Delhi High Court
Directorate Of Enfocement vs Arvind Kejriwal on 25 June, 2024
Author: Sudhir Kumar Jain
Bench: Sudhir Kumar Jain
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: June 21, 2024
Decided on: June 25, 2024
+ CRL.M.C 4858/2024
DIRECTORATE OF ENFORCEMENT
..... Petitioner
Through: Mr. S. V. Raju, ASG with
Mr. Zoheb Hossain, Special
Counsel for ED along with
Mr. Anam Venkatesh,
Mr. Vivek Gurnani,
Ms. Abhi Priya,
Mr. Dipanshu Gaba,
Ms. Shweta Desai,
Ms. Bhanupriya, AD, Mr. S.
K. Sharma, AD/IO and
Mr. Gaurav Saini, ALA
V
ARVIND KEJRIWAL
..... Respondent
Through: Dr. Abhishek Manu Singhvi,
Senior Advocate with
Mr. Vikram Chaudhari,
Senior Advocate, Mr. Vivek
Jain, Mohd Irshad,
Mr. Karan Sharma,
Mr. Rishikesh Kumar,
Mr. Mohit Siwach,
Mr. Sadiq Noor,
Mr. Kaustubh Sandhu,
Ms. Hargun Sandhu,
Ms. Nikita Gill and
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:25.06.2024 CRL.M.A. 18446/2024 IN CRL.M.C. 4858/2024 Page 1
15:13:33
Mr. Rajat Jain, Advocates
CORAM
HON'BLE DR. JUSTICE SUDHIR KUMAR JAIN
ORDER
CRL.M.A. 18446/2024 (stay)
1. The factual background of the case as appearing from the
record is that CBI registered an FIR bearing no. RC-0032022A0053
dated 17.08.2022 against Sh. Manish Sisodia, Deputy Chief Minister,
GNCTD and others under section 120 B read with section 477A of
IPC, 1860 and section 7 of Prevention of Corruption Act, 1988 on the
allegations of irregularities in framing and implementation of Excise
Policy of GNCTD for the year 2021-22. Thereafter, the
petitioner/Directorate of Enforcement (hereinafter referred to as
"ED") recorded ECIR bearing no. ECIR/HIU-II/14/2022 on
22.08.2022 and initiated investigation to trace out proceeds of the
crime stated to have been generated due to alleged irregularities in
formulation and implementation of Excise Policy 2021-22. CBI filed
the charge-sheet in predicate offence on 25.11.2022. ED filed the
Prosecution Complaint on 26.11.2022 and the Special Court has
taken the cognizance vide order dated 20.12.2022. ED subsequently
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also filed 06 supplementary charge-sheets and cognizance was taken
by the Special Court on these supplementary charge sheets
accordingly.
1.1 ED issued 9 summon to the respondent which were stated to be
replied by the respondent but the respondent did not appear before
ED in response to the summons. ED filed complaints under section
174 of Code of Criminal Procedure, 1973 (hereinafter referred to as
"the Code") bearing no. CT 02/2024 dated 02.02.2024 and CT
04/2024 against the respondent on which the cognizance was taken
vide order dated 07.02.2024 and 07.03.2024 respectively passed by
the Special Judge, Rouse Avenue Courts, New Delhi. The respondent
challenged the cognizance orders dated 07.02.2024 and 07.03.2024
but the concerned Special Court vide order dated 15.03.2024 declined
to grant any interim relief to the respondent. The respondent on
19.03.2024 also filed a writ petition bearing W.P. (Crl) 937/2024
seeking quashing of summons under section 50 PMLA dated
26.02.2024 and 16.03.2024 and notice was issued by this Court for
22.04.2024. The respondent also filed an application bearing Crl.
M. A. no 9106/2024 in W.P. (Crl) 937/2024 and the Division Bench
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of this Court did not grant any interim relief to the respondent on the
said application vide order dated 21.03.2024.
1.2 ED arrested the respondent on 21.03.2024 at 9:05 PM under
section 19 the Prevention of Money-Laundering Act, 2002
(hereinafter referred to as "PMLA") for the purpose of further
investigation. The respondent being aggrieved by the arrest filed the
writ petition bearing Diary No. 13598/2024 before the Hon'ble
Supreme Court which was listed on 22.03.2024. The Hon'ble
Supreme Court dismissed the said writ petition as withdrawn after
giving liberty to the respondent to raise all pleas and contentions
before the trial court during the remand proceedings. The Special
Judge vide order dated 22.03.2024 granted the custody of the
respondent to ED for investigation till 28.03.2024 which was
extended till 01.04.2024. The respondent was remanded to judicial
custody on 01.04.2024 which is continuing up till date.
