Shri Anand Balakrishna Appugol vs Directorate Of Enforcement
2022 Latest Caselaw 9544 Kant

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       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 24TH DAY OF JUNE, 2022

                          BEFORE

           THE HON'BLE MR. JUSTICE H.P. SANDESH

              CRIMINAL PETITION NO.3338/2022
BETWEEN:

SHRI ANAND BALAKRISHNA APPUGOL
S/O LATE BALAKRISHNALAXMANRAO APPUGOL
AGED ABOUT 56 YEARS
OCC: AGRICULTURE AND BUSINESS
(PERMANENT ADDRESS PLOT-2, I MAIN
II STAGE, HANUMAN NAGAR, BELAGAVI)
C/O SHRI MANOHAR BALAKRISHNA APPUGOL
PLOT NO.320, CTS NO.505
HANUMAN NAGAR, BELAGAVI-590019.       ... PETITIONER

        (BY SRI ASHOK R. KALYANASHETTY, ADVOCATE)
AND:

DIRECTORATE OF ENFORCEMENT
BY ITS INVESTING OFFICER
ASSISTANT DIRECTOR, DEPT OF REVENUE
MINISTRY O FINANCE, GOVT. OF INDIA
REPRESENTED BY THE SPECIAL PUBLIC PROSECUTOR
PREMISES OF HIGH COURT BUILDING
BENGALURU-560001.                       ... RESPONDENT

        (BY SRI MADHUKAR DESHPANDE, SENIOR CGSC)

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 439
OF CR.P.C PRAYING TO ENLARGE THE PETITIONER ON BAIL ON
SUCH TERMS AND CONDITIONS AS DEEMED FIT AND PROPER
IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN CASE
NO.ECIR/BGZO/22/2020 INITIATED BY THE RESPONDENT
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HEREIN FOR THE OFFENCE OF MONEY LAUNDERING UNDER
SECTION 3 OF PREVENTION OF MONEY LAUNDERING ACT P/U/S
4 OF THE SAID ACT NOW PENDING ON THE FILE OF THE PRL.
CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE,
BENGALURU (CCH-1).

     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 14.06.2022 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:


                                ORDER

This petition is filed under Section 439 of Cr.P.C. seeking

regular bail of the petitioner in Crime No.185/2017 of

Khadebazar Police Station, Belagavi for the offences punishable

under Sections 406, 408, 420 of IPC and Sections 3 and 4 of the

Prevention of Money Laundering Act, 2002 (herein after referred

as 'PML Act) .

2. Heard the learned counsel for the petitioner and the

learned High Court Government Pleader appearing for the

respondent-State.

3. The factual matrix of the case is that this petitioner

was the Chairman of Krantiveera Sangolli Rayanna Urban Credit

Society (KSRUCS) situated at Belagavi. That on 01.09.2017, the

Assistant Registrar of Co-operative Society, Sub-Division,

Belagavi filed a complaint to the Khadebazar police station,

Belagavi and on the basis of the said complaint, a case was

registered in Cr.No.185/2017 for the offences punishable under

Sections 406, 408, 420 of IPC and after completion of the

investigation, charge-sheet has been filed and case number also

given in C.C.No.1/2020 which is pending on the file of Principal

District and Sessions Judge, Belagavi. The petitioner was earlier

arrested and enlarged on bail by this Court at Dharwad Bench in

Crl.P.No.102337/2017. It is also the contention that respondent

filed an application under Section 167 of Cr.P.C and he was

remanded to the custody and now, this petitioner is in judicial

custody and hence, he has approached the Trial Court in

Crl.Misc.No.695/2022 and the same was rejected. Hence, the

present petition is filed.

