Jharkhand High Court
Sunil Yadav vs Directorate Of Enforcement on 12 April, 2024
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
IN THE HIGH COURT OF JHARKHAND AT RANCHI
B.A. No. 11102 of 2023
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Sunil Yadav, age 37 years old son of Pashupati Yadav, resident of village Subhanpur Bhatta, P.O & P.S.- Sahibganj , District-Sahibganj.
... ... Petitioner Versus Directorate of Enforcement.
... ... Opposite Party
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CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
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For the Petitioner : Mr. S. Nagamuthu, Sr. Advocate Mr. Indrajit Sinha, Advocate Ms. Sonam Gupta, Advocate Mr. Shiva Pande, Advocate Mr. Yash Badkur, Advocate Mr. Shreyas Kaushal, Advocate Ms. Sneh Singh, Advocate Ms. Pinki Kumari, Advocate For the Opp. Parties : Mr. Anil Kumar, Addl. SGI Mrs. Chandana Kumari, AC to Addl. SGI Mr. Priyanshu Shekhar, AC to Addl. SGI
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th
C.A.V. on 15 March, 2024 Pronounced on 12/04/2024
Prayer:
1. The instant application has been filed under Section 439 and 440 of the Code of Criminal Procedure, 1973 praying for grant of bail in connection with Case No. ECIR-04/2022, registered under Section 3 punishable under Section 4 of PML Act, 2022.
Factual Matrix of the Case:
2. The prosecution story in brief as per the allegation made in the instant ECIR/complaint reads as under:
The case of prosecution in brief is that the investigation under the Prevention of Money Laundering Act, 2002, was initiated by recording an ECIR bearing no. 3/2022 based on the FIR no. 85/2020 dt. 22.06.2020 of one Sambhu Nandan Kumar at Barharwa Police Station, Distt-Sahebganj, Jharkhand against accused Pankaj Mishra and others. It is alleged that the accused persons threatened the above complainant over the phone not to Page 1 of 42 B.A. No. 11102 of 2023 participate in the tender of Barharwa Toll, and on the refusal of which the complainant was attacked by a mob, on the behest of the accused persons. Subsequently, the charge sheet no. 231/2020 dated 30.11.2020 was filed in the court at Rajmahal, Distt Sahebganj. Further, the agency took several other FIRs related to the matter along with the above case to investigate the instant case.
It was revealed during the investigation that the vehicles carrying the mined items (Mainly stone chips) had to cross Barharwa Toll before reaching the main roads. It was also revealed that apart from mining under valid licenses, a vast quantity of mining is being carried out illegally in Sahibganj District and adjoining areas. It also revealed that the accused person, Pankaj Mishra, is involved in the illegal collection of levies from the trucks carrying stone chips through his accomplices and also has control over the mining of stone chips and boulders as well as installation and operations of several crushers, set up across various mining sites in Sahebganj district. He has a fixed share in almost all the mines and transportation by several persons, including his associates. He enjoys political clout, being the representative of the Chief Minister, Jharkhand, who is also an MLA from Barhait, Sahebganj. The investigation into the bank accounts reveals the acquisition of proceeds of crime running into crores of rupees.
It is stated that to unearth the larger picture, the Enforcement Directorate has merged the other FIRs who were lodged against the accused Pankaj Mishra, related to illegal mining into existing ECIR. Further, the issue of illegal mining & damage to the environment is also being investigated considering the observation of the Hon'ble National Green Tribunal (NGT), New Delhi given in the matter and various FIRs registered related to the issue of illegal mining. It is further alleged that apart from mining under valid license, a huge quantity of mining is being carried out illegally in Sahibganj District and adjoining areas and the accused Pankaj Mishra is involved in illegal collection of levies from the trucks carrying stone chips through his accomplices. It is further, alleged that total cash amounting to Rs. 5,34,44,400/- was recovered from accomplices as well as close associates of the prime accused Pankaj Mishra.
The present petitioner is the close associate of the above accused. The co- ordinates revealed that the petitioner has taken part in the offence related to Page 2 of 42 B.A. No. 11102 of 2023 illegal mining and illegal transportation of the mined stone chips. It is also stated that during investigation the links between prime accused i.e. Pankaj Mishra and Rajesh Yadav @ Dahu Yadav has been established. The petitioner has been found involved in the activities related to money Laundering and have pivotal role with the other accused in acquisition, possession, concealing and layering the proceeds of crime acquired out of illegal activities as stated by the prosecution.
The present petitioner has assisted to another accused in his illegal activities relating to illegal mining. It is alleged that the accused person acquired the proceeds of crime amounting to Rs.4,28,81,865/- and used them to procure the tender of operation of the ferries controlled by Nav Yatayat Samiti, Sahebganj. The total POC involved in the tender was Rs.8.5 crores. It is further alleged that the operations of the said Samiti is directly controlled by co-accused Pankaj Mishra and Dahu Yadav as well as the present petitioner.
In the instant case, these accused persons have knowingly acquired and possessed the proceeds of crime in such a manner as if it was untainted money; they also trying to project the said ill-gotten money/proceeds of crime as untainted. Further, it has been alleged that the accused petitioner has not only received the huge amount in illegal way earned through illegal mining, trade and transportation of stone chips etc. but also came in possession of such "proceeds of crime" and now claiming the same as untainted.
The present petitioner had been arrested and accordingly the petitioner had preferred the Misc. Cri. Application No.2813 of 2023 for grant of his bail but the same was dismissed vide order dated 07.10.2023 by the learned Spl. Judge, PML Act, Ranchi.
Hence the present petition has been preferred for the grant of bail.
Argument on behalf of the learned counsel for the petitioner:
3. Mr. S. Nagamuthu, learned senior counsel for the petitioner has argued inter alia on the following grounds:
i. The petitioner has not been shown as an accused in the scheduled offence so merely by inserting penal offence under Section 120-B of IPC, the Page 3 of 42 B.A. No. 11102 of 2023 offence said to be committed under Section 3 of the PML Act, 2002 will not be attracted.
ii. The ground has been taken that the FIR is dated 22.06.2020 and after lapse of two years, the ECIR has been instituted, hence, it is nothing but an afterthought.
iii. There are altogether three complaints apart from the original ECIR. In the ECIR three persons have been arrayed as an accused, namely, Pankaj Mishra, Prem Prakash and Pashupati Yadav. In the first complaint, Pankaj Mishra; Bachhu Yadav and; Prem Prakash have been arrayed as accused, in the second complaint, Pashupati Yadav has been arrayed as an accused and in the third complaint, Krishna Kumar Saha; Bhagwan Bhagat and Tinkal Kumar Bhagat have been arrayed as accused persons.
iv. It has been contended that the name of the petitioner has come in the complaint which itself suggest that there was no imputation said to attract the offence under Section 3 of the PML Act, 2002.
v. The ground has been taken that merely because some money has been deposited in the bank account that cannot be said to be offence said to attract the offence under Section 3 of the PML Act, 2002.
vi. Further, the ground has been taken that if the entire ECIR/complaint will be taken into consideration then it will be found that the allegation against the petitioner is of involvement in the illegal mining and the illegal mining operation is not a scheduled offence within the meaning of Schedule Offence under the PML Act, hence, also no case under Section 3 is made out.
vii. It has been contended that only one mobile phone and some loose papers have been recovered from the house/possession of the petitioner and hence, the entire allegation against the petitioner itself is bad in the eyes of law.
viii. Learned senior counsel has relied upon the judgment rendered by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors., (2022) SCC OnLine SC 929, particularly paragraphs-281, 282, 317, 401, 467(d) as also has relied on another Page 4 of 42 B.A. No. 11102 of 2023 judgement rendered in Pavana Dibbur vs. The Directorate of Enforcement passed in Criminal Appeal No. 2779 of 2023, particularly paragraphs-17 and 29 thereof.
ix. Learned counsel for the petitioner has also taken the ground of parity since one of the co-accused persons, namely, Pashupati Yadav has been directed to be released on bail by the order passed by the co-ordinate Bench of this Court.
4. Learned counsel for the petitioner based upon the aforesaid ground has submitted that the learned court while considering the prayer for bail ought to have taken into consideration all these aspects of the matter both legal and factual but having not done so, serious error has been committed.
5. Further submission has been made in the aforesaid view of the matter as per the ground agitated, it is a fit case where the petitioner is to be given the privilege of bail.
Argument on behalf of the learned counsel for the respondent-ED:
6. While on the other hand, Mr. Anil Kumar, learned Additional Solicitor General of India for the opposite party-Enforcement Directorate has vehemently opposed the prayer for grant of regular bail by taking the following grounds:
(i) It is incorrect on the part of the petitioner to take the ground that the case is of illegal mining only rather if the entire complaint will be taken into consideration, then various FIRs have also been made subject matter of the enquiry. The FIRs were also instituted on the basis of the direction of the National Green Tribunal which were under investigation.
(ii) The ground which has been taken that the instant case is not under scheduled offence, cannot be said to be correct argument reason being that if the all FIRs which has been made subject matter of the ECIR will be taken into consideration, it is evident therefrom that the allegation has been levelled against the petitioner under Section 411 and 414 of Indian Penal Code which are scheduled offence, hence, the ground that the alleged offence is not coming under the fold of the Schedule Offence, is contrary to the record.Page 5 of 42 B.A. No. 11102 of 2023
(iii) It has been revealed in the investigation that the petitioner is closely associated with Pankaj Mishra as also operates the account since the mobile number of the present petitioner has been shown in the accounts of Pankaj Mishra.
(iv) Learned ASGI has taken the aid of different paragraphs to the prosecution complaint in which material has been surfaced in course of enquiry.
(v) Learned ASGI appearing for the opposite party-ED has submitted that since the issue is for consideration of bail, hence, the entire material in entirety is to be taken into consideration so as to come to the conclusion of fulfilling the twin test as required under Section 45(1) of the Act, 2002 and if the entire allegation will be taken into consideration then it would be evident that the petitioner has deeply been found to be involved as a close associate of Pankaj Mishra, co-accused person.
