Mahammed Naseer vs Assistant Director
2023 Latest Caselaw 14993 Ori

                                    IN THE HIGH COURT OF ORISSA AT CUTTACK
                                                  BLAPL No.7356 of 2023
                            (In the matter of an application under Section 439 of the Criminal
                            Procedure Code, 1973)


                                Mahammed Naseer                              ....             Petitioner(s)
                                                            -versus-
                                Assistant Director, Enforcement      ....                Opposite Party(s)
                                Directorate, Government of India,
                                Kolkata

                                 Advocates appeared in this case through Hybrid Arrangement Mode:

                                For Petitioner(s)                   :          Mr. Tanmay Mishra, Adv.


                                For Opposite Party (s)              :                Mr. G. Agarwal, Adv.

                                                        CORAM:
                                                        DR. JUSTICE S.K. PANIGRAHI

                                                         DATE OF HEARING:-26.09.2023
                                                        DATE OF JUDGMENT: -20.11.2023
                            Dr. S.K. Panigrahi, J.

                            ECIR   Dated     Sub-Zone     Case No. and                         Sections
                             No.                          Courts' Name
                            07   18.11.2009 Bhubaneswar PMLA        Case                  Sections 406/ 420/
                                                        No.47 of 2017                     468/ 471/ 34 of the
                                                        pending in the                    I,.P.C.        and
                                                        court          of                 Sections 4, 5 and 6
                                                        learned Special                   of the Prize Chits
                                                        Judge,     C.B.I.,                and         Money
                                                        Bhubaneswar                       Circulation
                                                                                          Schemes
                                                                                          (Banning)      Act,
                                                                                          1978.

Digitally Signed
Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38

1. This application is arising out of PMLA Case No.47 of 2017 arising out

of ECIR No.7 of 2009, pending before the Special Judge, C.B.I.,

Bhubaneswar wherein the petitioner has been implicated and charge

sheeted for commission of alleged offences punishable U/s.3 of the

Prevention of Money Laundering Act, 2002, in connection with CBI

EOW P.S. Case No. PMLA Case No.47 of 2017 arising out of ECIR

No.7 of 2009.

I. FACTUAL MATRIX OF THE CASE:

2. The prosecution case as alleged in nutshell is that one Niranjan Sahu

lodged the FIR alleging that in the month of September he deposited a

sum of Rs.10,000/- in M/s. Fine Indi Sales Pvt. Ltd., Kanpur (herein

after referred to as M/s. FIPL) in their Multi Level Marketing Scheme

(herein after referred to as MLM Scheme) towards product booking.

One Somnath Panda had introduced the informant about the process

of this business and also managed to induct him into this business.

Accordingly with a hope to get benefit, the informant joined the

business and also received online money receipt time to time, but has

not received either the products or the product vouchers. It is also

mentioned that as per his knowledge one Amiya Kumar Pani had

started the business in Odisha and afterwards one Manmath Kumar

Panda had sponsored one Srijukta Pitamber Raj of Balasore. After

getting returns for three to four months the informant had made a top

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 up of Rs.40,000. Till this date the informant has made to join around

twenty people in this business and has given a deposit of Rs.5,00,000/-.

3. As per the Company Rules and Regulations so also online guidelines,

after opening an account in ICICI Bank, the informant transferred

money through cheques into Company account from his own account

and after getting the Payment Verification Code no. through email, he

made people to join the business online. Many people from far and

near have made product bookings and are getting bonus. As some

people have no Bank accounts in the aforesaid bank, the petitioner

had deposited his money in his account and transferred the same to

Company's account. As per Company system a person receives a sum

of Rs.1000 per month if he makes a product booking of Rs.10,000 and

after deduction of TDS receives a sum of Rs.897 in core banking

account. It is alleged that as per agreement of the Company, product

or product voucher have not been supplied till date. The informant

had joined the Company with a belief that it is a product based

business, but instead of getting the products, the informant was

getting money every month. On the basis of above allegation FIR was

lodged as Sahadevkhunta P.S. Case No. 118 of 2009 against officials of

M/s FIPL for commission of offences under section 406/420/468/471/34

of IPC and section 4/5/6 of Prize Chit and Money Circulations Scheme

(Banning) Act, 1978 and investigation started.

