Orissa High Court

Pradeep Kumar Sethy vs Enforcement Directorate on 17 December, 2021

              IN THE HIGH COURT OF ORISSA AT CUTTACK

                               BLAPL No.5606 of 2020
            Pradeep Kumar Sethy                  ....           Petitioner
                                          Mr. Millan Kanungo, Sr. Adv.
                                          M/s. Chandana Mishra, Adv.
                                       -versus-

            Enforcement Directorate,         ....           Opp. Party
            Government of India, Bhubaneswar
            Zone.
                                      Mr. Gopal Agarwal, Adv. (ED)
                       CORAM:
                       JUSTICE S.K. PANIGRAHI
                                    ORDER

Order No. 17.12.2021

14. 1. This matter is taken up through hybrid mode.

2. Heard learned counsel for the Petitioner and learned counsel for the State.

3. The Petitioner being in custody in connection with ECIR No.BSZO/04/2014 registered under Section 3 read with Sections 70(1) and 70(2) of Prevention of Money Laundering Act, 2002 (hereinafter referred to as "the PML Act" for brevity) pending before the court of learned Sessions Judge, Khurda, has filed this petition under Section 439 of the Cr.P.C. for his release on bail.

4. The prosecution story, in brief, has been summarized, as follows:

i. In Kharvel Nagar PS Case No.44 dated 07.02.2013, charge sheet dated 10.07.2013 under Sections 420, 406 and 120B of the I.P.C. was filed and a second charge-sheet dated

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28.07.2013 of the same P.S. but different P.S. Case No.145 dated 27.5.2013 was filed before the jurisdictional Court of learned S.D.J.M., Bhubaneswar against the Petitioner and others of Artha Tatwa Group. Petitioner was arrested on 13.05.2013 and since then he is in custody. This investigation emerged from the case wherein ED has lodged the complaint.

ii. The CBI, pursuant to directions of Hon'ble Supreme Court, took over the said investigations and filed a charge-sheet dated 11.12.2014 against the Petitioner and others under Sections 120B, 294, 341, 406, 409, 467, 471, 506 read with 34 of the I.P.C. and Sections 3, 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (hereinafter referred to as "the PCMCSB Act" for brevity) before the learned Special C.J.M., CBI, Bhubaneswar. On 07.01.2015, ED took the Petitioner to custody and recorded his statement under Section 50 of the PML Act and the said recording continued till 15.01.2015. Learned Sessions Judge, Khurda, upon an application/ Complaint case filed by ED, took cognizance of the offence under Section 3 of the PML Act, 2002 on 01.11.2016 and was pleased to issue summons to the Petitioner and others vide order dated 06.12.2016.

iii. Learned Special C.J.M., Bhubaneswar convicted the Petitioner in connection with the aforesaid CBI case and awarded the sentence for 7 years imprisonment with a further direction to deposit the alleged misappropriated amount of Rs.250 Crore. Learned Sessions Judge, dealing with ED case, was pleased to issue production warrant on 13.09.2017. In the

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meantime, the Petitioner appeared before the learned Sessions Judge on 03.04.2018 through his Advocate pursuant to the summons issued on 06.12.2016 by ED. Even when the counsel appeared in terms of earlier summons, learned Sessions Judge, Khurda vide order dated 20.06.2018 was pleased to remand the Petitioner to custody. Thereafter, the Petitioner sought bail which was got rejected vide order dated 10.12.2019 by the learned Sessions Judge, Khurda in Crl. Misc (PMLAJ) Case No.34/16. Aggrieved by the said order, the Petitioner has filed the instant bail application.

5. Learned counsel for the Petitioner submitted that relief of bail was declined by the learned Sessions Judge by placing reliance on Section 45 of PML Act and the twin conditions contained therein even though the said conditions were declared unconstitutional and were accordingly struck down by the Hon'ble Supreme Court in Nikesh Tarachand Shah vs Union of India1. He further submitted that the learned Sessions Judge committed manifest error one after the other, namely, the issuance of production warrant and execution thereof on 20.06.2018 especially when the Petitioner, pursuant to the summons, appeared before the Court through his counsel on 03.04.2018. There was no compelling necessity for the issuance of the production warrant and even if there was one, the learned Sessions Judge ought to have released him on bail by virtue of Section 88 of the Cr.P.C. Moreover, if the Petitioner was in custody in terms of production warrant issued under Section

(2018) 11 SCC 1.

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267 Cr.P.C., and not in terms of Section 19 of PML Act, it was the duty of the court concerned to release him on bail with conditions consistent with the bail rather than refusing. Hence, the Petitioner deserves to be enlarged on bail.

