Calcutta High Court (Appellete Side)
Amit Banerjee vs Shri Manoj Kumar on 10 March, 2016
Author: Joymalya Bagchi
Bench: Joymalya Bagchi
1
IN THE HIGH COURT AT CALCUTTA
Criminal Miscellaneous Jurisdiction
BEFORE:
The Hon'ble Mr. Justice Joymalya Bagchi
C.R.M. 1209 of 2016
AMIT BANERJEE
VERSUS
SHRI MANOJ KUMAR, ASSISTANT DIRECTOR,
ENFORCEMENT DIRETORATE
For the petitioner : Mr. Milon Mukherjee, Sr. Adv.
Mr. Suman De
For the Enforcement
Directorate : Mr. Kaushik Chanda, Addl.
Solicitor General
Mr. Jatinder Singh Dhatt
Heard on : March 10, 2016
Judgement on : March 10, 2016
Joymalya Bagchi, J. :
Leave is granted to correct the cause title in the supplementary affidavit. This application for bail has been preferred on behalf of the petitioner who is in custody for 268 days. It appears that an initial complaint was filed on behalf of the enforcement directorate against the accused company and its directorate on 24.08.2015. Cognizance was taken thereon under Section 3 read with Section 2 17(1)(2) of Prevention of Money Laundering Act, 2002 (hereinafter referred to as PML Act) read with Section 4 of the said Act and leave was given to conduct further investigation.
Pursuant to further investigation the petitioner who is a senior field officer of the accused company was arrested and interrogated. In conclusion of further investigation, a supplementary complaint was filed against the petitioner and another accused, namely, Arun Mukherjee in addition to the earlier accused persons. The supplementary complaint was accepted and cognizance was taken thereon by order dated 18.08.2015.
Prayer for bail of the petitioner was rejected by the Special Court on 04.02.2016. Thereafter the petitioner has approached this Court.
Mr. Mukherjee, learned senior counsel appearing for the petitioner submits that he is in custody for 268 days and his involvement did not transpire in the course of the initial investigation. Materials collected in the course of subsequent investigation as recorded in the averments of the supplementary complaint also shows that the petitioner was associated with the company on or after 2009 whereas the debentures floated and the investments made by the public with regard thereto were between 2001 to 2008. He also submitted amounts so collected have been subsequently refunded to the depositors. Hence, by no stretch of imagination the petitioner could have played any role in the alleged deception or violation of the provisions of law relating to such public offences on behalf of the accused company. He submitted that the petitioner is not an accused in respect of any scheduled offence under the provisions of the SEBI Act 3 or otherwise and, therefore, prosecution of the petitioner under the PML Act was unwarranted. He further submitted that no property in the hand of the petitioner was attached in exercise of powers under Section 5 of the Act so as to indicate he is directly or indirectly connected with the proceeds of crime of any scheduled offence. Accordingly, no case has been made out against the petitioner in respect of the offences under PML Act.
He further submitted that the powers of this Court under Section 439 Cr.P.C. are not trammeled by the restrictions engrafted in Section 45 of the PML Act and, therefore, there is no embargo in granting bail to the petitioner in view of the period of detention and the extent of his complicity in the alleged crime.
He further criticized the procedure followed by the directorate in filing a supplementary complaint and the Special Court taking cognizance thereon. He vehemently argued that there cannot be a second cognizance of the self-same offence and cognizance of an offender is alien in criminal law. He further submitted that in view of the fact that the second complaint does not disclose the involvement of the petitioner in respect of any scheduled offence or as no proceeds of crime were attached in his hands. There is no embargo in granting of bail to the petitioner bearing in mind the fact that the investigation is complete and there is hardly any prospect of commencement of the trial in the near future.
