Chattisgarh High Court
Arvind Singh vs Directorate Of Enforcement on 6 February, 2025
1
2025:CGHC:6842
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
ORDER RESERVED ON 16.01.2025
ORDER DELIVERED ON 06.02.2025
MCRC No. 7524 of 2024
1 - Arvind Singh S/o Lt. Shri Gopal Singh Aged About 49 Years R/o SA -
8, Metro Hexa, Avanti Vihar Raipur Chhattisgarh.
... Applicant
versus
1 - Directorate Of Enforcement Raipur Zonal Office, 2nd Floor, A -1
Block Pujari Chambers, New Dhamtari Road, Panchpedinaka Raipur,
Chhattisgarh.
...Respondent(s)
For Petitioner(s) : Shri Sunil Otwani, Advocate assisted by Shri Shobhit Koshta and Shri Shashank Mishra, Advocates For Respondent/ED : Dr. Saurabh Kumar Pandey, Advocate (Hon'ble Shri Justice Arvind Kumar Verma) C A V Order The applicant is seeking release on regular bail under section 483 of the Bhartiya Nagrik Surksha Sanhita, 2023 read with Section 45 of the 2 PMLA 2002 in connection with ECIR No. RPZO/04/2024 dated 11.04.2024 registered by the Directorate of Enforcement, Raipur (ED), for the offences under Sections 03 and 04 of the PMLA, 2002. FACTUAL ASPECTS OF THE CASE
2. The applicant was working as an employee of the Bhilai Steel Plant since the year 1995. He has been on Sabbatical leave from 01.04.2020 to 31.03.2023. The Income Tax Department carried out a search and seizure operation on several premises in the State of Chhattisgarh. Subsequent to the aforesaid raids, the IT Department recorded statement of various persons alleged to be part of the liquor syndicate including the applicant.
3. The applicant was arrested on 01.07.2024 by the ED for the alleged offence punishable under Sections 3 & 4 of the PMLA, 2002 in relation to the ECIR 04. This ECIR 04 is identical to the investigation carried out by it previously in relation to another ECIR bearing ECIR No. ECIR/RPZO/11/2022. The applicant was arrested in relation to ECIR 11 and has undergone 10 months of custody. The proceedings in relation to ECIR 11 were ultimately quashed by the Apex Court with a finding that there were no proceeds of Crime therein. Immediately thereafter the ED registered ECIR04 to investigate the case which was quashed by the Apex Court. Despite having in custody for 14 days, the applicant was remanded by the learned Special Judge to a further custody of 8 days and subsequently remanded to judicial custody. The applicant preferred 3 application before the Special Judge (PMLA) ASJ-04, Raipur seeking regular bail which was dismissed vide order dated 8.10.2024.
4. Apart from the instant case, following cases are pending against the applicant.
1. FIR No. 04/2024 registered by the ACB, Raipur under Sections 420, 467,468,471 and 120-B IPC read with Section 7 & 12 of the PC Act. The applicant was arrested and charge sheeted and the matter is pending trial before the court of Special Judge (PC Act), Raipur.
2. ECIR/RPZO/11/2022 for the alleged ofence under Sections 3 & 4 of the PMLA. Prosecution complaint has been filed by the ED in this ECIR on 04.07.2023 however, the Apex Court vide order dated 08.04.2024 in WP (Crl.) 153/2023 has quashed the prosecution complaint with a finding that there was no scheduled offence and no proceeds of crime in relation to the said case.
5. The Chhattisgarh State Police registered an FIR bearing No.
04./2024 on 17.01.2024 at EOW/ACB, Raipur under Sections 420,467,471 and 120-B IPC and 7 & 12 of the PC aCt, 1988 against Mr. Anil Tuteja (Retired IAS), the then Joint Secretary in the State of CG Mr . Anwar Dhebar, Mr. Arun Tripath (ITS) then Special Secretary, Government of Commerce and Industry Department and MD, CG State Marketing Corporation Ltd. Mr Vikas Agrawal @ Subbu, Mr. Sanjay Diwan and others for collecting commissions and supplying unaccounted liquor to government liquor shops resulting in approximate loss of Rs. 2161 crores to the Government.
6. The FIR for the predicate offence registered by ACB/EOW, Raipur CG under Sections 120-B, 420,467 and 471 IPC and 7 & 12 of the PC 4 Act which are scheduled offences included in para 1 & 8 of Part-A of the Schedule to PMLA 2002 as defined under Section 2(1)(y) of the Act. Accordingly, enquiries were initiated under the PMLA against the persons who are suspected after recording the facts of scheduled offence and initiating money laundering investigation in file No. ECIR/RPZO/04/2024 on 11.04.2024 by the officials of Directorate of Enforcement, Raipur.
7. The ED has filed three prosecution complaints dated 19.06.2024, 30.08.2024 and 5.10.2024 in this case. One PAO 02/2024 dated 02.05.2024 was issued whereby properties to the tune of Rs. 205 crores approximately have been attached and subsequently the same has been confirmed by the learned adjudicating authority vide order dated 7.10.2024 in OC NO. 2318/2024.
SUBMISSION ON BEHALF OF THE APPLICANT
8. Contention of Shri Otwani, learned counsel for the applicant is that the prosecution agency/respondent-ED has already filed prosecution complaint (second PC) against the present applicant on 30.08.2024 and the investigation against the applicant is complete therefore no fruitful purpose would be served to keep the applicant in custody during the trial which is yet to be commenced. He further contended that the prosecution agency has filed three charge sheets against the applicant ie. 19.06.2024, 27.09.2024 and 5.10.2024 and there are 35 witnesses in all and the said ECIR is against nine accused persons spanning into over 21,000 pages. It is further contended that 3-4 charge sheets are yet 5 to be filed in the scheduled offence which would evidently prolong the proceeding under the PMLA being contingent on the proceeding in the scheduled offence resulting in trial. He further submits that the imprisonment before conviction is also punitive amounting to violation of Article 21 of the Constitution of India.
9. Further contention of the counsel for the applicant is that the ED is relying upon the same alleged material that was collected illegally during the course of investigation carried out in relation to the first and second ECIR. He contended that the applicant cannot be prejudiced and his legal rights can't be violated because of the illegal actions of the ED in the first ECIR. The ED cannot derive benefit out of its own illegal actions and arrest the applicant for the second time for the same alleged offence under Section ¾ of the PMLA. It is contended tht the applicant had already undergone ED custody for the maximum permissible period of 14 days om terms of Section 167 Cr.P.C. for the offence under Section 3 of the PMLA. It has been further contended that that the applicant has already been examined by the ED even in relation to the second ECIR and again there was absolutely no necessity of custodial interrogation of the applicant. He has relied upon the judgment of the Apex Court in Vijay Madanlal Choudhary Vs. Union of Inda 2022 SCC OnLine SC929; Arvind Kejriwal Vs. Directorate Enforcement 2024 SCC OnLine SC1703.
10. He contended that it is the case of the ED that ECIR 11 still exists and since the investigation in ECIR 11 and ECIR 04 is identical, the ED 6 cannot prolong the custody of the applicant. The investigating agencies are acting in tandem with each other to elongate the pre-trial incarceration of the applicant. He contended that the respondent/ED has alleged that it is a big scam with vide implication in the society but in the light of the judgment of the Apex Court in Jalaluddin Khan Vs. Union of India 2024 INSC 604, wherein it has been held that role of each accused has to be seen while as an independent. There is no substantial admissible evidence brought on record by the respondent which would establish that the applicant was involved in the activity of manufacturing duplicate holograms, illegal commission from the liquor suppliers for unaccounted official sale of liquor or sale off the record unaccounted illicit country liquor. Apart from the narratives, there is no evidence to substantiate the same.
11. Contention of learned counsel for the applicant is that the applicant had remained in judicial custody for 9 months 22 days in ECIR 11/2022 registered without any predicate offence. He submits that considering the prolonged incarceration of the applicant in relation to the investigation being conducted by different investigating agency for the same alleged offence and having suffered over 9 months of custody in relation to ECIR 11 which is the same investigation as in the instant case, the applicant may be granted bail. He further submits that the applicant cannot be put in jail without trial as bail is the rule and jail is exception even in cases pertaining to the PMLA. He has placed his reliance in the matter of Ramkripal Meena Vs. Directorate of 7 Enforcement, SLP (Crl.) No.3205/2024, wherein the Apex Court has held that :
"7. Adverting to the prayer for grant of bail in the instant case,it is pointed out by the learned counsel for the ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to be examined. The conclusion of proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year. Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and keeping in view the peculiar facts and circumstances of the case, it seems to us that the rigours of Section 45 of the Act can be suitably relaxed to afford conditional liberty to the petitioner. Ordered accordingly."
12. He submits that time and again it has been reiterated by the Apex Court that the right to speedy trial is a facet of the Fundamental right to life of an accused under Article 21 of the Constitution of India. The Apex Court in the matter of Manish Sisodia Vs. CBI and ED (2023) SCC OnLine SC1393 has held that :
"27. However, we are also concerned about the prolonged period of incarceration suffered by the appellant - Manish Sisodia. In P. Chidambaram v. Directorate of Enforcement48, the appellant therein was granted bail after being kept in custody for around 49 days, relying on the Constitution Bench in Shri Gurbaksh Singh Sibbia and Others v. State of Punjab, (1980) 2 SCC 565. and Sanjay Chandra v. Central Bureau of Investigation, (2012) 1 SCC 40 that even if the allegation is one of grave economic offence, it is 8 not a rule that bail should be denied in every case. Ultimately, the consideration has to be made on a case to case basis, on the facts. The primary object is to secure the presence of the accused to stand trial. The argument that the appellant therein was a flight risk or that there was a possibility of tampering with the evidence or influencing the witnesses, was rejected by the Court. Again, in Satender Kumar Antil v. Central Bureau of Investigation and Another, (2022) 10 SCC 51 this Court referred to Surinder Singh Alias Shingara Singh v. State of Punjab (2005) 7 SCC 387 and Kashmira Singh v. State of Punjab, (1977) 4 SCC 291 to emphasize that the right to speedy trial is a fundamental right within the broad scope of Article 21 of the Constitution. In Vijay Madanlal Choudhary (supra), this Court while highlighting the evil of economic offences like money laundering, and its adverse impact on the society and citizens, observed that arrest infringes the fundamental right to life.