1.3 The respondent on 26.03.2024 preferred a writ petition bearing
no. W.P. (Crl) 985/2024 to challenge his arrest on the ground of
illegality and the remand order dated 22.03.2024 which was replied
by ED. The writ petition bearing W.P. (Crl) 985/2024 was dismissed
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by Co-ordinate Bench of this Court vide judgment dated 09.04.2024.
The respondent being aggrieved by the judgment dated 09.04.2024
filed SLP (Crl) bearing no 5154/2024 before the Hon'ble Supreme
Court. The respondent was granted interim bail in SLP (Crl)
5154/2024 vide order dated 10.05.2024 till 01.06.2024 on the account
of campaigning in the upcoming Lok Sabha general elections. The
Hon'ble Supreme Court has already reserved judgment after
conclusion of arguments in SLP (Crl) 5154/2024 vide order dated
17.05.2024.
1.4 The respondent on 30.05.2024 filed interim bail application
vide IA no. 91/2024 and regular bail application vide IA no. 92/2024
before the Special Judge. The Special Judge has dismissed IA no
91/2024 for grant of interim bail vide order dated 05.06.2024. ED
and the respondent have handed over written notes during the course
of arguments on the bail application bearing IA no. 92/2024. The
Court of Ms. Niyay Bindu, Vacation Judge, (PC Act), CBI-13, Rouse
Avenue District Courts, New Delhi (hereinafter referred to as "the
Vacation Judge") vide order dated 20.06.2024 (hereinafter referred
to as "the Impugned Order") granted bail to the respondent.
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1.5 ED being aggrieved by Impugned Order filed the present
petition bearing Crl.M.C. no. 4858/2024 under section 439(2) read
with section 482 of the Code to challenge the Impugned Order along
with Crl.M.A. no. 18446/2024 with the prayer to grant ad interim ex
parte stay of the operation of Impugned Order and said application is
under disposal vide present order. The notice of Crl.M.C. no.
4858/2024 was ordered to be issued to the respondent which was
accepted on behalf of the respondent and was ordered to be listed on
10.07.2024 before the Roaster Bench. This Court on 21.06.2024
heard the arguments at length on Crl.M.A. no. 18446/2024 and
accordingly reserved the order and further till the pronouncement of
the order on Crl.M.A. no. 18446/2024, the operation of the Impugned
Order was stayed. The present order is restricted to disposal of
Crl.M.A. no. 18446/2024.
2. ED in the present petition has challenged the Impugned Order
primarily on the following grounds besides others:
i) The Vacation Judge has denied ED a proper
opportunity to present its case which is utter violation of
first mandatory condition as per section 45 of PMLA.
The oral prayer made on behalf of ED for seeking stay
of the impugned order was also rejected by the Vacation
Judge in utter disregard of settled precedents of law.
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ii) The averments raised on behalf of the respondent
before the Vacation Judge during the course of
arguments have already been considered and rejected
by another Co-ordinate Bench of this Court in judgment
dated 09.04.2024. The Co-ordinate Bench of this Court
in judgment dated 09.04.2024 has considered material
collected by ED against the respondent, credibility of
statements of witnesses and approver, validity of arrest
of the respondent and remand order dated 22.03.2024,
time of arrest of the respondent for not joining
investigation despite issuance and service of 9 summons
and no fresh material collected by ED since October,
2023, etc.
iii) There is evidence and material against the
respondent to demonstrate that the respondent has
committed offence of money laundering in his individual
capacity and in his vicarious liability as per section 70(1)
of PMLA and no court could have come to a reasonable
ground to believe that he is not guilty of offence of
money laundering.
iv) The respondent had active role in demanding
kickback and meeting with south group. The respondent
also had role in formulation of Excise Policy and
utilization of proceed of crime amounting to Rs.45
crores approximately.
v) The statements recorded under section 50 of PMLA
are admissible in nature and can be relied upon at the
stage of remand or even to reject bail.
3. Sh. S.V. Raju, the learned Additional Solicitor General assisted
by Sh. Zoheb Hossain, Special Counsel advanced arguments for ED.
Dr. Abhishek Manu Singhvi and Sh. Vikram Chaudhari, the learned
Senior Counsels advanced arguments on behalf of the respondent.
ED and the respondent have also submitted a written note/
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submissions in terms of order dated 21.06.2024 which are perused
and considered.
4. Before averting to the arguments, it is necessary to reproduce
the relevant paragraphs of the Impugned Order which were also
referred by learned Senior Counsels for both the parties during course
of arguments. The para nos. 16, 20, 24, 25, 26, 27, 29, 31 and 33 are
reproduced verbatim as under:-
16. Although, various bulky documents and citations have
been filed by both the parties, most of which were not even
relevant in respect of the present application but it seems
that both the parties have filed the same alongwith detailed
oral arguments with the apprehension as to an order may
be passed in favour of the opposite party. Admittedly, the
present matter is a peculiar case wherein various accused,
witnesses and stake holders are involved and neither ED
nor the defense wants the order to be passed in favour of
the other. However, it is not possible to go through these
thousands of pages of the documents at this juncture but
this is the duty of the court to work upon the matter
whichever comes for consideration and pass the order in
accordance with the law. Although, sometimes the courts
refrain from passing such orders on account of various
reasons which may be having long lasting effects. . . .