(vi) Learned ASGI for the opposite party-ED on the ground of the enlargement of bail of the co-accused person, namely Pashupati Yadav has submitted that the involvement of the said co-accused person is quite different to that of the involvement of the present petitioner since the present petitioner has been found to be a close associate of Pankaj Mishra.
(vii) Further, the ground has also been taken that the co-ordinate Bench has already rejected the prayer for bail sought for by Pankaj Mishra and Prem Prakash, other co-accused persons.
(viii) The ground, therefore, has been taken that since the ground of parity is being taken on behalf of the petitioner then the requirement will be to consider the involvement of the present petitioner with the involvement of Pashupati Yadav, Pankaj Mishra and Prem Prakash so as to come to the conclusion while granting the benefit of parity by assessing the involvement of the present petitioner with the involvement of accused persons whose prayer for bail has been denied and the accused person whose prayer for bail has been allowed.
(ix) The contention has been made that Pankaj Mishra is the person who is in the helms of the affairs of illegal mining and the present petitioner is his Page 6 of 42 B.A. No. 11102 of 2023 close associate. Further, the complicity has also been shown against the Prem Prakash whose bail application has already been rejected.
7. Learned ASGI for the opposite party-ED, based upon the aforesaid grounds, has submitted that since the nature of allegation committed by the present petitioner is identical to that of Pankaj Mishra to the extent that he has been found to be a close associate while against Pashupati Yadav no such allegation is there, as such, the instant bail application is fit to be rejected.
Analysis
8. This Court, before appreciating the argument advanced on behalf of the parties, deems it fit and proper to discuss herein some of the provision of law as contained under the Act, 2002 with its object and intent.
9. The Act was enacted to address the urgent need to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof including vesting of it in the Central Government, setting up of agencies and mechanisms for coordinating measures for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime. The issues were debated threadbare in the United Nation Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Basle Statement of Principles enunciated in 1989, the FATF established at the summit of seven major industrial nations held in Paris from 14 th to 16thJuly, 1989, the Political Declaration and Noble Programme of Action adopted by United Nations General Assembly vide its Resolution No. S-17/2 of 23.2.1990, the United Nations in the Special Session on countering World Drug Problem Together concluded on the 8th to the 10thJune, 1998, urging the State parties to enact a comprehensive legislation. This is evident from the introduction and Statement of Objects and Reasons accompanying the Bill which became the 2002 Act. The same reads thus:
"INTRODUCTION Money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. To obviate such threats international community has taken some initiatives. It has been felt that to prevent money-laundering and connected activities a comprehensive legislation is urgently needed. To achieve this objective the Prevention of Money-laundering Bill, 1998 was introduced in the Parliament. The Bill was Page 7 of 42 B.A. No. 11102 of 2023 referred to the Standing Committee on Finance, which presented its report on 4th March, 1999 to the Lok Sabha. The Central Government broadly accepted the recommendation of the Standing Committee and incorporated them in the said Bill along with some other desired changes.
STATEMENT OF OBJECTS AND REASONS It is being realised, world over, that money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. Some of the initiatives taken by the international community to obviate such threat are outlined below:--
(a) the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, to which India is a party, calls for prevention of laundering of proceeds of drug crimes and other connected activities and confiscation of proceeds derived from such offence.
(b) the Basle Statement of Principles, enunciated in 1989, outlined basic policies and procedures that banks should follow in order to assist the law enforcement agencies in tackling the problem of money-laundering.
(c) the Financial Action Task Force established at the summit of seven major industrial nations, held in Paris from 14th to 16th July, 1989, to examine the problem of money-laundering has made forty recommendations, which provide the foundation material forcomprehensive legislation to combat the problem of money-laundering. The recommendations were classified under various heads. Some of the important heads are--
(i) declaration of laundering of monies carried through serious crimes a criminal offence;
(ii) to work out modalities of disclosure by financial institutions regarding reportable transactions;
(iii) confiscation of the proceeds of crime;
(iv) declaring money-laundering to be an extraditable offence; and
(v) promoting international co-operation in investigation of money-
laundering.
(d) the Political Declaration and Global Programme of Action adopted by United Nations General Assembly by its Resolution No. S-17/2 of 23rd February, 1990, inter alia, calls upon the member States to develop mechanism to prevent financial institutions from being used for laundering of drug related money and enactment of legislation to prevent such laundering.
(e) the United Nations in the Special Session on countering World Drug Problem Together concluded on the 8th to the 10th June, 1998 has made another declaration regarding the need to combat money-laundering. India is a signatory to this declaration."
10. It is thus evident that the Act, 2002 was enacted in order to answer the urgent requirement to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof for combating money-laundering and also to prosecute Page 8 of 42 B.A. No. 11102 of 2023 the persons indulging in the process or activity connected with the proceeds of crime.
11. It needs to refer herein the definition of "proceeds of crime" as provided under Section 2(1)(u) of the Act, 2002 which reads as under:
"2(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property 3[or where such property is taken or held outside the country, then the property equivalent in value held within the country] 4[or abroad]; [Explanation.--For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;]"
12.It is evident from the aforesaid provision that "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.
13.In the explanation it has been referred that for the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. The aforesaid explanation has been inserted in the statute book by way of Act 23 of 2019.
14.It is, thus, evident that the reason for giving explanation under Section 2(1)(u) is by way of clarification to the effect that whether as per the substantive provision of Section 2(1)(u), the property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.
15.The "property" has been defined under Section 2(1)(v) which means any property or assets of every description, whether corporeal or incorporeal, Page 9 of 42 B.A. No. 11102 of 2023 movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.
16.The schedule has been defined under Section 2(1)(x) which means schedule to the Prevention of Money Laundering Act, 2002. The "scheduled offence"
has been defined under Section 2(1)(y) which reads as under:
"2(y) "scheduled offence" means-- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or (iii) the offences specified under Part C of the Schedule."
17. It is evident that the "scheduled offence" means the offences specified under Part A of the Schedule; or the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule.
18. The offence of money laundering has been defined under Section 3 of the Act, 2002 which reads as under:
"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 [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. [Explanation.-- For the removal of doubts, it is hereby clarified that,-- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:-- (a) concealment; or (b) possession; or (c) acquisition; or
(d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]"
19. It is evident from the aforesaid provision that "offence of money-laundering"
means 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 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.
20. It is further evident that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly Page 10 of 42 B.A. No. 11102 of 2023 or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.
21. The punishment for money laundering has been provided under Section 4 of the Act, 2002. 30. Section 50 of the Act, 2002 confers power upon the authorities regarding summons, production of documents and to give evidence. For ready reference, Section 50 of the Act, 2002 is quoted as under:
"50. Powers of authorities regarding summons, production of documents and to give evidence, etc.--(1) The Director shall, for the purposes of section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:-- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a [reporting entity] and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assistant Director or a Deputy Director shall not-- (a) impound any records without recording his reasons for so doing; or (b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the [Joint Director]."
22. The various provisions of the Act, 2002 along with interpretation of the definition of "proceeds of crime" has been dealt with by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors., (2022) SCC OnLine SC 929 wherein the Bench comprising of Three Hon'ble Judges of the Hon'ble Supreme Court have decided the issue by taking into consideration the object and intent of the Act, 2002.
23. The interpretation of the condition which is to be fulfilled while arresting the person involved in the predicate offence has been made as would appear from paragraph265. For ready reference, relevant paragraphs are being referred as under:
Page 11 of 42 B.A. No. 11102 of 2023"265. To put it differently, the section as it stood prior to 2019 had itself incorporated the expression "including", which is indicative of reference made to the different process or activity connected with the proceeds of crime. Thus, the principal provision (as also the Explanation) predicates that if a person is found to be directly or indirectly involved in any process or activity connected with the proceeds of crime must be held guilty of offence of moneylaundering. If the interpretation set forth by the petitioners was to be accepted, it would follow that it is only upon projecting or claiming the property in question as untainted property, the offence would be complete. This would undermine the efficacy of the legislative intent behind Section 3 of the Act and also will be in disregard of the view expressed by the FATF in connection with the occurrence of the word "and" preceding the expression "projecting or claiming" therein. This Court in Pratap Singh v. State of Jharkhand, enunciated that the international treaties, covenants and conventions although may not be a part of municipal law, the same be referred to and followed by the Courts having regard to the fact that India is a party to the said treaties. This Court went on to observe that the Constitution of India and other ongoing statutes have been read consistently with the rules of international law. It is also observed that the Constitution of India and the enactments made by Parliament must necessarily be understood in the context of the present-day scenario and having regard to the international treaties and convention as our constitution takes note of the institutions of the world community which had been created. In Apparel Export Promotion Council v. A.K. Chopra, the Court observed that domestic Courts are under an obligation to give due regard to the international conventions and norms for construing the domestic laws, more so, when there is no inconsistency between them and there is a void in domestic law. This view has been restated in Githa Hariharan, as also in People's Union for Civil Liberties, and National Legal Services Authority v. Union of India."
24. The implication of Section 50 has also been taken into consideration. Relevant paragraph, i.e., paragraphs-422, 424, 425, 431, 434 read as under:
"422. The validity of this provision has been challenged on the ground of being violative of Articles 20(3) and 21 of the Constitution. For, it allows the authorised officer under the 2002 Act to summon any person and record his statement during the course of investigation. Further, the provision mandates that the person should disclose true and correct facts known to his personal knowledge in connection with the subject matter of investigation. The person is also obliged to sign the statement so given with the threat of being punished for the falsity or incorrectness thereof in terms of Section 63 of the 2002 Act. Before we proceed to analyse the matter further, it is apposite to reproduce Section 50 of the 2002 Act, as amended. -----:
424. By this provision, the Director has been empowered to exercise the same powers as are vested in a civil Court under the 1908 Code while trying a suit in respect of matters specified in sub-section (1). This is in reference to Section 13 of the 2002 Act dealing with powers of Director to impose fine in respect of acts of commission and omission by the banking companies, financial institutions and intermediaries. From the setting in which Section 50 has been placed and the expanse of empowering the Director with same powers as are vested in a civil Court for the purposes of imposing fine under Section 13, is obviously very specific and not otherwise.
425. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression "proceeding" in the earlier part of this judgment and held that it Page 12 of 42 B.A. No. 11102 of 2023 applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon which is only for the purpose of collecting information or evidence in respect of proceeding under this Act. Indeed, the person so summoned, is bound to attend in person or through authorised agent and to state truth upon any subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act. The criticism is essentially because of subsection (4) which provides that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC. Even so, the fact remains that Article 20(3) or for that matter Section 25 of the Evidence Act, would come into play only when the person so summoned is an accused of any offence at the relevant time and is being compelled to be a witness against himself. This position is well-established. The Constitution Bench of this Court in M.P. Sharma had dealt with a similar challenge wherein warrants to obtain documents required for investigation were issued by the Magistrate being violative of Article 20(3) of the Constitution. This Court opined that the guarantee in Article 20(3) is against "testimonial compulsion" and is not limited to oral evidence. Not only that, it gets triggered if the person is compelled to be a witness against himself, which may not happen merely because of issuance of summons for giving oral evidence or producing documents. Further, to be a witness is nothing more than to furnish evidence and such evidence can be furnished by different modes. The Court went on to observe as follows: "Broadly stated the guarantee in article 20(3) is against "testimonial compulsion". It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness-stand. We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit it would be to rob the guarantee of its substantial purpose and to miss the substance for the sound as stated in certain American decisions. The phrase used in Article 20(3) is "to be a witness". A person can "be a witness" not merely by giving oral evidence but also by producing documents or making intelligible gestures as in the case of a dumb witness (See section 119 of the Evidence Act) or the like. "To be a witness" is nothing more than "to furnish evidence", and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes. So far as production of documents is concerned, no doubt Section 139 of the Evidence Act says that a person producing a document on summons is not a witness. But that section is meant to regulate the right of cross examination.
It is not a guide to the connotation of the word "witness", which must be understood in its natural sense, i.e., as referring to a person who furnishes evidence. Indeed, every positive volitional act which furnishes evidence is testimony, and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part. Nor is there any reason to think that the protection in respect of the evidence so procured is confined to what transpires at the trial in the court room. The phrase used in article 20(3) is "to be a witness" and not to "appear as a witness". It follows that the protection afforded to an accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room but may well extend to compelled testimony previously obtained from him. It is available therefore to a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in prosecution. Whether it is available to other persons in other situations does not call for decision in this case." (emphasis supplied) Page 13 of 42 B.A. No. 11102 of 2023
431. In the context of the 2002 Act, it must be remembered that the summon is issued by the Authority under Section 50 in connection with the inquiry regarding proceeds of crime which may have been attached and pending adjudication before the Adjudicating Authority. In respect of such action, the designated officials have been empowered to summon any person for collection of information and evidence to be presented before the Adjudicating Authority. It is not necessarily for initiating a prosecution against the noticee as such. The power entrusted to the designated officials under this Act, though couched as investigation in real sense, is to undertake inquiry to ascertain relevant facts to facilitate initiation of or pursuing with an action regarding proceeds of crime, if the situation so warrants and for being presented before the Adjudicating Authority. It is a different matter that the information and evidence so collated during the inquiry made, may disclose commission of offence of money-laundering and the involvement of the person, who has been summoned for making disclosures pursuant to the summons issued by the Authority. At this stage, there would be no formal document indicative of likelihood of involvement of such person as an accused of offence of money laundering. If the statement made by him reveals the offence of money laundering or the existence of proceeds of crime, that becomes actionable under the Act itself. To put it differently, at the stage of recording of statement for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; and in any case, there would be no formal accusation against the noticee. Such summons can be issued even to witnesses in the inquiry so conducted by the authorised officials. However, after further inquiry on the basis of other material and evidence, the involvement of such person (noticee) is revealed, the authorised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection under Article 20(3) of the Constitution. However, if his/her statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence.
434. It is, thus, clear that the power invested in the officials is one for conducting inquiry into the matters relevant for ascertaining existence of proceeds of crime and the involvement of persons in the process or activity connected therewith so as to initiate appropriate action against such person including of seizure, attachment and confiscation of the property eventually vesting in the Central Government."
25.It is evident from the observation so made as above that the purposes and objects of the 2002 Act for which it has been enacted, is not limited to punishment for offence of money-laundering, but also to provide measures for prevention of money-laundering. It is also to provide for attachment of proceeds of crime, which are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceeding relating to confiscation of such proceeds under the 2002 Act. This Act is also to compel the banking companies, financial institutions and intermediaries to maintain Page 14 of 42 B.A. No. 11102 of 2023 records of the transactions, to furnish information of such transactions within the prescribed time in terms of Chapter IV of the 2002 Act.
26.The predicate offence has been considered in the aforesaid judgment wherein by taking into consideration the explanation as inserted by way of Act 23 of 2019 under the definition of the "proceeds of crime" as contained under Section 2(1)(u), whereby and whereunder, it has been clarified for the purpose of removal of doubts that, the "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, meaning thereby, the words "any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence" will come under the fold of the proceeds of crime.
27.So far as the purport of Section 45(1)(i)(ii) is concerned, the aforesaid provision starts from the non-obstante clause that notwithstanding anything contained in the Code of Criminal Procedure, 1973, 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 a 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.
28. Sub-section (2) thereof puts limitation on granting bail specific in sub-section (1) in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail.
The explanation is also there as under sub-section (2) thereof which is for the purpose of removal of doubts. A clarification has been inserted that the expression "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973, and accordingly, the officers authorised under this Act are empowered to arrest an Page 15 of 42 B.A. No. 11102 of 2023 accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section.
29. The fact about the implication of Section 45 has been interpreted by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) at paragraphs-372-374. For ready reference, the said paragraphs are being referred as under:
"372. Section 45 has been amended vide Act 20 of 2005, Act 13 of 2018 and Finance (No. 2) Act, 2019. The provision as it obtained prior to 23.11.2017 read somewhat differently. The constitutional validity of Sub-section (1) of Section 45, as it stood then, was considered in Nikesh Tarachand Shah. This Court declared Section 45(1) of the 2002 Act, as it stood then, insofar as it imposed two further conditions for release on bail, to be unconstitutional being violative of Articles 14 and 21 of the Constitution. The two conditions which have been mentioned as twin conditions are: (i) that there are reasonable grounds for believing that he is not guilty of such offence; and (ii) that he is not likely to commit any offence while on bail.
373. According to the petitioners, since the twin conditions have been declared to be void and unconstitutional by this Court, the same stood obliterated. To buttress this argument, reliance has been placed on the dictum in State of Manipur.
374. The first issue to be answered by us is: whether the twin conditions, in law, continued to remain on the statute book post decision of this Court in Nikesh Tarachand Shah and if yes, in view of the amendment effected to Section 45(1) of the 2002 Act vide Act 13 of 2018, the declaration by this Court will be of no consequence. This argument need not detain us for long. We say so because the observation in State of Manipur in paragraph 29 of the judgment that owing to the declaration by a Court that the statute is unconstitutional obliterates the statute entirely as though it had never been passed, is contextual. In this case, the Court was dealing with the efficacy of the repealing Act. While doing so, the Court had adverted to the repealing Act and made the stated observation in the context of lack of legislative power. In the process of reasoning, it did advert to the exposition in BehramKhurshidPesikaka and Deep Chand including American jurisprudence expounded in Cooley on Constitutional Limitations and Norton v. Shelby County."
30. Subsequently, the Hon'ble Apex Court in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement, (2023) SCC OnLine SC 1486 by taking into consideration the law laid down by the Larger Bench of the Hon'ble Apex Court in Vijay MadanlalChoudhary and Ors. Vs. Union of India and Ors.(supra), has laid down that since the conditions specified under Section 45 are mandatory, they need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It has further been observed that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority Page 16 of 42 B.A. No. 11102 of 2023 is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act. For ready reference, paragraph-17 of the said judgment is quoted as under:
"17. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of 17 A.B.A. No. 10671 of 2023 crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act."
31. The Hon'ble Apex Court in the said judgment has further laid down that the twin conditions as to fulfil the requirement of Section 45 of the Act, 2002 before granting the benefit of bail is to be adhered to which has been dealt with by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) wherein it has been observed that the accused is not guilty of the offence and is not likely to commit any offence while on bail.
32. In the judgment rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) as under paragraph 284, it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken to forward for attachment and confiscation of proceeds of crime Page 17 of 42 B.A. No. 11102 of 2023 and until vesting thereof in the Central Government, such process initiated would be a standalone process. So far as the issue of grant of bail under Section 45 of the Act, 2002 is concerned, as has been referred hereinabove, at paragraph-412 of the judgment rendered in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) it has been held therein by making observation that whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering.
33. The Hon'ble Apex Court in the case of Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India through Manoj Kumar, Assistant Director, Eastern Region, (2015) 16 SCC 1 has been pleased to hold at paragraph -30 that the conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisions of Section 65 and also Section 71 of PMLA. Section 65 requires that the provisions of Cr.P.C shall apply insofar as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of 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 CrPC would apply only if they are not inconsistent with the provisions of this Act.
34. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 CrPC. 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. For ready reference, paragraph-30 of the said judgment reads as under:
"30. The conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisions of Page 18 of 42 B.A. No. 11102 of 2023 Section 65 and also Section 71 of PMLA. Section 65 requires that the provisions of CrPC shall apply insofar as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of 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 CrPC would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 CrPC. 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."
35. Now adverting into fact of the instant case and the allegation levelled against the present petitioner which according to learned counsel for the petitioner is being said that the same cannot be said to attract the ingredient of Section 3 of PMLA. While on the other hand, the learned counsel appearing for the ED has submitted by referring to various paragraphs of prosecution complaint that the offence is very much available attracting the offence under provisions of PML Act.
