[Cites 62, Cited by 0]
Jharkhand High Court
Bhagwan Bhagat vs Union Of India Through The Directorate ... on 10 December, 2025
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
[2025:JHHC:37262]
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. Revision No. 495 of 2025
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Bhagwan Bhagat, aged about 47 years, son of Jaganath Bhagat, resident
of Ratanpur, Barharwa, P.O. Barharwa, P.S. Barharwa, District Sahibganj,
Jharkhand-816101.
...... Petitioner
Versus
Union of India through the Directorate of Enforcement
... ... Opposite Party
With
Cr. Revision No. 459 of 2024
-----
Bhagwan Bhagat, aged about 46 years, son of Jaganath Bhagat, resident
of Ratanpur, P.O. & P.S. Barharwa, Sahibganj, Jharkhand-816101.
...... Petitioner
Versus
Union of India through the Directorate of Enforcement
... ... Opposite Party
------
CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
-------
For the Petitioners : Mr. Indrajit Sinha, Advocate
Mr. Rishav Kumar, Advocate
Mrs. Sneh Singh, Advocate
For the Opposite Parties : Mr. Amit Kumar Das, Advocate
Mr. Saurav Kumar, Advocate
Mr. Varun Girdhar, Advocate
Mr. Manmohit Bhalla, Advocate
------
C.A.V./Reserved on 26.11.2025 Pronounced on 10/12/2025
1. Since these matters are interlinked and, as such, both are heard together
and being disposed of by this common order/judgment.
2. Both of these Criminal Revision petitions have been filed under sections
438 & 442 of Bhartiya Nagarik Suraksha Sanhita, 2023.
3. Criminal Revision No. 459 of 2024 is directed against the order dated
01.03.2024 passed by the learned Additional Judicial Commissioner-
XVIII-cum-Special Judge, PML Act, Ranchi in connection with ECIR
Case No. 04 of 2022 in ECIR/RNZO/03/2022 registered for the offence
under Sections 3 punishable under Section 4 of the Prevention of Money
Laundering Act, 2002 (in short PMLA,2002) whereby and whereunder,
the Miscellaneous Criminal Application No.526 of 2024 filed by the
petitioner seeking discharge, has been rejected.
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4. Criminal Revision No. 495 of 2025 is directed against the order dated
14.03.2024 passed by the learned Additional Judicial Commissioner-
XVIII-cum-Special Judge, PML Act, Ranchi in connection with ECIR
Case No. 04 of 2022(B) (also referred to as ECIR Case No.0010004/2022)
in ECIR/RNZO/03/2022 registered for the offence under Section 3
punishable under Section 4 of the Prevention of Money Laundering Act,
2002, whereby and whereunder, the charge has been framed against the
petitioner.
Factual Matrix:
5. The brief facts of the case as per the pleadings made in the instant petitions
which requires to be enumerated herein, read as under:
(i) An ECIR bearing number 03/2022 (RUD No. 1 of PC dated
16.09.2022) was recorded based on FIR number 85/2020 dated
22.06.2020 (RUD No. 2 of PC dated 16.09.2022). The FIR was filed
by the Barharwa Police Station, Sahebganj District, Jharkhand, under
Sections 147, 149, 341, 342, 323, 379, 504, 506 r/w 120-B of the
Indian Penal Code (IPC), 1860 against Pankaj Mishra, the assembly
constituency representative of Barhait, Sahebganj, Jharkhand, and
others. The complaint was lodged by Shri Sambhu Nandan Kumar,
who alleged threats and obstruction on 22.06.2020 linked to
participating in the tender for Barharwa Toll. Accused Pankaj Mishra
reportedly warned and discouraged the complainant from
participating in the tender. Upon refusal, the complainant was
attacked by a mob associated with Pankaj Mishra.
(ii) The investigation has uncovered that the primary motive behind
preventing the complainant's involvement in the Barharwa Toll
tender was to gain control over the six tolls under Braharwa Nagar
Panchayat. These tolls are situated along the route connecting mining
sites to main roads, facilitating the transportation of mined materials.
In Sahebganj District and nearby areas, significant illegal mining
takes place alongside lawful mining activities. This control over the
Braharwa Nagar Panchayat Toll would have empowered Pankaj
Mishra and his accomplices to oversee the number of vehicles and
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the quantity of mined materials being transported, contributing to
their dominance in the area.
(iii) Despite registering multiple FIRS related to illegal mining in
Sahebganj and adjoining regions, such unlawful practices still
persist. Investigations have unveiled extensive illegal mining
activities in Sahebganj, Jharkhand, as well as the illicit transportation
of illegally mined minerals via roads, railways, and inland vessels.
Illegitimate quarrying, often involving explosives, occurs at
unlicensed mining sites. These activities are substantiated by various
FIRs registered under Sections 411 and 414 of the IPC, along with
Sections 3, 4, and 5 of the Explosive Substances Act, 1908. These
offences are also categorized as scheduled offences under the
Prevention of Money Laundering Act (PMLA). Evidently, scheduled
offences have been committed, and the proceeds from illegal mining
are being laundered. The derived proceeds from these Illicit activities
are controlled by the accused parties, particularly Pankaj Mishra and
his associates, directly or indirectly. To comprehend the broader
context, this office merged the FIRs mentioned in Paragraph 3.8 of
PC dated 16.09.2022 with the existing ECIR related to illegal mining.
Further, the issue of illegal mining & environmental damage is also
being investigated considering the observation of the NGT and
various FIRs registered related to the issue of illegal mining.
(iv) The investigation has revealed that illegal mining activities are
largely unreported. The resulting proceeds are often handled in cash
and are subject to money laundering through the associates of the
accused individuals. In connection with PMLA, the investigation has
disclosed Pankaj Mishra's (Accused No.1) engagement in
widespread illegal mining activities in Sahebganj, Jharkhand. On
08.07.2022 searches were conducted at the premises under the
occupation of Pankaj Mishra and those of his associates, leading to
the seizure of approximately Rs. 5,34,44,400/- in cash. Additionally,
the bank balances of Pankaj Mishra and his associates, including
Krishna Kumar Saha, were frozen, having total frozen balances
amounting to Rs.13,32,26,570/-.
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(v) Thus, the investigation revealed a large-scale illegal mining
syndicate operating in Sahebganj and adjoining districts under the
patronage of accused Pankaj Mishra and his close associates. The
proceeds generated from such illegal mining were systematically
laundered through a network of benamidars, cash deposits, layering,
and use of business entities.
(vi) In continuation to the prosecution complaint dated 16.09.2022
against accused Pankaj Mishra (Accused no. -1) and other accused
persons, the second supplementary prosecution complaint dated
02.09.2023 has been against the present petitioner and other co-
accused and petitioner has been arraigned accused no.6. His role as
a close accomplice of Pankaj Mishra, who knowingly assisted in the
laundering of proceeds of crime, was detailed therein.
(vii) The investigation has brought out that the petitioner was actively
aided illegal mining operations and instrumental in facilitating the
handling of unaccounted cash proceeds. Further the petitioner was found
in possession of 28.50 lakh during the search conducted on
08.07.2022, which remains unexplained and is alleged to be proceeds
of crime. Further it has been alleged that the petitioner was
responsible for placement and layering of illicit cash into the banking
system, with cash deposits of 2.70 crore made in his personal
accounts. It has further been alleged that petitioner had facilitated
laundering of 24.87 crore on behalf of Pankaj Mishra (accused no.1)
through HDFC Bank account No. 50200062737102 between
29.10.2021 and 18.05.2022, which was operated using his linked
mobile number.
(viii) The said Prosecution Complaints filed against the petitioner and his
co-accused have been duly cognized by the learned Special Court and
further vide order dated 01.03.2024, the petitioner's application for
discharge under Section 227 Cr.P.C was rejected, and consequently
by order dated 14.03.2024, charges under Section 3 punishable under
Section 4 of PMLA were framed against him.
(ix) The instant revision applications have been preferred against the
order dated 01.03.2024 and 14.03.2024.
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Arguments advanced on behalf of the petitioner:
6. Learned counsel for the petitioner has taken the following grounds in
assailing the impugned orders:
(i) It has been submitted that the learned Special Judge, PML Act,
Ranchi has failed to appreciate that the prosecution has not
produced material which would show that the petitioner has, in any
manner, dealt with "proceeds of crime".
(ii) It has also been submitted that the learned Special Judge has also
failed to appreciate that the petitioner cannot be said to even
remotely be associated with the scheduled offence as mentioned in
the ECIR.
(iii) The petitioner has been prosecuted on the basis of assumptions and
surmises, and the officials of the Investigating Agency has totally
overlooked the principle that there must be 'reason to believe' rather
than mere assumptions that the offences alleged against the
petitioner have actually been committed by him.
(iv) It has further been submitted that from the records it is evident that
there is no cogent material to show the petitioner's involvement in
the alleged offence and the case of the prosecution is also not
supported with any material to show the petitioner's involvement.
(v) It has further been submitted that carrying out any mining operation
under the MMDR Act cannot be considered to be predicate offence.
(vi) Even as per the allegation, the allegation is of exceeding the
carrying out of mining operations from the lease hold area and there
is no evidence that money of Pankaj Mishra was used by the
petitioner.
(vii) Only on the basis of Section 120B of IPC, no predicate offence will
be said to be committed since herein, the case of the opposite party-
ED is based only upon Section 120B of IPC as per the first FIR
instituted.
7. The opposite party-ED cannot be allowed to proceed merely on
presumption of commission of predicate offence attracting the offence
said to be committed under Section 3 of the PML Act, 2002 and to fortify
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his argument, reliance has been placed the judgment rendered in the case
of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.,
(2022) SCC OnLine SC 929.
8. Learned counsel for the petitioner, on the aforesaid grounds, has submitted
that it is, therefore, a fit case where the impugned orders need to be
interfered with.
Arguments advanced on behalf of the Opposite Party/Respondent:
9. While on the other hand, Mr. Amit Kumar Das, learned counsel for the
opposite party-ED has submitted that it is incorrect on the part of the
petitioner to take the ground that merely because the mining operation was
carried out under the MMDR Act, 1957, it will not attract the ingredient
of Section 3 of the PML Act because herein the investigation is predicated
on multiple FIRs disclosing a criminal conspiracy and other acts of
extortion, theft, and violence, which are scheduled offences under the IPC
and other statutes. The proceeds of crime in this case were generated from
the criminal activities relatable to these scheduled offences, which took
place in the context of the large-scale illegal mining syndicate therefore
the nexus is clearly established.
10. It has been contended that although initially FIR was instituted said to be
under predicate offence, i.e., under Section 120B of the IPC but
subsequently, 25 FIRs have been instituted on the direction of the NGT
inserted under Section 307 of IPC which is a predicate offence.
11. It has been submitted that the reason behind inserting the offence of
Section 307 of IPC, as per the allegation, is that the petitioner after
carrying out the mining operation, used to transport the mineral through
Toll Plaza and for smooth transportation of the minerals, the offence under
Section 307 of IPC has been committed for the purpose of creating an
atmosphere of threat so that nobody comes forward to restrict the illegal
transportation of the minerals. Hence, it is incorrect that only on the basis
of Section 120B of IPC, the offence under Section 3 of PML Act has been
attracted rather the subsequent FIR also contains another predicate
offence, i.e., Section 307 of IPC.
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12. It has been contended by referring to paragraph 9.8, 9.14, 9.15, 9.16, 10.5
& 13 (ii) of the supplementary prosecution complaint that there is direct
evidence available against the present petitioner ad thus it is the onus upon
the petitioner, in view of the provision of Section 24 of the PML Act to
disprove the same on the principle of reverse onus.
13. It has been contended by referring to the ECIR that the petitioner was
closely associated with Pankaj Mishra who was carrying out the illegal
mining operations and the money which was accumulated by the said
Pankaj Mishra, was being used for the purpose of its concealment and
laundering leading to laundering of money as would be evident from
paragraphs of the 2nd prosecution complaint.
