Kerala High Court
Shri.Satheesh Kumar.P vs Assistant Director on 30 August, 2024
Author: C.S.Dias
Bench: C.S.Dias
2024:KER:65527
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BAIL APPL. NO. 11142 OF 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
FRIDAY, THE 30TH DAY OF AUGUST 2024 / 8TH BHADRA, 1946
BAIL APPL. NO. 11142 OF 2023
CRIME NO.ECIR/KCZO/45/2021 OF ENFORCEMENT DIRECTORATE KOCHI, Ernakulam
PETITIONER/S:
SHRI.SATHEESH KUMAR.P,AGED 56 YEARS
S/O.P.N.KUNHIRAMAN NAMBIAR, ANJANAM HOUSE, KOLAZHY.P.O,
THRISSUR, PIN - 680010
BY ADVS.
R.ANIL
B.RAMAN PILLAI (SR.)
SUJESH MENON V.B.
THOMAS SABU VADAKEKUT
MAHESH BHANU S.
RESSIL LONAN
JOEL GEORGE KAMPIYIL
RESPONDENT/S:
1 ASSISTANT DIRECTOR,DIRECTORATE OF ENFORCEMENT, GOVERNMENT
OF INDIA, COCHIN ZONAL OFFICE, REPRESENTED BY STANDING
COUNSEL, HIGH COURT OF KERALA, PIN - 682031
2 STATE OF KERALA,
REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN
- 682031
BY ADV L.Sundareshan, ASG of India
Sri.JAISHANKAR V.NAIR, SC, ENFORCEMENT DIRECTORATE
THIS BAIL APPLICATION HAVING FINALLY HEARD ON 10.7.2024, THE
COURT ON 30.8.2024 PASSED THE FOLLOWING:
2024:KER:65527
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BAIL APPL. NO. 11142 OF 2023
C.S.DIAS,J
======================
BA No.11142 of 2023
-----------------------------------
Dated this the 30th day of August, 2024
ORDER
The application is filed under Section 439 of the Code of Criminal Procedure, 1973, by the fourteenth accused in Crime No.ECIR/KCZO/45/2021, registered by the Enforcement Directorate, Cochin, against the fifty five accused persons for allegedly committing the offences under Section 3 read with Section 17 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 ('Act', in short). The petitioner was arrested on 04.09.2023.
2. The prosecution case, in brief, is that, from 2014 to 2020, the accused 1 to 6 had sanctioned and disbursed multiple loans from the Karuvannur Service Co-operative 2024:KER:65527 3 BAIL APPL. NO. 11142 OF 2023 Bank Ltd - 112 (hereinafter referred to as 'Bank') to the same person, against the loan limits set by the Bank, and by accepting the title deeds of the same property as collateral security, after forging the membership records by including persons who are not members of the Society, by furnishing false addresses and manipulating the software of the computer system, and by falsely disbursing loans in the names of property owners without their knowledge or consent and manipulating the inventory of supermarket run by the Bank. Accordingly, the accused have cheated and misappropriated Rs.100/- Crore from the Bank. The first informant, Smt.Sreekala, Secretary-in-Charge of the Bank, filed a complaint before the Irinjalakkuda Police Station and FIR No.0650/2021 was registered on 14.7.2021 against Sunil Kumar T.R, the former Secretary of the Bank (presently the 2024:KER:65527 4 BAIL APPL. NO. 11142 OF 2023 thirty third accused); Biju.M.K, the former Branch Manager of the Bank (presently the thirty fourth accused); Jilse.C.K, the former Senior Accountant of the Bank (presently the sixteenth accused); Kiran.P.P., a member of the Society (presently the ninth accused); Bijoy.A.K, a Commission Agent (presently the first accused) and Reji Anil, the Accountant of the Supermarket for committing the offences under Sections 406, 420, 409 and 465 read with Sec.34 of the Indian Penal Code ('IPC'). Subsequently, the crime was transferred to the Crime Branch by order No. D3- 108924/2021/PHQ dated 21.7.2021 and was re-registered as Crime No.0165/2021. The DYSP-1, Crime Branch, Thrissur, by letter bearing No.289/DY.SP-I/CB/TSR/21 dated 22.9.2021, informed the Deputy Director of Enforcement Directorate, Kochi regarding the details of the accused and the 2024:KER:65527 5 BAIL APPL. NO. 11142 OF 2023 status of the crime. As Section 420 of the IPC is a scheduled offence under the Act, enquiries were initiated against the accused persons after recording the facts of the scheduled offence as ECIR No.KCZO/45/2021 dated 2.8.2021. By committing the above criminal activity, the accused have obtained and possessed the proceeds of crime, layered and projected the proceeds of the crime as untainted money as defined under Sec.2(1)(u) and 2(1) (v) of the Act. The proceeds of the crime generated, acquired, possessed and concealed by the accused persons are now being projected and claimed as untainted money and properties. Thus, the accused have committed the above offences.