20. So far as the well settled principle of bail is concerned,
several guidelines have been issued by the Hon'ble Supreme
Court specifically in the celebrated judgment of Satender
Kumar Antil Versus CBI & Anr. which have been
enlightening the trial courts to a great extent and
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compliance of those guidelines have been ensured on State
level as well on District level.
24. ED is taking plea that the investigation is still pending
in this matter and there is a likelihood that the applicant
may influence the witnesses and tamper with the evidence.
On oral enquiry by the court, the IO informed that out of
the total alleged amount of 100 crores, around 40 crores has
been traced out in the previous months and the remaining
60 crores yet to be traced. On this aspect, ED has failed to
clarify as to how much time is required for tracing out the
complete money trail. Meaning thereby that until and
unless this exercise of tracing out the remaining amount
gets completed by ED, accused is supposed to remain
behind bars that too without proper evidence against him.
This is also not an acceptable submission of ED.
25. ED is again and again pressing upon the twin conditions
available under Section 45 of PMLA to fortify it's
arguments that the aspect of bail under PMLA is altogether
different from the provisions of bail under CrPC but one
consideration is not being taken care of by ED that even for
implicating a person as an accused in such a criminal
matter is also required to be done under certain guidelines
and legal procedures. Maxim of law that every person must
be presumed innocent until proven guilty seems to be not
applicable in the given case in respect of the present
accused.
26. This is also noticeable that ED is silent about the facts as
to how the proceeds of crime have been utilized in
Assemble Elections at Goa by AAP as admittedly after
about two years, the bigger portion of the alleged amount
remains to be traced out.
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27. There are certain undisputed facts as specified on
behalf of the applicant that in the month of July 2022, the
material was available with the ED against the accused but
he was called only in August 2023 which shows malafide of
ED and ED has failed to answer this objection of the
applicant.
29. Ld. Counsel for the applicant states that statements of
co-accused do not show any incriminating material against
applicant. But, Ld. ASG stated that the statements of those
co-accused/approvers is sufficient to establish the personal
relation of the applicant with some of them and also the
specific role and involvement of the applicant in the alleged
offence. It may be possible that some known persons of the
applicant are having involvement in an offence or being
known to a third person, involved in the offence, but ED
has failed to give any direct evidence against the applicant
in respect of the proceeds of crime.
31. On the other hand, ED is silent of certain issues raised
by the applicant such as that he was not named either in
CBI case or in the ECIR FIR. Secondly, the allegations
against the applicant have surfaced after the subsequent
statements of certain coaccused. Thirdly, this is also an
admitted fact that the accused has not been summoned by
the court till date, yet, he is lying in the judicial custody at
the instance of ED on the pretext of the investigation being
still going on.
33. Interestingly, both the parties have relied upon the
observations of Hon'ble Supreme Court as given in the
celebrated case of Vijay Madanlal Chaudhary versus Union
of India in respect of bail under Section 45 of PMLA.
However, in view of the above discussion and on the prima
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facie basis, the guilt of the accused is yet to be established.
In respect of the condition that he shall not involve in the
offence after his release on bail, it is already undertaken so
by the applicant in his application. Moreover, if bail is
granted, the same shall be conditional which shall put the
applicant under an obligation in this regard.
5. Sh. S.V. Raju argued that the Impugned Order is perverse as
the Vacation Judge has not given an opportunity of being heard to
ED to oppose the bail application filed by the respondent as per
mandate of section 45(1)(i) of PMLA. The Vacation Judge has also
not recorded its satisfaction that there are reasonable grounds to
believe that the respondent has not committed offence of money
laundering and is not likely to commit any offence while on bail as
per section 45(1)(ii) of PMLA. Sh. S. V. Raju has referred para no.
16 of the Impugned Order.
5.1 Sh. S.V. Raju also argued that the Vacation Judge in para no.
27 of the Impugned Order has recorded wrong finding that the
material was available with ED in the month of July, 2022 against the
respondent who was called only in the month of August, 2023 which
reflected mala fide of ED. It was also argued that ECIR subject
matter of the present petition was registered in the month of August,
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2022. The respondent was arrested on 21.03.2024 and thereafter filed
writ petition bearing W.P.(Crl) 985/2024 to challenge his arrest and
remand and the Co-ordinate Bench of this Court in para no 155 of the
judgment dated 09.04.2024 has already held that there was nothing
before the Court to reach a conclusion that the timing of the arrest
was deliberated by ED and the conduct of the respondent was not
responsible for a situation in which there was no other option except
to arrest him for joining the investigation.