49 In P. Chidambaram v. Central Bureau of Investigation, (2020) 13 SCC 337, the appellant therein was granted bail after being kept in custody for around 62 days.
This Court referred to Section 19 of the PML Act, for the in-built safeguards to be adhered to by the authorized officers to ensure fairness, objectivity and accountability. Vijay Madanlal Choudhary (supra), also held that Section 436A of the Code can apply to offences under the PML Act, as it effectuates the right to speedy trial, a facet of the right to life, except for a valid ground such as where the trial is delayed at the instance of the accused himself.
In our opinion, Section 436A should not be construed as a mandate that an accused should not be granted bail under the PML Act till he has suffered incarceration for the specified period. This Court, in Arnab Manoranjan Goswami v.
State of Maharashtra and Others (2021) 2 SCC 427, held that while ensuring proper enforcement 9 of criminal law on one hand, the court must be conscious that liberty across human eras is as tenacious as tenacious can be.
29. Detention or jail before being pronounced guilty of an offence should not become punishment without trial. If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be proper to equate these cases with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, kidnapping for ransom, mass violence, etc. Neither is this a case where 100/1000s of depositors have been defrauded.
The allegations have to be established and proven. The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Code and Section 45 of the PML Act. The reason is that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted, that he be ensured and given a speedy trial. When the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years."
13. Further he has relied upon the decisions of Satender Kumar Antil Vs. Central Bureau of Investigation (2002) 10 SCC 561; Surinder Singh Alias Shingara Singh Vs. State of Punjab (2005)7 SCC387 and Kashmira Singh Vs. State of Punjab (1977) 4 SCC 291. In the 10 matter of Manish Sisodia Vs. ED and CBI (supra), it has been held that :
37. Insofar as the contention of the learned ASG that since the conditions as provided under Section 45 of the PMLA are not satisfied, the appellant is not entitled to grant of bail is concerned, it will be apposite to refer to the first order of this Court. No doubt that this Court in its first order in paragraph 25, after recapitulating in paragraph 24 as to what was stated in the charge-sheet filed by the CBI against the appellant, observed that, in view of the aforesaid discussion, the Court was not inclined to accept the prayer for grant of bail at that stage. However, certain paragraphs of the said order cannot be read in isolation from the other paragraphs. The order will have to be read in its entirety. In paragraph 28 of the said order, this Court observed that the right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 Cr.P.C. and Section 45 of the PMLA.
The Court held that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted that he be ensured and given a speedy trial. It further observed that when the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, would be guided to exercise the power to grant bail. The Court specifically observed that this would be true where the trial would take years. It could thus clearly be seen that this Court, in the first round of litigation between the parties, has specifically observed that in case of delay coupled with incarceration for a long period and depending on the nature of the allegations, the right to bail will have to be read into Section 45 of PMLA.
11
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39. A Division Bench of this Court in the case of Ramkripal Meena v. Directorate of Enforcement5 was considering an application of the petitioner therein who was SLP(Crl.) No. 3205 of 2024 dated 30.07.2024 to receive a bribe of rupees five crore and from whom, an amount of Rs.46,00,000/- was already recovered. In the said case, the petitioner was arrested on 26th January 2022 in connection with FIR No. 402/2021 registered against him for the offences punishable under Sections 406, 420, 120B of IPC and Section 4/6 of the Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992. He was released on bail by this Court vide order dated 18th January 2023. Thereafter, the petitioner was arrested by the ED on 21st June 2023. The Court observed thus:
"7. Adverting to the prayer for grant of bail in the instant case, it is pointed out by learned counsel for ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to be examined. The conclusion of proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year. Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and keeping in view the peculiar facts and circumstances of this case, it seems to us that the rigours of Section 45 of the Act can be suitably relaxed to afford conditional liberty to the petitioner. Ordered accordingly."
44. The learned Special Judge and the learned Single Judge of the High Court have considered 12 the applications on merits as well as on the grounds of delay and denial of right to speedy trial. We see no error in the judgments and orders of the learned Special Judge as well as the High Court in considering the merits of the matter. In view of the observations made by this Court in the first order, they were entitled to consider the same. However, the question that arises is as to whether the trial court and the High Court have correctly considered the observations made by this Court with regard to right to speedy trial and prolonged period of incarceration. The courts below have rejected the claim of the appellant applying the triple test as contemplated under Section 45 of the PMLA. In our view, this is in ignorance of the observations made by this Court in paragraph 28 of the first order wherein this Court specifically observed that right to bail in cases of delay coupled with incarceration for a long period should be read into Section 439 Cr.P.C. and Section 45 of the PMLA.
14. Further it has been reiterated that in cases where the fundamental right to speedy trial of the accused is violated, the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime. He has referred to the judgment of Gulam Nabi shaikh Vs. State of Maharastra, 2024 SCC OnLine SC1693, wherein it has been observed that :
"19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the 13 nature of the crime."
15. He contended that Section 436-A Cr.P.C. should not be construed as a mandate that an accused should not be granted bail under the PMLA till he has suffered incarceration for the specified period of half of the maximum period of imprisonment. The detention or jail before being pronounced the guilty of an offence should not become punishment without trial. As has been held by the Apex Court in the case of Manish Sisodia 1, (2023) SCC OnLine 1393. the right to bail in cases of delay coupled with incarceration for a long period should be read into Section 439 cr.P.C. and Section 45 of the PMLA. The reason is that the constitutional mandate is the higher law and it is the basic right of the person charged of an offence and not convicted, he be given a speedy trial. When the trial is not proceeding for reasons not attributable to the accused, the court unless there are good reasons may well be guided to exercise the power to grant bail.
16. Further Contention of the learned counsel for the applicant is that the bail application of the accused/applicant cannot be rejected on the ground of severity of the offence or due to the bar contained in Section 45 of the PMLA in cases where there is a violation of the right of the accused to speedy trial coupled with long period of pre-trial incarceration as has been held in the case of Manish Sisodia 3 (2024) SCC OnLine SC920. If the trial gets protracted and it is clear that the case will not be decided within a foreseeable time, the accused person is entitled for bail. In several cases, the Apex Court has granted bail to the accused 14 persons solely on the ground of delay in trial coupled with long pre-trial incarceration despite the alleged gravity of the offences and restrictions contained in special statutes on grant of bail. In has referred to the decisions of the Apex Court in the matter of Vijay Nair Vs. ED, SLP (Crl.) Dy.No. 22137 of 2024, wherein it has been held as under:
"12. Here the accused is lodged in jail for a considerable period and there is little possibility of trial reaching finality in the near future. The liberty guaranteed under Article 21 of the Constitution does not get abrogated even for special statutes where the threshold twin bar is provided and such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception. The cardinal principle of bail being the rule and jail being the exception will be entirely defeated if the petitioner is kept in custody as an under-trial for such a long duration. This is particularly glaring since in the event of conviction, the maximum sentence prescribed is only 7 years for the offence of money laundering."
17. Similarly, in the matter of Neeraj Singhal Vs. ED, SLP (Crl.) No. 8439 of 2024, it has been held that :
"2. Keeping in view the period of incarceration undergone by the appellant, Neeraj Singal, and as the trial has effectively not commenced, we accept the present appeals. Accordingly, we direct that the appellant, Neeraj Singal, will be released from jail in connection with ECIR/DLZO-II/06/2019 dated 29.08.2019 for the offence(s) punishable under the Prevention of Money Laundering Act, 2002, in relation to the scheduled offence(s) under Sections 467, 471 and 120B of the Indian Penal Code, 1860 and Section 447 of the Companies Act, 2013, on terms and conditions to be fixed by the trial court."15
18. In the matter of Kalvakunta Kavitha Vs. ED SLP (Crl.) No. 10778 of 2024, it has been held as under:
"10. On perusal of the record, we find that in CBI case charge-sheet has been filed and in ED case complaint has been filed. As such, the custody of the appellant herein is not necessary for the purpose of investigation.
11. The appellant has been behind the bars for the last five months. As observed by us in the case of Manish Sisodia (supra), taking into consideration that there are about 493 witnesses to be examined and the documents to be considered are in the range of about 50,000 pages, the likelihood of the trial being concluded in near future is impossible.
12. Relying on the various pronouncements of this Court, we had observed in the case of Manish Sisodia (supra) that the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial.
13. We had also reiterated the well-established principle that "bail is the rule and refusal is an exception". We had further observed that the fundamental right of liberty provided under Article 21 of the Constitution is superior to the statutory restrictions."
19. In the matter of Prem Prakash Vs. ED , SLP (Crl.) No. 5416 of 2024, it has been held as under:
"46. The Investigating Agency have also referred to ECIR No. 4 as a criminal antecedent. A reference was made to ECIR No. 4 of 2022 pertaining to illegal Stone Mining and related activities in Saheb Ganj, Jharkhand, where the petitioner was arrested on 25.08.2022 and the prosecution complaint was filed on 16.09.2022.16
Insofar as the bail pertaining to ECIR No. 4 of 2022, which is pending in this Court in SLP (Criminal) No. 691 of 2023, at the after notice stage, the merits of the bail in that case will be independently examined. Having examined the facts of the present case arising out of ECIR No. 5 of 2023 and in view of the findings recorded hereinabove, we do not think that the appellant can be denied bail based on the pendency of the other matter. We say so in the facts and circumstances of the present case as we do not find any justification for his continued detention. The appellant has already been in custody for over one year. The Trial is yet to commence. There is a reference to one more ECIR which the Investigating Agency refers to in their counter, namely, ECIR/RNZO/18/2022 but nothing is available from the record as to whether any proceedings have been taken against the appellant. "
20. Further in the matter of Manish Sisodia 3 (2024) SCC OnLine SC920, it has been held as under:
"54. In the present case, the appellant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case, conditions can be imposed to address the concern of the State.
55. Insofar as the apprehension given by the learned ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant."17
21. In the matter of Jainam Rathod Vs. State of Haryana 2022 OnLine SC 1506, it has been observed as under:
"7. The appellant is in custody since 28 August 2019. 187 accused are named in the criminal case by the prosecution. It is stated in the counter affidavit that all except 27 of them have appeared. It is evident that even as regards the balance, 4 (2019) 9 SCC 165 proclamation proceedings are intended to be initiated pursuant to the order of the Special judge dated 25 March 2022. The proceedings are now listed before the Special Judge in July 2022.