14. Learned counsel for the opposite party-ED has submitted that the order
impugned in Cr. Rev. No. 459 of 2024 is refusal of the prayer of discharge
and it cannot be said to suffer from an error since ample materials are
available based upon which it cannot be said that no prima facie case is
available against the petitioner leading to quashing of the entire criminal
proceeding rather all these aspects are to be adjudicated in course of the
trial.
15. Learned counsel for the Opposite Party-ED, on the aforesaid grounds, has
submitted that it is, therefore, not a fit case where the impugned orders
need to be interfered with.
Response of the learned Counsel for the petitioner
16. Mr. Indrajit Sinha, learned counsel for the petitioner, in response, has
submitted by relying upon the judgment rendered in Vijay Madanlal
Choudhary and Ors. Vs. Union of India and Ors. (supra) that whatever
has been argued by Mr. Das, based upon the material collected as inserted
in the ECIR, is nothing but mere presumption which has been deprecated
by the Hon'ble Supreme Court as would be evident from the judgment
rendered by the Hon'ble Supreme Court.
Analysis:
17. This Court has heard the learned counsel for the parties at length and has
also gone through the finding recorded by the learned trial Court in the
impugned order as also the case diary.
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18. In order to appreciate the contention of the learned counsel for the parties
this Court has gone through the second supplementary prosecution
complaint dated 02.09.2023 which has been annexed with the main
petition.
19. It is evident from record that the prosecution in the present case was
initiated based on the registration of ECIR/RNZO/03/2022 dated
08.03.2022 registered by the Respondent (ED) under provisions of the
PMLA. The said ECIR/RNZO/03/2022 dated 08.03.2022 arises out of an
FIR Barharwa P.S. Case No. 85/2020 dated 22.06.2020 registered by the
Barharwa Police Station in respect of a toll tender case against various
accused persons. Subsequently, the Respondent identified four more FIRs
- FIR No. 63/21 registered at Sahibganj Mufassil Police Station, FIR No.
146/21 registered at Taljhari Police Station, and FIR Nos. 28/22 and 29/22,
also registered at Sahibganj Mufassil Police Station; and these FIRs were
also clubbed as predicate offences for the investigation of
ECIR/RNZO/03/2022.
20. Thereafter, the Respondent further identified several FIRs registered
against various persons for offences pertaining to illegal mining, storage
and transportation, and these FIRs were also clubbed as predicate offences
for the purposes of investigation into ECIR/RNZO/03/2022.
21. During investigation 47 searches were conducted by the Respondent
between 08.07.2022 and 24.08.2022. The residence of the Petitioner was
also searched on 08.07.2022. From the search of the residence of the
petitioner, mobile phones, loose sheets, and a cash amount of
Rs.28,50,000/-was seized. On the very day of the search, i.e., 08.07.2022,
the Petitioner tendered a statement to the Respondent, explaining that the
recovered cash amount was proceeds from the sale of stone by the
Petitioner to retail customers, which proceeds were yet to be deposited in
the bank.
22. The Petitioner was eventually arrested on 07.07.2023 when he had
appeared before the Respondent in due compliance of summons issued to
him. As many as 8 statements of the Petitioner were recorded under
Section 50 of the PMLA, including those recorded post the arrest of the
Petitioner.
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23. After the arrest of the Petitioner, the Respondent filed a second
Supplementary Prosecution Complaint (Second SPC) in ECIR Case No. 4
of 2022, on 02.09.2023 arraying the Petitioner as an accused levelling
allegation of illegal mining. The Second SPC was also filed against three
accused persons namely, Krishna Kumar Saha (Accused No. 5), the
Petitioner (Accused No. 6), and Tinkal Kumar Bhagat (Accused No. 7)
and thereafter the learned court took cognizance of offence under Section
3 punishable under Section 4 of the PML Act, 2002 against the petitioner
and other accused persons.
24. In the said 2nd supplementary prosecution complaint, the role and other
incriminating material against the present petitioner has been mentioned,
for ready reference the relevant paragraphs of the aforesaid prosecution
complaint are being quoted as under:
"1.2 The Investigation revealed that Pankaj Mishra, along with his
associates, had a strategic intention of securing authority over the tolls
managed by Barharwa Nagar Panchayat. This controi would facilitate
the seamless supervision of his unlawful mining operations, given that
these toll points are strategically positioned along routes connecting
stone mining sites to diverse destinations, encompassing regions such
as Bihar and Bengal. Furthermore, the inquiry established a direct link
between Pankaj Mishra and the engagement in illegal mining activities
involving stone chips. His involvement was channeled through a
network of accomplices, prominently including Krishna Kumar Saha,
Bhagwan Bhagat, Tinkal Bhagat, Bishnu Kumar Yadav, and other
individuals.
1.3 Prosecution Complaint dated 16.09.2022 and Supplementary
Prosecution Complaint dated 19.06.2023 in this matter have been filed
before this Hon'ble Special Court, PMLA, Ranchi. During the course of
the investigation, the following FIRs related to the issue of illegal
mining in Sahebganj and its vicinity were merged in order to unearth
the larger picture and for carrying out a comprehensive investigation.
1.5 Further, as per the report submitted to Hon'ble NGT it is
specifically mentioned that 125 FIR(s) were lodged against various
persons for the offence of illegal mining, storage and transportation.
This Directorate also identified some of the FIRS lodged in the matter
of Illegal mining and transportation activities during the above-stated
period out of which 50 FIR(s) were mentioned in Paragraph No. 3.4 of
the Prosecution Complaint dated 16.09.2022 (RUD No. 41.) and is not
repeated again for brevity. The contents of the supplementary
prosecution complaint are in addition to the earlier Prosecution
Complaint dated 16.09.2022 and me earller relied upon documents
mentioned to be read in supplement to the facts of the present
investigation.
1.6 There are several other FIRS lodged in the matter of the Illegal
mining in Sahebganj and Its adjoining areas but such illegal activities
have not stopped. The investigation has revealed about huge illegal
mining activities in Sahebganj, Jharkhand along with the
transportation of such stolen minerals through roads, railways, and
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inland vessels. A huge quantity of explosives is being used to break
rocks/stones illegally into unleased mining sites. The above activities
are also evident and corroborated by several FIRs lodged for offences
under sections 411, 414 along with various other sections of IPC, as
well as for offences under sections 3, 4, and 5 of the Explosive
Substances Act, 1908 and Section 8 of the Environment Protection Act,
1986 into the matter of illegal mining which are also scheduled offences
under PMLA, To unearth the larger picture and for carrying out a
comprehensive investigation, the above-discussed FIRs were merged
into the existing investigation. Further, the issue of illegal mining &
environmental damage is also being investigated considering the
observation of the Hon'ble NGT and various FIR(s) registered related
to the issue of illegal mining.
Brief Facts of the offence/allegation/allegation/charge /amount
involved under PMLA
3.1 An ECIR bearing number 03/2022 (RUD No. 1 of PC dated
16.09.2022) was recorded based on FIR number 85/2020 (lated
22.06.2020 (RUD No. 2 of PC dated 16.09.2022). The FIR was filed by
the Barharwa Police Station, Sahebganj District, Jharkhand, under
Sections 147, 149, 341, 342, 323, 379, 504, 506 r/w 120-B of the Indian
Penal Code (IPC), 1860 against Pankaj Mishra, the assembly
constituency representative of Barhait, Sahebganj, Jharkhand, and
others. The complaint was lodged by Shri Sambhu Nandan Kumar, who
alleged threats and obstruction on 22.06.2020 linked to participating
in the tender for Barharwa Toll. Accused Pankaj Mishra reportedly
warned and discouraged the complainant from participating in the
tender. Upon refusal, the complainant was attacked by a mob
associated with Pankaj Mishra.
3.2. The investigation has uncovered that the primary motive behind
preventing the complainant's involvement to the Barharwa To!! tender
was to gain control over the six tolls under Braharwa Nagar
Panchayat. These tolls are situated along the route connecting mining
sites to main roads, iacilitating the transportation of rained materials.
In Sahebganj District and nearby areas, significant illegal mining takes
place alongside lawful mining activities. This control over the
Braharwa Nagar Panchayat Toll would have empowered Pankaj
Mishra and his accomplices to oversee the number of vehicles and the
quantity of mined materials being transported, contributing to their
dominance in the area.
3.3 Despite registering multiple FIRS related to illegal minling
Sahebganj and adjoining regions, such unlawful practices stili persist.
Investigations have unveiled extensive illegal mining activities in
Sahebganj, Jharkhand, as well as the illicit transportation of illegally
mined minerals via roads, railways, and inland vessels. Illegitimate
quarrying, often involving explosives, occurs at unlicensed mining
sites. These activities are substantiated by various FIRs registered
under sections 411 and 414 of the IPC, along with sections 3, 4, and 5
of the Explosive Substances Act, 1908. These offences are also
categorized as scheduled offences under the Prevention of Money
Laundering Act (PMLA). Evidently, scheduled offences have been
committed, and the proceeds from illega mining are being laundered.
The derived proceeds from these illicit activities are controlled by the
accused parties, particularly Pankaj Mishra and his associates, directly
or indirectly. To comprehend the broader context, this office merged
the FIRS mentioned in Paragraph 3.8 of PC dated 16.09.2022 with the
existing ECIR related to illegal mining. Further, the issue of illegal
mining & environmental damage is also being investigated considering
the observation of the Hon'ble NGT and various FIRS registered
related to the issue of illegal mining.
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3.4/ The investigation has revealed that illegal mining activities are
largely unreported. The resulting proceeds are often handled in cash
and are subject to money laundering through the associates of the
accused individuals. In connection with PMLA, the investigation has
disclosed Pankaj Mishra's (Accused No.1) engagement in widespread
illegal mining activities in Sahebganj, Jharkhand. On 08.07.202
searches were conducted at thepremises under the occupation of
Pankaj Mishra and those of his associates, leading to the seizure of
approximately Rs. 5,34,44,400 in cash. Additionally, the bank balances
of Pankaj Mishra and his associates, including Krishna Kumar Saha,
were frozen, having total frozen balances amounting to Rs.
13,32,26,570. The details of the bank balances and other seizures have
been cited below separately in para 6 of this prosecution complaint.
Brief details of persons examined u/s 50(2) & (3) of PMLA:
Bhagwan Bhagat (Accused No. 6)-
I. In his statement dated 06.08.2022 (RUD No. 13) recorded under
section 50 of PMLA, 2002, it is revealed that he looks after the business
of stone loading on railway rakes for Pankaj Mishra. He has further
stated that he used to load around 2 to 3 railway rakes per month for
Pankaj Mishra. Further, in order to maximize the purported profits for
Pankaj Mishra, he also used to show the sale of stone material to
Pankaj Mishra at a lower price/discounted rates in his book of accounts
and later, for the accused Pankaj Mishra, he himself sold them at
market value and received the payments in the bank account of Pankaj
Mishra.
II. Further, the indulgence of the accused Bhagwan Bhagat in illegal
mining activities is also corroborated by the joint inspection conducted
from 25.07.2022 to 29.07.2022 (RUD No 43) in the presence of officials
from the various government departments. Thus, it is evident that
Bhagwan Bhagat is one of the close confidants of Pankaj Mishra and
carries out his illegal mining activities under his patronage. During the
course of the searches dated 08.07.2023, cash amounting to Rs.
28,50,000/- was seized from the possession of Bhagwan Bhagat. On
being asked about the source of the cash seized, he was unable to
provide satisfactory answers. Further, in his statement dated
06.08.2022 (RUD No. 13), Bhagwan Bhagat stated that the seized cash
was his sale proceeds of the last 5-7 days which was generated by
selling the stone aggregates, however, no satisfactory documentary
evidence in respect of the source of the seized cash was furnished by
him. Thus, it is evident that the cash seized from his possession is the
proceeds of crime generated out of illegal stone mining activities.