36. This Court, in order to appreciate the rival submission, is of the view that various paragraphs of prosecution complaint upon which the reliance has been placed on behalf of both the parties, needs to be referred herein so as to come to the conclusion as to whether the parameter as fixed under Section 451(i)(ii) of the PMLA is being fulfilled in order to reach to the conclusion that it is a fit case where regular bail is to be granted or not. Relevant paragraphs of supplementary prosecution complaint are referred herein:
1.6 Moreover, in accordance with the report submitted to the Hon'ble NGT, it is explicitly stated that 125 FIRs have been filed against various persons for offences related to illegal mining, storage, and transportation. This Directorate has also identified certain FIRs in connection with illegal mining and transportation activities during the aforementioned period, with 50 of these FIRs detailed in Paragraph No. 3.4 of the Prosecution Complaint dated 16.09.2022, which have also been relied upon by the Directorate during the investigation and in supplementary prosecution complaint.
Brief Facts of the offence/allegation/charge/amount involved under PMLA 3.6 During the course of the investigation, the FIR(s) mentioned in Paragraph No. 1.2 of this Prosecution Complaint were also identified to be lodged against the accused namely Pashupati Yadav (Accused No.4), his associate Rajesh Yadav @ Dahu Yadav Sunil Yadav Bachhu Yadav and others. The same has been merged in the instant ECIR and taken into the ambit of investigation to conduct a comprehensive investigation. 3.8 During the investigation conducted under the Prevention of Money Laundering Act (PMLA), 2002, it was revealed that Accused No.8 1.e Sunil Page 19 of 42 B.A. No. 11102 of 2023 Yadav is one of the close associates of Pankaj Mishra and played a pivotal role in facilitating illegal mining, its transportation, and other related criminal activities. The investigation has revealed that the accused Sunil Yadav, along with his brother Dahu Yadav @ Rajesh Yadav, jointly controlled Naav Yatayat Sahyog Samiti Limited in Sahebganj under the patronage of Pankaj Mishra. They fraudulently secured a tender for ferry services that was floated by the State of Bihar on 14.03.2022, covering the route from Manihari to Sahebganj This was acquired through their substantial influence, dominance and power The auction was awarded for a sum of Rs 8.52 crore, and an initial deposit of Rs. 4,28,81,865/-in cash was made with the Nazarat Branch of the Collectorate Kathihar by the Samiti, which is under the control of Pankaj Mishra and Dahu Yadav Rajesh Yadav. The accused Sunil Yadav was responsible for organizing this cash and depositing it with the Collectorate in Katihar Additionally, during the investigation, searches were conducted at the residences and business premises of the accused persons on 08.07.2022. 3.9 Further, investigation has revealed that the accused Sunil Yadav along with his brother Rajesh Yadav Dahu Yadav were involved in facilitating the transportation of trucks laden with illegally mined stone chips/aggregates through their inland vessels. During the search dated 08.07 2022, several registers containing the details of such trucks along with the quantity of stone chips/stone were seized and the retention of the same is confirmed by Learned Adjudicating Authority vide order dated 26.12 2022
5. SEARCHES CONDUCTED DURING THE COURSE OF THE INVESTIGATION:
During the investigation, a Total of 47 (Forty-Seven) searches were conducted on 08.07.2022, 14.07.2022, 15.07.2022, 25.07.2022, 26.07.2022 and 24.08.2022. On 08.07.2022 searches were conducted at the residential premises of the accused person at Shobhanpur Bhatta, Sahebganj, Kalı Mandir (Situated between Sahebganj Mirza-Chowki Road), 816109 as well as at business premises of the accused at Hotel White House, Shibganj, Bengali Tola Road, near Railway Station, Sahebganj, Jharkhand 816109. During the course of the above stated searches, in total Cash amounting to Rs 5,34,44,400/ was seized, bank balances amounting to Rs 13,32,26,570/-, an inland vessel MN Infralink -III, having registration number WB 1809, along with 5 number of crushers were frozen under Section 17 of PMLA. In addition to these two trucks were also seized During the above searches, several incriminating documents/records and digital devices were also seized. The details of the above seized items and frozen properties have been mentioned in paragraph 7 of the Prosecution Complaint dated 16.09.2022 which includes the seizure from the residential premise under the occupation present accused Surul Yadav situated at Shobhanpur Bhatta, Sahebganj, Kali Mandir (Situated between Sahebganj Mirza- Chowki Road), 816109.
7.3 Further during the investigation, During the investigation the accused Sunil Yadav was also summoned under Section 50 of PMLA, 2002 on 28.07.2022, 16.08.2022 and 01.09.2022 for the purpose of investigation.
However, the accused Sunil Yadav deliberately and intentionally avoided his presence before the Investigating Officer and as such NBW dated 29.10.2022 was issued by this Hon'ble court followed by the processes under Section 82 and 83 of Cr.P.C.
Brief detail of persons examined u/s 50(2) and 3 of PMLA 8.1 The statement dated 07.06.2022 of Ankush Rajhans, Proprietor of Enterprises recorded u/s 50 of PMLA, (RUD No. 46 and 47 of PC dated 16.09.2022) Infinity reveals that he was given permission by IWAI (Inland Waterways Authority of India) for operating the inland vessels in Sahebganj, but Pankaj Mishra, Dahu Yadav and others did not allow him to operate the Page 20 of 42 B.A. No. 11102 of 2023 same and hindered and stopped the same forcefully. He further stated that Nav Yatayaat Samiti transports the illegally mined stone chips from different places in Sahebganj district to Bihar, in which the accused Sunil Yadav is a partner with Rajesh Yadav Dahu Yadav. The transportation is done from two ghats viz. Samda Ghat and Garam Ghat Garam Ghat is not a notified ghat. But, a large no of ferries operate from this place. The operation of this ghat is mainly looked at by Dahu Yadav Further, he has also stated in his statement under section 50 of PMLA, 2002 that Sunil Yadav, brother of Dahu Yadav carries out illegal mining in Anjuman Nagar with the backing of Dahu Yadav and Pankaj Mishra.
8.2 Rajesh Yadav @ Dahu Yadav (Associate of Pankaj Mishra) in his statement recorded under section 50 of PMLA on 14.07.2022 (RUD No. 57 of PC dated 16.09.2022), that he along with his brothers Sunil Yadav and Anıl Yadav are partners in his firm Singhwahını Transports and Logistics which possesses two inland vessels namely Titan-3 and Titan 4 The firm is engaged in the transportation of stone- laden trucks from Garam Ghat and Samda Nala Ghat, Sahebganj to Maniharı Ghat, Katihar Further, he has also stated that his brother Sunil Yadav is also his partner in his company R.A Yadav Transportation Private Limited. In his statement, he also stated that many of the trucks that were transported through his inland vessels did not have any mirung challan. Further, in his statement dated 16.07 2022 recorded under section 50 of PMLA, 2002, he stated that most of the money for the transportation of stone lade trucks was used to receive the fare in cash from the trucks for transportation through his inland vessels. 8.3 The statement of Shri Mukesh Yadav (RUD No. 51 of PC dated 16.09.2022) (one resident of Sahebganj who was threatened by the accused person) S/o Shri Paramanand Yadav was recorded on 07.06.2022 u/s 50(2) of PMLA, 2002 He has stated that Dahu Yadav and Bachchu Yadav are people of criminal character, against whom dozens of criminal cases are registered and there are dozens of armed associates in their gang and the business of Dahu Yadav and Bachhu Yadav is to run ships day and night from Garam Ghat, through which illegal stone-laden trucks are transported Trucks laden with stone chips are charged more than the prescribed fare, with overloaded trucks crossing the ship without challan, which is also transported by słup during nighttime Pankaj Mishra is involved in extortion, and he takes advantage of his hold in the police administration for illegal recovery He has further stated in his statement that on 14.03.2022 the abovesaid persons along with Sunil Yadav started firing at him and one person Ankush Rajhans when they were taking their vessel to participate in auction at Maniharı Ghat, Katihar Bihar.
Investigation has revealed that the accused Dahu Yadav and Sunıl Yadav have the illegal business of transportation of Cargo vessels through which they are involved in the transportation of stone-laden trucks. These trucks are transported illegally from Sahebganj to Bihar through Cargo vessels, which operate between Sahebganj Ghats to Maniharı Ghat Bihar. Sunil Yadav brother of Dahu Yadav looks after the transportation business with his Rajesh Yadav @ Dahu Yadav. This transportation business is carried under one firm Singhwahını Transports & Logistics. The work of Singhwahini Transports & Logistics is collectively looked after by Dahu Yadav, Sunil Yadav and Pashupati Yadav. The accused person in connivance with his son Yadav and others were involved in intimidating Mukesh Yadav and his associates in order to threaten these persons to not participate in the tender Dahu. 8.4 Statement of Hulas Chaudhary dated 31.08.2022 recorded under section 50 of PMLA, 2002 reveals that he had previously worked as a cashier in Naav Yaatayat Sahıyog Samiti Currently, he is a member of the samiti and supervises its operations He also mentioned that he has known Rajesh Yadav Page 21 of 42 B.A. No. 11102 of 2023 Dahu Yadav, for the past four years. Rajesh Yadav, alias Dahu, participated in two tenders for Naav Yaatayat Sahıyog Samiti over a span of four years. Hulas Chaudhary stated that Rajesh Yadav made payments for the tenders. He paid Rs 28 lakhs in March 2020-21 and an additional Rs. 8.52 crores in March 2022 Furthermore, Hulas Chaudhary disclosed that Rajesh Yadav, along with his brother Sunil Yadav, manages transportation-related work at the Ghat Additionally, the samıtı is paid an annual sum of Rs 10 lakhs by them.
Hulas Chaudhary's statement under section 50 of PMLA, 2002 also revealed that Rajesh Yadav and the accused, Sunil Yadav, transferred amounts of Rs 145 crore and Rs. 1.35 crore on two occasions from the bank account of Singhwahini Transports and Logistics to Hulas Chaudhary's SBI account (No 34673527802) This money was intended as payment for obtaining the tender for Naav Yaatayat Sabiyog Samiti. Furthermore, Hulas Chaudhary clarified that the funds deposited into his bank account from Singhwahını Transports and Logistics were provided by Sunil Yadav and Rajesh Yadav, intended for instalment payments in procuring tenders.
