering, apart from the
usual considerations, it would have to be seen whether the twin
conditions stipulated in Section 45 of the PMLA are met. A plain reading
of Section 45 of the PMLA shows that the respondent/ED must be given
an opportunity to oppose the application and the Court should have
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. The twin
conditions though restricts the right of accused to be released on bail
but do not impose absolute restraint and the discretion vests in the
Court.
15. Bail is the rule and jail is the exception. This principle is nothing
but a crystallization of the constitutional mandate enshrined in Article 21,
which says that that no person shall be deprived of his life or personal
liberty except according to the procedure established by law. Liberty is
the usual course of action and deprivation of it a detour. The deprivation
of liberty must only by procedure established by law, which should be
fair and reasonable. Right of the accused to speedy trial is an important
aspect which the Court must keep in contemplation when deciding a bail
application as the same are higher sacrosanct constitutional rights,
which ought to take precedence.
16. Section 45 of the PMLA while imposing additional conditions to be
met for granting bail, does not create an absolute prohibition on the
grant of bail. When there is no possibility of trial being concluded in a
reasonable time and the accused is incarcerated for a long time,
depending on the nature of allegations, the conditions under Section 45
of the PMLA would have to give way to the constitutional mandate of
Article 21. What is a reasonable period for completion of trial would
have to be seen in light of the minimum and maximum sentences
provided for the offence, whether there are any stringent conditions
which have been provided, etc. It would also have to be seen whether
the delay in trial is attributable to the accused.
17. Section 309(2) of the Code of Criminal Procedure reads as under:
"(2) If the Court after taking cognizance of an
offence, or commencement of trial, finds it
necessary or advisable to postpone the
commencement of, or adjourn, any inquiry or
trial, it may, from time to time, for reasons to be
recorded, postpone or adjourn the same on
such terms as it thinks fit, for such time as it
considers reasonable, and may by a warrant
remand the accused if in custody.....
In the present case, it is pertinent to mention here that in Cr.R.
No. 1326 of 2024 vide order dated 29.01.2025, this Court has set aside
the order of taking cognizance therefore, detention from the date of
earlier cognizance ie. on 5.10.2024 to the date of taking re-cognizance
by the Special Court vide order dated 22.03.2025 is not as per
provisions contained under Section 309(2) Cr.P.C. The applicant is in
custody since 30.04.2024 i.e. about one year and the maximum
punishment prescribed is 7 years as of today and the position is that
though the complaint has been filed on 21.08.2023, the trial has not yet
commenced and even hearing on charges has not taken place. In the
matter of Arun Pati Tripathi Vs. Directorate of Enforcement (supra)
in liquor scam case in the State of Chhattisgarh, (Arun Pati Tripathi Vs.
State of Chhattisgarh (Criminal Appeal No. 1264 of 2025, (SLP (Crl.)
No. 14646 of 2024), Criminal Appeal No. 1265 of 2025 (SLP (Crl.)
No. 17645 of 2024) and Criminal Appeal No.1266 of 2025 (SLP (Crl.)
NO. 298 of 2025), it has been observed as under:
"The appellant is being prosecuted for the various
offences punishable under Sections
420,467,468,471 and 120-B of the IPC,1860 and
Sections 7 & 12 of the Prevention of Corruption
Act, 1988. The appellant is in custody for
approximately 8 months.
However, to ensure that the investigation is
not affected in any manner, we direct that the
appellant shall be enlarged on bail on 10 th April
2025 subject to appropriate terms and conditions
fixed by the concerned Sessions Court."
18. Similarly, in liquor scam in the State of Chhattisgarh, in the matter
of Anil Tuteja Vs. Directorate of Enforcement, Criminal Appeal No.
1961 of 2025, it has been held as under:
"..........3. Thus, the factual position which emerges
is that (a) as of today cognizance of the offence
under the PMLA has not been taken as far as the
appellant is concerned; (b) the appellant has
undergone incarceration for about one year; (c)
there are 20 accused who will have to be heard n
charge and (d) more than 30 prosecution
witnesses have been cited.
4. The maximum sentence which can be imposed
in this Case is for imprisonment for 7 years.
Looking to the aforesaid factual aspects noted in
pare 3 there is no possibility of commencement of
trial in near future. Therefore, the principles laid
down by this Court in the case of V. Senthil Balaji
Vs. The Deputy Director, Directorate of
Enforcement, 2024 INSC 739 will apply. Moreover,
in similar fact situation, this Court by order dated
12th February 2025 in Criminal Appeal No. 725 of
2025 has granted bail to a co-accused. Hence, the
appellant is entitled to be enlarged on bail. "
19. In the present case also, the principle laid down by the Apex
Court in the matter of V. Senthil Balaji Vs. The Deputy Director,
Directorate of Enforcement, 2024 INSC 739 (Criminal Appeal No.
4011 of 2024 arising out of SLP (Crl. ) No.3986 of 2024 would apply.
The court has noted that where there are multiple accused persons and
the trial is not expected to end anytime in the near future and the delay
is not attributable to the accused, keeping the accused in custody by
using Section 45 PMLA a tool for incarceration or as a shackle is not
permissible. Liberty of an accused cannot be curtailed by Section 45
without taking all other germane considerations into account.
20. Therefore, the Apex Court in the matter of Arun Pati Tripathi Vs.
Directorate of Enforcement in Cr.A. No. 725 of 2025 (SLP (Crl.) No.
16219 of 2024) vide order dated 12th February 2025, has observed that
the custody of the appellant cannot be continued. Similarly, the Apex
Court in the matter of Anil Tuteja Vs. Directorate of Enforcement
Cr.A. No. 1961 of 2025 (SLP Crl.) No. 3148 of 2025, has observed that
the custody of the appellant cannot be continued.
20. After considering the entire facts and circumstances of the case,
particularly the long incarceration of the applicant in custody ie. about
one year, charge sheet has already been filed, the maximum
punishment prescribed is 7 years as of today and further that this Court
vide order dated 29.01.2025 in Cr.Rev. No. 1326 of 2024 has set aside
the order taking cognizance ie. 5.10.2024 to the date of taking re-
cogniance by the Special Court vide order dated 22.03.2025 which is
not as per provisions contained under Section 309(2) Cr.P.C. and
applying the principle laid down by the Apex Court in the matter of V.
Senthil Balaji (supra) as also Arun Pati Tripathi (supra) and Anil
Tuteja (supra), this court is of the view that the applicant deserves to be
granted regular bail. The concerned trial court shall enlarge the
applicant on bail subject to stringent terms and conditions as may be
fixed after hearing the ED/respondent. The condition shall include (a)
surrender of passport if any (b) furnishing an undertaking on oath to the
concerned court that he will regularly and punctually attend the trial
court and shall cooperate with the trial court for early disposal of the
case and (c) in the event it is found that the applicant is not cooperating
with the concerned court for early disposal of the case or commits a
breach of any of the conditions of bail, it will be open for the respondent
to apply for cancellation of bail before the concerned court.
21. Accordingly, the bail application is allowed.
Sd/-
(Arvind Kumar Verma)
Judge
SUGUNA Date:
DUBEY 2025.05.09
19:32:08
+0530