BRIEF SUMMARY OF EVIDENCE TO PROVE THAT THE
ACCUSED AND PROPERTIES ARE INVOLVED IN MONEY
LAUNDERING ALONG WITH THE FINDING OF THE
INVESTIGATION OFFICER UNDER PMLA, 2002:
9.8 On 29.07.2022, illegal mining by M/s Bhagwan Stone Works, one
of the -firms of Bhagwan Bhagat was identified at Mauja Borna. The
lease was given for mining on a total area of of 13.13 acres acres at
block Patna. However, the inspection revealed that the total mining has
been done on an area of 21 acres. The mining exceeded in adjacent
plots no. 135P, 138P, 137P, 136, 129P, 120, 119, 118P, 89P, 111P and
110P of Mauja Borna. It revealed that from April, 2019 to June, 2022,
total mining challan obtained by Bhagwan Bhagat was around
23908985 CFT whereas the actual mining done by him was several
times the quantity for which the mining challan was obtained. Thus,
about 7.8 acres of excess mining by Bhagwan Bhagat was identified
which was entirely illegal.
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9.14 Investigation reveals that Pankaj Mishra (Accused No.1) has
several financial transactions with Bhagwan Bhagat (Accused No.6)
and has also deposited Proceeds of crime amounting to Rs.
5,68,96,067.00 crores during the period 29.10.2021 to 18.05.2022 in
HDFC bank account of Pankaj Mishra bearing no. 50200062737102
(RUD No.). Investigation reveals that Pankaj Mishra has laundered the
proceeds of crime by way of projecting purported trading of stone
chips, with the assistance of Bhagwan Bhagat.
9.15 The bank accounts of Bhagwan Bhagat (Accused No.6) were
scrutinized which revealed that a huge amount of cash had been
deposited in his bank accounts.-----
13. Role of Accused in offence of money laundering under Section 3
of PMLA, 2002:
13(ii) Bhagwan Bhagat -
The Accused No. 6 namely Bhagwan Bhagat is knowingly indulged in
laundering the funds generated out of his illegal mining activities,
which he has done on about 7.8 acres beyond the permissible limits on
plot no. 135P, 138P, 137P, 136, 129P, 120, 119, 118P, 89P, 111P and
110P of Mauja Borna. The lease was given for mining on a total area
of 13.13 acres at block Patna. However, the inspection revealed that
the total mining has been done on an area of 21 acres. It revealed that
from April 2019 to June 2022, the total mining challan obtained by
Bhagwan Bhagat was around 23908985 CFT whereas the actual
mining done by him was several times the quantity for which the mining
challan was obtained.
Further, the accused Bhagwan Bhagat has knowingly assisted Pankaj
Mishra in carrying out illegal stone mining activities and subsequent
illegal activities connected thereto including day-to-day management
of his bank accounts, supplying illegally mined stone materials and
carrying out Illegal activities under his patronage. Further, after
deducting day-to-day expenses borne in cash, the accused Bhagwan
Bhagat is in possession of proceeds of crime to the tune of Rs.
2,70,64,300/- which has been deposited in five of his bank accounts. He
has also knowingly assisted Pankaj Mishra in laundering proceeds of
crime amounting to Rs. 4.87 crores in his HDFC bank account no.
50200062737102 during the period 29.10.2021 to 18.05.2022.
Hence, the accused Bhagwan Bhagat had directly indulged, knowingly
is a party and is actually involved in all the activities connected with
the offence of money laundering, i.e. use or acquisition, possession,
concealment, and projecting or claiming as untainted property.
Therefore, the accused Bhagwan Bhagat has committed offences
under Section 3 of PMLA, 2002 and as such, is liable to be prosecuted
under Section 4 of PMLA, 2002."
25. It has come in the prosecution complaint that the petitioner Bhagwan
Bhagat indulged in laundering the funds generated out of his illegal
mining activities, which he has done on about 7.8 acres beyond the
permissible limits on plot no. 135P, 138P, 137P, 136, 129P, 120, 119,
118P, 89P, 111P and 110P of Mauja Borna. The lease was given for
mining on a total area of 13.13 acres at block Patna. However, the
inspection revealed that the total mining has been done on an area of 21
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acres. It revealed that from April 2019 to June 2022, the total mining
challan obtained by Bhagwan Bhagat was around 23908985 CFT whereas
the actual mining done by him was several times the quantity for which
the mining challan was obtained.
26. Further, it is revealed that the accused Bhagwan Bhagat has assisted
Pankaj Mishra in carrying out illegal stone mining activities and
subsequent illegal activities connected thereto including day-to-day
management of his bank accounts, supplying illegally mined stone
materials and carrying out illegal activities under his patronage. Further,
after deducting day-to-day expenses borne in cash, the petitioner Bhagwan
Bhagat is in possession of proceeds of crime to the tune of
Rs.2,70,64,300/- which has been deposited in five of his bank accounts.
He has also assisted Pankaj Mishra in laundering proceeds of crime
amounting to Rs. 4.87 crores in his HDFC bank account no.
50200062737102 during the period 29.10.2021 to 18.05.2022 .
27. It is further appears from record that petitioner had preferred an
application for discharge being Misc. Criminal Application No.526 of
2024 in connection with said ECIR Case No. 04 of 2022 in
ECIR/RNZO/03/2022 registered for commission offence u/s 3 of the
Prevention of Money Laundering Act, 2002 to discharge him from this
case on the ground that the material brought on record by the prosecution
against this petitioner even if taken in their entirety, do not fulfill the
necessary ingredients of the offences as alleged by the prosecution and in
such view of the matter, there is not a single ground to proceed and frame
charges against the applicant.
28. Per Contra, the learned State counsel vehemently opposed the prayer of
the petitioner on the ground that, at the stage of framing charge only
prima-facie material has to be ascertained and there are sufficient prima-
facie clinching material was available on the record, as such charge has
been framed against the petitioner.
29. The Spl. Judge PML Act while appreciating the rival contention has
rejected the aforesaid discharge application of petitioner vide order dated
01.03.2024 on the ground that after going through the materials, it
transpires that the accused/petitioner not only received huge amount in
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illegal way earned through illegal mining, trade and transportation of stone
chips etc. but also came in possession of such "proceeds of crime".
30. The aforesaid order dated 01.03.2024 has been assailed before this Court
by way of filing the petition being Cr. Revision No. 459 of 2024.
31. Thereafter, the charges have been framed against the petitioner vide order
dated 14.03.2024 passed by the learned A.J.C. XVIII-cum-Special Judge,
PML Act, Ranchi. The said order dated 14.03.2024 has also been
challenged herein by filing the petition being Cr. Revision No. 495 of
2025.
32. In the background of the factual aspect stated hereinabove, the issues
which require consideration are--
(i) Whether the orders dated 01.03.2024 and 14.03.2024 by which
the application for discharge filed by the petitioner has been
dismissed and charges have been framed respectively, can be said to
suffer from an error?
(ii) Whether on the basis of the evidence which has been collected in
course of investigation, prima facie case against the petitioner is
made out or not?
33. Since both the issues are interlinked as such, they are taken up together.
34. This Court, before appreciating the argument advanced on behalf of the
parties deems it fit and proper to discuss herein some of the provisions of
law as contained under the Act, 2002 with its object and intent.
35. The Act 2002 was enacted to address the urgent need to have a
comprehensive legislation inter alia for preventing money-laundering,
attachment of proceeds of crime, adjudication and confiscation thereof
including vesting of it in the Central Government, setting up of agencies
and mechanisms for coordinating measures for combating money-
laundering and also to prosecute the persons indulging in the process or
activity connected with the proceeds of crime.
36. It is, thus, evident that Act 2002 was enacted in order to answer the urgent
requirement to have a comprehensive legislation inter alia for preventing
money-laundering, attachment of proceeds of crime, adjudication and
confiscation thereof for combating money-laundering and also to
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prosecute the persons indulging in the process or activity connected with
the proceeds of crime.
37. It needs to refer herein the definition of "proceeds of crime" as provided
under Section 2(1)(u) of the Act, 2002 which reads as under:
"2 (1) (u) "proceeds of crime" means any property derived or obtained,
directly or indirectly, by any person as a result of criminal activity
relating to a scheduled offence or the value of any such property 3[or
where such property is taken or held outside the country, then the
property equivalent in value held within the country] 4[or abroad];
[Explanation.--For the removal of doubts, it is hereby clarified that
"proceeds of crime" include property not only derived or obtained from
the scheduled offence but also any property which may directly or
indirectly be derived or obtained as a result of any criminal activity
relatable to the scheduled offence;]"
38. It is evident from the aforesaid provision that "proceeds of crime" means
any property derived or obtained, directly or indirectly, by any person as
a result of criminal activity relating to a scheduled offence or the value of
any such property or where such property is taken or held outside the
country, then the property equivalent in value held within the country or
abroad.
39. In the explanation it has been referred that for removal of doubts, it is
hereby clarified that "proceeds of crime" include property not only derived
or obtained from the scheduled offence but also any property which may
directly or indirectly be derived or obtained as a result of any criminal
activity relatable to the scheduled offence. The aforesaid explanation has
been inserted in the statute book by way of Act 23 of 2019.
40. It is, thus, evident that the reason for giving explanation under Section
2(1)(u) is by way of clarification to the effect that whether as per the
substantive provision of Section 2(1)(u), the property derived or obtained,
directly or indirectly, by any person as a result of criminal activity relating
to a scheduled offence or the value of any such property or where such
property is taken or held outside the country but by way of explanation the
proceeds of crime has been given broader implication by including
property not only derived or obtained from the scheduled offence but also
any property which may directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the scheduled offence.
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41. The "property" has been defined under Section 2(1)(v) which means any
property or assets of every description, whether corporeal or incorporeal,
movable or immovable, tangible or intangible and includes deeds and
instruments evidencing title to, or interest in, such property or assets,
wherever located.
42. The schedule has been defined under Section 2(1)(x) which means
schedule to the Prevention of Money Laundering Act, 2002. The
"scheduled offence" has been defined under Section 2(1)(y) which reads
as under:
"2(y) "scheduled offence" means-- (i) the offences specified under Part
A of the Schedule; or (ii) the offences specified under Part B of the
Schedule if the total value involved in such offences is [one crore
rupees] or more; or (iii) the offences specified under Part C of the
Schedule."
43. It is evident that the "scheduled offence" means the offences specified
under Part A of the Schedule; or the offences specified under Part B of the
Schedule if the total value involved in such offences is [one crore rupees]
or more; or the offences specified under Part C of the Schedule.
44. The offence of money laundering has been defined under Section 3 of the
Act, 2002 which reads as under:
"3. Offence of money-laundering.--Whosoever directly or indirectly
attempts to indulge or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected with the
[proceeds of crime including its concealment, possession, acquisition
or use and projecting or claiming] it as untainted property shall be
guilty of offence of money-laundering. [Explanation.-- For the removal
of doubts, it is hereby clarified that,-- (i) a person shall be guilty of
offence of money-laundering if such person is found to have directly or
indirectly attempted to indulge or knowingly assisted or knowingly is a
party or is actually involved in one or more of the following processes
or activities connected with proceeds of crime, namely:-- (a)
concealment; or (b) possession; or (c) acquisition; or (d) use; or (e)
projecting as untainted property; or (f) claiming as untainted property,
in any manner whatsoever; (ii) the process or activity connected with
proceeds of crime is a continuing activity and continues till such time a
person is directly or indirectly enjoying the proceeds of crime by its
concealment or possession or acquisition or use or projecting it as
untainted property or claiming it as untainted property in any manner
whatsoever.]"
45. It is evident from the aforesaid provision that "offence of money-
laundering" means whosoever directly or indirectly attempts to indulge or
knowingly assists or knowingly is a party or is actually involved in any
process or activity connected with the proceeds of crime including its
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concealment, possession, acquisition or use and projecting or claiming it
as untainted property shall be guilty of offence of money-laundering.
46. It is further evident that the process or activity connected with proceeds of
crime is a continuing activity and continues till such time a person is
directly or indirectly enjoying the proceeds of crime by its concealment or
possession or acquisition or use or projecting it as untainted property or
claiming it as untainted property in any manner whatsoever.
47. The punishment for money laundering has been provided under Section 4
of the Act, 2002.