4. On the very next day, the said FIR no.118/09 registered on the

complaint of Niranjan Sahu was transferred to the Crime Branch and

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 FIR no.17/09 was registered at P.S. CB-CID u/s 406/420/468/471/34 IPC

and Sections 4, 5 & 6 of the Prize Chits & Money Circulation Schemes

(Banning) Act, 1978.

5. In course of investigation of the aforesaid case, one Writ Petition was

preferred by President of M/s All India Networks Welfare Trust, a

registered trust of duped and gullible thousands and thousands of

investors of Karnataka, Tamil Nadu and Andhra Pradesh, with a

prayer to protect the fund of investors. This Court in the aforesaid

Writ Petition bearing WP(C) No.7693 of 2011 vide its order

dtd.12.12.2012 was pleased to direct that the investigation of the case

be handed over to CBI and that the Crime Branch shall assist the CBI

in the investigation. Accordingly, RC 2(E) of 2013- Kol was registered

on 1.03.2013 and CBI investigated the case. In course of investigation

the accounts of the Company was freezed. The accused persons were

also co-operating with the investigation. After completion of

investigation on 14.12.2016 the Investigation Officer submitted charge

sheet.

II. PETITIONER'S SUBMISSIONS:

6. Learned counsel for the Petitioner(s) earnestly made the following

submissions in support of his contentions:

7. The allegations made in the F.I.R. are entirely false and fabricated. The

F.I.R. lodged by the informant has been lodged to wreak vengeance

against the petitioner. As it reveals from the F.I.R. is that the entire

story is concocted one and it has been lodged deliberately only to

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 harass the petitioner. As such, the petitioner is entitled to be enlarged

on bail.

8. There is no material to make out prima facie involvement of the

petitioner in the alleged crime. The petitioner has no mens rea such as

to constitute an offence, without ingredients being established, there is

no offence made out against the petitioner. Therefore, the petitioner is

entitled to be enlarged on bail.

9. As per the policy, the Company has been selling the Suit Length to the

people at large for which, the purchaser was required to deposit

necessary value of Suit Length in the Bank account maintained by the

Company in ICICI bank by cheque and/or pay order.

10. Subject to deposit of the amounts, the Company had been issuing

necessary purchase voucher on the basis of which, the Company had

been delivering the product to the concerned purchaser. As per policy

of the Company, if a Customer does not intend to take delivery of the

product immediately, he is entitled to enter into a regular agreement

with the Company draft of which is also published on the website.

Upon such agreement being signed, it was provided that if the said

customer brings other customer for the Company, he was entitled to

get necessary commission on the amounts paid by other customers.

11. Since the Company had been dealing in sales of the cloth, there was a

huge margin in the sale price and the cost of the Company and

accordingly, as per the policy of the Company, the Company had also

been sharing the profits generated by them with their respective

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 Customers which were paid on monthly basis subject to such profits

made and no such deposit had ever been taken from any of the

Customer nor any fixed income had been promised on monthly basis.

12. The said facility was available only for a period of one year and within

the said period, the concerned Customer was duty bound to take

delivery of the cloth materials, and if within the period of one year the

Customer so chooses, then he was entitled to claim refund of amounts

paid by him which were refunded by the Company on the terms and

conditions already published on their website.

