Madras High Court
The Assistant Director vs Shri.Ahmed A.R.Buhari on 16 August, 2023
Crl.O.P No.19147 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on: 05.09.2023 Pronounced on: 13.09.2023
CORAM :
THE HONOURABLE Dr. JUSTICE G.JAYACHANDRAN
Crl.O.P. No.19147 of 2023
and
Crl. M.P. No.12883 of 2023
The Assistant Director,
Directorate of Enforcement,
Government of India,
Chennai Zonal Office-I,
Chennai – 600 006. .. Petitioner
Vs.
Shri.Ahmed A.R.Buhari ..Respondent
PRAYER : Criminal Revision Petition has been filed under section 482 of
Criminal Procedure Code to set aside the order dated 16.08.2023 granting bail
to the accused in Crl.M.P. No.6628 of 2023 in Spl.C.C.No.1 of 2022 by the
learned XIII CBI Court, (Spl. Court for PMLA Cases), Chennai.
For Petitioner : Mr.N.Ramesh,
Special Public Prosecutor
(Directorate of Enforcement Cases)
For Respondent :Mr.C.Manishankar,
Senior Counsel for
Mr.B.Sathish Sundar
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ORDER
Shri.Ahmed A.R.Buhari, the respondent herein was arrested on
04.03.2022, pursuant to registration of the case against him under Sections 3 &
4 of Prevention of Money Laundering Act, 2002 (hereinafter referred to
“PMLA Act”) in F.No.ECIR/CEZO/I/01/2018 which was on the file of
Directorate of Enforcement, Chennai Zone-I, Chennai. On completion of
investigation, the Enforcement Directorate had filed final report and the same
was taken on file by the Special Court for CBI cases, Chennai in Spl.C.C.No.01
of 2022 after being transferred from the Principal Sessions Court, Chennai.
Before the trial Court, the petitioner sought for grant of bail in Crl.MP. No.6628
of 2023 and same was allowed on 16.08.2023. The docket order uploaded in
the Court website read as below:-
“1.The petitioner/Accused (A1) required to surrender/deposit
his passport before this court custody until further orders.
2.Petitioner/Accused (A1) enlarged on bail, on his execution of
bond for Rs.1 lakh and two such sureties for the like sum each and the
sureties shall be his blood relatives and sureties required to produce
sufficient solvency certificates.
3.The petitioner/Accused (A1) on his enlargement on bail, shall
appear before this Court on all working days and to sign before this
Court daily at 10.00 AM until further orders without fail.
4.The petitioner shall not leave the Chennai City limit until
further orders.
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5.The petitioner required to make his appearance regularly for
future hearings of this case and required to extend his fullest
cooperation for the early disposal of this case.
6.The petitioner shall be made available for interrogation by
the respondent as and when required, without fail. The petitioner
required not to indulge in any activities of tampering of witnesses,
records and evidences.”
2. The Special Public Prosecutor appearing for the Enforcement
Directorate, on 17.08.2023 moved to this Court to set aside the order granting
bail. This Court called for the records through the Vigilance Cell of High
Court, after perusing the records and being satisfied that, the learned trial
Judge has not made detailed order while granting bail, this Court granted stay
of the bail and passed the following order.
“7. On the face of the order which is impugned in this
application to set aside the bail granted to the accused, it is obviously
seen that there is no discussion in respect of pleadings and the embargo
under Section 45 of the PMLA Act, the Act under which the accused
now been prosecuted.
8. Furthermore, when the prosecution has filed petition to
reopen the case for clarification, ignoring the said petition, the trial
Court has hurriedly passed the non-speaking order granting bail. The
copy of the order was not made available to the prosecution for reasons
best known and the Counsel has made an endorsement in the
application for dispensing with the production of the original order
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Crl.O.P No.19147 of 2023
copy, with specific statement that, attempt made on to peruse the bail
order did not fructify. The Staff in the Special Court has informed him
that the order is under preparation.
9. As stated earlier, case records seized by the Registrar
(Vigilance) also does not contain a detailed order except the docket
order which is signed by the Presiding Officer which is extracted above
for easy reference. In that order, there is no indication that there is a
detailed order dictated/pronounced and signed in the Open Court. This
clearly indicates that when the docket order signed by the Presiding
Officer, there was no detailed order.