8.6 Statement of Sunil Yadav dated 18.10.2023 -The custody of the accused person was granted by the court vide the order of the Hon'ble High Court dated 17.10.2023. The statement of the accused person recorded on 18.10.2023 and 19.10.2023 recorded by explaining the provisions of section 50 of PMLA, 2002 reveals that he was associated with the transportation activities under Singhwahını Transports and Logistics. The vessels operating under this firm were involved in transporting stone laden trucks from Sahebganj to Bihar The accused person and his brother Rajesh Yadav Dahu Yadav took the cash from those truck operators in lieu of passing them to Bihar, having knowledge that the said trucks did not have mining challans. His statement further reveals that the money deposited into his bank account as well as in the account of Singhwahını Transport and Logistics has been derived from the activities linked to the transportation of stone laden trucks through cargo vessels. His statement also reveals that the activity on the Ghats were also looked after by Bachhu Yadav (accused no. 2) and Rajesh Yadav @ Dahu Yadav. His statement under section 50 of PMLA, 2002 also reveals that he was responsible for the cash deposits amounting to Rs 2.80 crores in his bank accounts which were used for obtaining the tender of the ferry services in the name of Sahebganj Naw Yatayat Sahiyog Samiti Limited. Brief summary of evidence to prove that the accused and properties are involved in money laundering along with the finding of the investigation officer under PMLA:
9.2 It is also revealed during the investigation that Accused No. 1, Pankaj Mishra, is receiving assistance from local criminals, including Sunil Yadav, Rajesh Yadav (Dahu Yadav) and Bachhu Yadav (Accused No. 2), in their activities related to illegal mining and the illegal transportation of stone chips from Sahebganj District. Additionally, the criminal backgrounds of the accused persons have been identified during the course of the investigation.
Sunil Yadav has multiple criminal cases and is a co-accused with Bachhu Yadav, Rajesh Yadav, and others who also have various criminal cases registered against them.
9.9 Investigation reveals that M/s Singhwahini Transports and Logistics having its principal place of business and its address at Shobhanpur Bhatta, Sahebganj 816109, Jharkhand was incorporated on 17.02.2023 having three persons namely Rajesh Yadav @ Dahu Yadav, Sunil Kumar Yadav and Anil Yadav (all three partners are brothers) as its partners. From the partnership deed, it is seen that the capital of the partnership business as and when considered necessary and expedient for the purpose of carrying on business Page 22 of 42 B.A. No. 11102 of 2023 was decided to be contributed by the partners in the proportions as might be mutually agreed upon. Further, the profit and loss of the business was agreed to be shared upon by the partners in the i. Rajesh Yadav, Party of the first part - 40% ii. Anil Yadav, party of the second part - 30% iii. Sunil Yadav, party of the third part - 30% 9.17 Further, it is also revealed that a significant cash deposit has been made into the bank account of Singhwahini Transports and Logistics (accused No
9) and in the bank account of its partner Sunil Yadav (accused No 8) is represented from the operation of the above stated Cargo Vessels. --- 9.19 Investigation reveals that the gross receipts declared by Sunil Yadav in their LT returns during the assessment year 2019-20 to 2022-23 is only Rs. 18,91,93,016/- Further, the investigation has also revealed that the said cash deposit of Rs. 20,67,54,220/- into the accounts of the accused person and the accused firm M/s Singhwahini Transports and Logistics have been deposited in the account and further a majority of the cash has been shown in the I.T returns. In fact, the said amount of money deposited in cash was acquired out of the activities relating to the illegal transportation of the stone chips and related criminal activities and declaring them into the I.T returns is only an attempt to claim and project the proceeds of crime as untainted properties. Brief summary of result of investigation under PMLA 10.3 Pankaj Mishra, along with his accomplices, exercises control over stone mining, the setup and operation of several crushers, and the illegal transportation of stone chips via trucks and inland vessels in Sahebganj. They have a fixed share in nearly all the mining and transportation activities carried out by various individuals, including their associates. Pankaj Mishra wields political influence as the representative of the Chief Minister of Jharkhand and MLA from Barhait, Sahebganj. The accused persons mentioned above, including Sunil Yadav, enjoy his support to conduct their illegal activities related to the transportation of stone chips through cargo vessels run under his firm Singhwahini Transports & Logistics and through trucks, as well as their extortion business.
13. DETAILS OF PERSONS/ENTITIES INVOLVED IN COMMISSIONING THE OFFENCE OF MONEY LAUNDERING-
Sunil Kumar Yadav (Accused no 8) a. Accused No 8 is directly involved in the process and activity linked to Proceeds of Crime as mentioned in preceding paras herein above b. The accused, used to transport the illegally mined stone chips/aggregates from the cargo vessels which were plying from Sahebganj to Bihar. The registers containing details of such trucks and proceeds of crime acquired through such activities have also been seized. The accused person had the patronage of Pankaj Mishra for which a fixed Share of money from each truck was given to him.
c. The accused was directly involved in the use of proceeds of crime amounting to Rs. 4,28,81,865/- which was deposited in cash with the Nazarat Branch of collectorate, Katihar, for obtaining the tender of ferry Services which was floated on 14.03.2022 by Bihar State on behalf of Naav Yaatayat Sahıyog Samiti Ltd The accused was also directly associated with the cash deposit of Rs. 2.80 crores into the accounts of Singhwahını Transports & Logistics which was also used for paying the balance payments to the collectorate, Katihar as the balance bid amount. Notably, after obtaining such Page 23 of 42 B.A. No. 11102 of 2023 tender the cargo vessels started operations to transport illegally mined stone chips d. The total cash deposits in the bank accounts under his control and occupation during period 2017-18 to 2022-23 have been identified as Rs. 20,67,54,220/- The said cash deposits are nothing but proceeds of crime and the accused is directly a party with his absconded brother Rajesh Yadav @ Dahu Yadav in acquiring and using them.
15. ROLE OF ACCUSED IN OFFENCE OF MONEY LAUNDERING UNDER SECTION 3 OF PMLA, 2002 -
The roles of Accused No. 1 to 7 are already part of the Prosecution Complaint dated 16.09.2022, Supplementary Prosecution Complaint dated 19.06 2023 and 02.09.2023 and the same is not repeated here. However, evidence and role of other accused in support or corroboration to earlier Prosecution Complaints shall be read in concurrence.
A. Sunil Yadav, accused no. 8- The accused Sunil Yadav is a partner of accused no 9, Singhwahını Transport and Logistics and the authorized signatory of its bank accounts. The accused person in association with accused no. 9, M/s Singhwahini Transport and Logistics is directly a party and is knowingly involved in the activities linked with proceeds of crime The accused person is directly linked to the acquisition of proceeds of crime amounting in cash worth Rs. 20,87,80,720/-in the bank accounts linked to him as well as cash amounting to Rs 4,28,81,865/- which was directly used for payment of tender of the ferry services with Nazır, Collectorate, Katihar On the strength of the said tender and the agreement with Sahebganj Naav Yaatayat Sahyog Samiti Limited, the accused person further indulged in illegal transportation on the stone laden trucks through cargo vessels without desired mining challans. The accused person directly acquired proceeds of crime amounting to Rs. 4,38,65,734/ in bank accounts which were non cash credits and linked to the activities of the illegal operations of the cargo vessels. Thus, the accused person was directly linked to the proceeds of crime amounting to Rs. 33,21,86,932/- The accused person was knowingly a party with accused no 1 namely Pankaj Mishra, accused no 2 namely Bachhu Yadav and the absconded accused person namely Rajesh Yadav Dahu Yadav in transportation of the illegally mined stone chips through inland vessels in heu of which, the above stated proceeds of crime were acquired. The accused Sunil Yadav was directly involved in the use of proceeds of crime amounting to Rs 8.52 crores in cash for obtaining the tender of the Sahebganj-Maniharı Interstate Ferry Services. The said tender was obtained by becoming a party with the accused no. 1 Pankaj Mishra and his brother Rajesh Yadav Dahu Yadav, who is an absconder The accused person directly indulged with other accused persons in transporting trucks and other vehicles laden with stones chips and other aggregates and transported them without mining challan knowing the fact that the said activity was illegal The above-said process or activity connected with proceeds of crime was a continuing activity and continued even before the tender floated by Bihar State on 14.03.2022 Therefore, the accused Sunil Kumar Yadav is directly linked with the process and activity connected with the proceeds of crime including its concealment. acquisition, possession and use as well as claiming and projecting the proceeds of crime as untainted property Thus, the accused Sunil Yadav has committed offences under section 3 r/w section 70 of PMLA, 2002 of PMLA, 2002 and as such, is liable to be prosecuted under section 4 of the PMLA,2002.
B. M/s Singhwahini Transport and Logistics, accused no. 9 The accused M/s Singhwahını Transports & Logistics is a firm, which is controlled by its designated partners namely Sunil Yadav and his brother Rajesh Yadav Dahu Page 24 of 42 B.A. No. 11102 of 2023 Yadav. The accused person namely Singhwahını Transport and Logistics acquired proceeds of crime amounting to Rs 13,43,00,980/-in its Indian Overseas Bank account 234202000000500, proceeds of crime amounting to Rs 11,11,38,353/- In its HDFC Bank account no. 50200041248521 The total proceeds of crime acquired by the accused in its bank account was Rs 25,16,62.585/- out of which Rs 19,59,49,520/- was acquired in cash. The accused person was a party with accused no. 8 namely Sunil Yadav, accused no. 1 namely Pankaj Mishra, accused no 2 namely Bachhu Yadav and the absconded accused person Rajesh Yadav Dahu Yadav in transportation of illegally mined stone laden trucks through cargo vessels which were transported without any valid mining/transportation challans. The proceeds were laundered and used through the accused person showing it as a legal entity and was used as cover to operate the illegal busines 20 of stone chips transportation.
