Orissa High Court

Jitendra Jha vs Asst. Director on 27 January, 2023

         IN THE HIGH COURT OF ORISSA AT CUTTACK

                   BLAPL No.8986 of 2022

  (In the matter of application under Section 439 of the
  Code of Criminal Procedure).

  Jitendra Jha                         ....        Petitioner

                          -versus-

  Asst. Director, Enforcement          ... Opposite Party
  Directorate, Govt. of India,         .
  Bhubaneswar



  For Petitioner          :   Mr. M.Kanungo,
                              Sr. Advocate


  For Opposite Party      :   Mr. G.Agarwal, Advocate
                              (E.D.)

      CORAM:
                    JUSTICE G. SATAPATHY

               DATE OF HEARING :16.01.2023
               DATE OF JUDGMENT:27.01.2023


G. Satapathy, J.

1. This is an application U/S. 439 of Cr.P.C. by

the Petitioner for grant of bail in connection with Crl.

Misc. (PMLA) Case No. 5 of 2016 for commission of

offence U/S. 3 of Prevention of Money Laundering

Act, 2002 (hereinafter, referred to as "PML Act")

which is punishable U/S. 4 of PML Act pending in the

Court of learned Sessions Judge-cum-Special Judge

(PMLA) Khurda at Bhubaneswar on the allegation of

amassing property and cash to the tune of

Rs.2,56,30,383/- as proceeds of crime which was

seized and attached under the provisions of PML Act.

2. Heard Mr.M.Kanungo, learned Senior Counsel

for the petitioner as well as Mr.G.Agarwal, learned

counsel for Enforcement Directorate (In short, "ED")

and perused the written note of submissions filed by

respective parties.

3. At the inception, this Court feels it proper to

narrate the allegations appearing against the

petitioner in precise which runs as; on 05.03.2010 at

about 10 P.M., the petitioner was stated to be

terrorizing the local businessman of Barbil market

demanding extortion money by showing revolver

(Dada Bati), but since no one could muster courage

to lodge FIR against the petitioner, the IIC

accordingly lodged an FIR vide Barbil P.S. Case No.

58 of 2010 for commission of offences punishable

U/Ss. 307/387 of IPC read with Sections 25 & 27 of

Arms Act against the petitioner and in the course of

search of the house of the petitioner by the IIC and

Police staff, the petitioner fired at police but none

was injured and the IIC, Barbil recovered and seized

cash of Rs.97,15,000/- and gold ornaments of 662

grams from the house of the petitioner and it was

ascertained by the police that the petitioner had

accumulated such cash and property by smuggling

iror ore and demanding extortion as the petitioner

had no legal source of income to acquire such huge

property and cash. On this incident, immediate after

registration of the FIR in the aforesaid case, the

S.P., Keonjhar forwarded the copy of the FIR to the

Asst. Director, Directorate of Enforcement

Bhubaneswar for commission of scheduled offences

by the petitioner and others and accordingly, an

investigation was carried under PML Act in ECIR No.

14 dated 08.05.2010 and in the course of

investigation, ED found the offence U/Ss. 307/387 of

IPC read with Sections 25 & 27 of the Arms Act to be

scheduled offences under PML Act and the petitioner

and others to have acquired property and assets as

proceeds of crime out of stolen iron ore from railway

sidings at Barbil and collecting money illegally from

different persons by way of extortion. After attaching

the property of Rupees more than 2.5 crores, the ED

being represented by the Assistant Director lodged a

complaint against the petitioner and others in

complaint Case (PMLA) No. 5 of 2016 in the Court of

learned Sessions Judge-cum-Special Judge under

PML Act Khurda at Bhubaneswar in which case the

petitioner was taken into custody on 07.09.2022 on

the strength of NBWA issued against him for

remaining absent on 04.08.2022 to move a petition

U/S. 205 of Cr.P.C. for dispensing his personal

attendance in the case.

