Jharkhand High Court
Jogendra Tiwari vs Union Of India Through Directorate Of ... on 3 September, 2024
Author: Rongon Mukhopadhyay
Bench: Rongon Mukhopadhyay
IN THE HIGH COURT OF JHARKHAND AT RANCHI
B.A. No. 11977 of 2023
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Jogendra Tiwari, S/o Shri Rameshwar Tiwari, R/o Station
Road, P.O. & P.S. Mihijam, District Jamtara, PIN-815354
... ... Petitioner
Versus
Union of India through Directorate of Enforcement,
Government of India, having its office at Plot No. 1502/B,
Airport Road, P.O. Hinoo, P.S. Doranda, Ranchi, PIN-
834002, Jharkhand. ... ... Opposite Party
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CORAM : HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY
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For the Petitioner : Mr. Anshuman Sinha, Adv.,
Mr. Indrajit Sinha, Adv.
Mr. Aditya Tiwari, Adv.
For the Opp. Party : Mr. Amit Kr. Das, Spl. P.P.
Mr. Saurav Kumar, Adv.
Mr. Sankalp Goswami, Adv.
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C.A.V. on 13/05/2024 Pronounced on 03/09/2024
Heard Mr. Anshuman Sinha and Mr. Indrajit
Sinha, learned counsels for the petitioner and Mr. Amit Kr.
Das, learned Spl. P.P. for the Enforcement Directorate.
2. The petitioner, in this application prays for
grant of bail in connection with ECIR/RNZO/09/2022 in ECIR
Case No. 08/2023, for the offence u/s 3 of the Prevention of
Money Laundering Act, 2002 (for short PMLA, 2002)
punishable u/s 4 of PMLA, 2002.
3. It has been submitted by the learned counsels
for the petitioner that on a perusal of the prosecution
complaint it would transpire that initially the ECIR was lodged
on the basis of four First Information Reports and
subsequently by an addendum further fifteen First Information
Reports were added. A bare perusal of the conclusions arrived
at by the Investigating Agency would reveal that the
Directorate of Enforcement has wrongly mentioned that the
petitioner has committed the scheduled offences and generated
the proceeds of crime as out of the nineteen First Information
Reports the petitioner was an accused in only three First
Information Reports and in all the three cases the Police after
investigation had not sent up the petitioner for trial and has
filed final forms. Out of the total of nineteen First Information
Reports the Directorate of Enforcement in their prosecution
complaint have admitted that nine First Information Reports
which all relate to the liquor business have been quashed by
the Jharkhand High Court in separate quashing applications
and, therefore, those have not been considered and the
proceeds generated therefrom have not been accounted in the
prosecution complaint as proceeds of crime. It has been
submitted that out of the remaining fifteen First Information
Reports the case of the Directorate of Prosecution relating to
proceeds of crime hinges upon a total of six First Information
Reports, of which, four relate to alleged generation of proceeds
of crime from the business of sand and two relate to the
alleged money generated by commission of offences relating to
land. Referring to the provisions of PMLA, 2002, learned
counsels have submitted that until and unless the proceeds of
crime are generated by committing a schedule offence and a
person deals with the proceeds of crime in any manner a
person cannot be tried or held guilty for the offences under the
provisions of PMLA, 2002. Even in case of acquittal, quashing
or discharge of an accused in the schedule predicate offence
the natural consequence would be that the prosecution under
the provisions of PMLA, 2002 shall also stand terminated. In
the contours of the said submissions reference has been made
to the case of "Vijay Madanlal Choudhary and Ors. Versus
Union of India and Ors." reported in 2022 SCC OnLine 929. The
other judgments referred to in this connection are "Parvathi
Kollur and Another versus State by Directorate of Enforcement"
reported in 2022 SCC OnLine SC 1975, "Pavana Dibbur versus
Directorate of Enforcement" reported in 2023 SCC OnLine1586,
"Naresh Kumar Kejriwal versus Directorate of Enforcement
(Prevention of Money Laundering Act)" in Cr. Appeal No.
1262/2023. Since Section 45 of the PMLA, 2002 holds centre
stage as consideration of grant of bail would be guided by the
principles enumerated therein, learned counsels have once
again put reliance in the case of "Vijay Madanlal Choudhary
and Ors. Versus Union of India and Ors" (supra). Mr. Sinha has
drawn the attention of the Court to Section 24 of the PMLA,
2002 while submitting that the stage for raising presumption
has not been reached as the Special Court has yet to frame
charges. The domain of Section 24 of the PMLA, 2002 has been
aptly dealt with in the case of "Anil Tuteja versus Director,
Directorate of Enforcement and Others" reported in 2020 SCC
OnLine Chh 2527. Mr. Sinha, learned counsel for the petitioner
has once again reiterated that the generation of proceeds of
crime is confined to the purported illegal sale of sand and land.
In the context of the sand cases, submission has been
advanced that out of four First Information Reports, in three
First Information Reports being Jamtara Nagar P.S. Case No.