10. For the said reason, the order passed in Crl.M.P.No.6628 of
2023 in Spl.C.C.No.1 of 2022 dated 16.08.2023 has to be tested.
Therefore, it is hereby stayed.”
3. Thereafter, on completion of service to the respondent, the matter was
heard. In the meantime, the learned trial Judge has also uploaded the detailed
order which was made available to the prosecution on 21.08.2023. The
prosecution was permitted to file additional affidavit in response to the detailed
order passed by the trial Court.
4. The learned counsel for the petitioner/Directorate of Enforcement and
the learned counsel for the respondent made their oral and written submission.
Upon hearing both the side and on perusal of records this Court pass the
following order:-
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The respondent is a NRI, domiciled at Singapore. He is the Director of
M/s.Coastal Energyen (P) Limited and Power Plant under the name and style of
M/s.Mutiara Thermal Power Plant, Tuticorin with 1200 MW capacity and few
other group of Companies. The respondent and his Company came under the
scanner of Directorate of Revenue Intelligence (DRI), when the coal imported
from Foreign for conversion of coal into thermal energy, the price were inflated
and the inflated sale price was transferred to intermediary Form-B in Foreign
Country. The supplier Company was paid only the actual price. The difference
between the inflated price and the actual price been retained by the
intermediary Company. The modus operandi suspected by DRI was price for
superior quality coal has been collected from Indian buyer, mainly Public
Sector coal based Thermal Generating Co., but coal of inferior quality for low
cost purchased from the foreign Company. The difference in price been
retained by intermediary. DRI issued show cause notice to the respondent
under the provisions of Customs Act, 1962 and proceeded against the
respondent company and other Companies which imported coal of inferior
quality and sold it at inflated price as if it is of high quality.
5. Following DRI, the Economic Wing of CBI, Delhi, registered case in
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RC/221/2018/E0003, dated 22.01.2018, for offences under IPC and Prevention
of Corruption Act. Relying upon the FIR registered by CBI which is probing
offences under Sections 120-B r/w 420 of IPC and Section 13(2) r/w 13(1)(d)
of PC Act. Since case involving offence of siphoning of money to Foreign
Country, the Enforcement Directorate registered ECIR No.CEZO/1/01/2018
against this respondent and others on 31.01.2018. Around Rs.500 crores of
rupees alleged to have been laundered in this case.
6. Section 45(1) of PMLA Act impose twin conditions as restriction for
Courts to consider while entertaining bail petition involving crime proceeds of
one crore and above.
7. The respondent when earlier moved for bail, this Court had occasion to
consider the facts of the case and dismissed the bail petition on being satisfied
that the petitioner has failed to co-operate with investigation and he is
withholding the trail of proceeds of crime. In paragraph No.42 of the earlier
order dismissing the bail petition, this Court has observed as below:-
“42. During the investigation, the
respondent/complainant has asked the petitioner to furnish
bank account statements of the offshore Companies involved in
this transaction, original invoices raised by the Indonesian
Coal Miners to his Dubai based entities, Books of Accounts of
his foreign entities located in Mauritius and British Virgin
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Islands (BVI). The petitioner reluctant to part away those
crucial documents and had given evasive reply. Having refused
and reluctant to handover these documents which are essential
to ascertain whether the money laundered the manner in which
the investigation so far reveals, mere physical presence at
Respondent Office will not tantamount to cooperation to
investigation. Further, having declared to maintain silence, the
investigating agency needs time to collect the documents
required, by other means as the petitioner himself have put it in
his petition, (i.e.,) Letter of Request (LOR) under Section 57 of
PMLA, 2002 or Section 166-A of Cr.P.C., may be resorted. It is
the discretion and prerogative of the investigating agency, to
choose the mode and they need no advice neither from the
Court nor from the accused. To collect those documents, the
confinement of the petitioner in prison is inevitable, else he
may secret away the documents, taking advantage of his
liberty.”
8. This order was challenged before the Hon'ble Supreme Court and the
Hon'ble Supreme Court in its order [Special Leave to Appeal (Crl.) No.5476 of
2022], dated 05.12.2022 observed that, they do not find any ground to release
the petitioner on bail at this stage as it might hamper the ongoing investigation.