9. While the provisions of Section 212(6) of the Companies Act 2013 must be borne in mind, equally, it is necessary to protect the constitutional right to an expeditious trial in a situation where a large number of accused implicated in a criminal trial would necessarily result in a delay in its conclusion. The role of the appellant must be distinguished from the role of the main accused."
22. In the case of Sujay U Desai Vs. SFIO, 2022 SCC OnLine SC1507, it has been held as under:
"7. Having duly considered the provisions of Section 212(6) of the Companies Act, 2013, we are of the view that in the facts of the present case, the appellant ought to be granted the benefit of bail under Section 439 of the Code of Criminal Procedure 1973 since the right to an expeditious trial is protected under Article 21 of the Constitution. We accordingly, direct that the appellant shall be released on bail subject to such terms and conditions as may be imposed by the Sessions Judge, Kanpur in connection with Sessions Trial No. 577 of 2020."18
23. He submits that it is well settled that the object of bail is neither punitive nor preventive. The primary purpose of bail in a criminal case is to ensure that the accused will submit to the jurisdiction of the court and be in attendance whenever his presence is required. Deprivation of liberty must be considered punishment unless it can be required to ensure that an accused person will stand trial when called upon. Punishment can only begin after conviction and necessity is the operative test. He has referred to the judgment in the matter of Gudikanti Narasimhulu Vs. Public Prosecutor, High Court of Andhra Pradesh (1978) 1 SCC 240 it has been held as under:
The significance and sweep of Art. 21 make the deprivation of liberty 'a matter of grave concern and permissible only when the law authorizing it is reasonable, even-handed and geared to the goals of community good and State necessity spelt out in Art. 19. Indeed, the considerations I have set out as criteria are germane to the constitutional proposition I have deduced. Reasonableness postulates intelligent care and predicates that deprivation of freedom- by refusal of bail is not for punitive purpose but for the bi-focal interests of justice- to the individual involved and society affected."
24. It has been contended by the learned counsel for the applicant that even if the allegation is one of the grave economic offence, it is not a rule that bail should be denied in every case. Ultimately, the consideration has to be made on a case to case basis, on the facts. The primary object is to secure the presence of the accused to stand trial. He has referred to the case of P. Chidambaram Vs. ED (2020) 13 SCC 19 791, wherein it has been held as under:
21. 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 provides 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 20 and securing the presence of the accused to stand trial."
25. Shri Otwani, learned counsel for the applicant is that there is no evidence that the applicant is guilty of money laundering. The crux of the allegation against the applicant is that he played a role of facilitating and helping in running the illegal liquor syndicate and no substantive evidence is there against the applicant. The only evidence/material against the applicant is the statements recorded under Section 50 by the ED. The investigation against the applicant in the said ECIR filed by the respondent ED on 30.08.2024 is over and the custody of the applicant is no longer required for the purpose of investigation. The applicant has cooperated with the investigation.
26. Further contention of the learned counsel for the applicant is that the applicant cannot be arrested twice for the same offence under the PMLA and it can be affected only when an accused is considered to be guilty of the offence under Section 3 of the PM:A and guilt can only be established on admissible material. The applicant was already arrested in the same case and had undergone the ED custody of 14 days and the ED is relying upon the same material which was collected during the course of investigation carried out in the first ECIR.
27. It is contended by learned counsel for the applicant that the applicant has no role to pay in the allege liquor scam and he is not guilty of the offence of money laundering. The applicant is an employee of Bhilai Steel Plant and he is never a part of the alleged liquor scam. He is neither involved in the collection of cash amount from any of the shop 21 nor collected any kind of hologram. The allegation that the applicant arranged unaccounted bottles to the distilleries with the company and in the name of his nephew and wife, he has no knowledge about the same. He submits that on 3.10.2023, the truck containing 800 boxes of illegal liquor was caught by the police which was supplied by the M/s. Chhattisgarh Distillery to Bastar with duplicate holograms on bottles and was handed over to the Excise Commissioner. These duplicate holograms were already used by M/s. Welcome Distillery. This clearly shows that the distillers are in habit of supplying unaccounted liquor in connivance with low level excise officers for financial gain and have concocted a complete false story to implicate other individuals and save themselves.
28. It is submitted that as per ED, it is alleged that liquor scam is of Rs. 2161 crores. As per EOW the liquor scam is of Rs. 1660 crores. As per the STF, the liquor same is of Rs. 3200 crores. All this established that the investigation is being conducted by different agencies and calculating different numbers which is baseless. Further the alleged chats being relied upon is of February 2020 and the allegations are made for the period between April 2019-February 2023. it is contended that the allegation of the ED that the collection of bribe by sale of Part-B liquor is on the basis of assumptions and have tried to implicate the officer by using chats and by recording false statements by threatening the persons with arrest. There is no seizure of illegal liquor or holograms and bottles and the Ape Court has opined that prima facie there are no 22 proceeds of crime in the instant case. It is submitted that according to the statement of erstwhile Secretary of the Excise Department, no loss has been caused to the State Exchequer and the liquor trade had taken place as per law. There was no recovery of any unaccounted money, incriminating material, illegal liquor bottles or counterfeit holograms from the applicant or any other persons to implicate the applicant.
29. He contended that there is no admissible material in support of the bogus allegations of the ED and the statements being relied upon by the ED are coerced and completely inadmissible in law. However, it is settled law that the same cannot be considered at the stage of bail in as much as no opportunity to cross-examine is given to the applicant at such stage. He has referred to the decision of Paras Mal Lodha Vs. ED (2017) SCC OnLine Del 8676, wherein it has been observed as under:
"8. Admitted position is that the premises where raid was conducted on 10.12.2016 i.e. R-89, Greater Kailash part-I, New Delhi, did not belong to the petitioner. It is also admitted that at the time of recovery of `2.62 crores in the denomination of `2000 currency notes, the petitioner was not present in the said premises. On being asked whether the currency Rs. 2.62 crores recovered from Rohit Tandon's premises belonged to the petitioner, learned Senior Counsel, on instructions, emphatically denied if the said currency belonged to the petitioner. Learned Standing Counsel for the respondent fairly admitted that no other recovery of any cash was effected at petitioner's instance either at his residence or any other place. When specifically enquired as to how the money recovered from Rohit Tandon's premises was connected with the petitioner, the learned 23 counsel informed that statements of co-accused Rohit Tandon and his employees have been recorded and they have disclosed in their statements that the currency belonged to the petitioner. These statements are to be tested during trial. Status report reveals that Vijay Kumar @ Kant Mishra has claimed ownership of the new currency recovered from the spot before Income Tax Department. No credible evidence is on record to infer as to whom the money belonged and how the petitioner was beneficiary."
30. In yet another decision Chandra Prakash Khandelwal Vs. ED (2023) SCC OnLine Del 1094, it has been held as under:
34. Considering the submission of the petitioner, viz. the petitioner's claim he did not have knowledge if the funds of M/s. PACL were tainted in any manner on account of an order dated 28.11.2003 of Rajasthan High Court in PACL India Ltd. vs. Union of India as also an order dated 26.02.2013 in SEBI vs. PACL India Ltd. in CA 6753-54/2004 wherein, the Hon'ble Supreme Court refused to classify M/s.PACL as CIS but had only directed the SEBI on 22.08.2014 to look into its affairs and that there was no embargo for 18 years upon M/s.PACL on its operation. Admittedly the petitioner was a downstream investor of funds hence his submission he did not knowingly became a party to money laundering cannot be brushed aside lightly. Even otherwise he allegedly was a nominee non-executive director since 11.09.2012 in M/s.DDPL and M/s.Unicorn and prior to 11.09.2012 had nothing to do with these companies; further substantial amount received in the companies of petitioner was returned in the manner alleged above and even Gurmeet Singh's statement would show the petitioner represented the 25 companies were not associated with M/s.PACL. What weigh the statements under Section 50 of PMLA would 24 carry at the end of trial cannot be tested at the stage of bail, more importantly when the intermediary companies were never made an accused in the present ECIR. The ultimate effect of their non-inclusion would be seen at the conclusion of trial. Further considering the order dated 03.09.2020 wherein all remaining co-accused in this ECIR were admitted to bail, this Court has every reason to say the petitioner has passed the test of broad probabilities. Admittedly twin conditions of Section 45 (supra) does not put an absolute restraint on grant of bail or require a positive finding qua guilt."
31. He contended that there is absolutely no material to corroborate the false statements of these individuals who have been arraigned as co-accused persons in the instant case. It is well settled law that the statement of co-accused person is extremely weak piece of evidence and cannot be treated as substantive evidence as against the other co- accused persons. Therefore all the statements under Section 50 of the PMLA sought to be relied upon by the ED to substantiate its allegations against the applicant are inadmissible and does not form the basis for denial of bail. He has relied upon the judgment of Haricharan Kurmi Vs. State of Bihar, AIR 1964 SC 1184, wherein it has been held that:
"13. As we have already indicated. this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co- accused person. in dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach to adopt is to consider the other evidence against such an 25 accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right. As was observed by Sir Lawrence Jenkins in Emperor v. Lalit Mohan Chuckerbutty(1) a confession can only be used to "lend assurance to other evidence against a co- accused". In In re. Peryaswami Noopan,(2) Reilly J. observed that the provision of s. 30 goes not further than this : "where there is evidence against the co-accused sufficient, if,. believed, to support his conviction, then the kind of confession described in s. 30 may be thrown into the scale as an additional reason for believing that evidence."