13. In the year 2009 the first FIR was lodged which was registered as

Sahadev khunta P.S Case No. 118 of 2009. Since 2009 till date different

investigation agencies have investigated the matter and subsequently

in obedience to the order of the SP, CB CID, Orissa, the DSP, CID CB,

Cuttack Orissa took charge of investigation of the case from IIC

Sahadev khunta PS. On basis of the said FIR, Enforcement Directorate,

registered an ECIR for the purpose of the investigation under the

provisions of PMLA. None of the investigating officers or anybody

have ever complained against the petitioner regarding interfering in

the investigations or tampering the materials/evidence. Rather the

petitioner was co- operating with the investigation. The petitioner was

never arrested by the Enforcement Directorate before he was

remanded to custody in CBI case.

14. It is well settled in law that if the accused has not been arrested during

investigation, the accused is entitled to be released on hail as the

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 circumstances of his having not been arrested during investigation or

not being produced in custody is itself sufficient to entitle him to be

released on bail. In other words, when chargesheet was submitted

showing the accused not arrested, that itself shows there is no need of

custodial interrogation of accused. Therefore, the petitioner is entitled

to be released on bail.

15. It is pertinent to mention here that the trial of both CBI case and ECIR

lodged by Enforcement Directorate have been clubbed. Since charge

sheet has already been submitted and documents have already been

seized, there is no chance of tampering evidence. The petitioner was

cooperative during investigation and never misused his liberty of not

being arrested during investigation. It is also mentioned here that the

petitioner is a permanent resident of his locality, having his family

members and ancestral property. Therefore, there is no scope for his

absconding, if enlarged on bail.

16. The petitioner is a blind person. This fact has been recorded by the

Supreme Court while granting bail. Thus, the petitioner is entitled to

bail under Section 45 of the PMLA Act. Every aspect of the business

model of the company was clearly revealed to its distributors keeping

nothing ambiguous from the very inception of the business. Thus

there being no misrepresentation from the end of company, the said

impugned business transactions cannot be attributed to the petitioner

on the basis of Section 120(B)/420 of IPC. It is also mentioned here that

on bare reading of charge sheet as well as statement of the witnesses

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 the case of the prosecution is nothing but a contractual dispute, which

is civil in nature.

17. The entire transaction of the company is on website and the mode of

payment is also by Bank. None of the customers were claiming any

default by the company prior to freezing of the account of the

company by Bank. Therefore, there is absolutely no material against

the petitioner. As such, the petitioner who has no role in the alleged

crime is entitled to be released on bail.

18. Orissa High Court in the Writ Petition bearing WP(C) No.7693 of 2011

vide its order dtd.12.12.2012 was pleased to direct that the

investigation of the case be handed over to CBI and the Crime Branch

shall assist the CBI in the investigation. Accordingly. RC 2(E) of 2013

Kol was registered on 1.3.2013 and CBI investigated the case. In course

of investigation the accounts of the Company were freezed. The

accused persons were also co-operating with the investigation. After

completion of investigation the 10 submitted charge sheet did

14.12.2016 and kept the investigation open. Subsequently

investigation has been completed and final charge sheet has been filed

by CBI. The petitioner was never arrested by the CBI and had

cooperated in the investigation. The petitioner was remanded to

custody when he surrendered before the Court. In the meantime the

petitioner has been granted hail by the Hon'ble Supreme Court in the

CBI case.

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38

19. As per allegation made in the F.I.R., so also statement of the witnesses

no offences is made out against the petitioner. In the F.I.R. there is

absolutely no specific allegation against any of the petitioner. The co-

accused Md. Arif has also been granted bail by the Hon'ble Supreme

Court. Therefore, the petitioner who has no role in the alleged crime is

entitled to be enlarged on bail.

20. The petitioner is an innocent person having no nexus in the alleged

offence, languishing in jail custody since 14.02.2019 without any fault,

his further detention with hardened criminals will cause prejudice to

his life. Moreover, the petitioner who is a blind person is inside the

custody for more than 4 years without any fault. Therefore, the

petitioner is entitled to the benefit of Section 436-A CrPC.