The Hon'ble Supreme Court in its order had further observed as below:-
“2. However, once the investigation is complete, the
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petitioner shall be at liberty to approach the Trial Court for his
release on bail, and such a petition shall be considered as per
its own merit without being influenced by the orders passed by
the High Court or this Court.
3. The respondent is directed to expedite the
investigating process and make an endeavour to complete the
same within three months.
4. With the aforesaid directions, the Special Leave
Petition is disposed of.
5. As a result, pending interlocutory applications also
stand disposed of.”
9. Alleging there was no progress in the investigation till 04.03.2023, the
respondent had filed bail petition in Crl.M.P.No.1320 of 2023 before the trial
Court. After recording the fact,
(i) the case registered by DRI for violation of Customs Act has not
culminated in prosecution even after lapse of 5 years.
(ii) The investigation done by CBI for offence under Section 120-B r/w
420 of I.P.C and Section 13(2) r/w 13(1)(d) of P.C Act, 1988 still remains at
investigation and final report not yet filed even after lapse of more than 5 years,
despite declined to draw parallel from the closure report of CBI and action
dropped by DRI in similar cases and dismissed the bail petition on 17.03.2023
holding that,
“10. While considering these aspects, even if it is
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admitted that the cases initiated by D.R.I and CBI against
other entities on similar facts and circumstances have ended in
closure thereby making out no predicate offence, the action or
inaction on part of the prosecution agencies in other cases
cannot be a ground to hold that this petitioner/accused has not
committed the offence under PMLA. In other words, the
contention of the learned counsel that just because the D.R.I
and the CBI have dropped the proceedings in other similar
cases, the same will be done or expected to be done in this case
also by them cannot be presumed. It is true that the personal
liberty is the most cherished fundamental right under the
Constitution of India, but when it is curtailed by following the
procedures established by law, the same cannot be said to have
been affected.
11. In the case on hand, the specific case of
Enforcement Directorate is that the offshore entities belong to
this petitioner/accused and that steps are taken to get relevant
documents by issuing letter of request to those countries.
Whereas, the specific case of the accused is that he is no longer
involved with those offshore entities and he would rely upon
the order passed by this Court in Crl.M.P.No.4781 2022 under
section 305 Cr.P.C. holding that the entities alone could
appoint representatives to face the trial and this
petitioner/accused cannot be compelled to represent those
entities because the said entities were not served summons
properly and that they are said to be under liquidation process.
However, it was held in that order that this Petitioner/accused
cannot escape the liability under PMLA as he was in-charge of
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those entities during the relevant period. Hence, the Petitioner
cannot take advantage of the order passed by this court under
section 305 Cr.P.C. to gain support that he did not commit any
offence either under the schedule or under Section 3 of
PMLA.”
10. The respondent/accused, soon thereafter had filed bail petition under
Section 167(2) of Cr.P.C before the trial Court in Crl.M.P.No.2784 of 2023 on
the premise the complaint filed by Enforcement Directorate and taken on file as
Special C.C.No.1 of 2022 is an incomplete report. Referring that before the
Hon'ble Supreme Court, the Enforcement Directorate promised to complete the
investigation and file final report within 3 months but had not filed any report
therefore to be enlarged on statutory bail under Section 167(2) of Cr.P.C.
11. The trial Court taking note of the fact that the complaint of
Enforcement Directorate dated 23.04.2022 already taken cognizance and taken
on file by the Principal Sessions Judge, Chennai. Subsequently, the case
transferred to the Special Court for C.B.I case which is the Court notified to
deal cases under PMLA. On transfer, Special C.C.No.1 of 2022 assigned and
copies under Section 207 and Section 208 of Cr.P.C was readily available.
After receiving summons on behalf of other accused which are shell Companies
in Foreign countries, had filed petition under Section 305 of Cr.P.C retracting
his stand and claimed that he is not representing those Companies.
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12. As far as the FIR named accused A1 to A7 (including this petitioner)
investigation completed, complaint filed. As far as the offshore entities, the
investigation is yet to be completed. However, it will be any impediment to
proceed the trial against the accused persons. Relying upon the judgment of the
Delhi High Court rendered in Anand Subramanian -vs- C.B.I reported in 2022
SCC Online Del 3125, the trial Court dismissed the bail petition holding that
the material found in the complaint sufficient to make out prima facie case for
trial under Section 3 and 70 of PMLA Act. The complaint is sufficient and
complete in so far the accused/petitioner is concern, the investigation against
Public Servants of Public Sections Undertakings and offshore foreign
Companies which alone is incomplete. Whether filing or not filing of
supplementary Complaint will not affect the complaint against this accused.