In Bhuboni Sahu v. King(1) the Privy Council has expressed the same view. Sir. John Beaumont who spoke for the Board observed that a confession of a co-accused is obviously evidence of a very weak type. It does not indeed come within the definition of "evidence" contained in s. 3 of the Evidence Act. It is not required to be given on oath, nor in the presence of the accused, and it cannot be tested by cross-examination. It is a much weaker type of evidence than the evidence of an approver, which is not subject to any of those infirmities. Section 30, however, provides that the Court may take the confession into consideration and thereby, no doubt, makes it evidence on which the court may act; but the section does not say that the confession is to amount to proof. Clearly there must be other evidence. The confession is only one element in the consideration of all the facts proved in the case, it can be put into the scale and weighed with the other evidence." It would be noticed that as a result of the provisions contained in s. 30, the confession has no doubt to be regarded as amounting to evidence in a general way, because whatever is considered by the court is evidence; circumstances which are 26 considered by the court as well as probabilities do amount to evidence in that generic sense. Thus, though confession may be regarded as evidence in that generic sense because of the provisions of s. 30, the fact remains that it is not evidence as defined by s. 3 of the Act. The result, therefore, is that in dealing with a case against an accused person, the court cannot start with the confession of a co-accused person; it must (1) (1911) I.L.R. 38 Cal. 559 at p. 588.
(2) (1913) I.L.R. 54 Mad. 75 at p. 77.
(3) (1949) 76 I.A. 147 at p. 155.
begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence. That, briefly stated, is the effect of the provisions contained in s. 30. The same view has been expressed by this Court in Kashmira Singh v. State of Madhya Pradesh(1) where the decision of the Privy Council in Bhuboni Sahu's(2) case has been cited with approval.
16. Considering the evidence from this point of view, we must first decide whether the evidence other than the confessional statements of the co- accused persons, particularly Ram Surat, on whose confession the High Court has substantially relied, is satisfactory and tends to prove the prosecution case. It is only if the said evidence is satisfactory and is treated as sufficient by us to hold the charge proved against the two appellants, that an occasion may arise to seek for an assurance for our conclusion from the said confession. Thus considered, there can be no doubt that the evidence about the discovery of blood stains on which the prosecution relies is entirely insufficient to justify the prosecution 27 charge against both the appellants. In our opinion, it is impossible to accede to the argument urged before us by Mr. Singh that the said evidence can be said to prove the prosecution case. In fact, the judgment of the High Court shows that it made a finding against the appellants substantially because it thought that the confessions of the co- accused persons could be first considered and the rest of the evidence could be treated as corroborating the said confessions. We are, therefore, satisfied that the High Court was not right in confirming the conviction of the two appellants under S. 396 ,of the Indian Penal Code."
32. In the matter of Sanjay Jain Vs. ED. 2024 SCC OnLine SC 656, it has been held that :
"62. Thus, the confessional statement of a co- accused under Section 50 of the PMLA is not a substantive piece of evidence and can be used only for the purpose of corroboration in support of other evidence to lend assurance to the Court in arriving at a conclusion of guilt."
33. He contended that the none of them had admitted to the fictitious liquor scam in their statement under Section 131 (1A) It Act before the IT Department which is as much a judicial proceeding as the statement recorded under Section 50 of the PMLA. Nothing has been mentioned about the payment of commission or Part A, B or C liquor before the IT department by any individual as alleged by the respondent. The distillers who have given false statements before the respondent had denied making any payment of bribe or of the existence of the imaginary liquor syndicate.
28
34. Next contention of the counsel for the applicant is that the investigation conducted by the ED is mala fide and fictitious. The right to fair trial and investigation is a facet of the right to life and liberty under Article 21 of the Constitution of India. This right can be taken away by procedure established by law which must be just, fair and reasonable. He has referred to Babubhai Vs. State of Gujarat and Others (2010) 12 SCC 254 and Gangadhar Vs. State of Madhya Pradesh (2020) 9 SCC 202.
35. It is settled law that investigating agencies must be insulated from extraneous influence even of the controlling executive" while conducting their investigation. He had referred to the decision of Vineet Narain Vs. Union of India (1998) 1 SC 226. It has been observed by the Apex Court that "being a premier investigating agency, charged with the onerous responsibility of curbing the debilitating economic offence of money laundering in our country, every action of the ED in the course of such exercise is expected to be transparent,above board an conforming to pristine standards of fair paly in action. ED, mantled with far reaching powers under the stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness."
36. Learned counsel for the applicant submits that the manner in which the investigation has been carried out by the respondent/Agency is malafide and against the basic notions of fair investigation. It has proceeded in a selective and pick and choose manner in its investigation 29 which clearly shows the targeted nature of the investigation conducted by it. He further contended that none of the district Excise Officers have been made accused in the instant case. Various other stakeholders are being protected by the different agencies with the aim and hope of extracting false statements. He submits that the allegation of multi crore syndicate that has caused huge loss to the State exchequer has been made by the ED but despite change in government, neither any change has been brought in the existing liquor policy nor any license of any hologram manufacturer/distiller/cash collection agency have been cancelled and no action has been taken under Section 8 of the PC Act against these individuals by any investigating agency. He submits that the liquor trade has been continuing as usual in the State of Chhattisgarh despite the passage of nearly 10 months since the new government came into power. This shows that either the new government is also complicit and part of the alleged liquor syndicate or the entire set of allegations made by the ED are fictitious and imaginary and therefore the pick and choose manner of investigation entitles the applicant to bail.
37. He contended that the there is no material on record to suggest that the applicant does not satisfy the triple test as there is no allegation that he would either tamper with any evidence or influence any witness if granted bail. Mere apprehension of the investigating agency without any substantial basis for the same cannot be a ground for denying bail to the applicant. In the matter of P. Chidambaram Vs. Central Bureau of 30 Investigation (2020) 13 SCC 337, wherein it has been observed as under:
"31. It is to be pointed out that the respondent - CBI has filed remand applications seeking remand of the appellant on various dates viz. 22.08.2019, 26.08.2019, 30.08.2019, 02.09.2019, 05.09.2019 and 19.09.2019 etc. In these applications, there were no allegations that the appellant was trying to influence the witnesses and that any material witnesses (accused) have been approached not to disclose information about the appellant and his son. In the absence of any contemporaneous materials, no weight could be attached to the allegation that the appellant has been influencing the witnesses by approaching the witnesses. The conclusion of the learned Single Judge "...that it cannot be ruled out that the petitioner will not influence the witnesses directly or indirectly......" is not substantiated by any materials and is only a generalized apprehension and appears to be speculative. Mere averments that the appellant approached the witnesses and the assertion that the appellant would further pressurize the witnesses, without any material basis cannot be the reason to deny regular bail to the appellant; more so, when the appellant has been in custody for nearly two months, co-operated with the investigating agency and the charge sheet is also filed.
32. The appellant is not a "flight risk" and in view of the conditions imposed, there is no possibility of his abscondence from the trial. Statement of the prosecution that the appellant has influenced the witnesses and there is likelihood of his further influencing the witnesses cannot be the ground to deny bail to the appellant particularly, when there is no such whisper in the six remand applications filed by the prosecution. The charge sheet has been filed against the appellant and other co-accused on 18.10.2019. The appellant is in custody from 31 21.08.2019 for about two months. The co-accused were already granted bail. The appellant is said to be aged 74 years and is also said to be suffering from age related health problems. Considering the above factors and the facts and circumstances of the case, we are of the view that the appellant is entitled to be granted bail."
38. He submits that even otherwise, any apprehension regarding the applicant being a flight risk or tampering with evidence or influencing witnesses can be taken care of by imposing suitable conditions on the applicant while granting bail. He has further referred to the judgment of Bibhav Kumar Vs. State of NCT of Delhi in SLP (Crl.) No. 9817 of 2024, it has been held that :
"6. Learned Additional Solicitor General of India as well as learned counsel for the complainant-victim have vehemently argued that owing to the official status, which the petitioner has been enjoying in the past, and his political clout, he is likely to influence the private vulnerable witnesses whose versions will have material bearing on determining the nature and manner of occurrence that took place on 13.05.2024. It is, thus, urged that the prayer for bail may be deferred till such time the vulnerable witnesses are examined by the Trial Court."
39. He submits that the ground of arrest and the reason to believe do not meet the threshold of Section 19 PMLA and are grossly insufficient and there can be no necessity of arrest in the in the instant case. It is trite law that the provisions of Section 19 are mandatory and the compliance of the said provisions is a solemn function of the arresting authority which brooks no exception. He further submits that since all the 32 material is illegal and nullity in law and the prosecution complaint filed by the respondent/ED in relation to ECIR 11 has been quashed, no reasons to believe that the applicant is guilty of the offence under Sections 3 read with 4 of the PMLA can be reached at the by respondent. He submits that the entire basis on which the custody of the applicant was sought by the ED in ECIR 04 and the allegations made in the application seeking remand, grounds of arrest and the reasons to believe was the same as that in the ECIR 11/prosecution complaint. He submits that the respondent/ED is cognizant of the fact that if the applicant was made an accused in the main prosecution complaint without his arrest, he could not be taken into custody in terms of the law laid down by the Apex Court in Tarsem lal Vs. Enforcement Directorate, 2024 SCC OnLine SC 971, which clearly shows the wanton and malafide abuse of powers by the ED.
40. Lastly, he submits that the applicant has been questioned on various occasions by the ED in the second ECIR while he was in custody of the ACB and it has been alleged that the applicant was evasive during the course of such interrogation and therefore the same cannot be a ground for arrest in terms of settled law. He has referred to the matter of Pankaj Bansal Vs. Union of India and Others, 2023 Scc OnLine SC1244. Mere arrest in a scheduled offence cannot be a ground for arrest under Section 19 of the PMLA. The ingredients of the offences under the alleged FIRs and PMLA are completely distinct and separate and thus the ED cannot rely upon the same to substantiate its case. It 33 has been held in catena of decisions that refusal to make self incriminating statements cannot be equated to give evasive replies and does not amount to non-cooperation. He submits that the second ECIR is based solely on the CG FIR. As per settled law, no case under the PMLA can continue without an underlying scheduled offence. He therefore prays that the applicant may be granted regular bail in ECIR/RPZO/04/2024 dated 11.04.2024 registered by the Enforcement Directorate under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002.