5.2 Sh. S. V. Raju further argued that the respondent has filed SLP
(Crl) 5154/2024 to impugn the judgment dated 09.04.2024 passed in
W.P.(Crl) 985/2024 before the Hon'ble Supreme Court wherein the
respondent vide order dated 10.05.2024 was granted interim bail. It
was mentioned in order dated 10.05.2024 that nothing in the order
shall be treated as an expression of opinion on the merits of the case
of the Criminal Appeal pending before the Hon'ble Supreme Court.
The Hon'ble Supreme Court on 17.05.2024 has already heard the
arguments and the judgment is reserved. The Supreme Court vide
order dated 17.05.2024 has given the liberty to the respondent to file
an application for grant of bail which was ordered to be considered
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and decided in accordance with law. Sh. S. V. Raju also referred the
order dated 10.11.2023 passed in SLP (Crl) no. 14510/2023 titled as
Sanjay Singh V Union of India and another wherein the liberty
was given to the petitioner Sanjay Singh to apply for grant of regular
bail which if filed will be considered and decided on its merits
without being influenced by the impugned judgment and accordingly
it was argued that no such observation was made by the Hon'ble
Supreme Court in order dated 17.05.2024 while giving the liberty to
the respondent to file an application for grant of bail.
5.3 Sh. S. V. Raju also argued that the Impugned Order is perverse
being passed on irrelevant consideration and by ignoring relevant
consideration. The Vacation Judge in Impugned Order has taken the
contrary view pertaining to the issues which have already been
considered and decided vide judgment dated 09.04.2024 and said
order has never been set aside or stayed by the Hon'ble Supreme
Court. The findings as given in judgment dated 09.04.2024 were
binding on the Vacation Judge. Sh. S. V. Raju also referred various
paras of Impugned Order in particular para nos. 16, 27, 28, 29, 31, 32
and 33 to substantiate his arguments.
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5.4 Sh. S. V. Raju further argued that the Vacation Judge has not
considered vicarious liability of the respondent as per section 70(1)
of the PMLA as the political party i.e. Aam Aadmi Party (AAP) was
also found guilty of money laundering being the beneficiary of
proceeds of crime generated in Delhi Liquor Scam. It was further
argued that the proceeds of crime amounting to Rs.45 crores was
utilized in the election campaign of AAP in Goa Assembly Election
conducted in 2022. Accordingly, AAP has committed offence of
money laundering through respondent and the respondent is
accordingly covered under section 70 of PMLA.
5.5 Sh. S.V. Raju argued that the bail can be cancelled if the court
granting the bail have taken into consideration factors which should
not have been taken into consideration or bail is founded on
irrelevant consideration and referred Neeru Yadav V State of U.P.,
(2014) 16 SCC 508. Accordingly, it was argued that the Impugned
Order passed by the Vacation Judge be stayed till the final decision
of the present petition.
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5.6 ED in its written note has raised various issues for
considerations and most of these issues/points were argued by Sh. S.
V. Raju in oral submissions.
6. Dr. Abhishek Manu Singhvi, the learned Senior Counsel for
the respondent argued that the respondent cannot be detained in jail
indefinitely and the Vacation Judge was not expected to mention
each and every argument stated to have been advanced on behalf of
ED in impugned order. The judgment dated 09.04.2024 passed in
W.P. (Crl) 985/2024 was not decided on merits of the case but only
dealt with arrest of the respondent under section 19 of PMLA and
referred para no. 4 of the judgment dated 09.04.2024 wherein it was
observed by the learned Single Judge that the petition is not an
application seeking grant of bail, but release on the ground of arrest
of the respondent being illegal.
6.1 Dr. Singhvi further argued that the cancellation of bail and
grant of bail are two different aspects and the Impugned Order is not
perverse as the Vacation Judge has considered every aspect while
passing the Impugned Order. If the present application is allowed, it
would amount to cancellation of bail. Dr. Singhvi in support of his
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arguments cited Dolat Ram V State of Haryana, (1995) 1 SCC 349;
Kanwar Singh Meena V State of Rajasthan, (2012) 12 SCC 180;
Subhendu Mishra V Subhrat Kumar Mishra, 2000 SCC (Crl)
1580; Mahant Chand Nath Yogi V State of Haryana, (2003) 1
SCC 326 and Bhagirath Sinh V State of Gujarat, (1984) 1 SCC
284 and also the judgments delivered by other benches of this Court.