13. The bail petition in Crl.MP. No.6628 of 2023 filed was allowed by
the trial Court and that order is impugned by the Directorate of Enforcement in
the present petition. The circumstances under which the trial Court granted bail
and the grounds of challenge to the bail order has warranted and forced this
Court to make this above narrations as a prelude.
14. The sum and substance of the final report filed against this petitioner
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who is arrayed as first accused in Spl.C.C. No.1 of 2022 is that he was involved
in the business of import and sale of coal from overseas, particularly from
Indonesia through his Company by name M/s.Coastal Energyen Private
Limited. In respect of coal imported during 2011-15, the Director of Revenue
Intelligence, Mumbai Zonal Unit investigated about the over-invoice and issued
show cause notice in file No.DRI/MZU/F/INT.160/2014/977 dated 14.02.2017
under the relevant provisions of the Customs Act, 1962. The adjudication in
the proceedings initiated by DRI is still pending.
15. Followed by the proceedings of DRI, CBI has registered a case
against this petitioner, his Company and others. The investigation in the case
registered by CBI, Delhi in RC. No.221/2018/E0003 dated 22.01.2018 is still
pending and the final report not yet filed.
16. The case registered by CBI is the predicate offence which has led to
the complaint by Enforcement Directorate in F.No.ECIR/CEZ/01/2018. The
respondent on taking up the investigation had conducted search and seizure
operation under the provisions of PMLA Act, in the premises connected to the
petitioner. The search operation dated 12.09.2019 and 13.09.2019 had led to
recovery of incriminating material. Based on the complaint, the offence under
Sections 3 and 4 of PMLA Act, been taken cognizance by the Court designated
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to try offences under PMLA Act.
17. According to the complaint, above 564 crores of rupees alleged to
have been laundered. The accused being a successful bidder in the tender
floated by public sector undertaking through MMTC Limited for supply of coal
had supplied coal of lower quality at the bid price of higher quality of coal.
The difference in price siphoned through entities having its base outside the
country. Considering the gravity of the crime and the recur of Section 45(2) of
PMLA Act, Court had been dismissing the bail petition of this accused on all
the earlier occasion as narrated above.
18. The contention of the accused/petitioner is that, DRI which initiated
proceedings suspecting the transaction of the petitioner through his company
M/s.Coastal Energyen Private Limited had not completed the adjudication,
inspite of more than five years lapsed. CBI which followed DRI and registered
FIR on 22.01.2018 has also not filed its final report and a petition to quash the
FIR filed by this accused is pending before the Hon'ble Delhi High Court.
19. Enforcement Directorate which has filed the present complaint
alleging that the petitioner involved in the scheduled offence is purely based on
the outcome of the predicate offence. Enforcement Directorate also though filed
complaint has not shown interest in proceedings with the trial. When this
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petitioner earlier sought for bail before the High Court as well as the Supreme
Court, the Enforcement Directorate contended that investigation in respect of
certain foreign entities yet to be completed. Therefore, the Hon'ble Supreme
Court vide its order dated 05.12.2022 disposed the bail petition with liberty to
the petitioner to seek for bail after three months and also directed the
respondent/ Enforcement Directorate to complete the further investigation and
file supplementary complaint within a period of three months.
20. Since Enforcement Directorate not filed the promised supplementary
final report, bail petition in Crl.MP. No.6628 of 2023 was filed. The trial Court
taking into consideration the incarceration of the accused for more than one and
half years and non progress in the trial also the provisional attachment of the
petitioner's property worth about Rs.557.25 Crores and the action dropped by
DRI in a similar case pending investigation in the predicate crime registered by
CBI has prompted the trial Court to grant bail on conditions.