3. The allegations attributed against the petitioner (fourteenth accused) in the complaint, in a nutshell, are that, while the petitioner was conducting a money lending 2024:KER:65527 6 BAIL APPL. NO. 11142 OF 2023 business, he approached the defaulters of Nationalised Banks and offered to get their loan accounts closed and their title deeds released. Kiran P.P, who was an associate of the petitioner and a person outside the jurisdictional limits of the Bank, was granted membership No.19873 against the bye- laws of the Co-operative Society, through the influence of the petitioner. Then Kiran.P.P was sanctioned a loan for Rs.24,56,06,618/- by offering collateral security of properties of various persons, without their knowledge. As of now, the outstanding amount is Rs.48,57,10,662/-. The investigation has revealed that out of Rs.24.56/- Crore availed by Kiran P.P, Rs.14/- Crore was paid to the petitioner by bank transfer and in cash. The petitioner, in his statement recorded on 04-09- 2023, has stated that he has received only Rs.2,15,50,000/- from the Bank through Kiran PP. Whereas, Kiran P.P in his 2024:KER:65527 7 BAIL APPL. NO. 11142 OF 2023 statement recorded on 06-09-2023 has, inter alia, stated that from the loan received by him, Rs.1.25/- crore was handed over to the petitioner in cash at the car parking of the Bank in 2014, in the presence of Jijor K, the petitioner's agent; Suresh, the petitioner's friend; and Shaju, the petitioner's driver. In 2016, a cash loan of Rs.3/- crore was received by Kiran P.P. from the Bank, and the same was also handed over to the petitioner at the car parking of the Bank in three bags in the presence of Jijor; Shalini, the petitioner's friend; Shaju and Biju N.K, the then Manager of the Bank. Kiran P.P has further stated that cash loans of Rs.14/- Crore were handed over to the petitioner in cash on several occasions and transferred to the accounts of several persons as instructed by the petitioner. Jijor has confirmed in his statement regarding the cash transactions from Kiran P.P to the petitioner. The 2024:KER:65527 8 BAIL APPL. NO. 11142 OF 2023 petitioner has abetted and facilitated Kiran P.P., to commit the scheduled offence and, thereby, acquired the proceeds of the crime. The proceeds of the crime acquired by Kiran P.P. have reached the hands of the petitioner, and he has invested the money in his business. The petitioner has unaccounted money from 2015-2016. While examining the audited financial statements of M/s.Devi Financiers, a proprietary concern of the petitioner, submitted by Sanil Kumar C.V, the petitioner's Chartered Accountant, it was noticed that in the Balance Sheet as of 31st March 2016, the capital account stood at Rs.1,49,54,331/. However, in the balance sheet prepared as of 31st March 2017, the opening balance of the capital account is Rs.5,58,19,585/- i.e., an addition of Rs.4,08,65,254/- to the capital. But the same was not reflected in the petitioner's income tax return. In the statements