6.2 Dr. Singhvi further argued that the Hon'ble Supreme Court in
SLP (Crl) 5154/2024 titled as Arvind Kejriwal V Directorate of
Enforcement vide order dated 10.05.2024 has granted leave to the
respondent against the judgment dated 09.04.2024 passed in
W.P.(Crl) 985/2024 and as such the judgment dated 09.04.2024 is
under active consideration of the Hon'ble Supreme Court. Dr.
Singhvi also referred para no. 15 of the order dated 10.05.2024
passed by the Hon'ble Supreme Court whereby the respondent was
granted interim bail and order dated 17.05.2024 whereby liberty was
granted to the respondent to file an application for grant of bail. Dr.
Singhvi further stated that the judgment dated 09.04.2024 is not final
and cannot be mixed with issue regarding the grant of bail to the
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respondent. The Vacation Judge was competent to decide the bail
application independent of judgment dated 09.04.2024.
6.3 Dr. Singhvi while emphasizing that the personal liberty of a
person is supreme mentioned that the respondent did not misuse
interim bail granted for about 20 days by the Hon'ble Supreme Court
vide order dated 10.05.2024. There cannot be any perversity if a
different view is taken by the Vacation Judge while passing the
Impugned Order. The respondent was not named as an accused either
in RC registered by CBI or in ECIR registered by ED. Dr. Singhvi
also referred the various paragraphs of impugned order. It was stated
that no money trail could be traced qua the respondent as per section
3 of PMLA. Dr. Singhvi also referred law relating to section 45 of
PMLA and in particular, Vijay Madan Lal Chaudhary V Union of
India, 2022 SCC OnLine SC 929 and other judgments delivered by
the Apex Court and prayed for dismissal of the stay application.
7. Sh. Vikram Chaudhari, the learned Senior Counsel also
advanced arguments on behalf of the respondent and argued that the
Vacation Judge gave findings on each argument advanced on behalf
of the parties and stated that the Vacation Judge in first 15 pages of
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the Impugned Order has recorded the facts and arguments of the
parties and also referred the para no. 15 of the order dated 10.05.2024
passed by the Hon'ble Supreme Court. It was also stated that no
prejudice shall be caused if the respondent is released on bail and the
Vacation Judge as reflecting from para no. 36 of the Impugned Order
has considered most of the relevant arguments and contentions raised
on behalf of the parties which were accordingly dealt with.
8. The written submissions were also submitted on behalf of the
respondent. It is mentioned in written submissions that the
co-accused P. Sarath Reddy (PSR) made his statement on 09.11.2022
under section 50 of PMLA wherein he did not say any incriminating
fact against the respondent. The co-accused Magunta Sreenivasulu
Reddy (MSR) made his statement on 24.03.2023 under section 50 of
PMLA without mentioning any incriminating fact against the
respondent. PSR was examined 9 times under section 50 of PMLA
between his arrest and April, 2023 but he did not make any allegation
against the respondent. However, PSR was granted pardon by the
Special Judge on 29.05.2024 i.e. after 20 days from the grant of bail
on 08.05.2024 by this Court as grant of bail was not objected by ED.
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ED issued 9 summon to the respondent but the respondent was not
arrested till March, 2024.
8.1 In the written submissions besides arguments advanced by
learned Senior Counsels for the respondent, it is also stated that issue
pertaining to cancellation of bail is completely different from issue
pertaining to grant or rejection of bail. ED is seeking cancellation of
bail on the ground of perversity and not on the ground of misuse of
liberty, tampering of evidence, influencing the witnesses etc. The
Impugned Order passed by the Vacation Judge is not only reasoned
and passed on basis of contentions and arguments of the parties but is
also reflective of application of judicial mind. The Vacation Judge in
impugned order considered the relevant material which is contrary to
arguments advanced on behalf of ED. ED was given sufficient
opportunity by the Vacation Judge to advance arguments. The
Vacation Judge also recorded finding that conduct of ED was mala
fide. The Vacation Judge was not required to render finding on guilt
or acquittal of the respondent but only to make a reasonable ground
for believing that the respondent is not guilty on broad probabilities.
The respondent in written submissions also stated other pleas and
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averments which have been argued by the learned Senior Counsels
for the respondents.
9. This Court is conscious of the fact that this order pertains to
disposal of stay application bearing no. 18446/2024 and the main
petition has already been ordered to be listed before the Roster Bench
on 10.07.2024 for consideration. It is pertinent to mention that
substantial arguments advanced by both the parties and submissions
as mentioned in written submissions/note are pertaining to main
petition under section 439 (2) of the Code.