4. The learned counsel appearing for the petitioner

would vehemently contend that the material placed before the

Court does not suggest that the petitioner is guilty of the offence

of money laundering under Sections 3 and 4 of PML Act. This

petitioner was booked in Cr.No.185/2017, arrested and detained

in prison for the offences punishable under Section 420 of IPC

and this High Court granted bail and detention and deprivation of

his liberty again for the said scheduled offence leading to offence

under Section 3 of PML Act does not seem to be justified. The

counsel also vehemently contend that the provisional order of

attachment of the property of the petitioner is confirmed by the

adjudicating authority vide order dated 09.02.2021 and his

passport is also impounded and investigation has been

completed in Cr.No.185/2017 and charge-sheet also filed and

this petitioner was also subjected to enquiry by the respondent

on different dates and he is in judicial custody from 14.01.2022.

The petitioner was in custody from 05.11.2018 to 07.02.2021

and again arrested on 05.01.2022 and his total detention is

more than 2½ years and he is aged about 56 years and not

keeping good health and an allegation against this petitioner is

that he being the Chairman of the co-operative society, he used

the depositors money but he made sincere efforts to refund the

deposits and his efforts resulted in refund of Rs.35 lakh to the

depositors and some of the complaints before the Consumer

Forum are withdrawn hence, the rejection of the bail petition

under Section 439 of Cr.P.C. is bad in law and he is cooperating

for investigation. The counsel further submits that the very

observation of the Trial Court that presumption arises under

Sections 22 and 24 of PML Act, investigation is in infancy and

incorrect and contrary to records. The counsel submits that when

passport of the petitioner is seized, the question of flee away

from the investigation does not arise. The petitioner is a

businessman and an agriculturist and he owns movable and

immovable properties and his family is depending upon this

petitioner and the presence of this petitioner is not required.

Hence, he may be enlarged on bail.

5. The learned counsel for the petitioner in support of

his arguments relied upon the judgment of the High Court of

Hyderabad passed in Crl.P.Nos.3786, 4127 and 4137 of

2022 wherein quashed the extending the remand of accused

and also given liberty to file a fresh bail application under

Section 167(2) of Cr.P.C before the Metropolitan Sessions Judge

and directed to consider the said application in coming to the

conclusion that the Court performs a judicial function while

deciding an application for remand filed under Section 167(2) of

Cr.P.C and while exercising the powers, bound to pass a judicial

order by applying its mind and the learned counsel for the

petitioner referring the said judgment vehemently contend that

this petitioner is entitled for statutory bail under Section 167(2)

of Cr.P.C.

6. The learned counsel for the petitioner also relied

upon the judgment of the Apex Court dated 25.05.2021 in the

case of KRISHNA MOHAN TRIPATHI vs STATE and the

counsel brought to notice of this Court to paragraphs 8 and 12

wherein an observation is made that driving the parties to

another round of bail plea in the Trial Court or in the High Court

does not appear serving the cause of justice and we see no

reason to deny the personal liberty to the appellant now at this

stage, particularly when his properties otherwise remain

attached and it is also pointed out that his passport is already

deposited with the CBI. The counsel referring to this judgment

vehemently contend that in this case also, the property of the

petitioner was attached and passport also impounded. The

learned counsel for the petitioner also relied upon the judgment

of this Court passed in Crl.P.No.1189/2022 dated

30.03.2022 wherein this Court observed that once an accused

granted bail by a judicial Magistrate or the Session Court as the

case may be in respect of the predicated offences ipso facto is

entitled for grant of bail in respect of the offences under the Act.