48. The various provisions of the Act, 2002 alongwith interpretation of the
definition of "proceeds of crime" has been dealt with by the Hon'ble Apex
Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of
India and Ors., (2022) SCC OnLine SC 929 wherein the Bench
comprising of three Hon'ble Judges of the Hon'ble Supreme Court has
decided the issue by taking into consideration the object and intent of the
Act, 2002.
49. It is evident that the purposes and objects of the 2002 Act for which it has
been enacted, is not limited to punishment for offence of money-
laundering, but also to provide measures for prevention of money-
laundering. It is also to provide for attachment of proceeds of crime, which
are likely to be concealed, transferred or dealt with in any manner which
may result in frustrating any proceeding relating to confiscation of such
proceeds under the 2002 Act. This Act is also to compel the banking
companies, financial institutions and intermediaries to maintain records of
the transactions, to furnish information of such transactions within the
prescribed time in terms of Chapter IV of the 2002 Act.
50. The predicate offence has been considered in the aforesaid judgment
wherein by taking into consideration the explanation as inserted by way
of Act 23 of 2019 under the definition of the "proceeds of crime" as
contained under Section 2(1)(u), whereby and whereunder, it has been
clarified for the purpose of removal of doubts that, the "proceeds of crime"
include property not only derived or obtained from the scheduled offence
but also any property which may directly or indirectly be derived or
obtained as a result of any criminal activity relatable to the scheduled
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offence, meaning thereby, the words "any property which may directly or
indirectly be derived or obtained as a result of any criminal activity
relatable to the scheduled offence" will come under the fold of the
proceeds of crime.
51. In the judgment rendered by the Hon'ble Apex Court in Vijay Madanlal
Choudhary and Ors. Vs. Union of India and Ors. (supra) it has been held
that the Authority under the 2002 Act, is to prosecute a person for offence
of money-laundering only if it has reason to believe, which is required to
be recorded in writing that the person is in possession of "proceeds of
crime". Only if that belief is further supported by tangible and credible
evidence indicative of involvement of the person concerned in any process
or activity connected with the proceeds of crime, action under the Act can
be taken forward for attachment and confiscation of proceeds of crime and
until vesting thereof in the Central Government, such process initiated
would be a standalone process.
52. Now, after having discussed the judgments passed by the Hon'ble Apex
Court on the issue of various provisions of the Act, 2002, this Court, is
proceeding to discuss the principle governing discharge and framing of
charge.
53. Section 250 of Bharatiya Nagarik Suraksha Sanhita, 2023 ('BNSS' for
brevity) provides for discharge in sessions cases. It reads as follows:
"250.Discharge (1) The accused may prefer an application for
discharge within a period of sixty days from the date of commitment
of the case under section 232 (BNSS). (2) If, upon consideration of
the record of the case and the documents submitted therewith, and
after hearing the submissions of the accused and the prosecution in
this behalf, the Judge considers that there is not sufficient ground for
proceeding against the accused, he shall discharge the accused and
record his reasons for doing so."
54. Section 227 of Code of Criminal Procedure ('CrPC' for brevity)
contemplates discharge by the Court of Session. The trial Judge is required
to discharge the accused if the Judge considers that there is no sufficient
ground for proceeding against the accused. Section 250(2) BNSS
corresponds to section 227 CrPC. Section 250(1) BNSS stipulates a time
limit of 60 days from the date of committal of the case within which an
application for discharge should be filed by the accused.
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55. Section 239 CrPC provides for discharge of accused in warrant cases
instituted upon a police report. The power under section 239 Cr.P.C. is
exercisable when Magistrate considers the charge against the accused to
be groundless. Section 262(2) BNSS is similar to section 239 CrPC but
section 262 BNSS provides an opportunity to the learned Magistrate to
examine the accused either physically or through audio - video electronic
means. Section 262(1) BNSS stipulates a time limit of 60 days from the
date of supply of documents under section 230 BNSS within which an
application should for discharge should be filed by the accused.
56. Section 245 Cr.P.C. deals with warrant cases instituted otherwise than on
a police report. Section 245 CrPC corresponds t.o section 268 of BNSS.
The power under section 245 (1) Cr.P.C. is exercisable when the
Magistrate considers that no case against the accused has been made out
which, if unrebutted would warrant his conviction. The Magistrate has the
power of discharging the accused at any previous stage of the case under
section 245 (2) Cr.P.C. Sections 227 and 239 Cr.P.C. provide for
discharge before the recording of evidence on the basis of the police
report, the documents sent along with it and examination of the accused
after giving an opportunity to the parties to be heard. But the stage of
discharge under section 245 Cr.P.C., on the other hand, is reached only
after the evidence referred in section 244 is taken. Despite the difference
in the language of the provisions of sections 227, 239 and 245 Cr.P.C. and
whichever provision may be applicable, the Court is required to see, at the
time of framing of charge, that there is a prima facie case for proceeding
against the accused. The main intention of granting a chance to the accused
of making submissions as envisaged under sections 227 or 239 of Cr.P.C.
is to assist the Court to determine whether it is required to proceed to
conduct the trial.
57. The issue of discharge was the subject matter before the Hon'ble Supreme
Court in the case of State of Tamilnadu, by Inspector of Police in
Vigilance and Anti-Corruption v. N. Suresh Rajan, (2014) 11 SCC 709,
wherein at paragraphs no. 29, 32.4, 33 and 34 the Hon'ble Apex Court has
been observed as under:--
"29. We have bestowed our consideration to the rival submissions and
the submissions made by Mr. Ranjit Kumar commend us. True it is that
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at the time of consideration of the applications for discharge, the court
cannot act as a mouthpiece of the prosecution or act as a post office
and may sift evidence in order to find out whether or not the allegations
made are groundless so as to pass an order of discharge. It is trite that
at the stage of consideration of an application for discharge, the court
has to proceed with an assumption that the materials brought on record
by the prosecution are true and evaluate the said materials and
documents with a view to find out whether the facts emerging therefrom
taken at their face value disclose the existence of all the ingredients
constituting the alleged offence. At this stage, probative value of the
materials has to be gone into and the court is not expected to go deep
into the matter and hold that the materials would not warrant a
conviction. In our opinion, what needs to be considered is whether there
is a ground for presuming that the offence has been committed and not
whether a ground for convicting the accused has been made out. To put
it differently, if the court thinks that the accused might have committed
the offence on the basis of the materials on record on its probative
value, it can frame the charge; though for conviction, the court has to
come to the conclusion that the accused has committed the offence. The
law does not permit a mini trial at this stage.
32.4. While passing the impugned orders [N. Suresh Rajan v. Inspector
of Police, Criminal Revision Case (MD) No. 528 22 of 2009, order
dated 10-12-2010 (Mad)], [State v. K. Ponmudi, (2007) 1 Mad LJ (Cri)
100], the court has not sifted the materials for the purpose of finding
out whether or not there is sufficient ground for proceeding against the
accused but whether that would warrant a conviction. We are of the
opinion that this was not the stage where the court should have
appraised the evidence and discharged the accused as if it was passing
an order of acquittal. Further, defect in investigation itself cannot be a
ground for discharge. In our opinion, the order impugned [N. Suresh
Rajan v. Inspector of Police, Criminal Revision Case (MD) No. 528 of
2009, order dated 10-12-2010 (Mad)] suffers from grave error and
calls for rectification.
33. Any observation made by us in this judgment is for the purpose of
disposal of these appeals and shall have no bearing on the trial. The
surviving respondents are directed to appear before the respective
courts on 3-2-2014. The Court shall proceed with the trial from the
stage of charge in accordance with law and make endeavour to dispose
of the same expeditiously.
34. In the result, we allow these appeals and set aside the order
of discharge with the aforesaid observations.
58. It is further settled position of law that defence on merit is not to be
considered at the time of stage of framing of charge and that cannot be a
ground of discharge. A reference may be made to the judgment as
rendered by the Hon'ble Apex Court in State of Rajasthan v. Ashok
Kumar Kashyap, (2021) 11 SCC 191. For ready reference Paragraph no.
11 of the said judgment are quoted below:--
"11. While considering the legality of the impugned judgment [Ashok
Kumar Kashyap v. State of Rajasthan, 2018 SCC OnLine Raj 3468]
and order passed by the High Court, the law on the subject and few
decisions of this Court are required to be referred to.
11.1. In P. Vijayan [P. Vijayan v. State of Kerala, (2010) 2 SCC
398 : (2010) 1 SCC (Cri) 1488], this Court had an occasion to consider
Section 227 CrPC What is required to be considered at the time of
framing of the charge and/or considering the discharge application has
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been considered elaborately in the said decision. It is observed and held
that at the stage of Section 227, the Judge has merely to sift the evidence
in order to find out whether or not there is sufficient ground for
proceeding against the accused. It is observed that in other words, the
sufficiency of grounds would take within its fold the nature of the
evidence recorded by the police or the documents produced before the
court which ex facie disclose that there are suspicious circumstances
against the accused so as to frame a charge against him. It is further
observed that if the Judge comes to a conclusion that there is sufficient
ground to proceed, he will frame a charge under Section 228 CrPC, if
not, he will discharge the accused. It is further observed that while
exercising its judicial mind to the facts of the case in order to determine
whether a case for trial has been made out by the prosecution, it is not
necessary for the court to enter into the pros and cons of the matter or
into a weighing and balancing of evidence and probabilities which is
really the function of the court, after the trial starts.
11.2. In the recent decision of this Court in M.R. Hiremath [State of
Karnataka v. M.R. Hiremath, (2019) 7 SCC 515 : (2019) 3 SCC (Cri)
109 : (2019) 2 SCC (L&S) 380], one of us (D.Y. Chandrachud, J.)
speaking for the Bench has observed and held in para 25 as under :
(SCC p. 526)
"25. The High Court [M.R. Hiremath v. State, 2017 SCC OnLine Kar
4970] ought to have been cognizant of the fact that the trial court was
dealing with an application for discharge under the provisions of
Section 239 CrPC. The parameters which govern the exercise of this
jurisdiction have found expression in several decisions of this Court. It
is a settled principle of law that at the stage of considering an
application for discharge the court must proceed on the assumption
that the material which has been brought on the record by the
prosecution is true and evaluate the material in order to determine
whether the facts emerging from the material, taken on its face value,
disclose the existence of the ingredients necessary to constitute the
offence. In State of T.N. v. N. Suresh Rajan [State of T.N. v. N. Suresh
Rajan, (2014) 11 SCC 709 : (2014) 3 SCC (Cri) 529 : (2014) 2 SCC
(L&S) 721], adverting to the earlier decisions on the subject, this Court
held : (SCC pp. 721-22, para 29)
'29. ... At this stage, probative value of the materials has to be gone
into and the court is not expected to go deep into the matter and hold
that the materials would not warrant a conviction. In our opinion, what
needs to be considered is whether there is a ground for presuming that
the offence has been committed and not whether a ground for convicting
the accused has been made out. To put it differently, if the court thinks
that the accused might have committed the offence on the basis of the
materials on record on its probative value, it can frame the charge;
though for conviction, the court has to come to the conclusion that the
accused has committed the offence. The law does not permit a mini trial
at this stage.'"
59. Further it is pertinent to mention here that power to discharge an accused
was designed to prevent harassment to an innocent person by the arduous
trial or the ordeal of prosecution. How that intention is to be achieved is
reasonably clear in the section itself. The power has been entrusted to the
Sessions Judge who brings to bear his knowledge and experience in
criminal trials. Besides, he has the assistance of counsel for the accused and
Public Prosecutor. He is required to hear both sides before framing any
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charge against the accused or for discharging him. If the Sessions Judge
after hearing the parties frames a charge and also makes an order in support
thereof, the law must be allowed to take its own course. Self-restraint on
the part of the High Court should be the rule unless there is a glaring
injustice which stares the court in the face. The opinion on any matter may
differ depending upon the person who views it. There may be as many
opinions on a particular matter as there are courts but it is no ground for the
High Court to interdict the trial. It would be better for the High Court to
allow the trial to proceed. Reference in this regard may be taken from the
judgment as rendered by the Hon'ble Apex Court in Stree Atyachar Virodhi
Parishad v. Dilip Nathumal Chordia, (1989) 1 SCC 715.