10. Sh. S. V. Raju opened the arguments by referring the para no.
16 of the Impugned Order wherein the Vacation Judge has observed
that it is not possible to go through thousands of pages of documents
filed by the respective parties but it is the duty of the court to work
upon the matter whichever comes for consideration and passed the
order in accordance with law. The Vacation Judge in para no. 36 of
the Impugned Order as also referred by Dr. Singhvi observed that
most of the relevant arguments and contentions raised on behalf of
the parties are being dealt with in Impugned Order by the Vacation
Judge. It is not understandable that on one hand, the Vacation Judge
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has expressed her inability to go through entire documents stated to
have been running into thousands of pages at the time of passing the
Impugned Order and on the other hand, how in para no. 36 the
Vacation Judge has mentioned that relevant arguments and
contentions raised on behalf of the parties are dealt with. The perusal
of the Impugned Order is reflecting that the Vacation Judge has
passed the Impugned Order without going through and appreciating
the entire material brought on record by the rival parties which
reflects perversity in Impugned Order. There is factual force in the
arguments advanced by Sh. S. V. Raju that the Vacation Judge has
not passed the Impugned Order after due consideration of entire
material on record. Although, Sh. Vikram Chaudhari referred the
para no. 36 of the Impugned Order but the averment made in para no.
36 of the Impugned Order does not inspire any confidence to the
effect that the Vacation Judge before passing the Impugned Order has
considered the entire material brought on record. The observation
made by the Vacation Judge in Impugned Order is uncalled for,
unwarranted and out of context. The Vacation Judge should refrain
from making such observations in the Impugned Order. The Vacation
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Judge was required to consider every important and relevant
document at time of passing of Impugned Order.
10.1 The Vacation Judge in para nos. 1 to 6 has mentioned the
contentions of the parties i.e. ED and the respondent and the
arguments advanced by their respective counsels but the perusal of
Impugned Order is reflecting that the Vacation Judge did not
discussed and considered said contentions and the arguments in
impugned order. It is also worth mentioning that ED submitted a
written note in the concerned Special Court/Vacation Judge in
support of the argument wherein the petitioner has raised various
points as detailed therein for consideration but the Vacation Judge
has not considered the said points/issues as mentioned in the written
note submitted by ED before the Special Court/Vacation Judge.
11. Dr. Singhvi vehemently argued that the grant of bail and
cancellation of bail are two different aspects and also cited various
judgments in support of his arguments as referred hereinabove. It is
accepted proposition of law that the rejection of the bail in a non-
bailable case at initial stage and the cancellation of bail so granted
have to be considered and dealt with on different basis and very
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cogent and overwhelming circumstances are necessary for an order
directing the cancellation of bail already granted. Sh. S.V. Raju has
argued that the relevant factors which should have been considered
while dealing with the application for bail have not been taken note
of or that the bail is founded on irrelevant consideration and in this
eventuality, the superior court can set aside the order for grant of bail.
Sh. S. V. Raju in support of his arguments as mentioned hereinabove
cited Neeru Yadav V State of Uttar Pradesh (supra). However, the
issue whether the present main petition under section 439(2) of the
Code is maintainable or not maintainable has to be considered
appropriately by the concerned Roster Bench while dealing with the
main petition.
12. Sh. S.V. Raju while attacking the Impugned Order stated that
the Vacation Judge has not given appropriate opportunity to ED to
oppose the bail application as per section 45(1) of PMLA and the
facts and circumstances leading to the denial of opportunity to ED as
per the mandate of section 45(1) of PMLA are mentioned in the main
petition under section 439(2) of the Code which requires due
consideration by the court. Sh. Vikam Chaudhari in his argument
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after referring pages no. 1 to 15 of the Impugned Order has rebutted
this argument of ED but in humble assessment of this court,
argument raised by Sh. S. V. Raju needs due consideration of this
court. Every court is under an obligation to give sufficient and
appropriate opportunity to represent their respective case before the
court. ED ought to have given adequate opportunity to advance
arguments on bail application by the Vacation Judge.
13. The Vacation Judge in para no. 25 of the Impugned Order
observed that ED has again and again pressed the twin conditions as
per section 45 of PMLA which are stated to be altogether different
from the provision of bail under the Code and further observed that
due consideration is not being taken care by ED that even for
implicating a person as an accused in such a criminal matter, it is also
required to be done under certain guidelines and legal procedures. Sh.
S.V. Raju argued that the trial court should have satisfied itself with
the twin conditions as laid down under section 45 of PMLA but the
Vacation Judge in the Impugned Order has not considered the twin
conditions as per section 45 of PMLA. Dr. Singhvi has countered this
argument by stating that the Vacation Judge in Impugned Order has
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considered correct proposition of section 45 of PMLA. It is correct
that the Hon'ble Supreme Court in Vijay Madan Lal Choudhary V
Union of India (supra) which is also referred by Dr. Singhvi has
observed that at the stage of consideration of application for grant of
bail, it is expected to consider the question from the angle as to
whether the accused was possessed of the requisite mens rea and the
court is not required to record a positive finding that the accused had
not committed an offence under the Act. It was further observed that
the Court ought to maintain a delegate balance between a judgment
of acquittal and conviction and order granting bail much before
commencement of trial. The Court is not supposed to weigh the
evidence meticulously. However, the Vacation Judge in the
Impugned Order has not discussed requirement of section 45 of
PMLA while passing the Impugned Order. The trial court should
have at least recorded its satisfaction about fulfillment of twin
conditions of section 45 of PMLA before passing the impugned
order.