4. The provision as to bail as contemplated in

Sections 436 to 439 of Chapter XXXIII of Cr.P.C. is

founded on the Philosophy of protecting the

fundamental rights to protection of life and personal

liberty of a person as provided in Article 21 of our

sacred Constitution and Section 439 Cr.P.C. provides

discretion to the High Court and Court of Sessions

for protecting personal liberty of a person but refusal

of such discretion should not be arbitrary or

whimsical. The object of bail in these sections is

primarily to prevent punishment in the form of

imprisonment/ incarceration of the person accused

of offence pending investigation and trial. Law is also

well settled that deprivation of personal liberty of a

accused person at some times in criminal cases is

considered as a punishment, unless the personal

liberty is withheld according to the procedure

established by law. In the above circumstance, the

object of bail is neither punitive nor preventive;

rather for protecting individual liberty of a person

who is undoubtedly accused of offences but failing to

protect the personal liberty of a person without any

lawful excuse is doing like mere lip service than the

coveted action. In the matter of bail concerning

personal liberty of a individual, this Court considers

it profitable to refer to the observations of the

Hon'ble Apex Court in a very recent decision in

Satender Kumar Antil Vrs. Central Bureau of

Investigation and another; (2022) SCC Online

SC 825 which is extracted as under:-

"Liberty is one of the most essential requirements of the modern man. It is said to be the delicate fruit of a mature civilization. It is the very quintessence of civilized existence and the essential requirements of a modern man."

5. Besides, in P.Chidambaram Vrs.

Directorate of Enforcement; (2020) 77 OCR

(SC) 383, the Apex Court in Paragraph-23 has held

under:-

"23. Thus, from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the

offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provide so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case-to-case basis on the facts involved therein and securing the presence of the accused to stand trial."

6. In coming back to the prayer of the petitioner

to grant him bail, this Court feels it apposite to refer

to the rival contentions advanced in the course of

hearing of bail application. In opposing the prayer

for bail of the petitioner, Mr.G.Agarwal, learned

counsel for ED has submitted that the petitioner has

been detained in custody in this case for commission

of offence U/S. 3 PML Act which is punishable U/S. 4

of PML Act basing on the commission of scheduled

offences by the petitioner in Barbil PS. Case No. 58

of 2010 which was tried by the learned Asst.

Sessions Judge, Keonjhar and although the

petitioner was acquitted in the said case, but the

offence of money laundering being an independent

offence, mere acquittal of the petitioner for the

scheduled offence tried separately would not ipso

facto absolve the criminal liability of the petitioner

for the predicate offence under the PML Act as in this

case, the learned trial Court while acquitting the

petitioner had denied to release the seized gold

ornaments and property in favour of him for his

failure to establish such property belonged to him

and by observing so, the learned trial Court had

placed the disposal of the seized cash and gold

ornaments with the State Government and

complaint having filed in this case claiming such

property to be proceeds of crime, the Special Court

has already attached the property of the petitioner

including the aforesaid seized property.

6.1 In counter to such argument, Mr.M.Kanungo,

learned Senior Counsel by filing the certified copy of

order passed by learned Sessions Judge, Keonjhar in

Criminal Appeal No. 11 of 2012 U/S. 454 of Cr.P.C.

against the disposal of property as recorded by

learned Additional Sessions Judge in ST Case No.

23/70 of 2011 which arises out of Barbil P.S. Case

No. 58 of 2010, submits that the learned Sessions

Judge, Keonjhar in an appeal has directed release of

the property in favour of the petitioner and hence,

the said property cannot be considered as a

proceeds of crime and the petitioner having

acquitted in the original criminal case for the

scheduled offence under IPC and the property

having directed to be returned back to the

petitioner, there remains no material to authorize

the further detention of the petitioner in this case.

7. In support of rival claims, both the parties

rely upon the different observations passed by the

Apex Court in Vijay Madanlal Choudhary and

others Vrs. Union of India and others; (2022)

SCC Online SC 929 wherein at Paragraph-281 the

Apex Court has been pleased to observe as under:-

" 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 crime properties. Indeed, in the event of acquittal of the person concerned or being absolved from allegation of criminal activity relating to scheduled offence, and if it is established in the court of law that the crime property in the concerned case has been rightfully owned and possessed by him, such a property by no stretch of imagination can be termed as crime property and ex-consequenti proceeds of crime within the meaning of Section 2(1)(u) as it stands today. On the other hand, in the trial in connection with the scheduled offence, the Court would be obliged to direct return of such

property as belonging to him. It would be then paradoxical to still regard such property as proceeds of crime despite such adjudication by a Court of competent jurisdiction. It is well within the jurisdiction of the concerned Court trying to scheduled offence to pronounce on that matter."

In this case, the learned Sessions Judge has

directed in the Criminal Appeal referred to above for

return of properties to the petitioner but whether the

ED has challenged such order passed by learned

Sessions Judge could not be apprised to this Court,

however in the complaint it has been stated that the

acquittal of the petitioner has been challenged by

the Department in GCRLA No. 1 of 2013 which is

pending as stated in the complaint by the

Department. It is also undoubtedly advanced by Mr.