101/2020, Jamtara Nagar P.S. Case No. 103/2020 and Nala
(Jamtara) P.S. Case No. 71/2020 either the cognizance order
has been quashed or the petitioner acquitted from the charges
levelled against him. So far as the fourth FIR is concerned
relating to "Margo Munda P.S. Case No. 27/2020" the order of
cognizance has itself been quashed in Cr.M.P. No. 2505/2023
on the ground that the company is not an accused in the
charge-sheet. Therefore, in the light of the various
pronouncements of the Hon'ble Supreme Court the
prosecution of the petitioner under the provisions of PMLA,
2002 is impermissible so far as the predicate offence relating to
sand is concerned. Learned counsel has thereafter drawn the
attention of the Court to the land cases which have been
instituted by the Director of Enforcement as predicate offences.
These are based on Deoghar Town P.S. Case No. 342/2020
and Jasidih P.S. Case No. 50/2020 and in both the cases the
dispute pertains to the same piece of land which has been
referred to as "Roy Bungalow". Final forms have been
submitted by the Police in both the cases claiming the dispute
to be civil in nature. The contention of the Directorate of
Enforcement that in both the cases protest petitions have been
filed has been sought to be negated by submitting that only in
one case protest petition has been filed as in Jasidih P.S. Case
No. 50/2020 the protest petition is said to have been filed on
14.02.2020 while the final form has been submitted much
later on 27.06.2023. Even assuming that the protest petitions
have been filed, the same would have a significant bearing on
the case of the petitioner as it cannot be said that any case is
registered with the jurisdictional Police unless the protest
petition is to be treated as a complaint in terms of Section 2 (d)
of the Code of Criminal Procedure. The protest petition filed in
Deoghar P.S. Case No. 342/2020 suffers from several
infirmities and does not fulfil the requirement of a complaint as
in Section 2 (d) of the Cr.P.C. Reference has been made to the
case of "Mukhtar Zaidi versus the State of Uttar Pradesh and
Another" reported in 2024 SCC OnLine SC 553. It has,
therefore, been submitted that there is no schedule offence
relating to the land in question to prosecute the petitioner
under PMLA, 2002. So far as the allegation of proceeds of
crime of Rs. 4,13,95,000/- generated for sale and purchase of
land is concerned, it has been elaborately stated about the
dispute between the siblings relating to "Roy Bungalow"
culminating in a suit and the documents which have been
submitted would clearly indicate that there was no criminal
activity in the said case. The land dispute was amicably settled
vide Registered Partition Deed No. 1352/2019 and after
possession of their respective shares the same were sold by the
petitioner and such sale deeds have not been challenged in any
Court of Law. The aforesaid facts would signify that the
amount of Rs. 4,13,95,000/- are not the proceeds of crime as
alleged. Mr. Sinha after having dealt with fifteen First
Information Reports has now turned his attention to the rest
four First Information Reports and while doing so he has
submitted that in Narayanpur P.S. Case No. 111/2020 the sole
accused had died and the case was, therefore, disposed of and
Dhurwa P.S. Case No. 212/2022 was quashed by this Court in
Cr.M.P. No. 3641/2023. The remaining two First Information
Reports according to Mr. Sinha have not resulted in generation
of the proceeds of crime. It has, therefore, been concluded in
the aforesaid precincts that the requirement of Section 45 of
PMLA, 2002 having been satisfied the petitioner deserves to be
released on bail.
4. Mr. Amit Kr. Das, learned Spl. P.P. for the
Enforcement Directorate has submitted that ECIR/RNZO/09/
2022 was registered by the Directorate of Enforcement based
upon four First Information Reports; (i) FIR No. 342/2020
registered at Deoghar Town P.S., (ii) FIR No. 50/2020
registered at Jasidih P.S., (iii) FIR No. 27/2020 registered at
Margo Munda P.S. and, (iv) FIR No. 01/2022 registered at
Rikhya P.S. Deoghar. Since Sections 419, 420, 467, 471 and
120B IPC are schedule offences as mentioned in Schedule "A"
of PMLA, 2002 investigation was taken up for commission of
the offences of Money Laundering after recording an ECIR.
Further another fifteen FIRs have merged with the present
investigation of ECIR by addendum dated 16.10.2023. It has
been submitted that a total of nineteen First Information
Reports consisting of schedule offence under PMLA, 2002 were
considered during investigation as the petitioner was found
directly or indirectly involved in various illegal business related
sand mining, land grabbing, extortion and liquor business etc.
Thus the said First Information Reports which have been
merged are either in the name of family members, relations,
employees of the petitioner or associates involved in similar
illegal business. It has been submitted that the modus
operandi of the petitioner is to be involved in illegal business
which is running in the name of his employer or relations or
family members. Hence, the petitioner is never directly involved
in most of the business but the ultimate beneficiary of such
activities is the petitioner. Mr. Amit Kr. Das, learned Spl. P.P.