6. Learned counsel for the Enforcement Directorate has vehemently opposed the Petitioner's prayer for bail. He further submitted that after the judgment of the Hon'ble Apex Court in Nikesh Tarachand Shah vs. Union of India (supra), Section 45 of the PML has been amended by Act 13 of 2018 and Act 23 of 2019 and the same was considered by Hon'ble Apex Court in case of P.Chidambaram vs. Directorate of Enforcement2. Further, as the offence under the PML Act is cognizable and non-bailable, triable by the Special Court, the Counsel's appearance cannot be accepted without the accused being personally present in Court in view of Section 45 of the PML Act and Section 88 of the Cr.P.C has no application in any way. Hence, the learned trial court has rightly rejected the bail application of the Petitioner, as he has confessed his guilt in many other cases and is a convict serving sentence.

7. Section 45 of the PML Act departs from the rule of presumption of innocence in as much as it introduces two further pre-conditions that may be satisfied before an accused can be enlarged on bail. The pre-amendment Section 45 of the PML Act provides the following:

2019 (9) SCC 24.

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Offences to be cognizable and non-bailable.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),-

(a) Every offence punishable under this Act shall be cognizable;

(b) no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless--

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.

8. The quoted provision imposed two conditions before bail could be granted to a person accused of an offence punishable for a term of imprisonment for more than three years under Part A of the Schedule attached to the PML Act.

These conditions were that before grant of bail the Public Prosecutor was required to be given an opportunity to oppose the plea for bail and that where the Public Prosecutor opposed such plea the Court could order release of the accused on bail only after recording a satisfaction that there were reasonable grounds for believing that the person to be released

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was not guilty of the offence he was accused of and that while on bail he was not likely to commit any offence.

9. The constitutional validity of the afore quoted provision imposing the twin conditions for grant of bail was questioned before the Hon'ble Supreme Court in Nikesh Tarachand Shah v. Union of India (supra) and the Supreme Court, after holding that the prescribed twin conditions for release on bail were violative of Articles 14 and 21 of the Constitution of India declared Section 45(1) of the PML Act, to that extent, to be unconstitutional. The Hon'ble Supreme Court was of the opinion that:

"54. Regard being had to the above, we declare Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail, to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. All the matters before us in which bail has been denied, because of the presence of the twin conditions contained in Section 45, will now go back to the respective Courts which denied bail. All such orders are set aside, and the cases remanded to the respective Courts to be heard on merits, without application of the twin conditions contained in Section 45 of the 2002 Act. Considering that persons are languishing in jail and that personal liberty is involved, all these matters are to be taken up at the earliest by the respective Courts for fresh decision. The writ petitions and the appeals are disposed of accordingly."

10. Learned Counsel for the Enforcement Directorate has submitted that the particular section i.e., Section 45(1) has already been amended and therefore the above case cannot be a provision for bail anymore. By Act 13 of 2018 Section 45(1) of

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the PML Act was sought to be amended w.e.f 19.04.2018. Through such amendment the words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" as occurring in Section 45(1) before the judgment of the Supreme Court in Nikesh Tarachand Shah's case (supra) were substituted with the words "under this Act". As per learned counsel for the ED, after such amendment, the defect on the basis of which the Supreme Court had declared Section 45(1) of the PML Act to be unconstitutional was cured and consequently the twin conditions prescribed in Section 45(1) stood revived.

11. At this juncture, it is pertinent to peruse the post amendment Section as well which reads as:

"Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence (under this Act) shall be released on bail or on his own bond unless:

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail...."

12. This Court is of the opinion that the declaration by the Supreme Court in Nikesh Tarachand Shah's (supra) would render the twin conditions prescribed in Section 45(1) of the PML Act for release of an accused on bail to be void in toto; such conditions have to be disregarded of any legal force from its inception. They cease to be law and are rendered inoperative

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to the extent that they are to be regarded as if they had never been enacted. That being so, the twin conditions for grant of bail under Section 45(1) of the PML Act as are now sought to be pressed into service by the ED cannot be considered to have revived or resurrected only on the prospective substitution of the words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" with the words "under this Act" especially without there being any amendment with regard to the twin conditions for grant of bail which had specifically been declared to be unconstitutional as also in the absence of any validating law in this regard with retrospective effect.