60.Further, the difference between the approach with which the Court should
examine the matter in the discharge has been explained by the Hon'ble
Supreme Court in Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460, in
the following words:--
"17. Framing of a charge is an exercise of jurisdiction by the trial court
in terms of Section 228 of the Code, unless the accused is discharged
under Section 227 of the Code. Under both these provisions, the court
is required to consider the "record of the case" and documents
submitted therewith and, after hearing the parties, may
either discharge the accused or where it appears to the court and in its
opinion there is ground for presuming that the accused has committed
an offence, it shall frame the charge. Once the facts and ingredients of
the Section exists, then the court would be right in presuming that there
is ground to proceed against the accused and frame the charge
accordingly. This presumption is not a presumption of law as such. The
satisfaction of the court in relation to the existence of constituents of an
offence and the facts leading to that offence is a sine qua non for
exercise of such jurisdiction. It may even be weaker than a prima facie
case. There is a fine distinction between the language of
Sections 227 and 228 of the Code. Section 227 is the expression of a
definite opinion and judgment of the Court while Section 228 is
tentative. Thus, to say that at the stage of framing of charge, the Court
should form an opinion that the accused is certainly guilty of
committing an offence, is an approach which is impermissible in terms
of Section 228 of the Code.
30. We have already noticed that the legislature in its wisdom has used
the expression "there is ground for presuming that the accused has
committed an offence". This has an inbuilt element of presumption once
the ingredients of an offence with reference to the allegations made are
satisfied, the Court would not doubt the case of the prosecution unduly
and extend its jurisdiction to quash the charge in haste. A Bench of this
Court in State of Maharashtra v. Som Nath Thapa (1996) 4 SCC
659 referred to the meaning of the word "presume" while relying
upon Black's Law Dictionary. It was defined to mean "to believe or
accept upon probable evidence"; "to take as proved until evidence to
the contrary is forthcoming". In other words, the truth of the matter has
to come out when the prosecution evidence is led, the witnesses are
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cross-examined by the defence, the incriminating material and evidence
is put to the accused in terms of Section 313 of the Code and then the
accused is provided an opportunity to lead defence, if any. It is only
upon completion of such steps that the trial concludes with the court
forming its final opinion and delivering its judgment. Merely because
there was a civil transaction between the parties would not by itself
alter the status of the allegations constituting the criminal offence.
61.Thus, it is evident that the law regarding the approach to be adopted by the
Court while considering an application for discharge of the accused person
the Court has to form a definite opinion, upon consideration of the record
of the case and the documents submitted therewith, that there is not
sufficient ground for proceeding against the accused.
62. The Hon'ble Apex Court has further dealt with the proper basis for framing
of charge in the case of Onkar Nath Mishra v. State (NCT of
Delhi) wherein at paragraphs 11, 12 and 14 it has been held as under:--
"11. It is trite that at the stage of framing of charge the court is required
to evaluate the material and documents on record with a view to finding
out if the facts emerging therefrom, taken at their face value, disclosed
the existence of all the ingredients constituting the alleged offence. At
that stage, the court is not expected to go deep into the probative value
of the material on record. What needs to be considered is whether there
is a ground for presuming that the offence has been committed and not
a ground for convicting the accused has been made out. At that stage,
even strong suspicion founded on material which leads the court to form
a presumptive opinion as to the existence of the factual ingredients
constituting the offence alleged would justify the framing of charge
against the accused in respect of the commission of that offence.
12. In State of Karnataka v. L. Muniswamy [(1977) 2 SCC 699 : 1977
SCC (Cri) 404], a three-Judge Bench of this Court had observed that
at the stage of framing the charge, the Court has to apply its mind to
the question whether or not there is any ground for presuming the
commission of the offence by the accused. As framing of charge affects
a person's liberty substantially, need for proper consideration of
material warranting such order was emphasised.
14. In a later decision in State of M.P. v. Mohanlal Soni [(2000) 6 SCC
338 : 2000 SCC (Cri) 1110] this Court, referring to several previous
decisions held that : (SCC p. 342, para 7)
"7. The crystallised judicial view is that at the stage of framing charge,
the court has to prima facie consider whether there is sufficient ground
for proceeding against the accused. The court is not required to
appreciate evidence to conclude whether the materials produced are
sufficient or not for convicting the accused."
63. The Hon'ble Apex Court in the case of Palwinder Singh v. Balvinder
Singh, (2009) 2 SCC (Cri) 850 has been pleased to hold that charges can
also be framed on the basis of strong suspicion. Marshaling and
appreciation of the evidence is not in the domain of the court at that point
of time.
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64. In the judgment passed by the Hon'ble Supreme court in the case of Sajjan
Kumar v. CBI, reported in (2010) 9 SCC 368, the Hon'ble Supreme Court
has considered the scope of Sections 227 and 228 CrPC. The principles
which emerged therefrom have been taken note of in para 21 as under:
"21. On consideration of the authorities about the scope of Sections
227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges
under Section 227 CrPC has the undoubted power to sift and weigh the
evidence for the limited purpose of finding out whether or not a prima
facie case against the accused has been made out. The test to determine
prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the court disclose grave
suspicion against the accused which has not been properly explained,
the court will be fully justified in framing a charge and proceeding with
the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of the
prosecution but has to consider the broad probabilities of the case, the
total effect of the evidence and the documents produced before the
court, any basic infirmities, etc. However, at this stage, there cannot be
a roving enquiry into the pros and cons of the matter and weigh the
evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an
opinion that the accused might have committed offence, it can frame the
charge, though for conviction the conclusion is required to be proved
beyond reasonable doubt that the accused has committed the offence.
(v) At the time of framing of the charges, the probative value of the
material on record cannot be gone into but before framing a charge the
court must apply its judicial mind on the material placed on record and
must be satisfied that the commission of offence by the accused was
possible.
(vi) At the stage of Sections 227 and 228, the court is required to
evaluate the material and documents on record with a view to find out
if the facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence. For this
limited purpose, sift the evidence as it cannot be expected even at that
initial stage to accept all that the prosecution states as gospel truth even
if it is opposed to common sense or the broad probabilities of the case.
(vii) If two views are possible and one of them gives rise to suspicion
only, as distinguished from grave suspicion, the trial Judge will be
empowered to discharge the accused and at this stage, he is not to see
whether the trial will end in conviction or acquittal."
65. In the judgment passed by the Hon'ble Supreme court in the case of M.E.
Shivalingamurthy v. CBI, reported in (2020) 2 SCC 768, the above
principles have been reiterated in para 17, 18, 28 to 31 and the Hon'ble
supreme court has explained as to how the matters of grave suspicion are
to be dealt with. The aforesaid paragraphs are quoted as under:
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"17. This is an area covered by a large body of case law. We refer to a
recent judgment which has referred to the earlier decisions viz. P.
Vijayan v. State of Kerala and discern the following principles:
17.1. If two views are possible and one of them gives rise to suspicion
only as distinguished from grave suspicion, the trial Judge would be
empowered to discharge the accused.
17.2. The trial Judge is not a mere post office to frame the charge at the
instance of the prosecution.
17.3. The Judge has merely to sift the evidence in order to find out
whether or not there is sufficient ground for proceeding. Evidence
would consist of the statements recorded by the police or the documents
produced before the Court.
17.4. If the evidence, which the Prosecutor proposes to adduce to prove
the guilt of the accused, even if fully accepted before it is challenged in
cross-examination or rebutted by the defence evidence, if any, "cannot
show that the accused committed offence, then, there will be no
sufficient ground for proceeding with the trial".
17.5. It is open to the accused to explain away the materials giving rise
to the grave suspicion.
17.6. The court has to consider the broad probabilities, the total effect
of the evidence and the documents produced before the court, any basic
infirmities appearing in the case and so on. This, however, would not
entitle the court to make a roving inquiry into the pros and cons.
17.7. At the time of framing of the charges, the probative value of the
material on record cannot be gone into, and the material brought on
record by the prosecution, has to be accepted as true.
17.8. There must exist some materials for entertaining the strong
suspicion which can form the basis for drawing up a charge and
refusing to discharge the accused.
18. The defence of the accused is not to be looked into at the stage when
the accused seeks to be discharged under Section 227 CrPC (see State
of J&K v. Sudershan Chakkar). The expression, "the record of the
case", used in Section 227 CrPC, is to be understood as the documents
and the articles, if any, produced by the prosecution. The Code does not
give any right to the accused to produce any document at the stage of
framing of the charge. At the stage of framing of the charge, the
submission of the accused is to be confined to the material produced by
the police (see State of Orissa v. Debendra Nath Padhi).
28. It is here that again it becomes necessary that we remind ourselves
of the contours of the jurisdiction under Section 227 CrPC. The
principle established is to take the materials produced by the
prosecution, both in the form of oral statements and also documentary
material, and act upon it without it been subjected to questioning
through cross-examination and everything assumed in favour of the
prosecution, if a scenario emerges where no offence, as alleged, is
made out against the accused, it, undoubtedly, would ensure to the
benefit of the accused warranting the trial court to discharge the
accused.
29. It is not open to the accused to rely on the material by way of defence
and persuade the court to discharge him.
30. However, what is the meaning of the expression "materials on the
basis of which grave suspicion is aroused in the mind of the court's",
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which is not explained away? Can the accused explain away the
material only with reference to the materials produced by the
prosecution? Can the accused rely upon material which he chooses to
produce at the stage?
31. In view of the decisions of this Court that the accused can only rely
on the materials which are produced by the prosecution, it must be
understood that the grave suspicion, if it is established on the materials,
should be explained away only in terms of the materials made available
by the prosecution. No doubt, the accused may appeal to the broad
probabilities to the case to persuade the court to discharge him."
66. It has been further held in the case of Asim Shariff v. National
Investigation Agency, (2019) 7 SCC 148, that mini trial is not expected
by the trial court for the purpose of marshalling the evidence on record at
the time of framing of charge. It has been held at paragraph no. 18 of the
said judgment as under:--
"18. Taking note of the exposition of law on the subject laid down by
this Court, it is settled that the Judge while considering the question of
framing charge under Section 227 CrPC in sessions cases (which is
akin to Section 239 CrPC pertaining to warrant cases) has the
undoubted power to sift and weigh the evidence for the limited purpose
of finding out whether or not a prima facie case against the accused has
been made out; where the material placed before the court discloses
grave suspicion against the accused which has not been properly
explained, the court will be fully justified in framing the charge; by and
large if two views are possible and one of them giving rise to suspicion
only, as distinguished from grave suspicion against the accused, the
trial Judge will be justified in discharging him. It is thus clear that while
examining the discharge application filed under Section 227 CrPC, it
is expected from the trial Judge to exercise its judicial mind to
determine as to whether a case for trial has been made out or not. It is
true that in such proceedings, the court is not supposed to hold a mini
trial by marshalling the evidence on record."
67. In the case of Asim Shariff v. NIA, (supra), it has been held by the
Hon'ble Apex Court that the words 'not sufficient ground for proceeding
against the accused' clearly show that the Judge is not a mere post office
to frame the charge at the behest of the prosecution, but has to exercise his
judicial mind to the facts of the case in order to determine whether a case
for trial has been made out by the prosecution. In assessing this fact, it is
not necessary for the court to enter into the pros and cons of the matter or
into a weighing and balancing of evidence and probabilities which is really
his function after the trial starts. At the stage of Section 227, the Judge has
merely to sift the evidence in order to find out whether or not there is
sufficient ground for proceeding against the accused. The sufficiency of
ground would take within its fold the nature of the evidence recorded by
the police or the documents produced before the court which ex-
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facie disclose that there are suspicious circumstances against the accused
so as to frame a charge against him.