in relation to the land grabbing cases are concerned has
submitted that in FIR No. 342/2020 and FIR No. 50/2020 final
form has been submitted by the Police showing the dispute to
be civil in nature and in FIR No. 342/2020 a protest petition
has been filed by the informant stating therein that the house
was demolished and the belongings were looted by the accused
persons and the said protest petition is pending adjudication
before CJM, Deoghar. In FIR No. 50/2020 also the informant
has filed a protest petition on 14.02.2020. With respect to the
sand mining cases in FIR No. 71/2020, the learned trial court
has passed an order of acquittal on 17.10.2023 and so far as
Margo Munda P.S. Case No. 27/2020 is concerned, the
cognizance order was quashed by the High Court and the
matter was remanded back to the learned trial court for
passing a reasoned and speaking order afresh as per law after
considering the materials available on record. Therefore, the
said predicate offence is pending. Mr. Amit Kr. Das, learned
Spl. P.P. has drawn the attention of the Court to the liquor
business while submitting that nine First Information Reports
were quashed by the High Court although the matters were
related to the search conducted by the State Police and liquor
was found to be in excess as per the stock register of the
petitioner and the proceeds of liquor business were not
considered in the investigation. The other case is Dhurwa P.S.
Case No. 212/2022 wherein cognizance has been taken by the
accused persons for the offence u/s 504 IPC. It has further
been submitted that after filing of the prosecution complaint
two of the First Information Reports have either been quashed
by the High Court or an order of acquittal has been passed and
in FIR No. 101/2020 although the same was quashed but the
matter was remanded back for framing of charge under other
Sections if any offence is made out. The submission of the
learned counsel for the petitioner that no predicate offence
remain is misconceived as protest petitions have been filed in
two of the land grabbing cases and in two cases charge-sheets
have been filed. The generation of proceeds of crime to the tune
of Rs. 5.6 Crores by sale of land will survive prosecution as a
protest petition has been filed and the protest petition is
treated as a complaint petition pending inquiry and taking
recourse to "Vijay Madanlal Choudhary and Ors. Versus Union
of India and Ors" (supra), it has been submitted that for
institution of prosecution case under PMLA, 2002 the
registration of an FIR or the pendency of a complaint for
inquiry is required which is fulfilled in view of the pendency of
the protest petition. It has been submitted that the proceeds of
crime in cash amounting to Rs. 2,43,79,070/- has been
deposited directly in the bank account of the concerns of the
petitioner which had applied for license of wholesale sale of
liquor in the State of Jharkhand in the year 2021 and apart
from this the proceeds of crime in cash amounting to
Rs.3,82,41,860/- have been firstly deposited in the bank
account of the associates of the petitioner and was thereafter
transferred to the bank accounts of the concerns of the
petitioner. By adopting such modes the total proceeds of crime
to the tune of Rs. 6,26,20,930/- had reached the concerns
belonging to the petitioner either directly or after routing it
through the accounts of their associates. It has been submitted
that the bank accounts/statements of the companies/firms of
the petitioner reveals that cash deposit has been utilized by the
petitioner for meeting the application for the license of
wholesale sale of liquor and for operational expenses in the
said business in the State of Jharkhand. It has been submitted
that the accused need not be named in the predicate offence
and the predicate offence is considered to be concluded only in
case of quashing of the various proceedings, acquittal or
discharge of the accused. In support thereof reliance has been
placed in the case of "Vijay Madanlal Choudhary and Ors.
Versus Union of India and Ors" (supra). He has also referred to
the case of "P. Rajendran versus The Assistant Director,
Directorate of Enforcement" in Criminal Original Petition No.
19880 of 2022 of the Madras High Court and "Pavana Dibbur
versus Directorate of Enforcement" (supra). Drawing the
attention of the Court to the rigors of Section 45 PMLA, 2002
reference has been made by Mr. Amit Kr. Das, learned Spl. P.P.
to the case of "Tarun Kumar versus Assistant Director,
Directorate of Enforcement" reported in 2023 SCC OnLine SC
1486. It has been submitted that the petitioner has failed to
discharge the burden of proof u/s 24 PMLA, 2002 and in this
connection he has referred to the case of "Rohit Tandon versus
Directorate of Enforcement" reported in 2018 11 SCC 46 and
"Union of India versus Hassan Ali Khan and Another" reported
in 2011 10 SCC 235. The conduct of the petitioner has also
been highlighted to the effect that a search was conducted in
the residential premises of the petitioner and Amrendra Tiwari
on 23.08.2023 and from the said premises the mobile phone of
the petitioner was recovered and seized and it was found that
the data from the said phone has been deleted. Moreover, the
petitioner was found to be tampering with the evidence as the
e-mail which were used for correspondence with regard to the
business activities of the petitioner have been deleted and the
petitioner has also failed to provide access to the e-mail Id. In
course of investigation statements were recorded which
revealed that the E-mail Id belongs to the petitioner. The
petitioner being in judicial custody had threatened the Chief
Editor of the Newspaper Prabhat Khabar after filing of the
prosecution complaint for which an FIR was also got
registered.