13. Moreover, this contention has been consistently rejected by Hon'ble High Courts across the country since the amendments occurred. The Bombay High Court in Deepak Virendra Kochhar v. Directorate of Enforcement3 while dealing with the new amended Section 45(1) has held as under:

"... In view of clear language used in para 46 of the Supreme Court decision in Nikesh Tarachand Shah, Court has no hesitation in reaching a definite conclusion that amendment in sub-section (1) of Section 45 of PMLA introduced after the Supreme Court decision in Nikesh Tarachand Shah does not have effect of reviving twin conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of Constitution of India...."

14. The Bombay High Court in Sameer M.

Bhujbal v. Assistant Director Directorate of Enforcement4,

Order dated 25-3-2021 in Bail Application No. 1322 of 2020

Order dated 06.06.2018 in Bail Application No. 286 of 2018

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addressed a similar objection raised on behalf of the ED and repelled the same through the following observations:

"9. It is to be noted here that, after effecting amendment to Section 45(1) of the PMLA Act the words "under this Act" are added to Sub Section(1) of Section 45 of the PMLA Act. However, the original Section 45(1)(ii) has not been revived or resurrected by the said Amending Act. The learned counsel appearing for the applicant and the learned Additional Solicitor General of India are not disputing about the said fact situation and in fact have conceded to the same. It is further to be noted here that, even Notification dated 29.3.2018 thereby amending Section 45(1) of the PMLA Act which came into effect from 19.4.2018, is silent about its retrospective applicability. In view thereof, the contention advanced by the learned A.S.G. cannot be accepted. It is to be further noted here that, the original Sub-section 45(1)(ii) has therefore neither revived nor resurrected by the Amending Act and therefore, as of today there is no rigor of said two further conditions under original Section 45(1)(ii) of PMLA Act for releasing the accused on bail under the said Act.

10. In view of the above, when there is no bar of twin conditions contained in original Section 45(1)(ii) of the PMLA Act, the present application has to be considered and decided under Section 439 of the Code of Criminal Procedure with or without conditions."

15. Even the Hon'ble Delhi High Court while considering the applicability of twin conditions made the following observations in Sai Chandrasekhar v. Directorate of Enforcement5:



    2021 SCC OnLine Delhi 1081



                                               // 10 //




                  "17.         Twin         conditions       mentioned

in Section 45 of the PML Act continue to be struck down as being unconstitutional in view of the judgment of the Apex Court in the case of Nikesh Tarachand Shah v. Union of India (2018) 11 SCC 1. The amendment in Section 45 by the Finance Act 2018 is only with respect to substituting the term 'offence punishable for 3 years' with 'offence under this Act'. The said amendment does not revive the twin conditions already struck down by the aforesaid judgment.

18. Since the twin conditions for bail in section 45 of the PML Act have been struck down by the Hon'ble Supreme Court and the same are neither revived nor resurrected by the Amending Act therefore, as of today there is no rigor of said two conditions under original Section 45(l)(ii) of the PML Act for releasing the Petitioner on bail. The provisions of Section 439 of Cr.P.C and the conditions therein will only apply in the case of the Petitioner for grant of bail."

16. This issue has also been dealt in a similar manner by the Madhya Pradesh High Court in Dr. Vinod Bhandari v. Assistant Director, Directorate of Enforcement6 and the High Court of Patna in Ahilya Devi v. The State of Bihar7 and in Parkash Gurbaxani v. The Directorate of Enforcement through Assistant Director8.

17. It was also brought to this Court's notice that the Petitioner has been in custody for a period of about 8 years. "Justice delayed is justice denied" is the cornerstone in delivering justice and a speedy trial forms the essence of the entire criminal justice system. At the same time, "justice hurried is

Order dated 29.08.2018 in M.Cr.C. No. 34201/2018

Order dated 28.05.2020 in Criminal Miscellaneous No. 41413 of 2019

Order dated 02.06.2021 in CRM-M-12901-2021(O&M)

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justice buried" and therefore, there has always existed a need to strike a balance between the two adages in the delivery of justice to the people. The importance of speedy trial has been emphasized in Hussainara Khatoon & Ors v. Home Secretary, State of Bihar9, wherein the Hon'ble Supreme Court has iterated that:

"Speedy trial is, as held by us in our earlier judgment dated 26th February, 1979, an essential ingredient of 'reasonable, fair and just' procedure guaranteed by Article 21 and it is the constitutional obligation of the State to device such a procedure as would ensure speedy trial to the accused. The State cannot be permitted to deny the constitutional right of speedy trial to the accused on the ground that the State has no adequate financial resources to incur the necessary expenditure needed for improving the administrative and judicial apparatus with a view to ensuring speedy trial."