Hence, the accused is directly a party with the above stated accused persons in activities connected with proceeds of crime including its acquisition, use, concealment and projection of tainted property as untainted property and hence, is guilty of the offence of money laundering as defined under section 3 r/w Section 70 of PMLA, 2002 and as such is liable to be punished under section 4 of PMLA, 2002.
37. It is evident from supplementary prosecution complaint that 125 FIRS have been Lodged against various persons for the offence of illegal mining, storage, and transportation. The Directorate has also identified 50 FIRS under various sections including sections 411, 414 of IPC, as well as for offences under section 3, 4, 5 of explosive substance Act, 1908 and Section & of Environment Protection Act, 1986 linked to illegal mining and transportation activities in Sahebganj and merged them into the ECIR for a comprehensive investigation.
38. It was revealed in the investigation that the petitioner used to transport illegally mined stone chips/aggregates from cargo vessels that were plying from Sahebganj to Bihar. The accused person had the patronage of Pankaj Mishra, for which a fixed share of money from each truck was given.
Further, it is revealed that the operation of the ferries is controlled by Nav Yatayat Samiti, Sahebganj which has taken the tender for an amount of Rs 8.5 crores. Investigation has also revealed that Pankaj Mishra along with Dahu Yadav @ Rajesh Yadav (Brother of Petitioner), Bacchu Yadav, and present petitioner Sunil Yadav all together control Naw Yatayat Sahyog Samiti Limited, Sahebganj and they fraudulently obtained the tender of ferry services, which was floated by Bihar State on 14.03.2022 from Manihari to Sahebganj using their power, clout and influence.
Further the petitioner is directly involved in using the proceeds of crime amounting to Rs. 4,28,81,865/- which was deposited in cash with the Nazarat Page 25 of 42 B.A. No. 11102 of 2023 Branch of the collectorate, Katihar, to obtain the tender for ferry services floated on 14.03.2022 by Bihar state on behalf of Naav Yatayat Sahiyog Samiti Ltd. Petitioner was also directly associated with the cash deposit of Rs. 2.80 crores into the accounts of Singhwahini Transports & Logistics, which was used for paying the balance payments to the collectorate, Katihar, as the balance bid amount. Notably, after obtaining such tender, the cargo vessels started operations to transport illegally mined stone chips.
Further investigation revealed that an amount of Rs. 20,67,54,220/-has been deposited in cash in the bank accounts under his control and occupation during the period 2017-18 to 2022-23. The said cash deposits are nothing but proceeds of crime, and the accused is directly involved, along with his absconding brother Rajesh Yadav @ Dahu Yadav, in acquiring and using them.
The present petitioner directly looks transportation of over the illegal stone chips through inland vessels. These inland vessels are indirectly operated by Pankaj Mishra through his accomplices Rajesh Yadav, Rahul Yadav, Bachhu Yadav and present petitioner. Several trucks laden with stone chips/aggregates are crossed through these inland vessels without mining challans. These stone chips are mined illegally and are undeclared to the government for evading royalty on them. During searches, registers containing the details of the vehicles, no. of trips, payment collected from these trucks in cash in lieu of illegal transportation have also been seized. The details of the vehicles have been cross-verified from the District Mining Officer and the illegal transportation of the stone chips have been confirmed. Thus, the investigation has revealed that there is connivance of the petitioner with Pankaj Mishra and Rajesh Yadav & Dahu Yadav in the illegal activities connected with the proceeds of crime derived out of illegal mining activities and the said petitioner is facilitating the accused person Pankaj Mishra to run the business of extortion illegal mining and transportation activities in Sahebganj. Besides this, heavy levy is extorted forcefully from transport vehicles operating in these mining areas, for allowing them to transport the mined stones and other items.
Page 26 of 42 B.A. No. 11102 of 2023It has also come on record that the Petitioner has criminal antecedents and is a habitual offender, as mentioned in Paragraphs No. 11.5 of the prosecution complaints which is also considered during conducting investigation under PMLA, 2002 as various FIR(S) have scheduled offence as specified under Part A of the Schedule. Investigation has also revealed that in lieu of facilitating and assisting Pankaj Mishra, the petitioner is getting protection in the criminal cases lodged against him.
Further statement of Rajesh Yadav @ Dahu Yadav brother of petitioner was recorded under section 50 of PMLA wherein, he has revealed his affiliation with Pankaj Mishra and also disclosed information regarding the operation of ferry services and transportation of stone chips via Inland ferry services. Other witnesses also corroborated to the fact that Rajesh Yadav and Petitioner along with other accomplices are operating illegal transportation business of illegally mined stone as well as collecting levy from truck drivers etc.
39. The present petitioner is a partner in Singhwahini Transport and Logistics and the authorized signatory of its bank accounts. He is directly a party and knowingly involved in the activities linked with proceeds of crime. He is directly linked to the acquisition of proceeds of crime amounting in cash worth Rs. 20,87,80,720/- in the bank accounts linked to him as well as cash amounting to Rs. 4,28,81,865/- which was directly used for payment of tender of the ferry services with Nazir, Collectorate, Katihar.
40. It is pertinent to mention here that Supplementary Prosecution Complaint was filed against Sunil Yadav (Present Petitioner) and Singhwahini Transports & Logistics on 20.10.2023 on and cognizance of the same is taken by the Learned Trial Court, and trial is in progress.
41. It is submitted that petitioner directly looks over the illegal transportation vessels of stone chips through inland. These inland vessels are indirectly operated by Pankaj Mishra through his accomplices Rajesh Yadav, Sunil Yadav, Rahul Yadav, and Bachhu Yadav. Several laden trucks with chips/aggregates are crossed through these inland vessels without mining challans. These stone chips are mined illegally and undeclared to government for evading royalty on the them. During searches, registers Page 27 of 42 B.A. No. 11102 of 2023 containing the details of the vehicles, no. of trips, payment collected from these trucks in cash in lieu of illegal transportation have also been seized. The details of the vehicles have been cross-verified from the District Mining Officer and the illegal transportation of the stone chips have been confirmed. Thus, the investigation has revealed that there is connivance of the petitioner Sunil Yadav with Pankaj Mishra and Rajesh Yadav @ Dahu Yadav in the illegal activities connected with the proceeds of crime derived out of illegal mining activities.
42. Thus, from aforesaid imputation and discussion prima-facie it appears that the involvement of present petitioner in alleged crime cannot be lightly brushed out.
43. Now coming to the contentions as raised by the learned counsel for the petitioner wherein he has taken the ground that the petitioner is not accused in the predicate offence, hence cannot be made liable for money laundering offence. But the contention of the learned counsel appears to be misplaced because the offence of money Laundering is independent of the scheduled offence, particularly in matters related to the proceeds of crime.
44. At this juncture it will be purposeful to discuss the core of section 3 of PML Act, 2002. Section 3 of the Act 2002, addresses itself to three things (i) person;
(ii) process or activity; and (iii) product. Insofar as persons covered by Section 3 are concerned, they are, (i) those who directly or indirectly attempt to indulge; or (ii) those who knowingly assists; or (iii) those who are knowingly a party; or (iv) those who are actually involved. Insofar as process is concerned, the Section identifies six different activities, namely (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting; or (vi) claiming as untainted property, any one of which is sufficient to constitute the offence. Insofar as product is concerned, Section 3 identifies "proceeds of crime" or the property representing the proceeds of crime as the product of the process or activity.
45. The argument that the mere generation of proceeds of crime is not sufficient to constitute the offence of money laundering, is actually preposterous. It is evident that as per Section 3, there are six processes or activities identified therein. They are, (i) concealment; (ii) possession; (iii) acquisition; (iv) use;
Page 28 of 42 B.A. No. 11102 of 2023(v) projecting as untainted property; and (vi) claiming as untainted property. Even if a person does not retain the money generated as proceeds of crime but "uses" it, he will be guilty of the offence of money-laundering, since "use" is one of the six activities mentioned in Section 3. In the instant case the proceeds obtained from illegal mining activities are laundered through diverse methods, one of which Involves making incremental cash deposits in their bank accounts. This is done in a piecemeal manner with the intention of presenting the tainted property as untainted.
46. Keeping in mind these essential elements that make up the molecular structure of Section 3, this Court adverts in to facts of the instant case as discussed in preceding paragraph is of view that the contention of the learned counsel for the petitioner has no substance.
47. Further, the burden of proof is on the Petitioner until the contrary is proved, the same is observed in various judicial pronouncements and upheld in Vijay Madanlal Choudhary (2022) SCC Online 929. In Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46, the Supreme Court observed that the provisions of section 24 of the PMLA provide 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.
48. So far as the ground taken on behalf of the petitioner that no predicate offence is said to be committed is concerned, while considering the argument advanced on behalf of the opposite party-ED this Court is of thew that the FIRs were directed to be registered by the NGT, has also been brought under the purview of the enquiry by the ED wherefrom when the material was collected of illegal mining, hence, a case under Section 411 and 414 of Indian Penal Code (IPC) were instituted. These offences are well within the fold of the scheduled offence, hence, by taking into consideration the aforesaid material to the extent that the offence under Section 411/414 of Indian Penal Code has been found to be there, as such, the argument which has been advanced that there is no schedule offence, is not fit to be accepted.
49. Further the offence of money laundering as contemplated in Section 3 of the PMLA has been elaborately dealt with by the three Judge Bench in Vijay Page 29 of 42 B.A. No. 11102 of 2023 Madanlal Choudhary (supra), in which it has been observed that Section 3 has a wider reach. The offence as defined captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and is not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money laundering. Of course, the authority of the Authorised Officer under the Act to prosecute any person for the offence of money laundering gets triggered only if there exist proceeds of crime within the meaning of Section 2(1)(u) of the Act and further it is involved in any process or activity. Not even in case of existence of undisclosed income and irrespective of its volume, the definition of "Proceeds of Crime" under Section 2(1)(u) will get attracted, unless the property has been derived or obtained as a result of criminal activity relating to a scheduled offence. The property must qualify the definition of "Proceeds of Crime" under Section 2(1)(u) of the Act. As observed, in all or whole of the crime property linked to scheduled offence need not be regarded as proceeds of crime, but all properties qualifying the definition of "Proceeds of Crime" under Section 2(1)(u) will necessarily be the crime properties.