5. The submission of the learned ASGI has been
replied to by the learned counsels for the petitioner to the
effect that after the change in Government Policy of Liquor
Trade in March, 2024 the business was taken over by the State
and the related documents were not retained by the petitioner
anymore. So far as the various e-mails are concerned, the
Investigating Agency has already recovered the contents of the
said e-mails. The e-mail [email protected] has not
been used by the petitioner for a long time since the liquor
policy itself has changed. As regards, the allegation of deposit
of cash is concerned, it has been submitted that the business
of sand and liquor involves cash transaction and the cash
accrued from these business transactions has been deposited
in the bank and the documents showing the routine business
activities and transactions of these companies have already
been brought on record. It has been submitted that the
incident in Birsa Munda Central Jail, Hotwar led to institution
of FIR No. 564/1993 converted to CID P.S. Case No. 04/2023
and the same has already been quashed in W.P.(Cr.)
No.94/2024.
6. The prosecution complaint was filed by the
Directorate of Enforcement being ECIR Case No. 08/2023, in
which, the petitioner has been made an accused. The details of
the predicate offences have been enumerated in the
prosecution complaints which includes; (a) Deoghar Town P.S.
Case No. 342/2020 which alleges that all the accused persons
had usurped the land belonging to Kiran Singh by forceful
means and by producing forged documents. The accused
persons had demolished the house of the complainant and had
looted their belongings amounting to Rs. 5,00,000/- and had
also threatened to kill the complainant and her family. The
second FIR is Jasidih P.S. Case No. 50/2020 against the
petitioner and others and the accused persons are alleged to be
involved in hatching a criminal conspiracy by issuance and
production of forged land possession certificate and deed for
land measuring 27,413.25 square feet at Mouza-Shyamganj,
Thana No.-413, Plot No.- 775 and 776, District- Deoghar. On
the basis of the land possession certificate the complainant
had executed an agreement to sale in the name of M/s. Saran
Alcohol Pvt. Ltd., and Brij Mohan Singh. The third predicate
offence is Margo Munda P.S. Case No. 27/2020, in which, it is
alleged that a surprise inspection was conducted by the Circle
Office and the Officer-Incharge of Margo Munda P.S. on
15.07.2020 at Pandnia Sand Mines which was operated by
Saran Alcohol, Distillery Road, Gilanpara Dumka and during
such inspection it was found that on 14.07.2020 total sand
mining was 91,250 cubic feet but only 80,000 cubic feet of
sand was found at the storage place and it was suspected that
11,250 cubic feet of sand was illegally transferred/sold
resulting in wrongful loss to the exchequer. The fourth FIR is
Rikhya P.S. Case No. 01/2022, in which, it has been alleged
that on 01.01.2022 one vehicle was stopped for checking and
in course of inspection Rs. 1,51,400/- in cash and two mobile
phones were recovered from the driver and liquor was also
seized from the vehicle and the driver had confessed that he
was smuggling foreign liquor in his personal vehicle on the
basis of the invoice issued by M/s. Saran Alcohol Pvt. Ltd., of
which, the petitioner is one of the Directors.
It has been alleged that during the course of
investigation searches were conducted in various premises
related to the petitioner and during such search it was revealed
that the petitioner was doing the business of sand and liquor
in the name of other individuals and entities and several FIRs
have been registered against such individuals with regard to
illegal sale of sand, illegal storage of liquor and extortion. In
the interest of investigation fifteen FIRs were merged with the
investigation of the ECIR/RNZO/09/2022 by issuance of an
addendum dated 16.10.2023. The role of the petitioner has
been demarcated in the prosecution complaint in the following
manner:
(a) Accused Jogendra Tiwari has committed
the schedule offence as mentioned in the FIRs.
Through these illegal activities, Jogendra Tiwari
has acquired huge amounts of cash which is
nothing but the proceeds of crime to the tune of
Rs. 13,29,92,620/-.
(b) Accused Jogendra Tiwari has generated
huge proceeds of crime from the illegal sale of
sand without challan and also from the
fraudulent sale of lands and deposited the
same in the bank account of himself and the
entities under his control.
(c) Further the same proceeds of crime were
also utilized for payment of license fees in the
application for getting wholesale liquor license.
(d) Jogendra Tiwari has indulged knowingly
as a party and is actually involved in the
process related to proceeds of crime by
(i) Placement - depositing the proceeds
of crime generated in the form of
cash by the commission of the
schedule offence in the bank
account of his entities, the
individuals associated with him and
their entities.
(ii) Layering - In some cases the
proceeds of crime are routed
through various accounts under his
control.
(iii) Integration - The said proceeds of
crime are then integrated in the
entities belonging to Jogendra Tiwari
and / or his associates and / or
their entities and used for payment
of license fee of wholesale sale of
liquor. Further the accused
Jogendra Tiwari has been found to
indulge in concealment, possession,
acquisition, use and projecting the
proceeds of crime as untainted
property.
7. The prosecution complaint would, therefore,
reveal that initially the predicate offences related to four FIRs
and subsequently by an addendum fifteen more FIRs were
added. In this context, we may refer to para 9.3 of the
prosecution complaint which reads as follows:
"9.3 It is submitted that as mentioned in
paragraph 2.3 that cognizance order in 9 FIRs has
been quashed by Hon‟ble High Court of Jharkhand
on 07.11.2023 i.e. after arrest of Jogendra Tiwari.