SUBMISSION ON BEHALF OF THE RESPONDENT/ED
41. Contention of Shri Pandey, learned counsel for the respondent/Ed is that the CG State police registered FIR bearing No. 04/2024 dated 17.01.2024 in EOW/ACB, Raipur under Sections 420,467,471 and 120- B IPC and 7 & 12 of the PC Act, 1988 against Anit Tuteja (Retired IAS) the then Joint Secretary in CG State, Anwar Dhebar, Arunpati Tripathi (ITS) the then Special Secretary, Government of Commerce and Industry Department and MD, CG State Marketing Corporation Ltd., Vikas Agrawal @ Subbu, Sanjay Diwan and others for collecting commissions and supplying unaccounted liquor to government liquor shops in an approximate loss of Rs. 2161 crores to the Government. As per the FIR,
(a) the manufacturer of country liquor in the State of Chhattisgarh namely CG Distilleries Ltd., M/s. Bhatia Wine Merchant Private Ltd. and Welcome Distilleries Pvt. Limited are licensed to supply country liquor in 34 the State.
(b) that accused Anwar Dhebar took advantage of his political influence and family relations with another accused Anil Tuteja and in association with one Arun Pati Tripathi, the Managing Director of CSMCL lead to increase the rate of liquor production and supply and in return, gained illegal commission amounting to lacs of rupees from the distillery owners. This mechanism is called Part -A.
(c) Similarly a new system which run parallel to the existing system of selling country liquor through government shops was created without any records from distillery operators which involved constructing duplicate holograms and selling them separately through government liquor shops. The illegal sales of these duplicate holograms resulted in earning worth crores of rupees. Various persons were implicated in this scheme including distillery owners, bottle supplying agencies, duplicate hologram supplier agencies, agencies involved in the collection of money from these type of illicit sale which took place during the years 2019 to 2022.
(d) During the tenure of one Niranjan Das, Secretary who collected bribes from foreign liquor manufacturers FL-10A license was implemented which was granted to three favoured firms of Anwar Dhebar. The license FL-10A was granted to Sanjay Mishra and Manish Mishra of M/s.Nexgen Power Engitech Pvt. Ltd. Atul Kumar Singh and Mukesh Manchanda of M/s. Om Sai Beverage pvt. Ltd., Ashish Sourabh Kedia of M/s. Dishita Ventures Pvt. Ltd. These license holders were 35 granted tender for the supply of foreign liquor through a conspiracy. All the three license holding firms procured liquor from foreign liquor manufacturing companies and made it available to the government making a profit of 10%. Out of this profit, 60% was given to the syndicate and the remaining 40% was received by the license holders.
(e) the liquor syndicate of Anil Tuteja, Arun Pati Tripathi and Anwar Dhebar was working under the aegis of retired Indian Administrative officer Vivek Dhand. He was also a beneficiary of the scam.
(f) The syndicate received commission from the distillery owners by increasing parallel manufacturing and supplying duplicate liquor through the FL-10A license and between February 2019 to June 2022, approximately Rs. 2161 crores has been made in the illegal earnings.
42. The excise policy in the State of Chhattisgarh was amended in the year 2017 The excise policy in the State of Chhattisgarh was amended in the year 2017 and CSMCL in February, 2017, was thus created with the responsibility to exclusively retail liquor in the State of Chhattisgarh through its stores. The CSMCL was established with the vision to provide genuine liquor, to stop sale of illegal Liquor, to provide liquor on MRP. It established its own stores to retail the liquor/beer/wine/country liquor after procuring liquor from manufacturers directly and IMFL from another State PSU CSBCL.
43. It has also been revealed that with the advent of new policy in the State, CSMCL was incorporated and it established its own stores to retain the liquor/beer/wine/country liquor after procuring country liquor 36 directly from manufacturers and IMFL was procured from suppliers and stored in warehouses of another Stte Public Sector Undertaking, Chhattsigarh State Beverage Corporation Limited (CSBCL). The shops were supposed to be run by outsourced staff and cash collected was to be done by private vendors/Bank representatives.
44. Liquor was divided into two categories namely Country liquor and Indian Manufactured Foreign Liquor (IMFL). Country Liquor was produced in the State of Chhattisgarh through three distilleries :
I) M/s. Chhattisgarh Distilleries Ltd.
ii) M/s. Bhatia Wines and Merchants Pvt. Ltd.
iii) M/s. Welcome Distilleries Pvt. Ltd.
The CSMCL became the tool in the hands of the syndicate which was used by it to enforce a parallel excise department. The syndicate comprises of senior bureaucrats of State, politicians and officials of excise department. In February 2019, Arun Pati Tripathi (ITS Offier) was chosen by the syndicate to lead the CSMCL and later on he was made the Managing Director of the organization at the behest of accused Anwar Dhebar.
45. It is submitted that the as part of the conspiracy, Arun Pati Tripathi was assigned with the task to maximize the bribe commission collected on liquor procured by M/s.CSMCL and to make necessary arrangement for sale of non-duty paid liquor in the CSMCL run shops. Arun Pati Tripathi was supported by Anwar Dhebar and Senior IAS Officer in this operation. In furtherance of his plans, Anwar Dhebar gave the task of 37 cash collecting to Vikas Agrawal @ Subbu and the logistics were set to be the responsibility of the present applicant - Arvind Singh.
46. In the investigation, it has been established that it has come that massive corruption has taken place in the Excise Department since 2019 to 2023 in multiple ways. The total extortion amount is around Rs. 2000 crores. This amount is nothing but rightful amount which should have gone to the State Exchequer and have been taxed and yielded revenue for Central and State government. Thus this is the proceeds of crime which ED is investigating and trying to establish money trial and trace the assets created out of these proceeds of crime.
47. He further contended that during course of investigation, digital evidence has been gathered from multiple sources primarily being the Income Tax Authorities. It is submitted that the IT authorities had first conducted a search in the matter in the year February 2020 and collected multiple mobile devices and digital records. These records have been shared with the Directorate and have been discussed in detail in the main prosecution complaint. However, in order to bring out the role played by the accused, some of the important facts which shows the direct role fo the accused in the predicate offence and earning out of the same.
48. Shri Pandey, counsel for the respondent has contended that from the investigation conducted by the police during the predicate offence, the applicant was part of the liquor syndicate. It has also been revealed 38 that the applicant was an integral part of the syndicate running the illegal liquor business. He contended that the income tax authorities laid hand on the mobile phone of co-accused Anwar Dhebar, who is the main accused in the case and during analysis, it was gathered that he was in touch with the present applicant. Some of the incriminating chats are taken into record which shows the role of the applicant and when confronted he ha acknowledged that the chats belong to him and the co- accused Anwar Dhebar. From the chats, it is seen that the details of produce including Part-B of the three country liquor manufacturers in Chhattisgarh. He submits that the applicant along with one Vikas Agrawal had earned Rs. 40 crores from Part-B liquor sale. He was the key player in the syndicate and convenor of meeting of the distillers and Anwar Dhebar about introduction of Part- A commission. The applicant was supported by his nephew Amit Singh in this whole operation and their main role included logistics related to sale of Part-B liquor. The applicant and his nephew were also responsible for the transportation of Part-B liquor supply of duplicate hologram, supply of empty bottles for Part-B liquor. It is further contended by the counsel for the respondent that the applicant in association with his nephew had also considerable amount of proceeds of crime which is relatable aspects including transportation of Part-B liquor and supply of un invoiced empty bottles from Part-B sale. He further contended that the applicant and his nephew used to control the logistics of liquor business by way of his immediate relatives. He further contended that the applicant was also 39 involved in collection of Part-B sale proceeds. He submits that the applicant along with his nephew set up two fronts ie. the entities M/s. ADIP Empire and M/s. ADIP Agrotech Pvt. Ltd. for laundering and earning proceeds of crime.
49. He submits that the multiple instances of use of cash on the part of the applicant has been noticed, whether it be the use of cash for purchase of land or availing bank entries. The entities were used by the applicant to obtain invoices over and above the market value and some times even bogus bills were used. He submits that it is clear from the old farm owner who claimed much less earnings in their past ownership of the firm. He submits that the applicant had also helped in commission of the offence of money laundering by arranging bank entries and loans in the bank account of M/s. Top Security and Facility Management against cash. He had played a key role in getting the bank entry worth 60 crore to Anwar Dhebar against cash.
50. Next contention of the counsel for the respondent is that the applicant was in possession of the Proceeds of crime and an amount of about Rs. 20 crores has been acquired by him out of the sale proceeds of Part-B liquor which has been utilized by him in acquiring properties in their name and in the name of their family member. The ash payments over and above the consideration amount was made to purchase these properties. Vide PAO No. 04/2024 dated 02.05.2024, the properties worth Rs. 13 crores was purchased by the applicant in the name of his wife and her companies/firms which have been attached. It is contended 40 that the accused/applicant had layered his POC with the business income of his entities, M/s. ADIP Empire and M/s. ADIP Agrotech Pvt. Ltd. and utilized in the purchase of immovable properties. He submits that the investigation had also revealed that M/s. ADIP Agrotech Pvt. Ltd. was also incorporated in the name of the family members of the applicant and was utilized to purchase the assets by using the services of his associates namely Nagendra Singh, who provided bank entry against cash and which was ultimately utilized in purchase of assets That M/s. ADIP Agrotech Pvt. Ltd. received around Rs. 2.39 crores from Nagendra Singh and his family member and these funds were ultimately utilized in purchase of assets in the name of company.
51. Shri Pandey contended that the applicant had adopted the concept of over invoicing the services and obtained direct commission fro the distillers. He had set up firms like M/s. Jagdamba Enterprises and collected commission from distillers in the name of transportation of liquor. The payment so collected was utilized by the family of the applicant and the commission received in the bank accounts of M/s. Jagdamba Enterprises was also transferred to the members of the syndicate and for purchase of properties.
52. It is contended that during investigation, it has been revealed that the applicant leveraged his influence to enter the business of supplying bottles to the liquor syndicate and to facilitate this, he established a firm named M/s. ADIP empire under the name of his wife. This firm was involved in supplying bottles to M/s. Welcome Distilleries Ltd. The firm 41 was also involved in the transportation however later switched its profile to trading of bottles. The investigation has thus revealed that the actual supply of bottles was carried out by M/s. Anurag Traders while M/s. ADIP Empire merely raised invoices for the transactions.