50. To constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. The explanation clarifies that the proceeds of crime include property, not only derived or obtained from scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime.
51. Further it is settled proposition of law that if a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime, in that case, he can be held guilty of committing an offence under Section 3 of the PMLA. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence.
Page 30 of 42 B.A. No. 11102 of 202352. The contention of learned counsel for the petitioner that there was delay of 2 years on the part of the ED in registering ECIR after lodging of the FIR, is a self-serving argument. If the ED registers an Information Report immediately upon the registration of a FIR for a predicate offence, ED will be accused of acting in haste. If they wait until the story unfolds up to a particular stage, ED will be attacked as guilty of delay. Therefore, all the arguments on facts and all the legal contentions emanating from some portions of the judgment in Vijay Madanlal Choudhary (supra), to challenge the validity of the proceedings initiated by ED are completely unsustainable.
53. So far as the facts of the present case are concerned, the respondent ED has placed heavy reliance on the statements of witnesses recorded and the documents produced by them under Section 50 of the said Act, to prima facie show the involvement of petitioner in the alleged offence of money laundering under Section 3 thereof.
54. The three Judge Bench the Hon'ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement (2018) 11 SCC 46 has held that the statements of witnesses recorded by Prosecution - ED are admissible in evidence in view of Section 50. Such statements may make out a formidable case about the involvement of the accused in the commission of the offence of money laundering
55. In the instant case, it has been found that during the course of investigation from the statements of witnesses recorded under Section 50 that the petitioner had directly indulged, knowingly as the party and is actually involved in all the activities connected with the offence of money laundering. i.e., use or acquisition, possession, concealment, and projecting or claiming as untainted property.
56. As discussed above, the "offence of money-laundering" means 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 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 and the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly Page 31 of 42 B.A. No. 11102 of 2023 or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.
57. Further, it is evident from the judicial pronouncement as discussed above that in order to constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. The explanation clarifies that the proceeds of crime include property, not only derived or obtained from scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime and in the instant case from perusal of paragraph of the prosecution complaint it is evident that the petitioner is not only involved rather his involvement is direct in procuring the proceeds of crime by way of connivance with the other accused persons.
58. Further it is pertinent to mention here that it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence. Reference in this regard may be taken from the Judgment as rendered by the Hon'ble Apex Court in Pavna Dibbur Vs. Directorate of Enforcement, 2023 LiveLaw (SC)1021.
59. At the cost of repetition, it is pertinent to mention here that the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the offence of money laundering under Section 3 of the Act. Reference in this regard may be taken from the judgment as rendered by the Hon'ble Supreme Page 32 of 42 B.A. No. 11102 of 2023 Court in the case of Tarun kumar vs. Assistant Director, directorate of Enforcement (supra).
60. Thus, on the basis of the discussion made hereinabove the contention of the learned counsel for the petitioner that even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the P.M.L. Act, 2002, is totally misplaced in the light of accusation as mentioned in prosecution complaint.
61. So far as the argument advanced on behalf of the learned counsel for the petitioner that the ED has already filed a supplementary prosecution complaint against the petitioner and, thus, investigation is complete and therefore, no purpose would be served in keeping the petitioner in judicial custody.
62. In response to the said submission, the learned counsel for ED submitted that the mere fact that investigation is complete does not necessarily confer a right on the accused/petitioner to be released on bail.
63. In the context of aforesaid contention of learned counsel for the petitioner it would be relevant to note here that in the instant case mere filing of the charge-sheet does not cause material change in circumstances.
64. Further, it is settled proposition of law that the filing of charge-sheet is not a circumstance that tilts the scales in favour of the accused for grant of bail and needless to say, filing of the charge-sheet does not in any manner lessen the allegations made by the prosecution.
65. At this juncture it would be apposite to refer the decision of Hon'ble Supreme Court rendered in the case of Virupakshappa Gouda v. State of Karnataka, (2017) 5 SCC 406 wherein at paragraph-12 the Hon'ble Apex Court has observed which reads as under:
"12. On a perusal of the order passed by the learned trial Judge, we find that he has been swayed by the factum that when a charge-sheet is filed it amounts to change of circumstance. Needless to say, filing of the charge-sheet does not in any manner lessen the allegations made by the prosecution. On the contrary, filing of the charge-sheet establishes that after due investigation the investigating agency, having found materials, has placed the charge-sheet for trial of the accused persons."
66. Thus, this Court, after taking note of the settled legal proposition, is of view that the contention of the learned counsel for the petitioner is not tenable in Page 33 of 42 B.A. No. 11102 of 2023 the eye of law.
67. Now in the light of aforesaid discussion at this juncture this Court thinks it fit to revisit the scope of section 45 of the PML Act 2002. As discussed in preceding paragraphs that Section 45 of the PMLA Act, 2002 provides twin test. First 'reason to believe' is to be there for the purpose of reaching to the conclusion that there is no prima facie case and second condition is that the accused is not likely to commit any offence while on bail.
68. Sub-section (1)(ii) of Section 45 of the Act, 2002, provides that if 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, meaning thereby, the parameter which is to be followed by the concerned court that satisfaction is required to be there for believing that such accused person is not guilty of such offence and is not likely to commit of offence while on bail.
69. Section 45(2) provides to consider the limitation for grant of bail which is in addition the limitation under the Code of Criminal Procedure, 1973, i.e., limitation which is to be considered while granting the benefit either in exercise of jurisdiction conferred to this Court under Section 438 or 439 of Cr.P.C. is to be taken into consideration.
70. It is, thus, evident by taking into consideration the provision of Sections 19(1), 45(1) and 45(2) of PML Act that the conditions provided therein are required to be considered while granting the benefit of regular bail in exercise of power conferred under Section 439 of Cr.P.C., apart from the twin conditions which has been provided under Section 45(1) of the Act, 2002.
71. This Court, based upon the imputation as has been discovered in course of investigation, is of the view that what has been argued on behalf of the petitioner that proceeds cannot be said to be proceeds of crime but as would appear from the preceding paragraphs, money which has been obtained by the accused person has been routed by this petitioner and transferred it into the account of the accused persons.
72. Section 45 of the PMLA turns the principle of bail is the rule and jail are the exception on its head. Under the PMLA regime jail is the rule and bail are the exception. The power of the Court to grant bail is further conditioned upon Page 34 of 42 B.A. No. 11102 of 2023 the satisfaction of the twin conditions prescribed under Section 45(1) (i) and
(ii) PMLA. While undertaking this exercise, the Court is required to take a prima facie view on the basis of materials collected during investigation. The expression used in Section 45 of PMLA are "reasonable grounds for believing" which means that the Court has to find, from a prima facie view of the materials collected during investigation that there are reasonable grounds to believe that the accused has not committed the offence and that there is no likelihood of him committing an offence while on bail. Recently, in Tarun Kumar v Assistant Directorate of Enforcement, 2023 SCC Online SC 1486, the Hon'ble Supreme Court has held as under:
"As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act."
73. Further, it is pertinent to mention here that the process envisaged under Section 50 of PMLA is in the nature of an inquiry against the proceeds of crime and it is not an investigation and the authorities who are recording the statements are not police officers and therefore, these statements can be relied upon as admissible piece of evidence before the Court. The summons proceedings and recording of statements under PMLA are given the status of judicial proceedings under Section 50(4) of PMLA. When such is the sweep of Section 50 of PMLA, the statements that have been recorded and which has been relied upon in the complaint must be taken to be an important material implicating the petitioner. The statements that were recorded during the investigation has been dealt with in prosecution complaint and many of the statements clearly implicate the petitioner. Therefore, the statements that have been recorded and which has been relied upon, is also a strong material that prima facie establishes the offence of money laundering against the petitioner.
Page 35 of 42 B.A. No. 11102 of 202374. It is pertinent to mention here that the Hon'ble Apex Court in P. Chidambaram v. Central Bureau Investigation reported in 2020 13 SCC 337 has come up with triple test under Section 439 of Cr.PC, while dealing with cases involving economic offences. The principles that were summarized in this judgment is extracted hereunder:
"21. The jurisdiction to grant bail has to be exercised on the basis of the well- settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail: (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; (iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; (iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused; (v) larger interest of the public or the State and similar other considerations."
75.This Court on the basis of aforesaid discussions, factual aspects as also the legal position is of the view that there is no reason to believe by this Court that the petitioner is not involved in managing the money said to be proceeds of crime.
76.This Court while considering the prayer for regular bail has taken into consideration that though the Court is not sitting in appeal on the order passed by learned court since this Court is exercising the power of Section 439 Cr.P.C but only for the purpose of considering the view which has been taken by learned court while rejecting the prayer for bail, this Court is also in agreement with the said view based upon the material surfaced in course of investigation, as referred hereinabove.
On the issue of Parity:
77.Now coming to the ground of parity as raised by the learned counsel for the petitioner, the law is well settled that the principle of parity is to be applied if the case of the fact is exactly to be similar then only the principle of parity in the matter of passing order is to be passed but if there is difference in between the facts then the principle of parity is not to be applied.