However, it is submitted that in all the 9 FIRs the
entities had licenses for retail sale of liquor and the
said retail shops were raided and in all these cases
it was found that the stock of liquor in the retail
shop is over and above the stock mentioned in the
books. Since all these businesses were actually
being run by Jogendra Tiwari along with numerous
other retail shops in the name of other individuals,
therefore, he was the beneficiary of the proceeds of
crime generated by selling of this over stocked
liquor. However, the said proceeds of crime are not
being considered here."
8. It would, therefore, reveal that the purported
proceeds of crime for the trade in liquor has not been
considered to be the subject matter of the investigation. The
proceeds of crime are therefore confined to the illegal sale of
land and illegal sale of sand. It would be pertinent to mention
that the status of all nineteen FIRs have been enumerated in a
tabular form at para 2.3 of the prosecution complaint and from
which it appears that twelve cases as at serial nos. 3, 7, 9 to
18 of the tabular chart have either ended in acquittal or the
prosecution itself has been quashed by this Court and one of
the cases has been disposed of due to the death of the sole
accused. As regards the cases mentioned at serial nos. 5, 6
and 19 the same have also come to an end on account of the
quashment of the case(s) and / or acquittal of the accused
after the filing of the prosecution complaint. The impact of
quashment, discharge or acquittal in the predicate offence on
the offence of money laundering has been considered in the
case of "Vijay Madanlal Choudhary and Ors. Versus Union of
India and Ors." reported in 2022 SCC OnLine 929, wherein it
has been held as follows:
"251. The "proceeds of crime" being the core of
the ingredients constituting the offence of money-
laundering, that expression needs to be construed
strictly. In that, all properties recovered or attached
by the investigating agency in connection with the
criminal activity relating to a scheduled offence
under the general law cannot be regarded as
proceeds of crime. There may be cases where the
property involved in the commission of scheduled
offence attached by the investigating agency
dealing with that offence, cannot be wholly or partly
regarded as proceeds of crime within the meaning
of Section 2(1)(u) of the 2002 Act -- so long as the
whole or some portion of the property has been
derived or obtained by any person "as a result of"
criminal activity relating to the stated scheduled
offence. To be 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. To put it differently, the
vehicle used in commission of scheduled offence
may be attached as property in the concerned case
(crime), it may still not be proceeds of crime within
the meaning of Section 2(1)(u) of the 2002 Act.
Similarly, possession of unaccounted property
acquired by legal means may be actionable for tax
violation and yet, will not be regarded as proceeds
of crime unless the concerned tax legislation
prescribes such violation as an offence and such
offence is included in the Schedule of the 2002 Act.
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 distinction must
be borne in mind while reckoning any property
referred to in the scheduled offence as proceeds of
crime for the purpose of the 2002 Act. Dealing with
proceeds of crime by way of any process or activity
constitutes offence of money-laundering under
Section 3 of the Act.
252. Be it noted that the definition clause
includes any property derived or obtained
"indirectly" as well. This would include property
derived or obtained from the sale proceeds or in a
given case in lieu of or in exchange of the "property"
which had been directly derived or obtained as a
result of criminal activity relating to a scheduled
offence. In the context of Explanation added in 2019
to the definition of expression "proceeds of crime", it
would inevitably include other property which may
not have been derived or obtained as a result of any
criminal activity relatable to the scheduled offence.
As noticed from the definition, it essentially refers to
"any property" including abroad derived or obtained
directly or indirectly. The Explanation added in
2019 in no way travels beyond that intent of
tracking and reaching upto the property derived or
obtained directly or indirectlyas a result of criminal
activity relating to a scheduled offence. Therefore,
the Explanation is in the nature of clarification and
not to increase the width of the main definition
"proceeds of crime". The definition of "property" also
contains Explanation which is for the removal of
doubts and to clarify that the term property includes
property of any kind used in the commission of an
offence under the 2002 Act or any of the scheduled
offences. In the earlier part of this judgment, we
have already noted that every crime property need
not be termed as proceeds of crime but the converse
may be true. Additionally, some other property is
purchased or derived from the proceeds of crime
even such subsequently acquired property must be
regarded as tainted property and actionable under
the Act. For, it would become property for the
purpose of taking action under the 2002 Act which
is being used in the commission of offence of
moneylaundering. Such purposive interpretation
would be necessary to uphold the purposes and
objects for enactment of 2002 Act.
253. Tersely put, it is only such property
which is derived or obtained, directly or indirectly,
as a result of criminal activity relating to a
scheduled offence can be regarded as proceeds of
crime. The authorities under the 2002 Act cannot
resort to action against any person for money-
laundering on an assumption that the property
recovered by them must be proceeds of crime and
that a scheduled offence has been committed,
unless the same is registered with the jurisdictional
police or pending inquiry by way of complaint before
the competent forum. For, the expression "derived or
obtained" is indicative of criminal activity relating to
a scheduled offence already accomplished.
Similarly, in the event the person named in the
criminal activity relating to a scheduled offence is
finally absolved by a Court of competent jurisdiction
owing to an order of discharge, acquittal or because
of quashing of the criminal case (scheduled offence)
against him/her, there can be no action for money-
laundering against such a person or person
claiming through him in relation to the property
linked to the stated scheduled offence. This
interpretation alone can be countenanced on the
basis of the provisions of the 2002 Act, in particular
Section 2(1)(u) read with Section 3. Taking any other
view would be rewriting of these provisions and
disregarding the express language of definition
clause "proceeds of crime", as it obtains as of now."