Per contra, Mr. Chanda, learned Additional Solicitor General submitted that for invoking Section 3 of the PML Act against an accused prosecution of the said accused for a scheduled offence is not a sine qua non. The words used in Section 3 of the PML Act is wide enough to include 4 all abettors and/or conspirators who are involved in secreting the proceeds of crime arising out of a scheduled offence. Prima facie, materials have been collected in the course of subsequent investigation implicating the petitioner in playing of pivotal role in secreting and/or concealing the proceeds of crime by monitoring the activities of the agents and/or associates of the accused company and accordingly in view of the restriction imposed in the matter of grant of bail under Section 45 of the Act, prayer for bail ought to be rejected. He relied on various authorities interpreting a pari materia provision namely Section 37 of the NDPS Act, in support of such contention. Mr. Chanda further submitted that the restrictions under Section 45 of the PML Act override the powers of the High Court in granting bail under Section 439 of the Code. He further submitted that self-same issue has been decided by the Apex Court in respect of another co- accused person in the case of Goutam Kundu vs. Manoj Kumar, Assistant Director, Eastern Region, Directorate of Enforcement (Prevention of Money Laundering Act), Govt. of India in Criminal Appeal No. 1706 of 2015. He submitted that in the face of the aforesaid authority there is no escape from the conclusion that the restriction under Section 45 have to be read as a limitation in the power of granting of bail by the High Court. He concluded by submitting that the subsequent complaint is a continuation of the earlier complaint in view of the leave granted by the trial Court vide order dated 21.04.2015 and relied on (2015) 9 SCC 609 (S.R. Sukumar vs. S. Sunaad Raghuram) in support of such contention.
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With regard to the issue as to whether the powers relating to bail under Section 439 of the Code of Criminal Procedure is hedged by the limitations engrafted under Section 45 of the P.M.L. Act., let me examine the relevant provisions under Sections 44 and 45 of the P.M.L. Act, which read as follows: -
"44. Offences triable by Special Courts. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) -
[(a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed :
Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or]
(b) a Special Court may, upon a complaint made by an authority authorized in this behalf under this Act take [cognizance of offence under section 3, without the accused being committed to it for trial].
[(c) If the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering under sub-clause (b), it shall, on an application by the authority authorized to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed.] [(d) a Special Court while trying the scheduled offence or the offence of money laundering shall hold trial in accordance with the provisions of the 6 Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Court of Session.] (2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court" designated under section 43." (emphasis supplied) "45. Offences to be cognizable and non-bailable - (1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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 ;
Provided that a person who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the special court so directs ; 7
Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by -
(i) the Director ; or
(ii) any officer of the Central Government or State Government authorized in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.
[(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorized, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail." (emphasis supplied) It is trite law that a special law would prevail over the general powers provided under the Code of Criminal Procedure. However, Mr. Mukherjee has urged that in view of sub section 2 of Section 44, which opens with a non obstante clause, the powers relating to bail under Section 439 are protected and not restriction by the pre-requisites as engrafted in Section 45 of the PML Act. 8
I am unable to accept such contention on the premise that the words used in the non obstante clause are of restrictive nature and clearly indicative of its scope of operation. The non obstante clause in sub-section (2) of Section 44 of PML Act saves the power of the High Court under Section 439 Cr.P.C. from the operation that section, that is Section 44 and not other provisions of the Act including Section 45 thereof, in fact, obviates the applicability of the provisions of Section 44 of the said Act of 2002 and not the other provisions thereof including Section 45 therein.
That apart, the aforesaid provisions under the Act of 2002 are in pari materia to the provisions of Section 36A(3) and section 37 of the NDPS Act. While dealing with the aforesaid provisions, the Apex Court in Narcotics Control Bureau vs. Kishan lal & Ors. reported in (1991) 1 SCC 705 held that the restriction under Section 37 of the Act will restrict the powers of the Court to grant bail under Section 439 of the Code. Similar view was taken by the Apex Court in Union of India Vs Rattan Mallik @ Habul [2009 (2) SCC 624] wherein the Apex Court held as follows :
"13. It is plain from a bare reading of the non-obstante clause in the Section and Sub-section (2) thereof that the power to grant bail to a person accused of having committed offence under the NDPS Act is not only subject to the limitations imposed under Section 439 of the Code of Criminal Procedure, 1973, it is also subject to the restrictions placed by Sub-clause (b) of Sub-section (1) of Section 37 of the NDPS Act. Apart from giving an opportunity to the Public Prosecutor to oppose the application for 9 such release, the other twin conditions viz. ; (i) the satisfaction of the Court that there are reasonable grounds for believing that the accused is not guilty of the alleged offence ; and (ii) that he is not likely to commit any offence while on bail, have to be satisfied. It is manifest that the conditions are cumulative and not alternative. The satisfaction contemplated regarding the accused being not guilty, has to be based on "reasonable grounds". The expression 'reasonable grounds' has not been defined in the said Act but means something more than prima facie grounds. It connotes substantial probable causes for believing that the accused is not guilty of the offence he is charged with. The reasonable belief contemplated in turn points to existence of such facts and circumstances as are sufficient in themselves to justify satisfaction that the accused is not guilty of the alleged offence. [Vide Union of India v. MANU/SC/7905/2007 : Shiv Shanker Kesari 2008 CriLJ 335 ]. Thus, recording of satisfaction on both the aspects, noted above, is sine qua non for granting of bail under the NDPS Act."