G. Agrawal, learned counsel for E.D. that even if the

Petitioner has been acquitted of the charge framed

against him in a Sessions trial, a proceeding under

PML Act where the procedure and nature of proof

are totally different from a criminal proceeding

under Cr.P.C., is maintainable, but Mr. M. Kanungo,

learned Senior Counsel for the petitioner by relying

upon the observation made by Apex Court in

Paragraph 467(v)(d) in Vijay Madanlal Choudary

(Supra) submits that the Authorities under the

2002 Act cannot prosecute any person on notional

basis or on the assumption that a scheduled offence

has been committed, unless it is so registered with

the jurisdictional Police and/or pending enquiry/trial

including by way of criminal complaint before

competent forum and if the person is finally

discharged or acquitted of the scheduled offence or

the criminal case against him is quashed by the

Court of competent jurisdiction, there can be no

offence of money laundering against him or any one

claiming such property being the property linked to

stated scheduled offence through him. In support of

his contention, learned Sr. Counsel also relies upon

the order passed on 27.07.2022 in W.P. (c) No.

368 of 2021 (Indrani Patnaik and another Vrs.

Enforcement Directorate and others) wherein

the Apex Court after taking notes of submission

about discharge of the Petitioner therein from

the scheduled offences has been pleased to

observe as under :-

"taking note of the submissions made by the learned Additional Solicitor General and in the interest of justice, we reserve the liberty for the respondents in seeking revival of these proceedings if the order discharging the petitioners is annulled or in any manner varied, and if there be any legitimate ground to proceed under PMLA. Subject to the observations and liberty foregoing, this petition is allowed while quashing the proceeding in Complaint Case No. 05 of 2020 dated 10.01.2020 pending in the Court of Sessions Court, Khurda at Bhubaneswar cum Special Court under the Prevention of Money Laundering Act, 2002. All pending applications also stand disposed of."

8. Addressing the other plank of submission of learned

counsel for the E.D. that the Petitioner is habitual

offender and a hardcore criminal as various cases under

IPC, Arms Act and NSA etc. are pending against him and

investigation reveals that the Petitioner has committed

offences U/Ss. 307/392/394/399/402/411/471/120-B of

the IPC r/w Section 25/27 Arms Act which are scheduled

offences as defined U/S. 2(1)(y) of the PML Act and in

addition to the FIR in Barbil P.S. Case No. 58 of 2010

concerning the present PMLA case, there are six other

cases for commission of scheduled offence under PML Act

still pending for trial and investigation under PML Act is

still going on against the Petitioner and the present

complaint No. 5 of 2016 which arises out of Barbil P.S.

Case No. 58 of 2010 is still pending for adjudication for

proceeds of crime to the tune of Rs. 2,56,30,383.78/-

and supplementary complaint has been filed on

30.03.2017 for an amount of Rs. 11,34,407/- and unless

the Petitioner meets the requirement of Section 45 of the

PML Act, he cannot be released on bail. In reply, learned

counsel for the Petitioner again relies upon the

observation made by the Apex Court in Vijay Madanlal

Choudhary (Supra).

9. In the above context admittedly, there are

restrictions U/S. 45(1) of PML Act for release of persons

accused of an offence under the Act on bail, unless the

twin conditions enumerated therein are satisfied which

are reproduced below for clarity:-

(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.

In the above context of Section 45(1) of PML Act, it

is considered apposite to fall back upon the law laid down

in Paragraph 400 and 401 in Vijay Madanlal Choudary

(Supra).

"400. It is important to note that the twin conditions provided U/S. 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided U/S. 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational, but

judicial, guided by the principles of law as provided U/S 45 of the 2002 Act. xx xx xx xx xx

401. We are in agreement with the observations made by the Court in Ranjitsingh Brahmajeetsingh Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt."

After reading the law laid down in Vijay Madanlal

Choudhary (Supra), this Court considers it expedient to

reiterate that the Petitioner was acquitted of the criminal

case in Barbil P.S. Case No. 58 of 2010 for offence U/Ss.