9. It has also been held in the said case as
follows:
"187. Further, the PMLA does not contain any
provision which invest the power of an officer in-
charge of a police station, including the power to file
a chargesheet, in the investigating officer as
contained in the NDPS Act. Moreover, in case of the
NDPS Act, the investigating authority is required to
file a chargesheet. However, in case of the PMLA,
cognizance is taken on a complaint."
10. In the case of "Pavana Dibbur versus Directorate
of Enforcement" (supra), it has been held as follows:
"18. In a given case, if the prosecution for the
scheduled offence ends in the acquittal of all the
accused or discharge of all the accused or the
proceedings of the scheduled offence are quashed
in its entirety, the scheduled offence will not exist,
and therefore, no one can be prosecuted for the
offence punishable under Section 3 of the PMLA as
there will not be any proceeds of crime. Thus, in
such a case, the accused against whom the
complaint under Section 3 of the PMLA is filed will
benefit from the scheduled offence ending by
acquittal or discharge of all the accused. Similarly,
he will get the benefit of quashing the proceedings
of the scheduled offence. However, an accused in
the PMLA case who comes into the picture after the
scheduled offence is committed by assisting in the
concealment or use of proceeds of crime need not be
an accused in the scheduled offence. Such an
accused can still be prosecuted under PMLA so long
as the scheduled offence exists. Thus, the second
contention raised by the learned senior counsel
appearing for the appellant on the ground that the
appellant was not shown as an accused in the
chargesheets filed in the scheduled offences
deserves to be rejected."
11. The petitioner's involvement in the illegal
business of sand as a predicate offence is related to four FIRs;
Jamtara Nagar P.S. Case No. 101/2020, Jamtara Nagar P.S.
Case No. 103/2020, Nala (Jamtara) P.S. Case No. 71/2020
and Margo Munda P.S. Case No. 27/2020. All the four cases
have ended in either acquittal or quashment of the prosecution
case.
12. Applying the matrix of the pronouncements
quoted above there being no predicate offence in existence so
far as sand is concerned and as a consequence thereof no
proceeds of crime can be said to have been generated on
account of the same.
13. The other aspect of the allegation relates to the
dealing in land by the petitioner and his other associates /
entities. These are confined to two FIRs; Deoghar Town P.S.
Case No. 342/2020 and Jasidih P.S. Case No. 50/2020. In
Deoghar Town P.S. Case No. 342/2020 final form no.
349/2023 has been submitted while in Jasidih P.S. Case No.
50/2020 final form no. 204/2023 has been submitted showing
both the disputes to be civil in nature. It is the case of the
Directorate of Enforcement that in both the cases protest
petitions have been filed though the same has been refuted by
the learned counsel for the petitioner to the effect that no
protest petition has been filed in Jasidih P.S. Case No.
50/2020. It is the case of the petitioner that mere filing of the
protest petition without fulfilling the particulars necessary
would not categorize the same to be a "complaint" and once the
Jurisdictional Police has submitted final form and the status of
the case continues to remain in the realm of the protest
petition not having been treated as a "complaint" the same
cannot be concluded to be the commission of a schedule
offence and the property being a proceeds of crime. In such
context, reference may be made to the case of "Mukhtar Zaidi
versus the State of Uttar Pradesh and Another" reported in
2024 SCC OnLine SC 553, wherein it has been held as follows:
"9. In the case of Vishnu Kumar Tiwari v. State of
Uttar Pradesh, through Secretary Home, Civil
Secretariat, Lucknow, Justice K.M. Joseph,
speaking for the Bench laid down the legal position
relying upon previous judgments of this Court. In
the said case the facts were quite similar to that of
the present case where affidavits were filed along
with the Protest Petition. The net result is that the
Magistrate in the present case ought to have treated
the Protest Petition as a complaint and proceeded
according to Chapter XV of the Cr. P.C.. The relevant
paragraphs dealing with the above aspect in the
case of Vishnu Kumar Tiwari (supra), being
paragraphs 42 to 46 are reproduced hereunder:
"42. In the facts of this case, having regard to
the nature of the allegations contained in the
Protest Petition and the annexures which
essentially consisted of affidavits, if the
Magistrate was convinced on the basis of the
consideration of the final report, the
statements under Section 161 of the Code that
no prima facie case is made out, certainly the
Magistrate could not be compelled to take
cognizance by treating the Protest Petition as
a complaint. The fact that he may have
jurisdiction in a case to treat the Protest
Petition as a complaint, is a different matter.
Undoubtedly, if he treats the Protest Petition
as a complaint, he would have to follow the
procedure prescribed under Sections 200 and
202 of the Code if the latter section also
commends itself to the Magistrate. In other
words, necessarily, the complainant and his
witnesses would have to be examined. No
doubt, depending upon the material which is
made available to a Magistrate by the
complainant in the Protest Petition, it may be
capable of being relied on in a particular case
having regard to its inherent nature and
impact on the conclusions in the final report.