III. COURT'S REASONING AND ANALYSIS:

21. Section 45 of the Prevention of Money Laundering Act, 2002 ('PMLA')

lays down conditions to be satisfied for the purpose of granting bail to

an accused charged with the offence of money laundering. The

following points are noteworthy in this regard:

"The said section states that no person accused of an offence under the PMLA shall be released on bail 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

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38

- that he is not likely to commit any offence while on bail."

22. In the present case, it is pertinent to mention here that the trial of both

CBI case and ECIR lodged by Enforcement Directorate have been

clubbed. Since charge sheet has already been submitted and

documents have already been seized, there is no chance of tampering

evidence. The petitioner was cooperative during investigation and

never misused his liberty of not being arrested during investigation. It

is also mentioned here that the petitioner is a permanent resident of

his locality, having his family members and ancestral property.

Therefore, there is no scope for his absconding, if enlarged on bail.

23. The petitioner is a blind person. This fact has been recorded by the

Supreme Court while granting bail. Thus, the petitioner is entitled to

bail under Section 45 of the PMLA Act.

24. In the case of Vijay Agrawal through Parokar v. Directorate of

Enforcement1, the Delhi High Court held as follows:

"30. The jurisprudence of the bail positively lays down that a liberty of a person should not ordinarily been interfered with unless there exist cogent grounds. Despite, the twin conditions, it is not necessary that at the stage of bail, the Court has to come to the conclusion that the Applicant is not guilty for such an offence. The Court is at the stage of has to examine the case on the scale of broad probabilities. The Court at this stage is required to record an objective finding on the basis of material available on record and no other purpose.

BAIL APPLN. 1762/2022, CRL.M.(BAIL) 182/2023 (Delhi High Court) Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38

33. It is an admitted case that the Applicant was not an accused in the predicate offence. The Applicant‟s name also did not appear in the ECIR and in the first complaint filed by the E.D the name or role of the accused was not mentioned. It may again be reiterated even at the cost of the brevity that even as per the Vijay Madanlal Choudhary (Supra) though, the twin conditions provided under Section 45 of 2002 Act, restrict the right of accused to grant of bail but cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. It is a settled proposition that the discretion vested in the Court has to be exercised in accordance with the law and has to be guided by the principles of law.

35. In the present case, the Applicant is stated to be renowned developer and his plea that he did not know that he is dealing with the tainted money cannot be brushed aside mechanically. If the liberty of an individual is concerned, the Court cannot proceed merely on the basis of assumptions and presumptions. The evidentiary value of the statement recorded under Section 50 of PMLA has to be tested at the end of the trial and not at the stage of bail. The twin conditions of Section 45 do not put an absolute restrain on the grant of bail or require a positive finding qua guilt."

25. It is well settled that the court is only required to look at the prima

facie case and is not required to look into the test of guilt. It is required

to maintain a delicate balance between the judgment of acquittal and

conviction and an order granting bail before commencement of trial.

26. In the present case, the entire transaction of the company is on website

and the mode of payment is also by Bank. None of the customers were

claiming any default by the company prior to freezing of the account

of the company by Bank. Therefore, there is absolutely no material

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38 against the petitioner. As such, the petitioner who has no role in the

alleged crime is entitled to be released on bail.

27. With respect to the aforesaid discussion, this Court is inclined to grant

bail to the petitioner with certain conditions. Accordingly, it is

directed that the court in seisin over the matter shall release the

Petitioner on bail in the aforesaid case on stringent terms and

conditions 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 any criminal offence while on bail and iii. he shall not tamper with the evidence of the prosecution witnesses in any manner.

28. Violation of any of the conditions shall entail cancellation of the bail.

29. The BLAPL is, accordingly, disposed of.

(Dr. S.K. Panigrahi) Judge

Orissa High Court, Cuttack, Dated the 20th Nov., 2023/

Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR

Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 20-Nov-2023 17:26:38