21. The learned Special Public Prosecutor appearing for the Enforcement
Directorate submitted that after dismissal of the bail petition by the trial Court
in Crl.M.P No.1320 of 2023 on 17.03.2023 and bail petition in Crl.OP. No.2784
of 2023 dated 31.03.2023, there is no change of circumstances for entertaining
the bail petition. The trial Court on 16.08.2023, passed a cryptic order without
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any reasoning or recording its satisfaction for granting bail inspite of the twin
conditions imposed in Section 45(2) of PMLA Act. This was brought to the
notice of the High Court, the next day and interim stay of bail order was
granted. The copy of the bail order was made ready only on 21.08.2023 and
served to the prosecution. The detailed order of the trial Court for granting bail
also does not give reason for satisfaction to grant bail.
22.The learned Special Public Prosecutor specifically contended that this
is a case investigated by the Enforcement Directorate regarding siphoning of
Indian money more than Rs.550 Crores to Foreign country and the proceeds of
crime being scattered across the border. Steps are taken by the Enforcement
Directorate to trace the trail of the money and bring back the money. In
pursuant to this action letter of request been issued through the trial Court to
the Republic of Mauritius and United Arab Emirates on 03.10.2022. The
response from these two countries are awaited. In spite of actions taken by
Enforcement Directorate and same form part of the records in the trial Court,
the learned trial Judge in the impugned order dated 16.08.2023 had made a
baseless remark against Enforcement Directorate that no piece of paper in
respect of further investigation towards the case has been received by this
Court, further respondent also not chosen to speak about the present status of
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predicated offence.
23. The learned Special Public Prosecutor submitted that the progress in
the investigation of the predicate offence and the trial of PMLA offence are not
inter-dependant to each other. Due to the non-cooperation of the petitioner, the
commencement of trial is getting delayed which is well within the knowledge
of the trial Court. However, the trial Court ignoring the records available on its
file and the conduct of the accused had only taken note of the one and half
years incarceration of the petitioner but conveniently ignored to take note of the
fact that the petitioner who initially claimed as representative of two other
Companies later had chosen to file a petition under Section 305 of Cr.PC
declaring that he is not representing those two companies. Thereby, now those
two companies are to be served notice again. Hence, to expedite the trial, the
respondent is contemplating to split up the case against those companies so
that, the trial against this petitioner can proceed.
24. The learned counsel appearing for the Enforcement Directorate also
assured that if the trial is split up and not interfered unnecessarily by this
petitioner, the trial can be completed probably within a period of three months.
While there is material to show that the accused is involved in money
laundering and proceeds of crime of worth more than 550 Crores siphoned out
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of the country, ignoring the conditions mentioned in Section 45 of the PMLA
Act, the petitioner cannot be released on bail. Taking into consideration the
wide connection all over the world the petitioner have, it will not be difficult if
he defy the bail condition and abscond. Hence, the order of bail granted
unmindful of the gravity of the offence and overwhelming evidence against the
petitioner is to be cancelled.
25. The learned senior counsel appearing for the accused submitted that a
detailed order passed by the trial Court considering all the objections and the
past history of the case following the adjudication of the Hon'ble Supreme
Court rendered in Mohammed Muslim @ Hussain vs. State (NCT of Delhi) in
SLP. Crl.No.943 2023 dated 28.03.2023 and the judgement rendered in Vijai
Madanlal Choudary Vs. Union of India reported in 2022 SCC Online SC 929.
After recording its satisfaction as below, in respect of twin condition laid in
Section 45 of the PMLA Act, Court is not expected to go into deep of facts and
pros and cons of constitution and express his opinion. On perusal, the
petitioner who is aged about 50 years had been repeatedly applying for bail and
he suffers back pain owing to his old age from very inception of taking
cognizance, the summons to co-accused A2-A7 not yet been served and the
case being posted every 15 days for extension of remand. The custodial
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interrogation of the petitioner also been completed and his petition seeking
default bail also dismissed in view of the complaint filed on 22.04.2022.
Therefore, considering the incarceration of accused for nearly one and half
years, the petitioner is entitled for bail on stringent condition.
26. The documents relied by the prosecution and the petitioner/accused
perused. After examining the earlier order of this Court, the order of the
Hon'ble Supreme Court on appeal and trial Court orders passed subsequently,
this Court is constrained to interfere in the bail order for the following
reasons:-
(i) The trial Court patently erred in passing a docket
order on 16.08.2023 and thereafter, the detailed order which
was made ready to the parties only on 21.08.2023.