That is, if the material is such that it
persuades the court to disagree with the
conclusions arrived at by the investigating
officer, cognizance could be taken under
Section 190(1)(b) of the Code for which there is
no necessity to examine the witnesses under
Section 200 of the Code. But as the Magistrate
could not be compelled to treat the Protest
Petition as a complaint, the remedy of the
complainant would be to file a fresh complaint
and invite the Magistrate to follow the
procedure under Section 200 of the Code or
Section 200 read with Section 202 of the
Code. Therefore, we are of the view that in the
facts of this case, we cannot support the
decision of the High Court.
43. It is true that law mandates notice to the
informant/complainant where the Magistrate
contemplates accepting the final report. On
receipt of notice, the informant may address
the court ventilating his objections to the final
report. This he usually does in the form of the
Protest Petition. In Mahabir Prasad Agarwala
v. State [Mahabir Prasad Agarwala v. State,
1957 SCC OnLine Ori 5 : AIR 1958 Ori 11], a
learned Judge of the High Court of Orissa,
took the view that a Protest Petition is in the
nature of a complaint and should be examined
in accordance with the provisions of Chapter
XVI of the Criminal Procedure Code. We,
however, also noticed that in Qasim v. State
[Qasim v. State, 1984 SCC OnLine All 260 :
1984 Cri LJ 1677], a learned Single Judge of
the High Court of Judicature at Allahabad,
inter alia, held as follows : (Qasim case
[Qasim v. State, 1984 SCC OnLine All 260 :
1984 Cri LJ 1677], SCC OnLine All para 6)
"6. ... In Abhinandan Jha [Abhinandan
Jha v. Dinesh Mishra, AIR 1968 SC 117
: 1968 Cri LJ 97 : (1967) 3 SCR 668]
also what was observed was "it is not
very clear as to whether the Magistrate
has chosen to treat the Protest Petition
as complaint". This observation would
not mean that every Protest Petition
must necessarily be treated as a
complaint whether it satisfies the
conditions of the complaint or not. A
private complaint is to contain a
complete list of witnesses to be
examined. A further examination of
complainant is made under Section 200
CrPC. If the Magistrate did not treat the
Protest Petition as a complaint, the
Protest Petition not satisfying all the
conditions of the complaint to his mind,
it would not mean that the case has
become a complaint case. In fact, in
majority of cases when a final report is
submitted, the Magistrate has to simply
consider whether on the materials in the
case diary no case is made out as to
accept the final report or whether case
diary discloses a prima facie case as to
take cognizance. The Protest Petition in
such situation simply serves the
purpose of drawing Magistrate's
attention to the materials in the case
diary and invite a careful scrutiny and
exercise of the mind by the Magistrate
so it cannot be held that simply because
there is a Protest Petition the case is to
become a complaint case."
(emphasis supplied)
44. We may also notice that in Veerappa v.
Bhimareddappa [Veerappa v. B
himareddappa, 2001 SCC OnLine Kar 447 :
2002 Cri LJ 2150], the High Court of
Karnataka observed as follows : (SCC OnLine
Kar para 9)
"9. From the above, the position that
emerges is this : Where initially the
complainant has not filed any complaint
before the Magistrate under Section 200
CrPC, but, has approached the police
only and where the police after
investigation have filed the „B‟ report, if
the complainant wants to protest, he is
thereby inviting the Magistrate to take
cognizance under Section 190(1)(a) CrPC
on a complaint. If it were to be so, the
Protest Petition that he files shall have to
satisfy the requirements of a complaint
as defined in Section 2(d) CrPC, and
that should contain facts that constitute
offence, for which, the learned
Magistrate is taking cognizance under
Section 190(1)(a) CrPC. Instead, if it is to
be simply styled as a Protest Petition
without containing all those necessary
particulars that a normal complaint has
to contain, then, it cannot be construed
as a complaint for the purpose of
proceeding under Section 200 CrPC."
45. "Complaint" is defined in Section 2(d) of
the Code as follows:
"2. (d) "complaint" means any allegation
made orally or in writing to a
Magistrate, with a view to his taking
action under this Code, that some
person, whether known or unknown,
has committed an offence, but does not
include a police report.
Explanation.--A report made by a police
officer in a case which discloses, after
investigation, the commission of a
noncognizable offence shall be deemed
to be a complaint; and the police officer
by whom such report is made shall be
deemed to be the complainant;"
46. If a Protest Petition fulfils the requirements
of a complaint, the Magistrate may treat the
Protest Petition as a complaint and deal with
the same as required under Section 200 read
with Section 202 of the Code. In this case, in
fact, there is no list of witnesses as such in
the Protest Petition. The prayer in the Protest
Petition is to set aside the final report and to
allow the application against the final report.
While we are not suggesting that the form
must entirely be decisive of the question
whether it amounts to a complaint or is liable
to be treated as a complaint, we would think
that essentially, the Protest Petition in this
case, is summing up of the objections of the
second respondent against the final report."