53. He submits that the investigation has also revealed that the bills raised before the distillers were highly over invoiced to the tune of 20% to accommodate the Part-B liquor. As a result, M/s. Adip Empire played a role in committing the criminal activity related to the scheduled offence by serving as the intermediary for over invoicing which allowed for extra supply of bottles and additionally profited from the margin included in the invoices it raised. This margin related to the scheduled offence as proceeds of crime under the explanation provided in Section 2(1)(u) of the PMLA, 2002. Thus, the profit made by M/s. ADIP empire was merely acting as an intermediary by issuing invoices for bottles that were actually supplied by M/s. Anurag Traders to M/s. Welcome Distilleries Ltd. and out of Rs. 13.34 crores received in the bank account maintaining with the HDFC Bank amount totaling to Rs. 6,04 crores was transferred by M/s. ADIP Empire to its another bank account maintained with Canara Bank, Risali, Bhilai.
54. Shri Pandey next contended that the investigation conducted by the police during the predicate offence has revealed that the applicant was part of the liquor syndicate. It was also revealed that his whatsapp chat with accused Anwar Dhebar reveals that he was have strong association with him. The applicant along with Vikas Agrawal had earned 42 Rs. 40 crores approximately from Part-B liquor sale for providing logistics which is evidence from the fact that Sumit Malloo adjusted his old dues with Vikas Agrawal by selling his property to the applicant. This property was registered in the name of the wife of the applicant.
55. He contended that the applicant was the key player in the syndicate. He was also the convenor of meeting of distillers and Anwar Dehbar in the introduction of Part-A commission. He submits that the applicant was well supported by his nephew in the logistic supplying operation. The applicant and his nephew had earned considerable amount of proceeds of crime related to predicate offence as well. He submits that during investigation it has also been revealed that the relatives of the applicant were involved in collection of Part-B sale proceeds. The role of the applicant as a key player can also be deciphered from the fact that his nephew Abhishek Singh was also one of the directors in FL-10A licensee company.
56. It is contended that the applicant had also set up companies to earn commission and transportation related to Part-B. The fund trial investigation has also revealed funds from M/s. Jagdamba Enterprises for purchase of assets related to the wife of the applicant. The applicant has also helped in commission of the offence of money laundering by arranging bank entries and loans in the bank account of M/s. Top Security and Facility Management against cash. The applicant has also played a key role in getting bank entry worth Rs. 60 crores to accused Anwar Dhebar. He has also arranged bank entry of Rs. 2 crores against 43 cash in the bank account of his wife for investing in the share market. In this manner, the proceeds of crime has been used by the applicant and profit made by the wife of the applicant has been freezed.
57. the reply to the contention of the applicant that the applicant has already been arrested by the same agency for the same offence on same facts and therefore the second arrest of the applicant is illegal in terms of law, to which it has been contended by Shri Pandey, learned counsel for the respondent that he was arrested in the first ECIR RPZO11/2022 on 14.06.2023 and got bail on 02.04.2024 though the Apex Court had advised to grant only interim bail. Relevant part of the order of the Supreme Court in WP No. 153/2023 is reproduced below:
" A reading of the aforesaid order, prima facie, gives rise to a scenario that the High Court ought to have continued the interim bail order to await the order to be passed by this Court. The High Court's order rejecting the petition for bail and vacating the interim bail has resulted in the issuance of the NBW. Reply may be filed by the Enforcement Directorate within three weeks. Rejoinder, if any, be filed within two weeks thereafter. List it after six weeks. In the meantime, the petitioner (s) would continue on interim bail and the order issuing NBW is stayed."
58. In the IA filed in WP No. 153/2023, the relief for quashing of ECIR/RPZO/11/2022 was prayed for by the other co-accused Anil Tuteja however, the said relief was not granted to him. In some other connected petitions also the prayer for quashing the ECIR even though 44 it was made in the petition as well as vehemently pressed by the petitioner before this Court, no such order was accepted by this Court. The investigation had already taken place under the ECIR which can be used in recording a subsequent ECIR and therefore there was no relief granted with regard to quashing of the ECIR.
"8. We may note that the petitioners in Writ Petition (Crl.) No.153/2023 and the petitioner in Writ Petition (Crl.) No.217/2023 have not been shown as accused in the complaint. Only the second petitioner in Writ Petition (Crl.) No.208/2023 and the petitioner in Writ Petition No.216/2023 have been shown as accused in the complaint. In the case of those petitioners who are not shown as accused in the complaint, it is unnecessary to entertain the Writ Petitions since the complaint itself is being quashed.
9. Hence, we pass the following order:
(i) Writ Petition (Crl.) Nos.153/2023 and 217/2023 are disposed of;
(ii) The complaint based on ECIR/RPZO/11/2022, as far as the second petitioner (Anwar Dhebar) in Writ Petition (Crl.) No.208/2023 is concerned, is hereby quashed. The Writ Petition is, accordingly, partly allowed;
(iii) The complaint based on ECIR/RPZO/11/2022, as far as the petitioner (Arun Pati Tripathi) in Writ Petition (Crl.) No.216/2023 is concerned, is hereby quashed.
The Writ Petition is, accordingly, allowed;
(iv) There will be no order as to costs; and 45
(v) Pending applications, including those seeking impleadment, are disposed of accordingly.
10. At this stage, the learned ASG stated that, based on another First Information Report, which, according to him, involves a scheduled offence, criminal proceedings under the PMLA are likely to be initiated against the petitioners. It is not necessary for us to go into the issue of the legality and validity of the proceedings that are likely to be initiated at this stage. Therefore, all the contentions in that regard are left open to be decided in appropriate proceedings.
59. It is submitted that the ECIR/11/2022 recorded on 18.11.2022 on the basis of Income Tax Complaint filed before the Tiss Hazari Court, Delhi while ECIR/04/2024 was recorded on the basis of FIR No. 04/2024 dated 17.01.2024 registered by EOW/ACB, Raipur, Chhattisgarh Police under Sections 420,46,7,468,471 and 120-B IPC and 7 & 12 of the PC Act, Sections 120-B, 420,467 and 471 of IPC and 7 & 12 of the PC Act which are the schedule offences included in para 1 & 8 of the schedule to PMLA 2002 as defined under Section 2(1)(y) of the Act. It is further submitted the present investigation is based on the new ECIR bearing No. ECIR/RPZO/04/2024 which is recorded on 11.04.2024 on the basis of FIR registered by the CG State Police at EOW/ACB, Raipur. The applicant was arrested by the ED on 01.07.2024 and the Special Court PMLA, Raipur vide orders dated 02.07.2024 and 06.07.2024 had granted ED custody of the accused till 11.07.2024 and subsequently has been remanded to judicial custody. Further It is submitted that the present arrest was made only after recording of reasons to believe in 46 writing. The arrest of the applicant was performed completely in accordance with the provisions of sub section 1, 2 and 3 of Section 19 of the PMLA, 2002. All the safeguards as provided under the law have been duly complied with.
60. The next submission of the applicant that the investigation agencies have been acting in Tandem with each other to elongate the pre-trial incarceration of the applicant, to this it has been contended by the counsel for the respondent that the arrest of the applicant is completely based on his role in PMLA case and in accordance with the provisions of Sub-Section 1, 2 and 3of Section 19 of PMLA 2002.
61. It is submitted that the ED has filed a supplementary prosecution complaint on 30.08.2024 in respect of applicant and other accused. The special Court has taken cognizance of the same on 5,.10.2024 therefore it is submitted that any reference to old ECIR may not be considered while deciding bail in the instant case. Further if the applicant was apprehended by other investigating agencies and remained in their custody/judicial remand that cannot be attributed to the ED.
62. Next contention of the applicant that the applicant has suffering long period of pre-trial custody and the trial has not yet commenced and is not likely to conclude, to this it has been submitted by learned counsel for the respondent that the Special Court (PMLA) has already taken cognizance of the PC filed by the department on 5.10.2024 and issued summons to the applicant to appear in the court on 23.11.2024 which 47 shows that the trial is going to commence very soon. Further the trial proceedings will take time cannot be a ground to grant bail. In this regard reliance has been placed in the decision of the Apex Court in the matter of Gurwinder Singh Vs. State of Punjab & Another in SPECIAL LEAVE PETITION (CRIMINAL) No.10047 of 2023, it has been held as under:
"32. The Appellant's counsel has relied upon the case of KA Najeeb (supra) to back its contention that the appellant has been in jail for last five years which is contrary to law laid down in the said case. While this argument may appear compelling at first glance, it lacks depth and substance. In KA Najeeb's case this court was confronted with a circumstance wherein except the respondent-accused, other co-accused had already undergone trial and were sentenced to imprisonment of not exceeding eight years therefore this court's decision to consider bail was grounded in the anticipation of the impending sentence that the respondent- accused might face upon conviction and since the respondent-accused had already served portion of the maximum imprisonment i.e., more than five years, this court took it as a factor influencing its assessment to grant bail. Further, in KA Najeeb's case the trial of the respondent- accused was severed from the other co- accused owing to his absconding and he was traced back in 2015 and was being separately tried thereafter and the NIA had filed a long list of witnesses that were left to be examined with reference to the said accused therefore this court was of the view of unlikelihood of completion of trial in near future. However, in the present case the trial is already under way and 22 witnesses including the protected witnesses have been examined. As already discussed, the 48 material available on record indicates the involvement of the appellant in furtherance of terrorist activities backed by members of banned terrorist organization involving exchange of large quantum of money through different channels which needs to be deciphered and therefore in such a scenario if the appellant is released on bail there is every likelihood that he will influence the key witnesses of the case which might hamper the process of justice. Therefore, mere delay in trial pertaining to grave offences as one involved in the instant case cannot be used as a ground to grant bail. Hence, the aforesaid argument on the behalf the appellant cannot be accepted."
63. It is submitted that the Special Court after going through the prosecution complaint dated 30.08.2024 has stated that the offence prima facie exists and the accused in involved in money laundering activity on the basis of facts and appreciated the gravity and nature of offence committed by the applicant as well as evidences gathered against him in the investigation. The Apex Court in the case of Gautam Kundu Vs. Directorate of Enforcement,(2015) 16 SC 1, The relevant para from the above mentioned judgment is produced as under :
"28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with money 49 laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict.
29. Section 45 of the PMLA 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 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 50 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."