of Sanil Kumar recorded 2024:KER:65527 9 BAIL APPL. NO. 11142 OF 2023 on 04-10-2023 and 09-10-2023, he has, inter alia, stated that he was introduced to the petitioner in 2021. He submitted the petitioner's audited Profit & Loss Account and Balance Sheet on 31-03-2017. He also stated that during examining of the books of account of Devi Financiers, he found a cash deficit of Rs.4/- Crore and informed the matter to the petitioner. Then the petitioner submitted a letter of Jayarajan P, stating that he had invested Rs.4/- Crore, in cash, in the petitioner's business. On the petitioner's instructions, an addition of Rs.4/- Crore was made to the capital. However, Jayarajan. P, in his statement dated 29.09.2023, denied giving the petitioner Rs.4/- Crore, in cash. Hence, it is revealed that the petitioner has projected the proceeds of the crime of Rs. 4/- Crore as untainted money. It is revealed in the petitioner's Bank account No.103100010035463 maintained with the 2024:KER:65527 10 BAIL APPL. NO. 11142 OF 2023 Varadliam Service Co-operative Bank Ltd. a cash deposit of Rs. 50,000/- each was credited 20 times, totalling to Rs.10/- lakh. Subsequently, cash withdrawals of Rs.50,000/- each were made 19 times on 18-08-2014, 26-09-2014, and 13-04- 2015, totalling to Rs.9.50/- lakh. Again, on 06-06-2016, Rs.50,000/- each was credited 30 times totalling to Rs.15/- lakh. Subsequently, Rs.80,000/- each was withdrawn 10 times on 27-10-2016, totalling to Rs.8/- lakh. After that, Rs.2/- lakh and Rs.5.5/- lakh were withdrawn by cheque on 20-03-2017 and 28-01-2020. Likewise, there were huge cash deposits in the petitioner's bank accounts. The cash deposits in these bank accounts are the illegal loans availed by Kiran P.P. and handed over to the petitioner. The petitioner is maintaining forty-four accounts in various Banks. The cash credits in the petitioner's ten bank accounts for the financial years 2014-15 2024:KER:65527 11 BAIL APPL. NO. 11142 OF 2023 to 2016-17 analysed so far are as follows:
2014-15 2015-16 2016-17 Rs.1,35,87,612.00 Rs.1,52,92,407.00 Rs.87,93,532.00
The above analysis show that the petitioner has introduced vast amounts of cash into his bank accounts. There have been cash withdrawals, which are a layering of the proceeds of crime received from Kiran P.P. The proceeds of the crime of Rs.4/- Crore parked in the business of Devi Financiers was given the colour of legitimate money by introducing bogus capital from Jayarajan.P. The bogus balance sheet was prepared to accommodate the entries in the books of account. The petitioner has received Rs.2.15/- Crore from the Bank through Kiran P.P. Likewise, Jijor K.A has stated that the petitioner has invested the illegally acquired funds in his business and purchased immovable properties in the names of himself and his family members. The petitioner is actively 2024:KER:65527 12 BAIL APPL. NO. 11142 OF 2023 involved in committing and abetting the scheduled offence and acquiring the proceeds of the crime.