7. Per contra, the learned counsel appearing for the

respondent would submit that there was a misappropriation of

the amount by this petitioner and others to the tune of

Rs.281.14 crores and there were more than 26,000 depositors

and their money has not been refunded. The properties attached

is only to the tune of Rs.31 crore and hence, when the

misappropriation is to the tune of Rs.281.14 crore, mere

attachment of Rs.31 crore cannot be a ground to enlarge the

petitioner on bail. The counsel also vehemently contend that the

statement of this petitioner was also recorded and complaint was

also filed and the offences are cognizable and non-bailable and

the petitioner himself categorically admits that around 250 crore

of principal amounts are yet to be refunded to the depositors of

the co-operative society and till date, he could not make any

tangible effort to repay the said amount. The counsel also

vehemently contend that the depositors amount has been

invested for the purpose of purchase of the property in his name

and his family members i.e., the petitioner herein has purchased

a bungalow at Belagavi for a consideration of Rs.1.50 crore and

has availed a loan of Rs.1 crore from Canara Bank and the

petitioner also purchased Land Rover Discovery SUV car in the

year 2016 for Rs.1.25 crores and despite purchasing the said

properties and vehicles worth crores of rupees, the petitioner

herein did not produce any income tax return to substantiate his

source of income. The petitioner was non-cooperative and has

not provided satisfactory reply in the statements recorded under

Section 50(3) of PML Act hence, his judicial custody is necessary

and the petitioner has raised certain grounds in support of his

petition seeking bail but he has not made out any grounds for

granting bail. The onus to discharge the burden of proof is on

the petitioner under Section 24 of PML Act and if the petitioner

released on bail, the petitioner may dispose off the proceeds of

crime, thus leading to frustration of the objectives of PML Act

and very investment made by him for purchasing the property in

his name as well as his family members, driver of the car and

other staff of the bank is clear that he had committed the

aforesaid offences.

8. The learned counsel for the respondent in his

statement of objections, relied upon the judgment of the Apex

Court reported in (2019) 9 SCC 24 in the case of

P.CHIDAMBARAM vs DIRECTORATE OF ENFORCEMENT and

brought to the notice of this Court to paragraph 38 and so also

the judgment reported in 2020 SCC ONLINE ORI 544 in the

case of MOHD. ARIF vs GOVT. OF INDIA wherein the Orissa

High Court in paragraph 23 held that while deciding a bail

application, the provisions of Section 45 read with Section 24

which reverses the burden of proof and creates presumption of

guilt required to be dislodged by the accused, will mandatorily

apply. The counsel also relied upon the judgment between

ROHIT TANDON vs DIRECTORATE OF ENFORCEMENT in the

said judgment also a similar view has been held.

9. The learned counsel for the respondent in support of

his argument relied upon the judgment of the Apex Court

reported in (2020) 14 SCC 396 in the case of CENTRAL

BUREAU OF INVESTIGATION vs RAMENDU

CHATTOPADHYAY wherein, it is held that the Court is

conscious of the need to view such economic offences having a

deep-rooted conspiracy and involving a huge loss of investors'

money seriously. Though further investigation is going on, as of

now, the investigation discloses that the respondent played a

key role in the promotion of the chit fund scam described supra,

thereby cheating a large number of innocent depositors and

misappropriating their hard-earned money and cancelled the

bail. The counsel also brought to notice of this Court that the

facts and circumstances of the case is aptly applicable to the

case on hand and Apex Court taken note of the material on

record and observed that since there is a huge amount of money

belonging to the investors has been siphoned off, the High Court

committed an error in granting bail in favour of the respondent.

10. Having heard the respective counsel appearing for

the parties and also on perusal of the material available on

record, admittedly, earlier, the case has been registered against

this petitioner in Cr.No.185/2017 for the offences punishable

under Section 406, 408, 420 of IPC by the KSRUCS and the

same has been investigated and charge-sheet also filed and bail

was granted. It is also important to note that an application is

filed under Section 167 of Cr.P.C before the Trial Court and he

was remanded to the custody and he has been in custody from

January, 2022. It is also important to note that invoked the

offence punishable under PML Act wherein an allegation is made

that this petitioner being the Chairman of the KSRUCS,

misappropriated the amount of Rs.250 to 255 crore. It is also

important to note that the statement of the petitioner was also

recorded and admitted the fact that he had purchased the

bungalow and car and also it is the case of the prosecution that

he had indulged in siphoning off the amount of the depositors

money. In the contents of the complaint, a specific allegation is

made that immovable properties are listed out in paragraph 6

and movable properties also shown as schedule-B and apart

from that properties were attached to the tune of Rs.31 crore

only as mentioned in paragraph 6 of the complaint. The brief

summary of result of investigation under Section 50(3) of PML

Act is also mentioned in paragraph 8 acquiring the properties in

the name of his family members i.e., wife, son and also in the

name of the car driver and also his friend and so also in the

name of the Manager of KSRUCS and had indulged in

transferring the property in the name of Ramathulla.