68.Thus, from aforesaid legal propositions it can be safely inferred that if, upon
consideration of the record of the case and the documents submitted
therewith, and after hearing the submissions of the accused and the
prosecution in this behalf, the Judge considers that there is no sufficient
ground for proceeding against the accused, he shall discharge the accused
and record his reasons for doing so and if, after such consideration and
hearing as aforesaid, the Judge is of the opinion that there is ground for
presuming that the accused has committed an offence, the trial Court shall
frame the charge. However, the defence of the accused cannot be looked
into at the stage of discharge. The accused has no right to produce any
document at that stage. The application for discharge has to be considered
on the premise that the materials brought on record by the prosecution are
true.
69.Thus, at the time of considering an application for discharge, the Court is
required to consider to the limited extent to find out whether there is prima
facie evidence against the accused to believe that he has committed any
offence as alleged by the prosecution; if prima facie evidence is available
against the accused, then there cannot be an order of discharge
70.Therefore, the stage of discharge is a stage prior to framing of the charge
and once the Court rejects the discharge application, it would proceed for
framing of charge. At the stage of discharge, the Judge has merely to sift
and weigh the evidence in order to find out whether or not there is sufficient
ground for proceeding against the accused and in other words, the
sufficiency of grounds would take within its fold the nature of the evidence
recorded by the prosecution or the documents produced before the court
which ex facie disclose that there are suspicious circumstances against the
accused so as to frame the charge against him and after that if the Judge
comes to a conclusion that there is sufficient ground to proceed, he will
frame a charge and, if not, he will discharge the accused.
71.While exercising its judicial mind to the facts of the case in order to
determine whether a case for trial has been made out by the prosecution, it
is not necessary for the Court to enter into the pros and cons of the matter
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or into a weighing and balancing of evidence and probabilities which is
really the function of the court, after the trial starts.
72.It is considered view that at this stage of the instant case, the Court was only
required to consider whether a prima facie case has been made out or not
and whether the accused is required to be further tried or not because at the
stage of framing of the charge and / or considering
the discharge application, the mini trial is not permissible.
73. It requires to refer herein that the purpose of framing a charge is to provide
the accused with detailed information about the allegations against him.
Framing of proper charge is one of the basic requirements of a fair trial.
Charge is of great significance in a criminal trial as it helps not only the
accused in knowing the accusation against him but also helps him in the
preparation of his defence.
74. In a criminal trial the charge is the foundation of the accusation and every
care must be taken to see that it is not only properly framed. At the initial
stage of framing a charge the truth, veracity and effect of the evidence
which the prosecution proposes to adduce are not to be considered
meticulously.
75. It is settled position of law that the accused is entitled in law to know with
precision what is the law on which they are put to trial. Charges are framed
against the accused only when the Court finds that the accused is not
entitled to discharge under the relevant provision of CrPC/BNSS.
76. In a Sessions case the Court shall frame a charge in writing against the
accused when the Court is of the opinion that there is ground for
presuming that the accused has committed an offence as can be seen from
section 252 BNSS. In warrant cases a charge shall be framed when a prima
facie case has been made out against the accused as is evident from
sections 263 and 269 of BNSS.
77. The Hon'ble Supreme Court of India in State of Maharastra vs. Som Nath
Thapa (1996) 4 SCC 659 has been pleased to hold if the Court were to
think that the accused might have committed the offence it can frame the
charge, though for conviction the conclusion is required to be that the
accused had committed the offence. It was further held that at the stage of
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framing of charge the Court cannot look into the probative value of the
materials on record.
78. Further, while considering the question of framing a charge, the Court has
the undoubted power to sift and weigh the materials for the limited
purpose for finding out whether or not a prima facie case against the
accused has been made out. In exercising the power, the Court cannot act
merely as a post office or a mouthpiece of the prosecution.
79. The test to determine a prima facie case against the accused would
naturally depend on the facts of each case and it is difficult to lay down
the rule of universal application and if the material placed before the Court
discloses grave suspicion against the accused which has not been properly
explained, the Court will be fully justified in framing the charge and
proceeding with the trial.
80. In Kanti Bhadra Shah vs. State of West Bengal (2000) 1 SCC 722, the
Hon'ble Supreme Court held that whenever the trial Court decides to
frame charges, it is not necessary to record reasons or to do discuss
evidence in detail.
81. In State of Andhra Pradesh vs. Golconda Linga Swamy (2004) 6 SCC
522, the Hon'ble Supreme Court held that at the stage of framing of
charge, evidence cannot be gone into meticulously. It was held that it is
immaterial whether the case is based on direct or circumstantial evidence
and a charge can be framed if there are materials showing possibility about
commission of the offence by the accused as against certainty.
82. It needs to refer herein that Sections 215 and 464 CrPC ensure that
technicalities do not defeat justice. Both the sections lay that irregularity
or error in framing a charge is not fatal unless the accused is able to show
that prejudice is caused to him as result of such irregularity or omission.
The object of section 238 BNSS is to prevent failure of justice on account
of irregularity in framing of charge.
83. In judging a question of prejudice, as of guilt, the Court must act with a
broad vision and look to the substance and not to the technicalities, and its
main concern should be to see whether the accused had a fair trial, whether
he knew what he was being tried for, whether the main facts sought to be
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established against him were explained to him fairly and clearly and
whether he was a full and fair chance to defend himself.
84. In State of Uttar Pradesh vs. Paras Nathi Singh 2009 INSC 669, the
Hon'ble Supreme Court after considering the language of section 464
CrPC held that the burden is on the accused to show that a failure of justice
has been occasioned on account of error, omission or irregularity of the
charge.
85. Thus, framing of charge is not a mere empty formality. Every endeavour
must be made in a criminal trial to ensure that appropriate charge is framed
against the accused. Even though mere omission, error or irregularity in
framing charges does not ipso facto vitiate trial, the accused should be
made fully aware of the specific accusations against him in order to defend
himself properly. Apart from safeguarding the interests of the accused,
framing of proper charge also ensures that the interests of the victims and
the society at large are safeguarded and no guilty person goes unpunished
only on account of error in framing the charge.
86. The Hon'ble Supreme Court of India in Dipakbhai Jagdhishchandra
Patel vs. State of Gujarat (2009) 16 SCC 547 was pleased to hold that:
"21. At the stage of framing the charge in accordance with the
principles which have been laid down by this Court, what the
Court is expected to do is, it does not act as a mere post office.
The Court must indeed sift the material before it. The material to
be sifted would be the material which is produced and relied upon
by the prosecution. The sifting of material before the Court is not
to be meticulous in the sense that Court dons the mantle of the
trial Judge hearing arguments after the entire evidence has been
adduced after a full fledged trial and the question is not whether
the prosecution has made out the case for the conviction of the
accused. All that is required is, the Court must be satisfied that
with the materials available, a case is made our for the accused
to stand trial. A strong suspicion suffices. However, a strong
suspicion must be founded on some material."
87. Thus, from the aforesaid judicial pronouncements it is evident that at the
stage of framing charges, trial court is not to examine and assess in detail
the material placed on record by the prosecution nor is it for the court to
consider the sufficiency of the materials to establish the offence alleged
against the accused persons. Marshalling of facts and appreciation of
evidence at the time of framing of charge is not in the domain of the court.
Charge can be framed even on the basis of strong suspicion founded upon
materials before the court which leads the court to form a presumptive
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opinion as to the existence of the factual ingredients constituting the
offence alleged against the accused.
88. It needs to refer herein that ingredients of offences should be seen in the
material produced before the court for framing of charges and duty of
court at the stage of framing of charges is to see whether the ingredients
of offences are available in the material produced before the court.
Contradictions in the statements of witnesses or sufficiency or truthfulness
of the material placed before the court cannot be examined at the stage of
framing of the charge. For this limited purpose, the court may sift the
evidence. Court has to consider material only with a view to find out if
there is ground for presuming that the accused has committed an offense
and not for the purpose of arriving at a definite conclusion. "Presume‟
means if on the basis of materials on record, court can come to the
conclusion that commission of the offense is a probable consequence, then
a case for framing of charge exists.
89. Thus, it is well settled that at the time of framing of charge meticulous
examination of evidence is not required, however the evidence can be
sifted or weighed at least for the purpose of recording a satisfaction that
a prima facie case is made out for framing charge to proceed in the case.
Further the trial Court is not required to discuss the evidence for the
purpose of conducting a trial but the discussion of the materials on record
is required to reflect the application of judicial mind for finding that
a prima-facie case is made out against the petitioner.
90. It is settled connotation of law that at the stage of framing of charge, the
probable defence of the accused is not to be considered and the materials,
which are relevant for consideration, are the allegations made in the First
Information Report/complaint, the statement of the witnesses recorded in
course of investigation, the documents on which the prosecution relies and
the report of investigation submitted by the prosecuting agency. The
probative value of the defence is to be tested at the stage of trial and not at
the stage of framing of charge and at the stage of framing of charge minute
scrutiny of the evidence is not to be made and even on a very strong
suspicion charges can be framed.
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91. Further it is settled position of law that at the stage of framing the charge,
the trial Court is not required to meticulously examine and marshal the
material available on record as to whether there is sufficient material
against the accused which would ultimately result in conviction. The
Court is prima facie required to consider whether there is sufficient
material against the accused to presume the commission of the offence.
Even strong suspicion about commission of offence is sufficient for
framing the charge, the guilt or innocence of the accused has to be
determined at the time of conclusion of the trial after evidence is adduced
and not at the stage of framing the charge and, therefore, at the stage of
framing the charge, the Court is not required to undertake an elaborate
inquiry for the purpose of sifting and weighing the material.
92. Recently, the Full Bench of the Hon'ble Apex Court in the case of Ghulam
Hassan Beigh v. Mohd. Maqbool Magrey, (2022) 12 SCC 657 has
elaborately discussed the issue of framing of charge and has held in
paragraph 27 which reads as under:
"27. Thus from the aforesaid, it is evident that the trial court is enjoined
with the duty to apply its mind at the time of framing of charge and
should not act as a mere post office. The endorsement on the charge-
sheet presented by the police as it is without applying its mind and
without recording brief reasons in support of its opinion is not
countenanced by law. However, the material which is required to be
evaluated by the court at the time of framing charge should be the
material which is produced and relied upon by the prosecution. The
sifting of such material is not to be so meticulous as would render the
exercise a mini trial to find out the guilt or otherwise of the accused.
All that is required at this stage is that the court must be satisfied that
the evidence collected by the prosecution is sufficient to presume that
the accused has committed an offence. Even a strong suspicion would
suffice. Undoubtedly, apart from the material that is placed before the
court by the prosecution in the shape of final report in terms of
Section 173 CrPC, the court may also rely upon any other evidence or
material which is of sterling quality and has direct bearing on the
charge laid before it by the prosecution."
93. Thus, from aforesaid legal propositions it can be safely inferred that if,
upon consideration of the record of the case and the documents submitted
therewith, and after hearing the submissions of the accused and the
prosecution in this behalf, the Judge considers that there is no sufficient
ground for proceeding against the accused, he shall discharge the accused
and record his reasons for doing so and if, after such consideration and
hearing as aforesaid, the Judge is of the opinion that there is ground for
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presuming that the accused has committed an offence, the trial Court shall
frame the charge.
94. Therefore, the stage of discharge is a stage prior to framing of the charge
and once the Court rejects the discharge application, it would proceed for
framing of charge. At the stage of discharge, the Judge has merely to sift
and weigh the evidence in order to find out whether or not there is
sufficient ground for proceeding against the accused and in other words,
the sufficiency of grounds would take within its fold the nature of the
evidence recorded by the prosecution or the documents produced before
the court which ex facie disclose that there are suspicious circumstances
against the accused so as to frame the charge against him and after that if
the Judge comes to a conclusion that there is sufficient ground to proceed,
he will frame a charge and, if not, he will discharge the accused.
95. While exercising its judicial mind to the facts of the case in order to
determine whether a case for trial has been made out by the prosecution,
it is not necessary for the Court to enter into the pros and cons of the matter
or into a weighing and balancing of evidence and probabilities which is
really the function of the court, after the trial starts.