4. The principal contentions of the petitioner in the bail application are that, out of 55 accused included in the complaint, 45 are natural persons, and 10 are artificial persons. The Investigating Agency has chosen to arrest only four accused persons, i.e., accused nos.9, 14 (the petitioner), 15 and 16. The petitioner was arrested because the petitioner was unwilling to give statements implicating certain persons and organisations as desired by the Investigating Agency. The petitioner has no role in the subject matter. Although the investigation in the ECIR/KCZO/45/2021 was carried out for about two years and four months, the petitioner was not contacted or questioned even once. He was contacted for the first time on 22.8.2023, when a search was conducted in his 2024:KER:65527 13 BAIL APPL. NO. 11142 OF 2023 house. Thereafter, he was repeatedly called to record his statements. On all the occasions, he has co-operated with the investigation. Even though he was not arrayed as an accused, he was arrested on 4.9.2023 on totally false accusations. The arrest itself is illegal, as a copy of the grounds of arrest was not served on him. In Crime No.650 of 2021 of Irinjalakkuda Police Station, which is the sole basis for registering the ECIR, the petitioner is not an accused. Even after the crime was transferred to the Crime Branch on 21.7.2021, they questioned the Board members, staff of the Bank and several other persons, including Kiran.P.P, and have arrayed them as accused. The investigation by the Crime Branch is continuing even now. The Crime Branch has not raised any allegations against the petitioner in the last two years and four months. In addition to Crime No.650/2021, several FIRs have 2024:KER:65527 14 BAIL APPL. NO. 11142 OF 2023 been registered alleging embezzlement of funds of the Bank. The petitioner is not involved in any of the cases. The petitioner is innocent of the accusations levelled against him. The petitioner is the victim of fraudulent activities that have taken place in the Bank. The allegations against the petitioner have been masterminded by Biju.M.K and Kiran.P.P. Even though the petitioner had complained against them before police authorities in 2018, due to their influence, no case was registered. Instead, Kiran.P.P. paid back a portion of the amount. Shockingly, the Enforcement Directorate (ED) has used the said masterminds to falsely implicate the petitioner. The petitioner has not taken a single rupee of the Bank illegally, unauthorizedly or clandestinely. The petitioner has not taken a loan, advance or utilised the funds of the Bank. Whatever money that was received from the Bank was 2024:KER:65527 15 BAIL APPL. NO. 11142 OF 2023 the money of the petitioner, which was deposited by him. Kiran.P.P and the bank authorities have misappropriated the petitioner's money deposited in the bank. It is crystal clear from the records that all the monetary transactions between the petitioner and Kiran.P.P were through bank accounts. They were open and transparent transactions. The Investigating Agency has conducted itself unbecoming of an agency invested with such broad powers. The allegation that the petitioner has layered the proceeds of crime has no legal or factual basis. The allegation that the petitioner has indulged in money laundering is baseless and unsustainable in law. The statements produced along the complaint describing it as statements given by the petitioner are factually incorrect. The main effort of officers of ED was to compel the petitioner to name some political leaders. The petitioner, his 2024:KER:65527 16 BAIL APPL. NO. 11142 OF 2023 sick mother and his family, consisting of two unmarried daughters, are put to hardship and irreparable injury. Hence, the application may be allowed.
5. The first respondent has filed a bail objection report through its Retainer Counsel reiterating the assertions in the complaint. In addition to the same, it is contended that the present loan scam is the biggest bank robbery in the Co- operative banking history in the State of Kerala. The Bank was one of the trustworthy service Co-operative societies till 2010. Since 2012 onwards, persons like petitioner had joined hand in glove with high profile persons, including politicians and police officials, in connivance with the bank officials, to grab the wealth of the Bank and to loot the hard-earned money of its depositors. Persons like Kiran.P.P and other benami borrowers have flouted the bye-laws of the Bank and 2024:KER:65527 17 BAIL APPL. NO. 11142 OF 2023 the provisions of the Kerala Co-operative Societies Act, 1969, by securing illegal loans and acquiring the proceeds of the crime. The investigation has revealed that several persons have availed illegal loans during 2012-2019. Kiran.P.P, who was residing outside the territorial limits of the Bank, was granted membership and loans along with 51 other persons. The practice in the Bank was to disburse the loans in cash. Out of Rs.24.56/- crore availed by the Kiran.P.P, Rs.14/- crore was paid to the petitioner by bank transfer and in cash. The petitioner has admitted to have received Rs.2,15,50,000/- from the loan availed by Kiran.P.P. In the same way, Sunil Kumar (the approver) has stated that the petitioner had a nexus with high profile officers and politicians, and compelled him to grant loans. During the search at the petitioner's residence, a mobile phone was seized and the data 2024:KER:65527 18 BAIL APPL. NO. 11142 OF 2023 was extracted. The data shows several calls between the petitioner and Aravindakshan P.R. The investigation has revealed that the petitioner is maintaining 44 bank accounts in various banks. The petitioner could not satisfactorily explain the source of his cash deposits in the banks. There are sufficient materials to prove that the petitioner has committed the offence under Sections 3 r/w 4 of the Act. If the petitioner is enlarged on bail, he will influence the persons yet to be investigated, alert the other accused persons and beneficiaries of the proceeds of the crime, regarding the line of investigation. The accused have already demonstrated a tendency to sell the properties acquired through the proceeds of crime. The rigour under S.45 of the Act is applicable to the facts of the case. The petitioner has failed to dilute the twin conditions under Section 45 of the Act. The petitioner is an 2024:KER:65527 19 BAIL APPL. NO. 11142 OF 2023 influential person. If the petitioner is enlarged on bail, he would sabotage the ongoing investigation into the money trail.