11. No doubt, the Apex Court in the judgment referred

supra in KRISHNA MOHAN TRIPATHI's case observed that

when the properties has been attached and passport is

impounded, granted bail but in the case on hand, properties are

attached only to the tune of Rs.31 crore and the investors

invested the money to the tune of Rs.250 crore and the said

amount has not been refunded and the judgment of the Apex

Court in RAMENDU CHATTOPADHYAY's case taken note of the

fact that the Court is conscious of the need to view such

economic offences having a deep-rooted conspiracy and

involving a huge loss of investors' money seriously and it is also

observed that though further investigation is going on, as of

now, the investigation discloses that the respondent played a

key role in the promotion of the chit fund scam described supra,

thereby cheating a large number of innocent depositors and

misappropriating their hard-earned money. In the case on hand

also the specific allegation is made that this petitioner had

misappropriated the investors' money to the tune of Rs.250

crore and the same has not been refunded and admittedly, only

Rs.35 lakh was refunded and only Rs.31 crore properties were

attached but the amount involved in misappropriation and

siphoning off the amount is more than Rs.250 crore. It is also

evident from the records that the properties were attached in the

name of his family members and other office staff including the

driver of the car and Manager and the same has been came out

during the course of partial investigation and Apex Court also

observed that if the respondent continues on bail, there is little

chance of realizing any amount by selling the properties of the

Tower Group of companies, since he may use unlawful tactics to

keep prospective buyers away and also taken note of the fact

that huge amount of money belonging to the investors has been

siphoned off, under such circumstances, High Court should not

have released the respondent on bail. In the case on hand also

huge amount of money belonging to the innocent investors has

been siphoned off by this petitioner along with other Directors of

the bank. When such being the material on record, and

investigation also discloses the siphoning off the huge amount of

Rs.250 crore and Trial Court also while considering the bail

petition taken note of Section 24 of PML Act and apart from that

taken note of the gravity of the offences and accusation made

against this petitioner and the prima facie investigation material

discloses about indulging in committing an offence of fraud on

the innocent investors who have deposited the amount with the

petitioner's bank and when such huge amount is involved in the

fraud and also observed that there is a chance of absconding and

attempting to tamper with the prosecution evidences and the

Apex Court also observed the same in the judgment referred

supra in RAMENDU CHATTOPADHYAY's case. Hence, it is not

a fit case to exercise the discretion in favour of the petitioner

and the petitioner has not made out any ground to enlarge him

on bail. Admittedly, the complaint is also filed wherein several

allegations are made against this petitioner and further

investigation is also going on.

12. The other contention of the counsel for the petitioner

is that the petitioner is entitled for bail since the complaint was

filed on 07.02.2022 and 60 days has been lapsed cannot be

accepted at this juncture when the investigation is still going on

and the specific allegations are made that further investigation is

pending and hence, the question of invoking Section 167(2) of

Cr.P.C. as observed by the High Court of Hyderabad at this stage

cannot be looked into and no such application is filed before the

Trial Court and for the first time, raised said ground before this

Court and hence, the petitioner is not entitled for the bail on the

said ground and the High Court of Hyderabad remanded the

matter for consideration when an application is filed under

Section 167 of Cr.P.C and the same is not a scenario herein and

no specific date is found in the complaint. Except mentioning the

date as 07.02.2022, there is no acknowledgment in the

complaint stating that on what date the complaint was filed at

Mangaluru and process continued thereafter and hence, Section

167(2) of Cr.P.C cannot be invoked at this juncture and on the

said ground, the petitioner can approach the trial Court.

13. In view of the discussions made above, I pass the

following:

ORDER

The bail petition is rejected.

Sd/-

JUDGE

SN