96. It is considered view that at this stage of the instant case, the Court was
only required to consider whether a prima facie case has been made out or
not and whether the accused is required to be further tried or not because
at the stage of framing of the charge and / or considering
the discharge application, the mini trial is not permissible.
97. In the backdrop of aforesaid case laws and judicial deduction, this Court
is now proceeding to examine the fact so as to come to the conclusion as
to whether the evidence which has been collected in course of
investigation and has been brought on record, as would be available in the
impugned order prima facie case against the petitioner is made out or not?
98. It is evident from the 2nd supplementary prosecution complaint that the
petitioner Bhagwan Bhagat complicity lies his direct engagement in illegal
stone mining and the subsequent generation of vast sums as proceeds of
crime. While he initially possessed a legitimate lease for stone mining in
Mauja Simra, covering a mere 1.70 acres across Plot Nos. 429 and 430,
his actions starkly diverged from lawful conduct. Crucially, he flagrantly
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disregarded the stipulated terms of his lease and immensely flouted
environmental regulations by extending his mining operations to an
astonishingly larger, unauthorized area of 21 acres. This expansive and
unauthorized extraction represents a primary and egregious source of
illegal income. Furthermore, between April 2019 and June 2022, despite
obtaining mining challans for an approximate volume of 23,908,985
Cubic Feet (CFT), the actual quantity of stone illicitly mined by him was
definitively determined to be several times this declared figure. This
profound discrepancy underscores the systemic and massive scale of
illegal resource extraction under his direct control, which, in turn, directly
yielded substantial amounts of unaccounted cash, forming the very
essence of the proceeds of crime.
99. It is further evident that beyond his individual illicit mining, Petitioner's
role extends to actively assisting Pankaj Mishra in the larger illegal stone
mining activities orchestrated by Mishra. This assistance was not a passive
observation but a knowing and active collaboration, indicating a shared
criminal intent within the enterprise. His involvement was not limited to
mere extraction but encompassed subsequent illegal activities connected
thereto, suggesting a comprehensive engagement throughout the entire
illicit chain of operations, from the initial raw material extraction to the
ultimate generation and integration of illicit revenues. A particularly
critical aspect of his involvement was his responsibility for the day-to-day
management of Pankaj Mishra's bank accounts. Moreover, Petitioner
Bhagwan Bhagat was instrumental in supplying illegally mined stone
materials. This function was indispensable to the overall scheme, as the
efficient physical movement of the illegally extracted stone directly
translated into the ongoing generation of proceeds of crime; without such
a reliable supply, the larger money laundering operation would have been
unsustainable. The evidence further indicates that he carried out these
illegal activities under Pankaj Mishra's patronage, signifying that he
operated under the direction and protective umbrella of Pankaj Mishra,
thereby assuming a subordinate yet undeniably pivotal role within the
criminal network.
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100. The investigation has also uncovered evidence of Bhagwan Bhagat's direct
possession and active laundering of proceeds of crime. The petitioner
Bhagwan Bhagat was found to be in possession of proceeds of crime
amounting to Rs. 2,70,64,300/- (Rupees Two Crore Seventy Lakh Sixty-
Four Thousand Three Hundred Only). This substantial sum was
systematically deposited into five of his personal bank accounts, a
definitive act of integrating illicit funds into the formal banking system,
which is a fundamental component of money laundering. Furthermore, it
has been established that Bhagwan Bhagat knowingly and actively
assisted Pankaj Mishra in laundering an additional sum of Rs. 4.87 crores
(Rupees Four Crore Eighty-Seven Lakh Only). This transfer occurred into
Pankaj Mishra's HDFC bank account, specifically account number
5020xxxxxxxxxx, over a period spanning from October 29, 2021, to May
18, 2022.
101. Thus, prima facie it appears that the present petitioner Bhagwan Bhagat
has direct and active participation in the laundering activities of a key co-
accused, thereby contributing significantly to the overall volume of
criminal proceeds processed through the scheme.
102. Thus, it would be evident from the material collected that Bhagwan
Bhagat had directly indulged and knowingly is a party and is actually
involved in all the activities connected with the offence of money
laundering. These multifaceted activities explicitly encompass the use or
acquisition, possession, concealment, and projecting or claiming as
untainted property of the ill-gotten proceeds of crime. Consequently,
based on the evidence gathered during the course of the investigation,
prima facie, it appears that the petitioner Bhagwan Bhagat has committed
offence under Section 3 of the Prevention of Money Laundering Act,
2002.
103. Thus, from the aforesaid it is evident that prima-facie material is available
against the present petitioner, as such, charges have rightly been framed
under the Section 3 of the Act 2002 against the petitioner.
104. The main thrust of the argument of the learned counsel for the petitioner
is that carrying out of any mining operation under the MMDR Act cannot
be considered to be predicate offence and only on the basis of Section
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120B of IPC, no predicate offence will be said to be committed since
herein, the case of the opposite party-ED is based only upon Section 120B
of IPC as per the first FIR instituted.
105. In the aforesaid it requires to refer herein that scheduled offence has been
defined in Section 2 (y) of the Act 2002 wherein it has been stipulated that
the "scheduled offence" means-- (i) the offences specified under Part A
of the Schedule; or [(ii) the offences specified under Part B of the Schedule
if the total value involved in such offences is [one crore rupees] or more.
106. Herein it requires to refer herein that the prosecution in the present case is
not confined only to Barharwa P.S. Case No. 85/2020. The ECIR dated
08.03.2022 was registered on the basis of multiple FIRs disclosing
commission of scheduled offences under the PMLA, including Sections
120-B, 307, 379, 411, 414 IPC, Sections 3, 4, 5 of the Explosive
Substances Act, Section 27 of the Arms Act, and Section 8 of the
Environment Protection Act.
107. There is no dispute that the act of illegal mining under the MMDR Act is
not a scheduled offence but the investigation is predicated on multiple
FIRs disclosing a criminal conspiracy and other acts of extortion etc.
which are scheduled offences and further the proceeds of crime in this case
were generated from the criminal activities relatable to these scheduled
offences, which took place in the context of the large-scale illegal mining
syndicate therefore prima facie the nexus of the petitioner is clearly
established. Further, the foundational premise of the PMLA is the
laundering of "proceeds of crime," irrespective of whether the scheduled
offence arises under the IPC or a special statute. Once the commission of
the scheduled offence generates proceeds, the laundering of such proceeds
falls squarely within Section 3 of the PMLA.
108. It requires to refer herein that the FIR has been instituted under Section
307 of IPC also wherein allegation has been made that with the help of
Pankaj Mishra (accused no.1), the entire Toll Plaza has been taken under
their control for the purpose of passing the illegally explored minerals
from that space and whoever has come in the smooth transportation of the
minerals over the truck or vehicle, the force was been used, therefore,
Section 307 of IPC has been inserted and the proceeds accrued from them
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will come under the fold of proceeds of crime, therefore, it is not that on
the basis of the MMDR Act, the predicate offence has been instituted
rather on the basis of the allied offences, i.e., committed under Section 307
of IPC, the predicate offence has been instituted.
109. Further, the offence of conspiracy under Section 120B IPC is specifically
included as a scheduled offence in the PMLA when read with any other
substantive offence. Further it is settled position that conspiracy takes its
colour from the underlying offence. In the present case, the ECIR was
rightly registered as the conspiracy was integrally connected with the
commission of other offences relatable to the Schedule, and therefore
validly invoked the jurisdiction under PMLA. Further, multiple scheduled
offences exist in relation to the predicate acts forming the basis of the
instant case. The ECIR was not registered in isolation but in continuation
of offences disclosed in predicate FIRS which disclose cognizable
offences under the IPC and other statutes falling within the PMLA
Schedule, thus, the contention of the learned counsel for the appellant is
not fit to be accepted herein.
110. Further the learned counsel for the petitioner has contended that petitioner
was not named in the ECIR is irrelevant since under the scheme of the
PMLA, any person who directly or indirectly attempts to indulge, or
knowingly assists in any process connected with proceeds of crime, can
be prosecuted even if is not an accused in the predicate offence.
111. In the aforesaid context, it needs to refer herein that the Hon'ble Apex
Court in PavnaDibbur v. Directorate of Enforcement (Criminal Appeal
No. 2779/2023) held that who could commit an offence under the PMLA
may not be named in the scheduled offence.
112. Further the offence of money laundering as contemplated in Section 3 of
the PMLA has been elaborately dealt with by the three Judge Bench in
Vijay Madanlal Choudhary (supra), in which it has been observed that
Section 3 has a wider reach. The offence as defined captures every process
and activity in dealing with the proceeds of crime, directly or indirectly,
and is not limited to the happening of the final act of integration of tainted
property in the formal economy to constitute an act of money laundering.
Of course, the authority of the Authorised Officer under the Act to
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prosecute any person for the offence of money laundering gets triggered
only if there exist proceeds of crime within the meaning of Section 2(1)(u)
of the Act and further it is involved in any process or activity. Not even in
case of existence of undisclosed income and irrespective of its volume, the
definition of "Proceeds of Crime" under Section 2(1)(u) will get attracted,
unless the property has been derived or obtained as a result of criminal
activity relating to a scheduled offence. The property must qualify the
definition of "Proceeds of Crime" under Section 2(1)(u) of the Act. As
observed, in all or whole of the crime property linked to scheduled offence
need not be regarded as proceeds of crime, but all properties qualifying
the definition of "Proceeds of Crime" under Section 2(1)(u) will
necessarily be the crime properties.
113. The Hon'ble Apex Court in the case of Pavana Dibbur vs. The Directorate
of Enforcement (supra) has considered the effect of the appellant not
being shown as an accused in the predicate offence by taking into
consideration Section 3 of the Act, 2002.
114. Based upon the definition Clause (u) of sub-section (1) of Section 2 of the
Act 2002 which defines "proceeds of crime", the Hon'ble Apex Court has
been pleased to observe that clause (v) of sub-section (1) of Section 2 of
PMLA defines "property" to mean any property or assets of every
description, whether corporeal or incorporeal, movable or immovable,
tangible or intangible.
115. To constitute any property as proceeds of crime, it must be derived or
obtained directly or indirectly by any person as a result of criminal activity
relating to a scheduled offence. The explanation clarifies that the proceeds
of crime include property, not only derived or obtained from scheduled
offence but also any property which may directly or indirectly be derived
or obtained as a result of any criminal activity relatable to the scheduled
offence. Clause (u) also clarifies that even the value of any such property
will also be the proceeds of crime.
116. It has further been clarified that if a person who is unconnected with the
scheduled offence, knowingly assists the concealment of the proceeds of
crime or knowingly assists the use of proceeds of crime, in that case, he
can be held guilty of committing an offence under Section 3 of the PMLA.
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[2025:JHHC:37262]
Therefore, it is not necessary that a person against whom the offence under
Section 3 of the PMLA is alleged must have been shown as the accused in
the scheduled offence.
117. It is pertinent to mention herein that respondent ED was not investigating
the commission of illegal mining as an independent offence but has traced
the proceeds of crime generated therefrom and the role of the Petitioner in
its concealment, possession, and use. The Petitioner's plea that since he is
not named in the FIRs, he cannot be prosecuted under PMLA is contrary
to law and settled jurisprudence. The material collected prima facie
indicates that the Petitioner derived pecuniary benefits from illegal mining
activities and channeled such proceeds into assets and financial
transactions.
118. It has further been contended by the learned counsel for the petitioner that
respondent ED has heavily relied upon the statement of the co-accused
which has been recorded under Section 50 of the Act 2002 but it is the
settled position of law which has been settled by the Hon'ble Apex Court
that such type of evidence cannot be the sole basis in order to fix the
culpability of the accused person.
119. In the aforesaid context it needs to refer herein that there is no dispute
regarding the settled proposition of law that the statements recorded which
are merely confessional in nature ought to be ignored while adjudicating
upon a case as confessional statement of co-accused cannot be treated as
substantive evidence and such statements can only be pressed into service
when the Hon'ble Courts are inclined to accept other evidences. Thus,
instead of placing reliance solely upon the statements of the petitioner and
the other co-accused persons recorded under Section 50 of PMLA, the
opposite party ought to have collected and relied upon other evidence in
order to prosecute the petitioner.