307/387 of IPC r/w Section 25 and 27 of the Arms Act

which are considered to be the predicate offence leading

to launching of prosecution under PML Act in the present

complaint, but subsequently the property involved in such

criminal case had been directed to be restored to the

Petitioner in criminal appeal no. 11 of 2012 and whether

such order is/was challenged in the higher forum has not

been brought to the notice of this Court. No matter a

complaint under PML Act has been filed and pending

against the petitioner for commission of offence of Money

Laundering, but the acquittal of the petitioner for

commission of offence under IPC as scheduled offence

under PML Act and direction of the Appellate Court for

restoration of property to the petitioner relating to such

offence of IPC, unless the same are varied or set aside

reversing the findings therein, it appears to this Court

that these circumstances of acquittal of petitioner and

direction for restoration of the property to the petitioner

are sufficient to consider about existence of reasonable

grounds for believing the petitioner to have prima facie

discharged the satisfaction of the rigors of Sec. 45(1) of

PML Act, which appears to be logically justified and

fortified by the conclusion made by Apex Court in

paragraph-467(v)(d) in Vijay Madanlal Choudhary

(Supra) that if the person is finally discharged or

acquitted of the scheduled offence or the criminal

case against him is quashed by the Court of competent

jurisdiction, there can be no offence of money

laundering against him or any one claiming such

property being the property linked to stated

scheduled offence through him. It is stated on behalf

of the E.D. that investigation under PML Act is still going

on against the accused-petitioner in six FIRs, out of which

five FIRs are prior to the year 2010 and one FIR is of the

year 2021, but it is not made clear by the E.D. whether

any complaint under PML Act has been filed in respect of

six FIRs. Needless to say, E.D. can initiate proceedings

under PML Act in respect of those six(6) FIRs, if it is

permissible under law and the present complaint in

respect of Barbil PS case No. 58 of 2010 being

independent of the other cases has to be considered

independently and wholly on the facts involved and

dependent in this case. Since the proceeding U/S. 3 of

the PML Act is dependent on illegal gain of property as a

result of criminal activity relating to a scheduled offence,

the activity connected with such property constitutes

offence of money laundering. In other words, according

to Sec. 3 of PML Act, whoever directly or indirectly

attempts to indulge or knowingly assist 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. In this case, of

course, the Petitioner is facing a proceeding under PML

Act for commission of offence of Money Laundering and,

therefore, the rival claims of ED and the petitioner with

respect to the offence and the property attached or

seized by the ED are subject of adjudication and

presumption under PML Act but keeping the Petitioner in

custody for the purpose of trial or in anticipation of any

other complaint or supplementary complaint which is not

in existence at present, would be devoid of any sound

logic, especially when the petitioner had already been

acquitted for commission of scheduled/ predicate offences

and the property seized in connection with that case had

already been directed to be returned back to the

Petitioner, no matter the criminal appeal against such

order of acquittal is pending before this Court.

10. On a careful consideration of facts related to this

case and the law laid down by the Apex Court in Vijay

Madanlal Choudhary (Supra) together with the order

passed in Indrani Patnaik (supra) and keeping in view

the order of acquittal of Petitioner in criminal case for

scheduled offences under IPC and direction for release of

seized property of the criminal case in favour of the

Petitioner and regard being had to the pre-trial detention

of the Petitioner in custody since 07.09.2022 coupled with

the peculiar facts and circumstance involved in this case

persuading this Court to consider that the twin conditions

have been satisfied by the Petitioner, this Court considers

it to be a fit case to extend the benefit of bail to the

Petitioner.

11. The bail application of the petitioner stands allowed

and the petitioner be released on bail by the Court in

seisin of the case on such terms and conditions as deem

fit and proper and subject to his furnishing a cash surety

of Rs. 5,00,000/- (Five lakhs) which shall be kept in fixed

deposit/STDR in any Nationalised Bank, in addition to

furnishing of property surety of Rs. 20,00,000/- (Twenty

lakhs) and bail bonds of Rs. 10 lakhs(Ten lakhs) with two

solvent sureties each for the like amount to the

satisfaction of the learned Court in seisin of the case with

following additional conditions:-

(i) The petitioner shall appear before the Court in seisin of the case on each and every date of

posting without fail unless his attendance is dispensed with.

(ii) The petitioner shall deposit his Passport, if any, in the Court in seisin of the case till conclusion of trial, unless he is permitted to take back such Passport to use for specific purpose during the pendency of case.

(iii) The petitioner shall not leave the country without prior permission of the Court in seisin of the case.

(iv) The Petitioner shall inform the Court as well as the ED as to his place of residence during the trial by providing his mobile number(s), residential address, e-mail, if any, and other documents in support of proof of residence.

It is clarified that the Court in seisin of the case will

be at liberty to cancel the bail of the Petitioner without

further reference to this Court, if any of the above

conditions are violated or a case for cancellation of bail is

otherwise made out.

It is, however, made clear that nothing stated in

the order shall be construed as a final expression or

opinion on the merits of the case and the trial would

proceed independently of the observation made above

and such observation has been made purely for the

purpose of adjudication of the present bail application.

Accordingly, the BLAPL stands disposed of.