6. Heard; Sri.B.Raman Pillai, the learned Senior Counsel for the petitioner and Sri.L.Sundareshan, the learned Additional Solicitor General of India assisted by Sri.Jaishankar V.Nair, at length.
7. The learned Senior Counsel appearing for the petitioner strenuously argued that the petitioner is totally innocent of the accusations levelled against him. He reiterated all the contentions raised in the bail application. He meticulously took this Court through the relevant statements of the witnesses and accused. He submitted that the petitioner is in judicial custody since 4.9.2023, which is nearly a year now. The Trial Court has erroneously dismissed the 2024:KER:65527 20 BAIL APPL. NO. 11142 OF 2023 petitioner's bail application. The petitioner has no connection with the affairs of the Bank. It is only on 22.8.2023, a group of persons, assisted by the CRPF, went to the house of the petitioner and conducted a search as evident from Annexure A8 search list. The petitioner's statement was recorded. Thereafter, the petitioner was asked to appear on the following day, i.e. on 23.8.2023 and on subsequent dates with his Chartered Accountant. On 28.8.2023 and 1.9.2023 his statements were recorded. In the three statements nothing was asked about his involvement with the Bank. On 4.9.2023, the petitioner was again asked to appear before the Investigating Officer and a single line statement was recorded, even though he was detained from 10 a.m. till 10.30 p.m. It was in that statement it was recorded that the petitioner received Rs.2.15/- crore from Kiran, which was recorded only 2024:KER:65527 21 BAIL APPL. NO. 11142 OF 2023 to arrest him. There is no such evidence to substantiate the said allegation. The petitioner was arrested on 4.09.2023, but he was produced before the Court on the following day. Yet, Annexure 11 remand report does not show that his grounds of arrest were informed to him. Even though statements of several witnesses were recorded, including the statements of the petitioner's Chartered Accountant and an NRI business man, none of the statements show that the petitioner is involved in the crime. The petitioner had started a chappal business in 1990 named 'Novo Plastic'. He was making a profit of Rs.1/- crore per year. Thereafter, he started a real estate business which does not come within the purview of the Act. The petitioner started the finance business only in 2015. Subsequently, he joined the business of his brother-in- law in Bahrain and had three workshops there. In the 2024:KER:65527 22 BAIL APPL. NO. 11142 OF 2023 meantime, Kiran.P.P had illegally obtained Rs.24/- crore from the Bank and had defaulted the repayment. Rs.14/- crore was not given to the petitioner. Although the prosecution has relied on 82 witnesses, there is nothing to prove the petitioner's involvement in the crime. Actually, the petitioner was cheated by Kiran.P.P and the Bank. In 2016, the petitioner had for the first and the last time visited the Bank. The contradictions in the statements substantiate the falsity in the allegations against the petitioner. All the other accused arrested have been enlarged on bail by the Trial Court. The alleged non-co- operation of the petitioner is not a ground to deny bail to him as held by the Hon'ble Supreme Court in Pankaj Bansal v. Union of India [2023 SCC Online SC 1244]. The first respondent is deliberately preventing the Crime Branch from investigating the crime even after a lapse of nearly three 2024:KER:65527 23 BAIL APPL. NO. 11142 OF 2023 years. There is no evidence to substantiate that the petitioner has committed the predicate offence under Sec.420 of the Indian Penal Code. The petitioner has been incarcerated for nearly a year now. The trial in the crime is not likely to commence in the near future. The learned Senior Counsel relied on the decision of the Honourable Supreme Court in Manish Sisodia v. Directorate of Enforcement [2024 INSC 595], the decision of this Court in Thomas Daniel v. Enforcement Directorate [2023 SCC Online Ker 8214] and the decisions of the Delhi High Court in Ramesh Manglani v. Director of Enforcement [2023 SCC Online Del 3234] and Sanjay Jain v. Enforcement Directorate [B.A No.3807/2022] to support his contentions. An argument note is also filed.