64. It is relevant to submit that the application has to be looked into from the prism of the twin conditions laid down in the statute itself under Section 45 of the PMLA, 2002. These twin conditions are in addition to what limitations has already been described for grant of bail in Cr.PC, 1973. That even stands substantiated by the ruling of Hon'ble Ape Court in the matter of Vijay Madanlal Choudhary Vs. Union of India SLP (Crl.) No. 4634 of 2014, which is reproduced as under:
133. This Court has been restating this position in several decisions, including Gautam Kundu639 and Amit Kumar640. Thus, while considering the application for bail under Section 45 of the 2002 Act, the Court should keep in mind the above mentioned principles governing the grant of bail. The limitations on granting bail as 638 Supra at Footnote No.255 639 Supra at Footnote No.207 640 Supra at Footnote No.258 prescribed under Section 45 of the 2002 Act are in addition to the limitations under the 1973 Code."
65. Further in the matter of Sajjan Kumar Vs. Directorate of Enforcement, MANU/DE/2155/2022, it has been held that "in matter of regular bail, the Court must consider aspects, including but not limited to, the larger interest of the State or public-another factor relevant would be the gravity of alleged offence and /or nature of allegations levelled- 51 Economic offences constitute a class apart and need to be visited with a different approach, given their severity and magnitude."
66. It is contended that the investigation against the applicant is complete and the prosecution complaint in the ECIR 11 has already stood filed thus there is no necessity for the continued incarceration of the applicant in reply to this contention of the applicant, Shri Pandey submits that the ECIR/11/2022 was recorded on 18.11.2022 on the basis of Income Tax complaint filed before the Tiss Hazari Court Delhi while ECIR/04/2024 was recorded on the basis of FIR No. 04/2024 dated 17.01.2024 registered by EOW/ACB Raipur, Chhattisgarh Police under Sections 420,46,7,468,471 and 120-B IPC and 7 & 12 of the PC Act, Sections 120-B, 420,467 and 471 of IPC and 7 & 12 of the PC Act which are the schedule offences included in para 1 & 8 of the schedule to PMLA 2002 as defined under Section 2(1)(y) of the Act. It is submitted that the present investigation is based on the new ECIR bearing No. ECIR/RPZO/04/2024 which is recorded on 11.04.20-24 on the basis of the FIR registered by the Chhattisgarh State Police at EOW/ACB, Raipur. It is submitted that the economic offences fall in the category of the offences which travel far ahead of personal or private wrongs having the potential to usher in economic crisis. In the matter of Alok Agrawal Vs. Directorate of Enforcement bearing M.Cr.C. No. 6533 of 2019, decided on 03.01.2021, it has been discussed about the seriousness of the offences of money laundering and their impact on the economy of the country. In the said judgment it has been categorically stated that 52 allegations in the Enforcement Case Information Report/Prosecution Complaint is a matter of final outcome of the trial, but the burden of proof under Section 24 of the PMLA 2002 with regard to the said money is not proceeds of crime is always on the accused person. Relevant para is produced herein:
"6....It is true that at present there may or may not be direct or indirect attempts to indulge the applicant in any process of activity connected with the proceeds of crime, there is no attempt on the part of the applicant to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said money was the proceeds of crime and by depositing or investing the same in his wife's account and in the business of his wife and brother, the applicant has attempted to project the same as untainted money. The said allegations may be the subject matter of final outcome of the trial, but having been made, the burden of proof that the said money is not the proceeds of crime and, therefore, shifted to the applicant under Section 24 of the PML Act, 2002. For the sake of reference, Sections 3 and 24 of the PML Act are extracted herein below :-
"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 with the 4[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."
"24. Burden of Proof. - In any proceeding relating to proceeds of crime under this Act, (a) in the case of a person charged with the offence of money- laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that 53 such proceeds of crime are involved in money- laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money- laundering."
....9. Taking into consideration the entire circumstances of the case, judicial pronouncement of Supreme Court in Rohit (supra) gravity of offence and further considering the fact that the applicant is a Government Servant (Incharge Executive Engineer, Water Resources Department) and the manner in which the public money is alleged to have been laundered by the applicant, I am not inclined to release him on bail...."
65. Shri Pandey, learned counsel for the respondent submits that the applicant was arrested in the old ECIR/RPZO/11/2022 wherein prosecution complaint has already been quashed by the Supreme Court therefore that period cannot be counted as ED custody while deciding the instant bail application. The applicant was arrested in a separate case this time on 01.07.2024 in ECIR/RPZO/04/2024 which is based on different set of scheduled offence.
66. It is submitted that if the applicant is released on bail, he may tamper the evidence and influence the witnesses which many not only hamper the investigation but also result in further layering and concealment of proceeds of crime therefore the bail application filed by the applicant may be dismissed. It is submitted that the applicant had played a very crucial role in the liquor scam. He along with Vikas Agrawal had earned approximately Rs. 40 crores from 54 Part B liquor sale and the applicant was the key player in the syndicate eho convenes the meeting of distillers and accused Anwar Dhebar. The Special Court (PMLA), Raipur vide its order dated 5.10.2024 has taken cognizance of the above said prosecution complaint which shows that there is prima facie case of money laundering against the applicant. The present applicant was involved in the scam which involves money laundering of proceeds of crime of more than Rs. 2,000 crores approximately. As such the accused is involved in a grave and heinous financial crime and the present application is liable to be rejected. It has been held by the Orissa High Court in the matter of Mohd. Arif Vs. ED , BLAPL No. 2607 of 2020, describing the impact of the offence of money laundering has called money laundering as an act of financial terrorism not only posing a serious threat to the financial system of the country but also to the integrity and sovereignty of a nation and reiterated the view of the Supreme Court of denial of Bail in cases of economic offences. The relevant observation of the Court is as under:
22. The offence of Money Laundering is nothing but an act of financial terrorism that poses a serious threat not only to the financial system of the country but also to the integrity and sovereignty of a nation.
The International Monetary Fund estimates that laundered money generates about $590 billion to $1.5 trillion per year, which constitutes approximately two to five percent of the world's gross domestic product. The Supreme Court of India has 55 consistently held that economic offences are sui geneis in nature as they stifle the delicate economic fabric of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world. The offences, such as this, are committed with a deliberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum left behind to be borne by the unfortunate "starry eyed" petty investors. The perpetrators of such deviant "schemes,"including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial "Faustian bargain" and are grossly unmindful of untold miseries of the faceless multitudes who are left high and dry and consigned to the flames of suffering."
67. The economic offences constitute a class apart and need to be visited with different approach therefore in the mater of Y.S.Jagn Mohan Reddy Vs. CBI(2013) 7 SCC 439, the Apex Court has held as under:
"34.Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."
68. In yet another decision of the Apex Court ie. State of Gujarat Vs. Mohanlal Jitamalji Porwal & Others, (1987) 2 SCC 364, it has been specifically held that :
56
"...5. The Community or the State is not a person- non-grata whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community.
69. Contention of Shri Pandey, learned counsel for the respondent is that the applicant being an influential person close to the then ruling dispensation in the State of Chhattisgarh he may influence the witnesses and if released on bail there is a high likelihood that the petitioner would seek to frustrate the proceedings under the Act. The Apex Court in the matter of Neeru Yadav Vs. State of U.P.; (2016) 15 SCC 422, Hon'ble the Apex Court has held as under :-
"11. It is a well settled principle of law that while dealing with an application for grant of bail, it is the duty of the Court to take into consideration certain factors and they basically are; (i) the nature of accusation and the severity of punishment in cases of conviction and the nature of supporting evidence, (ii) reasonable apprehension of tampering with the witnesses for apprehension of threat to the complainant, and
(iii) Prima facie satisfaction of the court in support of the charge.
[See Chaman Lal v. State of U.P.; (2004) 7 SCC 525] 57
70. In reply to the contention to the contention of the counsel for the applicant that the departmental enquiry report conducted by the Commercial Tax (Excise) Department observed no wrongdoing in the liquor trade in the State of Chhattisgarh, it has been argued by the learned counsel for the respondent that this vitiates the procedure of law,. The department which is under the scrutiny, where senior officer like Excise Secretary and excise Minister were being summoned for their role in the scam, has conducted its own in house enquiry and claimed that there was no wrongdoing in the Excise Department. The findings of the investigation of the directorate, evidences collected and facts presented were not paid heed to and everyone involved was given a clean chit. It is a sham report and does not have any bearing on the subject case.
71. The contention of the counsel for the applicant that the investigation conducted by the Ed is completely malafide, to this, learned counsel for the respondent submits that the investigation by the Directorate is being carried out in an impartial manner and are free from any prejudice. Iti s a settled position of aw particularly in criminal matters that if an action is justified and based on material then malafide is of no consequence. In the present case, the arrest of the applicant is based on material in possession of the IO and not based on any extraneous grounds or mala fides. With regard to pick and choose contention of the applicant it is submitted that the investigation in liquor case is still going on and it is not correct to say that none of the district Excise Officers have been 58 made accused. Regarding the previous excise police and old practice is being continued, to this, it is submitted that the period of enquiry in the case is from April 2019 to June 2022 prior to the formation of new government.
72. Next contention of the learned counsel for the applicant is that the applicant satisfied the triple test for grant of bail. To this, it has been stated by learned counsel for the respondent that vide prosecution complaint dated 30.08.2024, cognizance has been taken by the Special Court dated 5.10.2024 and had demonstrated the complete modus operandi adopted by the applicant for commission of the offence of money laundering and investigation against the applicant is complete but the investigation with respect to the identification of remaining proceeds of crime and the persons involved therein is still going on. However, the delay in trial is no ground for claiming bail. The applicant has to satisfy the rigors provided in Section 45 of the PMLA prior to grant of bail. It is likely that if granted bail, the applicant would further launder or alienate the proceeds of crime which would frustrate the further proceedings. It is reiterated that satisfaction of triple test is not sufficient for persons arrested under PMLA,2002 and that the twin conditions imposed by Section 45 of the PMLA, 2002 have to be satisfied.