14. Sh. S.V. Raju also referred the para no. 20 of the Impugned
Order wherein the Vacation Judge observed that the Hon'ble
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Supreme Court in Satender Kumar Antil V CBI and Another,
(2022) 10 SCC 51 also laid down several guidelines for grant of bail
and argued that the law laid down in Satender Kumar Antil is
applicable if the accused is not arrested during the investigation. It
appears that the Vacation Judge has not discussed and appreciated
Satender Kumar Antil in the right perspective.
15. Sh. S.V. Raju also referred the para no. 27 of the Impugned
Order wherein the Vacation Judge observed that the material was
available with ED against the respondent in the month of July, 2022
but the respondent was called in August, 2023 which reflected mala
fide of ED and ED has failed to answer this objection of the
respondent. Sh. S.V. Raju argued that the present ECIR was
registered in the month of August, 2022 as such the said observation
of the Vacation Judge is factually incorrect. Dr. Singhvi, however,
countered the said argument by stating that there may be
typographical error in para no. 27 of the Impugned Order and in place
of July, 2022, it should have been read as July, 2023 and in place of
August, 2023, it should have been read as October, 2023. Be as it
may be, the Vacation Judge observed that there was mala fide on the
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part of ED. It is worth mentioning here that the Co-ordinate Bench of
this Court while delivering the judgment dated 09.04.2024 in
W.P.(Crl) 985/2024, in para no. 151 observed absence of any mala
fide intention on the part of ED and further observed that the Court
has to examine the arrest and remand of the respondent irrespective
of the timing of the elections. Dr. Singhvi although argued that the
finding given vide judgment dated 09.04.2024 has not attained
finality but this Court cannot lose sight of the fact that the Hon'ble
Supreme Court while hearing SLP(Crl) 5154/2024 although granted
the leave against the judgment dated 09.04.2024, but did not stay
operation of judgment dated 09.04.2024. The Vacation Judge after
following the judicial discipline should not have observe in para no.
27 of the Impugned Order that there was mala fide on the part of ED
particularly in light of observation made in judgment dated
09.04.2024 as referred herein above.
16. Sh.S.V. Raju also argued that ED during the hearing of bail
application subject matter of Impugned Order has raised issue of
vicarious liability qua the respondent as per section 70 of PMLA but
the said issued was not dealt by the Vacation Judge in the Impugned
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Order. The perusal of written note submitted by ED before the
Special Judge/Vacation Judge reflects that the issue regarding the
role of respondent for vicarious liability was taken by ED by
mentioning that the role of the petitioner in vicarious liability was
specifically examined and established after 30.10.2023 but said issue
did not find any place in the Impugned Order.
17. Dr. Singhvi argued that that the personal liberty of a person is
supreme and mentioned that the respondent did not misuse the
interim bail granted for about 20 days. It is also stated in written
submissions submitted on behalf of the respondent that Hon'ble
Supreme Court vide order dated 10.05.2024 passed in SLP (Crl)
5154/2024 granted interim bail to the respondent after taking into
consideration all objections of ED including objections/contentions
raised in the present petition. The Hon'ble Supreme Court vide order
dated 17.05.2024 also gave liberty to the respondent to file an
application for grant of bail and said application if any, shall be
considered and decided in accordance with law. Dr. Singhvi also
argued that if present application is allowed it shall tantamount to
cancellation of bail and further if the main petition under section 439
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(2) of the Code is dismissed, the respondent can be again sent back to
judicial custody.
17.1 The personal liberty as guaranteed under Article 21 of the
Constitution cannot be deprived to a citizen except with the
procedure established by law. The respondent was arrested on
21.03.2024 for further investigation when the respondent did not join
investigation despite issuance of 9 summon. The respondent filed a
petition bearing W.P. (Crl) no. 985/2024 to challenge arrest order
dated 21.03.2024 and to declare consequential proceedings as illegal,
non-est, arbitrary and unconstitutional and custody remand being
passed in a mechanical and patently routine manner. However, the
petition bearing W.P. (Crl) no. 985/2024 was dismissed by the Co-
ordinate Bench of this court vide judgment dated 09.04.2024. The
respondent has filed SLP (Crl) 5154/2024 before the Hon'ble
Supreme Court and leave was granted vide order dated 10.05.2024
and judgment has already been reserved after conclusion of
arguments vide order dated 17.05.2024. It is worth mentioning that
operation of the judgment dated 09.04.2024 was not stayed by the
Hon'ble Supreme Court. So at this stage it cannot be said that arrest
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and remand of the respondent was not in accordance with law and
personal liberty of the respondent was curtailed without following
procedure established by law.