8. The Additional Solicitor General of India 2024:KER:65527 24 BAIL APPL. NO. 11142 OF 2023 strenuously opposed the application. He too reiterated the contention of the first respondent in the bail objection report. He contended that the petitioner along with the other accused have committed a grave economic offence. He argued that out of Rs.340/- Crore that was swindled by the accused from the Bank, the petitioner is a beneficiary of Rs.25/- Crore, which is the proceeds of the crime. Since the predicate offence under Sec.420 is incorporated, the rigour under Sec.45 of the Act applies to the facts of the case. He drew the attention of this Court to the statements in the complaint wherein the witnesses and accused have categorically stated the petitioner's involvement in the crime. He contended that the statements of the accused are acceptable in evidence in view of Section 50 of the Act. He relied on the decisions of the Hon'ble Supreme Court in Vijay Madhanlal Choudhary 2024:KER:65527 25 BAIL APPL. NO. 11142 OF 2023 v. Union of India [2022 SCC Online SC 929], Nimmagadda Prasad v. CBI [(2013) 7 SCC 466], Y.S Jagan Mohan Reddy v. CBI [(2013) 7 SCC 439], Gautam Kundu v. Directorate of Enforcement [(2015) 16 SCC 1], Rohit Tandon v. Directorate of Enforcement [(2018) 11 SCC 46] and Directorate of Enforcement v. Gopal Reddy [2022 SCC Online SC 1862] to reinforce his submissions. He prayed that the application be dismissed.
9. The gravamen of the prosecution allegation against the petitioner is that he influenced the Bank and got loans sanctioned to Kiran.P.P, out of which the petitioner took Rs.14/- Crore. The petitioner is maintaining 44 Bank accounts in various Banks. He made cash deposits of Rs.1,35,87,612/-, Rs.1,52,92,407/ and Rs.87,93,532/- in the financial years 2014-15 to 2016-2017 in his ten bank accounts. The 2024:KER:65527 26 BAIL APPL. NO. 11142 OF 2023 statements show that Rs.1.25/- and Rs.3/- crore were again paid to the petitioner. The statements of the witnesses and accused, and the other materials placed on record, particularly the monetary transactions referred to above, prima facie reveal that the petitioner has received money from the other accused, which in turn was obtained by illegal means from the Bank.
10. The power of the Courts to grant bail to a person accused of an offence under the Act is circumscribed by Section 45 of the Act. It is apposite to refer to the said provision, which reads as follows:
"45. Offences to be cognisable and non-bailable― (1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless]
(i)the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii)where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:
Provided that a person, who is under the age of sixteen years or is a woman or is sick or infirm [or is accused either on his own or along with other co- accused of money-laundering a sum of less than one crore rupees] may be 2024:KER:65527 27 BAIL APPL. NO. 11142 OF 2023 released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by;-
(i)the Director; or
(ii)any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.
[(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed;
(2)The limitation on granting of bail specified in [***] of sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail."