18. P.N. Bhawati, J. in Hussainara Khatoon (supra) said that although the right to speedy trial is not "specifically enumerated as a fundamental right, it is implicit in the broad sweep and content of Article 21" as interpreted in Maneka Gandhi v. Union of India10. It was reiterated that 'reasonable expeditious trial' is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21.

19. The speedy trial of offences is one of the basic objectives of the criminal justice delivery system. Ample provisions have been made in the Code of Criminal Procedure and Police Act for expeditious disposal of matters at various stages. [ Sections

1979 AIR 1369

(1978) 1 SCC 248

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157, 167, 173, 309 of Code of Criminal Procedure and the committal proceeding with respect to sessions judge; and also the rules framed under Sections 7, 12 of Police Act 1861.] Although the problem of delay in disposal of cases is not a recent phenomenon, of late it has assumed gigantic proportions. A number of committees and commissions have been set up to look into the matter [The 14th. 77th and 79th Reports of Law Commission of India] but no appreciable change is visible. There are several stages of delay in disposal of cases by courts. The various reasons of delay mainly are, (i) the absence of witnesses, (ii) absence of counsel, (iii) adjournments, (iv) crowded lists, (v) failure to examine witnesses though present,

(vi) absence of a system of day-to-day hearing and (vii) delay in the delivery of the judgments.

20. The fundamental right to speedy trial is a result of judicial activism shown in respect of Article 21. The legal basis of the right is justified on the strength of the Magna Carta (1215) which provided that justice or right will neither be sold nor denied or deferred to any man. In USA, the right to speedy trial has been guaranteed by the VI Amendment of the US Constitution. The VI Amendment of the US Constitution says that 'in all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial'.

21. The social ecology of delayed trials has been further probed by the Apex court in a number of cases such as Mantoo Majumdar v. State of Bihar11, Khatri (II) v. State of Bihar12,

(1980) 2 SCC 406

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Veena Sethi v. State of Bihar13 with the help of Articles 14, 19 and 21 of the Indian Constitution. For example, Justice Krishna Iyer in Nimeon Sangama v. Home Secretary, Govt. of Meghalaya14 emphasised that expeditious trials and investigation are components of personal liberty. In Kadra Pahadiya (II) v. State of Bihar15 the Hon'ble Supreme Court re-emphasised that right to speedy trial was a fundamental right and the aggrieved person may approach the court for necessary directions to the state government and other appropriate authorities for enforcement of the right of the person. Recently, in Abdul Rahman Antulay v. R.S. Nayak16, the right was reemphasized in the following words by the Hon'ble Supreme Court:

"Fair, just and reasonable procedure implicit in Article 21 of the Constitution creates a right in the accused to be tried speedily."

22. The fundamental right to speedy trial is peculiar in character and is generically different from other constitutional rights of the accused. The right is in the interest of the accused if he is innocent. He does not suffer unduly for a long period. But it also works against him if he is actually guilty of the offence. The right is also in the interest of prosecution because it does not face the problems such as non-availability of witnesses and disappearance of evidence etc. But sometimes, it also goes against the prosecution specially when the

(1981) 1 SCC 627

A.I.R. 1983 S.C. 339

(1980) 1 SCC 700

A.I.R. 1982 S.C. 1167

[(1992) 1 SCC 225

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prosecution does not have hundred per cent foolproof case against known or hardened criminals. But the right strengthens the administration of justice because of the certainty of application of penal sanctions. It is this amorphous quality of right which makes the effects of its denial unpredictable.

23. The Petitioner herein was given maximum sentence of seven years in a case which was prosecuted by the CBI, after he pleaded guilty of the crime of committing fraud and deceiving investors which he has already served the sentence. He had also pleaded guilty of the same offence in two other cases. It has been submitted that all investigations in the PMLA case is over and the trial in the said case has not yet commenced. It is a matter of great concern that the Petitioner has been in detention for more than 8 years as on today, however, the trial in the instant case has not yet been commenced. The longevity of detention of the under-trial prisoners without commencement of trial defeats the very purpose of Criminal Justice System.

24. Considering the submissions made, facts and circumstances of the case and the cases cited hereinabove, it is directed that the Petitioner be released on bail in the aforesaid case with some stringent terms and conditions as deemed just and proper by the learned court in seisin over the matter with further conditions that: -

i. the Petitioner shall appear before the learned trial court on each date of posting of the case; ii. he shall not indulge in similar activities in future; and

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iii. he shall not tamper with evidence of the prosecution witnesses in any manner.