120. Further herein it is evident from the second supplementary prosecution
complaint dated 02.09.2023, filed against the petitioner and other co-
accused persons, is supported by substantial evidence gathered during the
investigation and is not based upon solely on the statements of the
accomplices. Furthermore, prima facie there is ample evidence
establishing the petitioner's involvement in the offence of money
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laundering, which is further corroborated by statements of witnesses in the
instant case. Further, the petitioner's role has already been discussed herein
in detail in the preceding paragraphs, therefore, the averments of the
petitioner are unfounded and liable to be dismissed.
121. Be it noted that the legal presumption under Section 24(a) of the Act 2002,
would apply when the person is charged with the offence of money-
laundering and his direct or indirect involvement in any process or activity
connected with the proceeds of crime, is established. The existence of
proceeds of crime is, therefore, a foundational fact, to be established by
the prosecution, including the involvement of the person in any process or
activity connected therewith. Once these foundational facts are established
by the prosecution, the onus must then shift on the person facing charge
of offence of money- laundering to rebut the legal presumption that the
proceeds of crime are not involved in money-laundering, by producing
evidence which is within his personal knowledge of the accused.
122. In the instant case, prima facie, the investigation has clearly revealed that
the petitioner played an active role in placement and layering of proceeds
of crime, including cash deposits of 2.70 crore in his accounts and
laundering of ₹4.87 crore on behalf of Pankaj Mishra through HDFC Bank
account No. 50200062737102. His possession of 28.50 lakh in
unaccounted cash during the search on 08.07.2022 is itself sufficient to
attract the presumption under Section 24 of the PMLA.
123. Further the subsequent explanation of the petitioner that the cash
represented stone-sale proceeds appears to be self-serving statement
because there is no cogent documentary support such as invoices, GST
returns, or bank entries, and therefore petitioner failed to rebut the
statutory presumption as stipulated in Section 24 of the Act 2002.
124. Thus, prima facie the petitioner's role in illegal mining and laundering of
its proceeds stood firmly established through seized cash, banking trails,
and statements recorded under Section 50 of the PMLA, therefore
arraignment of the petitioner as an accused is thus not arbitrary, but based
on material that surfaced during investigation.
125. It needs to refer herein that the Hon'ble Apex Court in the case of
Pradeep Nirankarnath Sharma Versus Directorate of Enforcement and
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[2025:JHHC:37262]
Another 2025 SCC OnLine SC 560 has observed that as established in
multiple judicial pronouncements, cases involving economic offences
necessitate a thorough trial to unearth the complete chain of events,
financial transactions, and culpability of the accused, therefore the
material submitted by the respondent, coupled with the broad legislative
framework of the PMLA, indicates the necessity of allowing the trial to
proceed and not discharging the appellant at the nascent stage of charge
framing and discharging the appellant at this stage would be premature
and contrary to the principles governing the prosecution in money
laundering cases, for ready reference the relevant paragraphs are being
quoted as under:
"30. The PMLA was enacted with the primary objective of preventing
money laundering and confiscating the proceeds of crime, thereby
ensuring that such illicit funds do not undermine the financial system.
Money laundering has far-reaching consequences, not only in terms of
individual acts of corruption but also in causing significant loss to the
public exchequer. The laundering of proceeds of crime results in a
significant loss to the economy, disrupts lawful financial transactions,
and erodes public trust in the system. The alleged offences in the present
case have a direct bearing on the economy, as illicit financial
transactions deprive the state of legitimate revenue, distort market
integrity, and contribute to economic instability. Such acts, when
committed by persons in positions of power, erode public confidence in
governance and lead to systemic vulnerabilities within financial
institutions.
31. The illegal diversion and layering of funds have a cascading effect,
leading to revenue losses for the state and depriving legitimate sectors
of investment and financial resources. It is settled law that in cases
involving serious economic offences, judicial intervention at a
preliminary stage must be exercised with caution, and proceedings
should not be quashed in the absence of compelling legal grounds. The
respondent has rightly argued that in cases involving allegations of
such magnitude, a trial is imperative to establish the full extent of
wrongdoing and to ensure accountability.
32. The PMLA was enacted to combat the menace of money laundering
and to curb the use of proceeds of crime in the formal economy. Given
the evolving complexity of financial crimes, courts must adopt a strict
approach in matters concerning economic offences to ensure that
perpetrators do not exploit procedural loopholes to evade justice.
33. The present case involves grave and serious allegations of financial
misconduct, misuse of position, and involvement in transactions
constituting money laundering. The appellant seeks an end to the
proceedings at a preliminary stage, effectively preventing the full
adjudication of facts and evidence before the competent forum.
However, as established in multiple judicial pronouncements, cases
involving economic offences necessitate a thorough trial to unearth
the complete chain of events, financial transactions, and culpability
of the accused.
34. The material submitted by the respondent, coupled with the broad
legislative framework of the PMLA, indicates the necessity of
allowing the trial to proceed and not discharging the appellant at the
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[2025:JHHC:37262]
nascent stage of charge framing. The argument that the proceedings
are unwarranted is devoid of substance in light of the statutory
objectives, the continuing nature of the offence, and the significant
financial implications arising from the alleged acts. Discharging the
appellant at this stage would be premature and contrary to the
principles governing the prosecution in money laundering cases."
126. Thus, the Second supplementary prosecution complaint contains detailed
evidence of the petitioner's involvement in handling proceeds of crime,
including the unaccounted cash in lakhs seized from his residence,
multiple suspicious deposits, and corroborating witness statements. The
investigation further revealed his association with other principal accused
engaged in illegal mining and transportation, thereby prima facie
establishing his complicity in the alleged crime.
127. Thus, from the prosecution complaint, it prima facie appears that the
petitioner acted as a fund manager for co-accused Pankaj Mishra, and
laundered proceeds of crime amounting to ₹4.87 crore through an HDFC
Bank account that was directly linked to the petitioner's mobile number.
Further the statement of Ankush Rajhans, recorded under Section 50 of
PMLA, corroborates that the petitioner was a known associate of Pankaj
Mishra in the illegal mining operations.
128. Thus, from perusal of case record, statements of witnesses, materials
available on record and in view of law laid down by the Hon'ble Apex
Court as referred hereinabove, this Court is of the considered view that
prima-facie sufficient materials are available on record for framing of
charge against the present petitioner.
129. It needs to refer herein that the Hon'ble Apex Court in the case of Munna
Devi v. State of Rajasthan, (2001) 9 SCC 631 has observed that the
revisional power under the Code of Criminal Procedure cannot be
exercised in a routine and casual manner. While exercising such powers
the High Court has no authority to appreciate the evidence in the manner
as the trial and the appellate courts are required to do. Revisional powers
could be exercised only when it is shown that there is a legal bar against
the continuance of the criminal proceedings or the framing of charge or
the facts as stated in the first information report even if they are taken at
the face value and accepted in their entirety do not constitute the offence
for which the accused has been charged.
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[2025:JHHC:37262]
130. Thus, it is evident that the revisional power can only be exercised to
correct patent error of law or procedure which would occasion unfairness,
if it is not corrected. The revisional power cannot be compared with the
appellate power. A Revisional Court cannot undertake meticulous
examination of the material on record as it is undertaken by the trial court
or the appellate court. This power can only be exercised if there is any
legal bar to the continuance of the proceedings or if the facts as stated in
the charge-sheet are taken to be true on their face value and accepted in
their entirety do not constitute the offence for which the accused has been
charged.
131. The Hon'ble Apex Court in the case of Asian Resurfacing of Road
Agency (P) Ltd. v. CBI, (2018) 16 SCC 299 has held that interference in
the order framing charges or refusing to discharge is called for in the rarest
of rare case only to correct the patent error of jurisdiction.
132. The Hon'ble Apex Court in the case of State of Tamil Nadu v. R.
Soundirarasu, (supra) has held in paragraph 81 to 83 as under:
"81. The High Court has acted completely beyond the settled
parameters, as discussed above, which govern the power
to discharge the accused from the prosecution. The High Court could
be said to have donned the role of a chartered accountant. This is
exactly what this Court observed in Thommandru Hannah
Vijayalakshmi [CBI v. Thommandru Hannah Vijayalakshmi, (2021) 18
SCC 135]. The High Court has completely ignored that it was not at
the stage of trial or considering an appeal against a verdict in a trial.
The High Court has enquired into the materials produced by the
accused persons, compared with the information compiled by the
investigating agency and pronounced a verdict saying that the
explanation offered by the accused persons deserves to be accepted
applying the doctrine of preponderance of probability. This entire
exercise has been justified on account of the investigating officer not
taking into consideration the explanation offered by the public servant
and also not taking into consideration the lawful acquired assets of the
wife of the public servant i.e. Respondent 2 herein.
82. By accepting the entire evidence put forward by the accused
persons applying the doctrine of preponderance of probability, the case
put up by the prosecution cannot be termed as "groundless". As
observed by this Court in C.S.D. Swami [C.S.D. Swami v. State, AIR
1960 SC 7] that the accused might have made statements before the
investigating officer as to his alleged sources of income, but the same,
strictly, would not be evidence in the case.
83. Section 13(1)(e) of the 1988 Act makes a departure from the
principle of criminal jurisprudence that the burden will always lie on
the prosecution to prove the ingredients of the offences charged and
never shifts on the accused to disprove the charge framed against him.
The legal effect of Section 13(1)(e) is that it is for the prosecution to
establish that the accused was in possession of properties
disproportionate to his known sources of income but the term "known
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[2025:JHHC:37262]
sources of income" would mean the sources known to the prosecution
and not the sources known to the accused and within the knowledge of
the accused. It is for the accused to account satisfactorily for the
money/assets in his hands. The onus in this regard is on the accused to
give satisfactory explanation. The accused cannot make an attempt
to discharge this onus upon him at the stage of Section 239CrPC. At the
stage of Section 239CrPC, the court has to only look into the prima
facie case and decide whether the case put up by the prosecution is
groundless."
133. It requires to refer herein that the ambit and scope of exercise of power of
discharge, are fairly well settled which has been elaborately discussed in
the preceding paragraph and as per settled proposition of law no
comprehensive assessment of the materials or meticulous consideration of
the possible defence need to be undertaken at this stage nor any exercise
of weighing materials in golden scales is to be undertaken at this stage.
The only deliberation at the stage of discharge is as to whether prima facie
case was made out or not and whether the accused is required to be further
tried or not.
134. Further, it is well settled that the revisional power cannot be parallelled
with appellate power. The Revisional Court cannot undertake meticulous
examination of the material on record as is undertaken by the Trial Court
or the Appellate Court.
135. From perusal of the impugned orders, it is evident that the Ld. Special
Judge has duly considered the rival submissions, examined the documents
and statements placed on record, and thereafter passed a reasoned order.
The discharge application filed by the Petitioner was rejected only after
satisfaction that sufficient grounds exist to proceed against him and
consequently, order for framing of charge has also been passed.
136. Hence, on the basis of discussion made herein above and taking into
consideration the settled position of law discussed and referred
hereinabove and further taking into consideration the ratio of the judgment
rendered by the Hon'ble Apex Court in the case of
Pradeep Nirankarnath Sharma Versus Directorate of Enforcement and
Another (supra), this court is of the considered view that there is no
illegality in the impugned orders dated 01.03.2024 and 14.03.2024 passed
by the learned Special Judge, PMLA Ranchi in connection with ECIR
Case No. 04 of 2022 in ECIR/RNZO/03/2022.
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137. Accordingly, this Court do not find any justifiable reason to interfere with
the impugned orders dated 01.03.2024 and 14.03.2024, consequently,
both the criminal revision petitions are hereby dismissed.
138. Pending Interlocutory Applications, if any, also stand disposed of.
(Sujit Narayan Prasad, J.)
10/12/2025
Saurabh/-
A.F.R.
Uploaded on: 11.12.2025
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