(emphasised)
11. Section 45 of the Act starts with a non-
obstante clause, which has an overriding effect on the general provisions of the Code of Criminal Procedure (Cr. P.C). There is a specific embargo to grant of bail to a person accused of an offence under the Act, which are: (i) that the Public Prosecutor must be given an opportunity to oppose the application for bail, and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused 2024:KER:65527 28 BAIL APPL. NO. 11142 OF 2023 person is not guilty of such offence and that he is not likely to commit any offence while he is on bail.
12. In addition to the above stipulation, Section 65 of the Act mandates that the provisions of the Cr. P.C shall apply in so far as they are not inconsistent with the provisions of the Act. Also, Section 71 of the Act states that the provisions of the Act shall have an overriding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, the conditions enumerated in Section 45 of the Act have to be complied with even in respect of an application for bail made under Section 439 of Cr. P.C. Consequently, the power to grant bail to a person accused of having committed an offence under the Act is not only subject to the limitations imposed under Section 439 of Cr. P.C., but also subject to the rigour imposed by the twin 2024:KER:65527 29 BAIL APPL. NO. 11142 OF 2023 conditions under sub-section (1) of Section 45 of Act.
13. In Gautam Kundu v. Directorate of Enforcement [(2015) 16 SCC 1], the Hon'ble Supreme Court has held that the compliance of Section 45 of the Act is mandatory to grant bail to an accused person.
14. In Vijay Madhanlal Choudhary v. Union of India [2022 SCC Online SC 929] a three-judge Bench of the Hon'ble Supreme Court has observed in the following manner:
"400. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the 2002 Act. While dealing with a similar provision 633 supra at footnote No.3 prescribing twin conditions in MCOCA, this Court in Ranjitsing Brahmajeetsing Sharma, held as under:
"44. The wording of Section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the legislature. Section 21(4) of MCOCA, therefore, must be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order 2024:KER:65527 30 BAIL APPL. NO. 11142 OF 2023 granting bail much before commencement of trial. Similarly, the Court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in futuro must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence.
45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail.
46. The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby".
401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt.
15. In Directorate of Enforcement Versus Aditya Tripathi [2023 SCC OnLine SC 619] the Honourable 2024:KER:65527 31 BAIL APPL. NO. 11142 OF 2023 Supreme Court has held that merely because the chargesheet is filed, it cannot be a ground to release the accused on bail in connection with the scheduled offences under the Act. Investigation for the predicate offences and the investigation by the Enforcement Directorate for the scheduled offence under the PML Act are different and distinct.
16. In Y.S Jagan Mohan Reddy vs. CBI [(2013) 7 SCC 439], the Hon'ble Supreme Court has made the following observations:
"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.
35. 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".
17. Keeping in mind the aforementioned legal principles, I will now examine the specifics of the present case. The 2024:KER:65527 32 BAIL APPL. NO. 11142 OF 2023 petitioner has raised a specific ground that the written grounds of arrest were not served on him. On an appreciation of the materials on record, I find in the arrest order dated 04.09.2023, the Authorised Officer has specifically recorded that he has reason to believe that the petitioner is guilty of an offence under the Act. The grounds of arrest were duly prepared, served, read over and understood by the petitioner at the time of his arrest. Hence, I conclude that the said contention is untenable.
18. Now, coming to the other contentions. The learned Additional Solicitor General has strongly opposed the bail application. Therefore, I will now proceed to decide whether this Court is convinced that there are reasonable grounds for believing that the petitioner is not guilty of the offence alleged against him and he is not likely to commit any offence while 2024:KER:65527 33 BAIL APPL. NO. 11142 OF 2023 he is on bail.