10. From a perusal of the above opinion of this
Court, it is also reflected that the Magistrate also
had the liberty to reject the Protest Petition along
with all other material which may have been filed in
support of the same. In that event the Complainant
would be at liberty to file a fresh complaint. The
right of the Complainant to file a petition under
Section 200 Cr. P.C. is not taken away even if the
Magistrate concerned does not direct that such a
Protest Petition be treated as a complaint.
14. Notwithstanding the aforesaid scenario the
dispute and /or the predicate offence primarily relate to a piece
of property commonly known as "Roy Bungalow". This property
appears to have undergone litigation for more than half a
century and after partition various sale deed were executed for
the said property. Paragraph 8 of the prosecution complaint
contains the details of the purported involvement of the
petitioner who as a member of the syndicate had taken control
of "Roy Bungalow" and had systematically dismantled the
structure and sold off portions of it ignoring the claims of the
earlier purchasers. The proceeds of crime has been construed
to be the difference between the actual consideration of land
paid by the purchasers and the consideration amount
mentioned in the sale deed. The Investigating Agency has tried
to highlight the role played by the petitioner in possessing and
selling off the property "Roy Bungalow" to different individuals
but the predominant aspect of the case as stated above is with
respect to the civil litigation and the consequent execution of
sale deeds which gives an imprimatur to the dispute being civil
in nature. Moreover, no conclusive role seems to have been
specifically assigned to the petitioner.
15. Apart from the land cases, in which, protest
petitions are said to have been pending the rest two cases
which are pending are Rikhya P.S. Case No. 01/2022 and
Jamtara (Mihijam) P.S. Case No. 140/2017 and these cases do
not reveal generation of proceeds of crime by the petitioner.
16. Another aspect of the case is the period of
incarceration of the petitioner in custody which is since
20.10.2023 and the trial having not yet started. In this
connection, reference is made to the case of "Ramkripal Meena
versus Directorate of Enforcement" in Special Leave to Appeal
(Crl.) No. 3205/2024, wherein it has been held as follows:
"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."
17. In the case of "Manish Sisodia versus
Directorate of Enforcement" reported in 2024 SCC OnLine SC
1920, it has been held as follows:
"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."
18. The period of custody and the probability of the
trial being concluded in the near future seemingly remote
these grounds can also be a defining factor in considering of
grant of bail to an accused as observed by the Hon'ble
Supreme Court in the above quoted judgments.
19. Based on the discussions made hereinabove, it
is concluded that there is "reason to believe" that the petitioner
is not guilty of the offence as alleged. So far as the other
conditions envisaged in Section 45 of PMLA, 2002 is
concerned, reference is made to the case of "Ranjitsing
Brahmajeetsing Sharma versus State of Maharashtra", reported
in (2005) 5 SCC 294, wherein it has been held as follows:
"38. We are furthermore of the opinion that the
restrictions on the power of the court to grant bail
should not be pushed too far. If the court, having
regard to the materials brought on record, is
satisfied that in all probability he may not be
ultimately convicted, an order granting bail may be
passed. The satisfaction of the court as regards his
likelihood of not committing an offence while on bail
must be construed to mean an offence under the Act
and not any offence whatsoever be it a minor or
major offence. If such an expansive meaning is
given, even likelihood of commission of an offence
under Section 279 of the Penal Code, 1860 may
debar the court from releasing the accused on bail.
A statute, it is trite, should not be interpreted in
such a manner as would lead to absurdity. What
would further be necessary on the part of the court
is to see the culpability of the accused and his
involvement in the commission of an organised
crime either directly or indirectly. The court at the
time of considering the application for grant of bail
shall consider the question from the angle as to
whether he was possessed of the requisite mens
rea. Every little omission or commission, negligence
or dereliction may not lead to a possibility of his
having culpability in the matter which is not the
sine qua non for attracting the provisions of
MCOCA. A person in a given situation may not do
that which he ought to have done. The court may in
a situation of this nature keep in mind the broad
principles of law that some acts of omission and
commission on the part of a public servant may
attract disciplinary proceedings but may not attract
a penal provision."
20. This condition can be construed to be also
fulfilled by the petitioner primarily for the reason that in a vast
majority of the cases which form the schedule offences his
complicity has not come to light leading to quashment of the
case or the acquittal of the accused and, therefore, there is no
likelihood of the petitioner committing a similar nature of
offence.
21. The twin conditions as encapsulated in Section
45 of PMLA, 2002 having been fulfilled coupled with the period
of incarceration of the petitioner and there being no probability
of the trial being concluded in the near future leads this Court
to conclude that the petitioner deserves to be released on bail.
Accordingly, the petitioner is directed to be released on bail on
furnishing bail bond of Rs. 1,00,000/- (Rupees One lac only)
with two sureties of the like amount each, to the satisfaction of
learned Special Judge, CBI-cum-PMLA, Ranchi in connection
with ECIR/RNZO/09/2022 in ECIR Case No. 08/2023.
22. It is made clear that the observations made in
this order shall not have any bearing in the trial and are
restricted only for the purposes of consideration of the plea of
bail of the petitioner.
23. This application is allowed.
(Rongon Mukhopadhyay, J.)
A. Sanga /AFR