73. Next contention is that the averments made by the counsel for the applicant that the grounds of arrest and the reasons to believe do not meet the threshold of Section 19 of the PMLA an are grossly insufficient 59 and there an be no necessity of arrest in the case is strongly denied by the learned counsel for the respondent and it is submitted that role of the applicant in the offence of money laundering is clearly established. The applicant was found to have committed the criminal activities related to the scheduled offence and thereby generating and possessing the proceeds of crime as defined under Section 2 (i)(u) of PMLA, 2002. The IO had reasons to believe on the basis of matter in his possession that the applicant was involved in money laundering activity and had acquired proceeds of crime in relation to liquor scam and the investigating officer deemed his arrest necessary on multiple counts which includes:
i) to prevent the destruction of evidence
ii) to confront him with various persons who are involved in these activities.
Iii) to trace out proceeds of crime acquired by him during his custodial interrogation.
iv) to prevent him from influencing the witnesses.
v) to identify other persons involved in the syndicate during his custodial interrogation
74. Lastly, it is submitted by Shri Pandey, learned counsel for the respondent that the arrest of the applicant was performed completely in accordance with the provisions of Sub-Section 1,2 and 3 of Section 19 of the PMLA, 2002 and all the safeguards as provided under the law have been complied with. Thus, in view of the above detailed reply made on behalf of the respondent, the applicant in the present matter may not 60 be granted bail. Shri Pandey contended that the fund trial investigation has been done and it has been established that the initial background of the applicant was that of a low level employee with a salary of Rs. 30,000/- per month at the time of leaving the company in the year 2019- 20 and after joining the syndicate, he earned commission of more than Rs. 20 crores. The ED has unearthed and attached 33 illegal properties worth Rs. 13,00,59,236/- in different entities registered in the name of his family members vide PAO dated 02.05.2024. Further it has been contended that M/s. ADIP Empire was having ledger account in the name of Deepak Duary (associated with Part-B collection) and funds have also been transacted with the present applicant and his family members ie. Amit Singh and Abhishek Singh.
75. Lastly, it has been contended that the applicant is actually involved in all the activities connected with the offence of money laundering ie. use or acquisition possession, concealment and projecting or claiming as untainted property as defined under Section 3 of the PMLA, 2002 and therefore the applicant is guilty of the offence of money laundering under Section 3 of the PMLA, 2002 and punishable under Section 4 of the PMLA.
CONSIDERATION OF THE APPLICATION FOR BAIL
76. Heard learned counsel for the parties at length and perused the records as well as the documents annexed with utmost circumspection. 61
77. In the present case, the applicant was involved in the criminal acts of the syndicate and is in possession of the proceeds of crime and that he received commission from the liquor suppliers. The applicant was the key player in the syndicate and convenor of meeting of the distillers and Anwar Dhebar about introduction of Part- A commission. However, no recovery of unaccounted money has been made in this regard. From the details of the whatsapp chats annexed with the charge sheet prima facie shows the involvement of the applicant in the present case has been established as massive corruption had taken place in the Excise Department by way of extorting amount of Rs. 2000 crores approximately and causing huge loss to the State Exchequer which otherwise would have yielded revenue for Central and State government.
78. After careful analysis of the material available on record which goes to show that there is prima facie involvement of the applicant in the crime in question and the charge sheet has been filed. Since, the allegations against the applicant are serious in nature and there was material to infer his involvement in serious crimes. However,the Apex Court has held that the power of ED to arrest must be based on objective and fair consideration of material against a person. Under the PMLA, ED officers can arrest a person if they have reasons to believe based on the material in their possession that the individual is guilty. It has been held by the Apex Court that PMLA allowed arrests on the subjective opinion of ED officer, the court said an officer's "reasons to 62 believe" that a person was guilty an deserved arrest should not be based on mere suspicion. "Suspicion requires a lower degree of satisfaction and does not amount to belief. Belief is beyond speculation or doubt.... Existence and validity of the 'reasons to believe' goes to the root of the power to arrest. The subjective opinion of the arresting officer must be founded and based upon fair and objective consideration of the material, as available with them on the date of arrest.
79. Before adverting to the facts of the case, it is expedient for this Court to extract Section 45 of the PML Act, 2002, which reads as under:-
"Section 45 of PMLA, 2002- 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 [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:
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm [or is accused either on his own or along with other co-accused of money- laundering a sum of less 63 than one crore rupees], may be released on bail, if the Special Court so directs:
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 a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.
[(1-A) 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."
80. Considering the judgment rendered by Hon'ble Division Bench of Madras High Court in N.Umashankar Vs. The Assistant Director, Directorate of Enforcement, reported in MANU/SCOR/25324/2022, wherein Hon'ble Division Bench of Madras High Court has examined Section 45 of the PMLA, 2002 and has held at paragraph 18 as under:-
"18. It is also brought to the notice of this Court 64 by the respondent in the counter affidavit that the documents collected would prima facie disclose that all the accused have committed acts of money laundering under Section 3 of the Prevention of Money Laundering Act and punishable under Section 4 of the said Act and the petitioners, during police custody also, did not co-operate with them and despite the complaint has been filed, further investigation is also in progress. Even before the Hon'ble Supreme Court in S.L.P. (Crl.) Nos. 7563-7565 of 2021, the respondent submitted that the petitioners are not co-operating during the investigation. Even before this court the learned Special Pubic Prosecutor appearing for the respondent submitted that the petitioners never co-operated for the investigation and therefore, the petitioners should not be enlarged on bail. It is also brought to the notice of this Court by the learned Special Pubic Prosecutor that even after the registration of the criminal complaint against the petitioners, they have indirectly started new Companies by using other names. 19. In view of the past conduct of the petitioners, this court does not believe that the petitioner are not guilty of the alleged offences and in such circumstances, this court cannot give a finding that the petitioners are not likely to commit offence while on bail. It is also alleged that if the petitioners are enlarged on bail, there is every likelihood that the petitioners may flee the jurisdiction of this Court to avoid the process of law. In these circumstances, we are not inclined to grant bail to the petitioners.
In the result, the Criminal Original Petitions are dismissed. No costs"65
81. Against the said judgment passed by Madras High Court, the applicant preferred SLP No. 620/2022 before the Apex Court, which has been dismissed on 25.02.2022 which reads as under:
"We are not inclined to interfere in these Special Leave Petitions. The Special Leave Petitions are dismissed accordingly. However, we direct the prosecution/Investigating Agency to ensure that the trial is concluded with utmost expedition. Pending applications, if any, stand disposed of."
82. The Apex Court in the matter of Directorate of Enforcement Vs. Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on 12.05.2023 has held as under:-
6. At the outset, it is required to be noted that respective respondent No. 1 - accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered. Section 45 of the PML Act, 2002 reads as under: -
"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 [under this Act] shall be released on bail or on his own bond 66 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 [or is accused either on his own or along with other co-accused of money- laundering a sum of less than one crore rupees], may be released on bail, if the Special Court so directs:
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 a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.
[(1-A) 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 authorised, 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 [* 67 * *] 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." By the impugned judgment(s) and order(s) and while granting bail, the High Court has not considered the rigour of Section 45 of the PML Act, 2002he Supreme Court on July 12 held that the power to arrest under the Prevention of Money Laundering Act (PMLA) cannot be exercised on the "whims and fancies"
of Directorate of Enforcement (ED) officers. 6.1 Even otherwise, the High Court has not at all considered the nature of allegations and seriousness of the offences alleged of money laundering and the offences under the PML Act, 2002. Looking to the nature of allegations, it can be said that the same can be said to be very serious allegations of money laundering which are required to be investigated thoroughly. 6.2 Now so far as the submissions on behalf of the respective respondent No. 1 that respective respondent No. 1 were not named in the FIR with respect to the scheduled offence(s) and/or that all the other accused are discharged/acquitted in so far as the predicated offences are concerned, merely because other accused are acquitted/discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1. An enquiry/investigation is going on against respective respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation for the scheduled offences itself is sufficient at this stage. 6.3 From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that chargesheet has been filed against respective respondent No. 1 - accused and therefore, the investigation is completed. However, the High Court has failed to notice and appreciate that the investigation with respect to the scheduled 68 offences under the PML Act, 2002 by the Enforcement Directorate is still going on. Merely because, for the predicated offences the charge sheet might have been filed it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002. Investigation for the predicated offences and the investigation by the Enforcement Directorate for the scheduled offences under the PML Act are different and distinct. Therefore, the High Court has taken into consideration the irrelevant consideration. The investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is till going on.
7. As observed hereinabove, the High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications after taking into consideration the observations made hereinabove."
84. The Apex Court has held that the power to arrest under the Prevention of Money Laundering Act (PMLA) cannot be exercised on the "whims and fancies" of Directorate of Enforcement (ED) officers. The court wondered if the ED even had a consistent, uniform and "one- rule-for-all" policy on when they should arrest people. It said the ED's 69 power to arrest must be based on objective and fair consideration of material against the accused.
85. It is prima facie clear that on the one hand, it is claimed that the matter is of a huge economic loss to the State Exchequer and the offence is of highly serious nature and on the other hand, the distillers who are allegedly supplying illegal liquor causing huge financial loss to the State exchequer, have not been made accused despite the fact that their names have been mentioned in the complaint made by the ED as member of the syndicate. Prima facie it appears that the prosecution has adopted an inconsistent stance being both hot and cold in its approach and has acted in a pick and choose manner in investigation. CONCLUSION
86. After going through the records and the rivals submissions on behalf of the parties, it has been revealed that in the investigation conducted by the police during the predicate office, the applicant was part of the liquor syndicate and was involved in money laundering and proceeds of crime along with other co-accused therefore, even if it is presumed that no predicate offence has been levelled against him, therefore, the applicant is entitled to get bail under PMLA, 2002, is not acceptable and deserves to be rejected and also considering the material placed on record, which prima facie shows involvement of the applicant in the crime in question, therefore, considering entirety of the matter, this Court is of the opinion that the applicant is unable to satisfy 70 twin conditions for grant of bail under Section 45 of the PMLA, 2002, as such, it is not a fit case for grant of bail to the applicant for the reasons mentioned hereinabove.
35. Accordingly, the prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 ('BNSS') read with Section 45 of the PMLA, for the alleged offence punishable under Sections 3 & 4 of the PMLA, 2002 is hereby rejected.
Sd/-
(Arvind Kumar Verma) Judge Digitally signed by SUGUNA SUGUNA DUBEY DUBEY Date: 2025.02.10 13:08:50 +0530