19. The prosecution has cited 82 witnesses and has produced 89 documents along with the complaint. The petitioner's specific role in the crime has been elaborately narrated in paragraph 12.5 of the complaint, which has already been stated above. Nevertheless, at the risk of the repetition it is stated that the essence of the accusation is that, out of Rs.24.56/- Crore obtained by Kiran P.P as loan from the Bank, Rs.14/- Crore was paid to the petitioner both through bank transfer and in cash. In the statement recorded on 04-09- 2023, the petitioner has stated that he had received only Rs.2,15,50,000/- from the Bank through Kiran P.P. Conversely, Kiran.P.P has asserted that he handed over Rs.1.25/- Crore to the petitioner in cash in 2014, and an additional Rs.3/-Crore in 2016. Kiran P.P has further stated 2024:KER:65527 34 BAIL APPL. NO. 11142 OF 2023 that cash loans of Rs.14/- Crore were given to the petitioner and to other persons as instructed by the petitioner on multiple occasions. Jijor has corroborated these cash transactions in his statement. Furthermore, the petitioner's Chartered Accountant had noticed an additional capital of Rs.4,08,65,254/- in the financial statement of the petitioner's proprietary concern, which was not reflected in his income tax returns. Although the petitioner submitted a letter of Jayarajan P, claiming that he had invested Rs.4/- Crore in cash in the petitioner's business, Jayarajan. P has denied making such a payment. This prima facie shows that Rs. 4/- Crore is unaccounted money. Additionally, a total of Rs.44.50/- lakh was deposited and Rs.15.50 lakh was withdrawn in the petitioner's Bank account No.103100010035463 at the Varadliam Service Co- operative Bank Ltd. The petitioner was maintaining forty-four 2024:KER:65527 35 BAIL APPL. NO. 11142 OF 2023 accounts in various Banks. The cash credits in the petitioner's ten bank accounts for the financial years 2014-15 to 2016-17 is Rs.1,35,87,612/-, Rs.1,52,92,407/- and Rs.87,93,532/-, respectively. These materials, particularly the above cash credits, prima facie lends support to the prosecution allegation against the petitioner regarding layering of the proceeds of the crime. Collectively, these factors prima facie appear to substantiate the prosecution case.
20. After the conclusion of the arguments and the application was reserved for orders, the learned Senior Counsel for the petitioner submitted the decision in Manish Sisodia's case and contended that the petitioner is entitled to the principles enunciated in the decision. I find myself unable to concur with the said contention.
21. In Manish Sisodia's case, the Honourable Supreme 2024:KER:65527 36 BAIL APPL. NO. 11142 OF 2023 Court granted bail to the appellant in that case, considering the prolonged period of incarceration, the trial in the case had not commenced despite the assurance given by the respondents in the earlier round of litigations and the Trial Court had not followed the directions in paragraphs 28 and 29 of its first order regarding the right of the appellant to speedy trial.
22. In the case on hand, the principles laid down in Manish Sisodia's case are not applicable. Therefore, the petitioner cannot draw analogy or parallels to the precedent set forth in the said case.
23. In Himanshu Chandravadan Desai v. State of Gujarat [(2005) 13 SCC 234], which bears similarities to the case on hand, the accused, who were the Directors of a Bank, had siphoned off crores of rupees of the Bank by granting 2024:KER:65527 37 BAIL APPL. NO. 11142 OF 2023 bogus loans, fabricating fictitious letters of credit in the names of their friends, relatives and associates with inadequate security. The Honourable Supreme Court declined to enlarge the accused on bail considering the huge amount involved in the systematic fraud, and apprehending danger of the appellants attempting to tamper with the evidence by pressurising the witnesses.
24. On a careful analysis of the facts and circumstances of the case, the materials placed on record, the rival submission made across the Bar, and on considering the parameters under Section 45 of the Act, I find no reasonable grounds for believing that the petitioner is not guilty of the offences alleged and that he is not likely to commit the offences if he is enlarged on bail.
In the light of the serious nature, gravity and severity of 2024:KER:65527 38 BAIL APPL. NO. 11142 OF 2023 the accusations levelled against the petitioner, without expressing anything on the merits of the case, I am of the definite view that the petitioner is not entitled to be released on bail at this stage.
Resultantly, the bail application is dismissed.
Sks/29.8.2024 sd/- C.S.DIAS, JUDGE