17.2 It is correct that the respondent was granted interim bail vide
order dated 10.05.2024 which was emphatically referred by Dr.
Singhvi passed in SLP (Crl) 5154/2024 by the Hon'ble Supreme
Court. The Hon'ble Supreme Court in order dated 10.05.2024
observed that the respondent has not been convicted although serious
accusations have been made against the respondent. It was further
observed that the respondent does not have any criminal antecedents
and the respondent is not a threat to the society. It was further
observed that investigation is pending since August, 2022 and further
legality and validity of arrest is under challenge before the Hon'ble
Supreme Court. Accordingly, the respondent was granted interim bail
till 01.06.2024 in background of the 18th Lok Sabha General Election
on conditions as detailed in para no. 18 of the order dated
10.05.2024. Although, there is no allegation of misuse of interim bail
by the respondent but one fact cannot be lose sight is that the
respondent was not granted interim bail on merit but in background
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of 18th Lok Sabha General Elections. Accordingly, arguments
advanced by Dr. Singhvi do not provide much help to the respondent.
There is also no force in argument advanced by Dr. Singhvi that if
the present petition under section 439 (2) of the Code is dismissed
then the respondent can be again remanded to judicial custody
particularly in view of the fact that Impugned Order passed by the
Vacation Judge is under serious challenge and grounds of challenge
as raised by ED requires consideration of concerned court.
18. Dr. Singhvi after referring para no. 24 of the Impugned Order
stated that no recovery of proceeds of crime was traced to the
respondent. The Vacation Judge in para no. 24 of the Impugned
Order observed that ED has failed to clarify that how much time is
required for tracing out the complete money trail particularly the
remaining Rs.60 crores. It was further observed that unless and until
the exercise of tracing out of remaining amount is completed by ED,
the respondent cannot be supposed to remain behind bars without
proper evidence against him. The perusal of the note submitted by
ED before the Special Judge/Vacation Judge reflected that the said
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plea was encountered by ED but not sufficiently and adequately dealt
with by the Vacation Judge in the Impugned Order.
19. The Vacation Judge in para no 31 of the Impugned Order
observed that the respondent was neither named in RC filed by CBI
nor in ECIR filed by ED and allegations against the respondent
surfaced on account of subsequent statements of certain accused
persons. The Vacation Judge also observed that the respondent is in
custody at instance of ED on pretext of ongoing investigation despite
he was not summoned by the court. Sh. S. V. Raju referred Pavana
Dibbur V The Directorate of Enforcement, Criminal Appeal no.
2779/2023 decided on 29th November, 2023 wherein it was observed
that it is not necessary that a person against whom the offence under
section 3 of PMLA is alleged must have been shown as the accused
in the scheduled offence. It was further observed that the conditions
precedent for attracting the offence under section 3 of the PMLA are
that there must be a scheduled offence and that there must be
proceeds of crime. It was argued that observation of the Vacation
Judge in Impugned Order is not legally tenable and as such Impugned
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Order is perverse. The argument as such advanced by Sh. S. V. Raju
requires further consideration.
20. Sh. S.V. Raju also argued that the Impugned Order was passed
on the basis of irrelevant consideration by ignoring relevant
consideration. In the humble submission of this Court, these points
are required to be considered by the Roster Bench at time of
consideration of petition under section 439(2) of the Code.
21. The arguments advanced by Dr. Singhvi and Sh. Vikram
Chaudhari that arrest of the respondent was bad, the judgment dated
09.04.2024 has not attained finality and other arguments which are
not specifically dealt with or discussed in this order in humble
opinion of this Court are required to be dealt with at the time of
consideration of the petition under section 439(2) of the Code.
22. The Vacation Judge while passing the Impugned Order did not
appropriately appreciate the material/documents submitted on record
and pleas taken by ED and the averments/grounds as raised in the
petition under section 439(2) of the Code require serious
consideration while dealing with said petition. Accordingly, the
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present application is allowed and the operation of the Impugned
Order is stayed.
23. It is made clear that nothing in this order shall be taken as any
opinion or observation on the merits of the petition under section 439
(2) of the Code.
24. Copy of this order be given dasti to both parties under
signature of the court master.
1. List on 10.07.2024 before the Roster Bench, as already fixed.
DR. SUDHIR KUMAR JAIN
(VACATION JUDGE)
JUNE 25, 2024
N/AK/ABK
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