78.It is further settled connotation of law that Court cannot exercise its powers in a capricious manner and has to consider the totality of circumstances before granting bail and by only simple saying that another accused has been granted bail is not sufficient to determine whether a case for the grant of bail on the basis of parity has been established. Reference in this regard may be taken Page 36 of 42 B.A. No. 11102 of 2023 from the judgment as rendered by the Hon'ble Apex Court in Ramesh Bhavan Rathod vs. Vishanbhai Hirabhai Makwana, (2021) 6 SCC 230, wherein, it has been held as under:
"25. We are constrained to observe that the orders passed by the High Court granting bail fail to pass muster under the law. They are oblivious to, and innocent of, the nature and gravity of the alleged offences and to the severity of the punishment in the event of conviction. In Neeru Yadav v. State of U.P. [Neeru Yadav v. State of U.P., (2014) 16 SCC 508 :] , this Court has held that while applying the principle of parity, the High Court cannot exercise its powers in a capricious manner and has to consider the totality of circumstances before granting bail. This Court observed : (SCC p. 515, para
17) "17. Coming to the case at hand, it is found that when a stand was taken that the second respondent was a history-sheeter, it was imperative on the part of the High Court to scrutinise every aspect and not capriciously record that the second respondent is entitled to be admitted to bail on the ground of parity. It can be stated with absolute certitude that it was not a case of parity and, therefore, the impugned order [Mitthan Yadav v. State of U.P., 2014 SCC OnLine All 16031] clearly exposes the non-application of mind. That apart, as a matter of fact it has been brought on record that the second respondent has been charge-sheeted in respect of number of other heinous offences. The High Court has failed to take note of the same.
Therefore, the order has to pave the path of extinction, for its approval by this Court would tantamount to travesty of justice, and accordingly we set it aside.
26. Another aspect of the case which needs emphasis is the manner in which the High Court has applied the principle of parity. By its two orders both dated 21-12-2020 [Pravinbhai Hirabhai Koli v. State of Gujarat, 2020 SCC OnLine Guj 2986] , [Khetabhai Parbatbhai Makwana v. State of Gujarat, 2020 SCC OnLine Guj 2988] , the High Court granted bail to Pravin Koli (A-
10) and Kheta Parbat Koli (A-15). Parity was sought with Sidhdhrajsinh Bhagubha Vaghela (A-13) to whom bail was granted on 22-10-2020 [Siddhrajsinh Bhagubha Vaghela v. State of Gujarat, 2020 SCC OnLine Guj 2985] on the ground (as the High Court recorded) that he was "assigned similar role of armed with stick (sic)". Again, bail was granted to Vanraj Koli (A-16) on the ground that he was armed with a wooden stick and on the ground that Pravin (A-10), Kheta (A-15) and Sidhdhrajsinh (A-13) who were armed with sticks had been granted bail. The High Court has evidently misunderstood the central aspect of what is meant by parity. Parity while granting bail must focus upon the role of the accused. Merely observing that another accused who was granted bail was armed with a similar weapon is not sufficient to determine whether a case for the grant of bail on the basis of parity has been established. In deciding the aspect of parity, the role attached to the accused, their position in relation to the incident and to the victims is of utmost importance. The High Court has proceeded on the basis of parity on a simplistic assessment as noted above, which again cannot pass muster under the law."
79. The Hon'ble Apex Court in Tarun Kumar Vs. Assistant Director Directorate of Enforcement (supra) wherein at paragraph-18, it has been held that parity is not the law and while applying the principle of parity, the Court is required Page 37 of 42 B.A. No. 11102 of 2023 to focus upon the role attached to the accused whose application is under consideration.
80. It has further been held in the paragraph 19 of the said judgment that the principle of parity is to be applied in the matter of bail but equally it has been laid down therein that there cannot be any negative equality, meaning thereby, that if a co-accused person has been granted bail without consideration of the factual aspect or on the ground said to be not proper, then, merely because the co-accused person has been directed to be released on bail, the same will not attract the principle of parity on the principle that Article 14 envisages positive equality and not negative equality. For ready reference, relevant paragraph, i.e., paragraph-19, of the aforesaid judgment reads as under:
"19. It is axiomatic that the principle of parity is based on the guarantee of positive equality before law enshrined in Article 14 of the Constitution. However, if any illegality or irregularity has been committed in favour of any individual or a group of individuals, or a wrong order has been passed by a judicial forum, others cannot invoke the jurisdiction of the higher or superior court for repeating or multiplying the same irregularity or illegality or for passing similar wrong order. Article 14 is not meant to perpetuate the illegality or irregularity. If there has been a benefit or advantage conferred on one or a set of people by any authority or by the court, without legal basis or justification, other persons could not claim as a matter of right the benefit on the basis of such wrong decision."
81. Now this court is adverting into facts of instant to decide the issue of parity in the backdrop of aforesaid settled legal ratio and further taken into consideration the aforesaid settled position of law, thinks fit to refer herein distinguishable facts in the case of present petitioner to that the case of Pashupati Yadav who is father of the present petitioner.
82. This Court needs to go through the imputation of allegation against the Pashupati Yadav @ Pashupat Yadav, in the prosecution complaint which has been appended to the instant petition by way of supplementary affidavit.
83. Thus, the main allegation against the Pashupati Yadav @ Pashupat Yadav with whom parity is claimed, was hand in glove and working as a close associate with the other co-accused persons who were running and trading of mining of stone chips illegally without paying any royalty amount. The crime proceeds to tune of Rs.1.23 Crores was deposited in the account of the said Singhvahani Transport Pvt. Ltd. from 22.04.2021 to 16.03.2022 on different dates.
Page 38 of 42 B.A. No. 11102 of 202384. But the Co-ordinate Bench of this Court while taking into consideration the illness of the said petitioner and also taking into account that name of the petitioner figures only in one of the cases relating to scheduled offence and also considering that crime proceeds have not been seized from any of his account, has enlarged him on bail.
85. But the allegation against the present petitioner is entirely different and as per the prosecution complaint it is evident that the present petitioner has been found involved in the activities of money laundering by acquisition, possession, concealing, layering of proceeds of crime and projecting it as untainted property. He has assisted to another accused in his illegal activities relating to illegal mining. It is alleged that the accused person acquired the proceeds of crime amounting to Rs.4,28,81,865/- and used them to procure the tender of operation of the ferries controlled by Nav Yatayat Samiti, Sahebganj. It has come during the investigation that the operations of the said Samiti is directly controlled by co-accused Pankaj Mishra and Dahu Yadav as well as the present petitioner. It has further come on record that the present petitioner is the partner in Singhwahani Transport and Logistic. The account detail of Singhwahani Transport and Logistic depicts the deposit of huge amount of cash on frequent basis which is none other but the proceeds of crime generated from the act of illegal mining.
86. Therefore, it is evident from the discussion as made above the case of the petitioner is different to that of the said Pashupati Yadav @ Pashupat Yadav as per the allegation and it is pertinent to mention here that the bail of accused Pankaj Mishra with whom the close proximity of the present petitioner has been alleged has already been rejected by co-ordinate Bench of this Court vide order dated 08.02.2024 passed in B.A. No. 10861 of 2023. Further the Bail petition of another accused namely Prem Prakash has also been rejected by the co-ordinate bench of this Court.
87. Applying the principle of parity, this Court is of the view as per the judgment rendered by the Hon'ble Apex Court rendered in Tarun Kumar (Supra) that the benefit of parity is to be given if the facts/involvement of the petitioner, is identical to the persons with whom parity is being claimed.
Page 39 of 42 B.A. No. 11102 of 202388. This Court, on the basis of the discussion of the involvement of the petitioner, vis-à-vis, the other co-accused persons, is of the view that the case of the petitioner is quite distinguishable to that of the case of Pashupati Yadav @ Pashupat Yadav as complicity of the petitioner is of being a close associate of Pankaj Mishra.
89. Otherwise also, it needs to refer herein by taking aid of the judgment rendered in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement, (supra) that if the benefit of bail has been granted by a Court that appears to be contrary to the material collected in course of investigation then applying the principle that Article 14 does not envisages negative equality, this Court, therefore, is of the view taking into consideration the allegation against Pashupati Yadav @ Pashupat Yadav that it is not a fit case, merely because Pashupati Yadav @ Pashupat Yadav has been granted bail the petitioner may also be released from judicial custody, as such, the said benefit is not fit to be accepted.
90. Further, it is required to refer herein that the Money Laundering is an economic offence and economic offences comes under the of grave offences hence needs to be visited with a different approach in the matter of bail as held by the Hon'ble Apex court in the case of Y. S Jagan Mohan Reddy v/s C. B. I., reported in (2013) 7 SCC 439. For ready reference, the relevant paragraphs of the aforesaid judgments are being quoted 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 offences having deep-rooted conspiracies and involving huge loss of public funds need 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."
91. Similarly, the Hon'ble Apex Court in case of Nimgadda Prasad Vs. C.B.I., reported in (2013) 7 SCC 466 has reiterated the same view in paragraphs-23 to 25 which reads as under:
"23. Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country's economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat v. Mohanlal Jitamalji Porwal [(1987) 2 SCC 364 : 1987 SCC (Cri) 364] this Court, while considering a request of the prosecution for adducing additional evidence, inter alia, observed as under: (SCC p. 371, para 5) Page 40 of 42 B.A. No. 11102 of 2023 "5. ... The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. 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. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest."
24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.
25. 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 a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."
92.This Court is conscious of this fact that while deciding the issue of grant bail in grave economic offences it is utmost duty of this Court that the nature and gravity of the alleged offence should have been kept in mind.
93.This Court, in view of the aforesaid material available against the petitioner, is of the view, that in such a grave nature of offence, which is available on the face of the material, applying the principle of grant of bail wherein the principle of having prima facie case is to be followed, the nature of allegation since is grave and as such, it is not a fit case of grant of bail.
94.Having regard to the entirety of the facts and circumstances of the case, this Court is of the opinion that the petitioner has miserably failed to satisfy this Court that there are reasonable grounds for believing that he is not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that he is prima facie guilty of the alleged offences.
Page 41 of 42 B.A. No. 11102 of 202395.For the foregoing reasons, having regard to facts and circumstances, as have been analysed hereinabove, since the petitioner has failed to make out a special case to exercise the power to grant bail and considering the facts and parameters, necessary to be considered for adjudication of bail, this Court does not find any exceptional ground to exercise its discretionary jurisdiction to grant bail.
96. Therefore, this Court is of the view that it is not a case where the prayer for bail is to be granted, as such, the instant application stands dismissed.
97. It is made clear that the views expressed in this order are prima-facie for consideration of matter of bail only.
(Sujit Narayan Prasad, J.) Saurabh/-
A.F.R. Page 42 of 42 B.A. No. 11102 of 2023