The aforesaid provisions of the P.M.L. Act, in fact, fell for decision in the case of Gautam Kundu Vs Manoj Kumar in Criminal Appeal No. 1706 of 2015 wherein the Apex Court while dealing with the case of another co-accused person in the instant case has held as follows: -
"29. Section 45 of the MPLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure 10 in case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail to any person accused of an offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule of the PMLA : (i) That the prosecutor must be given an opportunity to oppose the application for bail ; and (ii) That the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not likely to commit any offence while on bail.
30. The conditions specified under Section 45 of the PMLA are mandatory and needs to be complied with which is further strengthened by the provisions of Section 65 and also Section 71 of the PMLA. Section 65 requires that the provisions of Cr.P.C. shall apply in so far as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr.P.C. would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 of Cr.P.C. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the Authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant." 11
For the aforesaid reasons, I am unable to accept the contention of the learned Senior Counsel for the petitioner that the power to grant bail under Section 439 is not restricted by the limitations engrafted under Section 45 of the Act. In this perspective, if one examines the materials collected in the course of investigation as reflected in the subsequent complaint, I find that there are sufficient materials on record, which show that the petitioner as a Senior Field Officer had played a role in monitoring the activities of the agents of the company in dealing with the proceeds of crime which had accrued in the credit of the company pursuant to the commission of the scheduled offence for which prosecution has been launched against the said company. It has been vehemently argued that the petitioner had involved himself in the business of the company on or after 2009 while the investments in the company, which constitute the ingredients of the scheduled offence were made between 2001- 2008.
Hence, the petitioner cannot be said to be a person had played any role in the inviting the public to make investments in the debentures issued in violation of the provisions of the Companies Act, or allied laws so as to constitute the ingredients of the offence under Section 3 of the PML Act.
Section 3 of the PML Act reads as follows :
"3. Offence of money-laundering - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected [proceeds of crime including its concealment, 12 possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering".
The definition of the said offence is couched in wide expression indicating that anyone who directly or indirectly attempts to indulge or knowingly assists or is involved in any process or activity connected with proceeds of crime including its concealment, possession, acquisition, use and projecting or claiming as untainted property would be guilty of the offence.
There is no whisper in the said provision that an offender under Section 3 of the P.M.L. Act must be prosecuted in respect of a scheduled offence. It is true that in view of the definition of 'proceeds of crime' under Section 2(u) of the Act, such properties, which are directly or indirectly derived or obtained through activities, which amount to a 'scheduled offence' would constitute 'proceeds of crime', however, subsequent action of an individual pursuant to the acquisition of such 'proceeds of crime' in concealing or dealing with the same or portraying the same as 'untainted property' with requisite mens rea can definitely fall within the penal ambit of Section 3 of the said Act. Therefore, in view of the wide amplitude of the penal measure envisaged under Section 3, I am unable to accept the contention that the petitioner must be prosecuted in respect of a scheduled offence or must be in physical possession of proceeds of crime so as to be liable under Section 3 of the said Act. Any real and tangible nexus of a person in dealing with proceeds of crime with the requisite knowledge and mens rea would, in my considered opinion, be sufficient to attract the aforesaid penal provision. 13
In such circumstances, I am unable to come to a reasonable belief in the face of the materials on record collected against the petitioner, as reflected in the subsequent complaint particularly at pages 62 and 63 of the supplementary affidavit filed on behalf of the petitioner that he is not guilty of the offence under Section 3 of the PML Act. The relevant averments in the petition of complaint is narrated herein below:
"Sri Amit Banerjee in his statements, inter alia stated that he joined Rose Valley Chain Marketing System Ltd. in the year 2009 as an agent and now working as a Senior Field Employee and used to give support for sales and Marketing. Further Sri Banerjee stated that as a Senior Field Agent, he used to plan for Business Development under the Schemes offered by the Company through their brochure and application form.