(ii) On 17.08.2023, the learned Special Public
Prosecutor moved this Court for stay of the bail order and
reported certain irregularities. This submission prompted the
Court to issue oral direction to the Registrar (Vigilance) of the
High Court to bring records from the trial Court (which is
hardly two km away from the High Court Campus). The case
bundle secured and produced to the shock of this Court did not
contain the detail order, neither the docket order indicated that
a detailed order passed separately. The enquiry made in the
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trial Court by the Registrar (Vigilance) revealed that the
learned Judge had not made ready the detailed order. While
so, the grant of bail in haste without making the detail order
throw suspicion over the conduct of the trial Court.
(iii) However, this Court is not dwelling upon that aspect
since this matter is for the High Court administrative side to
take note and proceed. Except to reinforce the view of the
Hon'ble Supreme Court in Registrar General, High Court of
Karnataka and others vs. Narasimma Prasad reported in
2003 SCC Online SC 376, which had observed that a judicial
officer cannot pronounce the concluding portion of its
judgement in open Court without the entire text of the
judgement being prepared which dictated. In this case, the
material collected immediately on the next day of pronouncing
the order of granting bail, there was no prepared text of
detailed order.
(iv) The detail order made available on 21.08.2023
though runs to several pages, it does not contain the reasons
for satisfaction of the twin condition imposed under Section 45
of PMLA Act. The allegation against this accused is that out of
169 consignments of coal, the accused has supplied totally 77
consignments through MMTC, 5 consignments directly by its
offshore entities DNO, DMCC, Dubai and remaining 87
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consignments were supplied by his Company M/s.Coastal
Energyen Private Limited to the public sector undertaking in
India and the over all inflation of price that is the difference
between the inferior quality coal and the superior quality coal
is arrived at Rs.564.58 Crores. Out of which 557.28 Crores
had been diverted through his company M/s.Coastal Energyen
Private limited and CNO groups of entities. The materials
placed indicates at this juncture the accused cannot be
presumed to be not guilty.
(v) The gravity of offence, the length and breath of
crime committed has forced the Enforcement Directorate to
request the trial Court to issue letter of rogatory and the trial
Court had issued letter of request on 03.10.2022 to two
countries. The responses from those countries are awaited.
While so, it is incorrect to say that the Enforcement Directorate
has not taken any steps to proceed with its investigation in
respect of offshore entities.
(vi) The delay in completing the investigation by the CBI,
Delhi cannot be a ground to presume that accused is not guilty
of money laundering offence. Closure of investigation in a
similar case also cannot be a reason to presume that the
present case will also end in closure report. Ifs and buts
cannot be an adequate reason to hold this petitioner, not prima
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facie guilty of the alleged offence. No doubt personal liberty is
a fundamental right of a person, yet, subject to reasonable
restriction. Prolonged trial or incarceration pending trial is
antithesis to fundamental right. However, the reasonable
restriction and the interest of nation cannot be ignored while
taking note of the fundamental right of individual.
(vii) This Court is conscious of the dictum that, it is not
the expectation of law that Court must arrive at a positive
finding that applicant for bail has not committed an offence
under PMLA Act and if such is the expectation, it will be
impossible for an applicant to establish that he has not
committed the offence. However, in this case, records reveal
that about 169 consignments with inflated price being
encashed fraudulently by this petitioner through his Company
and the money has gone out of the country. The provisional
attachment of the property by efflux of time had lost its
enforceability and therefore if the petitioner is enlarged on
bail, apart from repeating similar crime by floating new
Company, the danger of he fleeing from the hands of justice
also cannot be ruled out.
27. For the reasons stated above, this Criminal Original Petition filed by
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the Enforcement Directorate is allowed. The order of the trial Court dated
16.08.2023 in Crl.M.P.No.6628 of 2023 granting bail to the respondent is
hereby set aside. Consequently, connected Miscellaneous Petition is also
closed.
13.09.2023
Internet : Yes
Index : Yes/No
rkp
To
1. The XIII CBI Court, (Spl. Court for PMLA Cases),
Chennai.
2.The Pubic Prosecutor,
High Court of Madras, Chennai.
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Crl.O.P No.19147 of 2023
Dr.G.JAYACHANDRAN, J.
rkp
Crl.O.P. No.19147 of 2023
and
Crl. M.P. No.12883 of 2023
13.09.2023
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