That he has other role in the field for the Rose Valley Group Company that he is a Secretary of Rose Valley Field Employ Union since 2011. Further Sri Amit Banerjee was asked to provide the list of Agents and also the name of the agents who are working under his Chain, Sri Banerje evaded the question and did not answer and regarding the Commission Structure Sri Banerjee stated that Commission structure, is spread from Rank 1 to Rank 18, Lower the Rank higher the Commission and average Commission is 18% to 18.5%. All the Commissions are distributed in two ways i.e. one on the basis of self business and other on the basis of his / her team (chain) business.14
On being asked about the Pamphlet with the heading "Sottita Janun" (KNOW THE TRUTH), which was published and circulated by the joint forum of Rose Valley Regd. Field Trade Unions, Sri Banerjee stated that he condemned this type of Leaflet and henceforth he will see that further this type of pamphlet will not be circulated without his approval. Sri Banerjee was also shown, the mobile messages sent by him and e-mails sent by [email protected], to Candid Communication, which he denied to answer.
On 23/06/15 again to the query about Candid Communication Sri Amit Banerjee replied that Sri Gautam Kundu was supposed to answer all the queries, but knowingly Sri Kundu put him into this, as he is not the employee of the company. Sri Kundu knows that agents and investor will listen to him. So, whenever any query comes from any corner of media or from any other agencies Sri Banerjee used to answer. Sri Banerjee also confessed that he used to receive collection from investors in cash or in cheque and he does not keep any record of money collected by him.
He further evaded and stated that the money collected from an investor was deposited in Company's branch office and keeping the record is not his duty and that is the duty of the Company to pay to the investors. On being asked about the commission Sri Banerjee stated that in last 6 years he had received Commission of approx. Rs.1 Crores including himself and chain since 2009."15
From the uncontroverted accusations it appears that the petitioner as a senior field officer knowingly monitored the activities of the agents of the accused company to secret the proceeds of crime and assiduously wanted to create an opinion that such assets constituted 'untainted money' in the hands of the accused company or its agents.
It is, therefore, not possible for a reasonable man of ordinary prudence to come to a conclusion at this stage that the petitioner is not guilty of the aforesaid offence. In the absence of such a conclusion, the limitations of Section 45 applies with full force restricting my discretion to grant bail under Section 439 of the Code of Criminal Procedure.
Coming to the issue of filing of the supplementary complaint, I find that the said complaint was presented before the Special Court pursuant to the leave granted by the Special Court to conduct further investigation. Although the power to conduct further investigation is envisaged in Section 173(8) of the Code relating to Police investigation under Chapter XII of the Code, the said powers would extend to investigation of a crime, cases where investigations are conducted under the special law conducted by any other agency under a special statute, namely PML Act, in view of the fact that 'investigation' as defined in Section 2(h) of the Code is to include investigation conducted by other agencies under special statutes as has been held in Directorate of Enforcement vs. Deepak Mukherjee (1994) 3 SCC 440.
It is trite law that if there are more than one offenders who have committed offence or offences in course of same transaction, they are to be tried together 16 (see Section 223 Cr.P.C.). Accordingly, the filing of the subsequent complaint and the prayer of the prosecuting agency to prosecute the offenders including the petitioner herein in the subsequent complaint along with offenders arrayed in the earlier complaint cannot be said to be a procedure which is alien to law or prejudicial to the interest of the complaint. In this regard, reference may be made to the ratio of the Apex Court in S.R. Sukumar (supra) wherein the Court held that there are limited powers to amend a complaint and in order to correct patent exfacie errors, which do not prejudice the accused or in certain circumstances where the trial of the offence or the offenders in the subsequent complaint are to be conducted together. In the aforesaid factual matrix, I am of the view that the filing of the subsequent complaint and the prayer to proceed against the accuseds therein along with accused persons in the earlier complaint is in no way prejudicial to the interest of the accused persons and is, in fact, for the ends of justice and to avoid multiplicity of proceedings.
It is true that the petitioner is in custody for 268 days, but in view of the materials on record prima facie connecting him with the commission of offence punishable under Section 3 of the P.M.L. Act read with Section 70(1) of the said Act and bearing in mind the restrictions engrafting in Section 45 thereof, I am unable to accede to the prayer for bail of the petitioner at this stage.
The prayer for bail is, accordingly, rejected.
I make it clear that the observations made by me are for the purpose of disposal of the application for bail and shall not have any bearing at any 17 subsequent stage of the proceeding, which, needless to mention, shall be conducted independently and in accordance with law.
Urgent Photostat Certified copy of this order, if applied for, be supplied expeditiously after complying with all necessary legal formalities.
(Joymalya Bagchi, J.) Aloke/AB Item no. 29