Karnataka High Court
Directorate Of Enforcement vs Sri. Sheethal Kumar Manere on 5 June, 2024
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NC: 2024:KHC:19474
CRL.P No. 41 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL PETITION NO. 41 OF 2024
BETWEEN:
DIRECTORATE OF ENFORCEMENT,
BANGALORE ZONAL OFFICE,
BMTC 'B' BLOCK, 3RD FLOOR,
SHANTHINAGAR, K.H. ROAD,
WILSON GARDEN,
BENGALURU - 560 027.
REPRESENTED BY ITS
ASSISTANT DIRECTOR
SRI. DILEEP MANGAWA
...PETITIONER
(BY SRI. MADHUKAR .M. DESHPANDE, ADVOCATE)
Digitally
signed by
BHARATHI S AND:
Location: high
court of 1. SRI. SHEETHAL KUMAR MANERE
karnataka
S/O SRI SUDHAKAR MANERE
AGED ABOUT 55 YEARS.
R/AT NO.20/783/2/ 'NARAYANI'
YESH LAXMI HALL ROAD,
ICHALAKARNAJI DISTRICT,
KOLHAPUR - 416 115
2. SMT. JYOTHI SHEETHAKUMAR MANERE
W/O SHEETHAL KUMAR MANERE
AGED ABOUT 50 YEARS
R/AT NO. 20/783/2/ 'NARAYANI'
YESH LAXMI HALL ROAD,
ICHALKARANJI DISTRICT,
KOLHAPUR - 416 115
...RESPONDENTS
(BY SRI. NAGENDRA NAIK .R., ADVOCATE FOR R1 & R2)
THIS CRL.P IS FILED U/S.439(2) CR.P.C PRAYING TO SET
ASIDE THE ORDER DATED 01.02.2023 PASSED BY THE HONBLE
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NC: 2024:KHC:19474
CRL.P No. 41 of 2024
XLVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AND SPECIAL
JUDGE FOR CBI CASES, BENGALURU CITY (CCH-48) IN
CRL.MISC.NO.437/2023 AND CONSEQUENTLY DISMISS THE
PETITION IN CRL.MISC.NO.437/2023 FILED BY THE RESPONDENT.
THIS CRL.P, COMING ON FOR FURTHER ARGUMENTS, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
The respondents have filed the petition seeking anticipatory bail before the learned 47th Additional City Civil and Sessions Judge, and Special Judge for CBI cases, Bengaluru (CCH-48) (hereinafter referred to as the 'Special Court') in Crl.Misc.No.437/2023. The said petition was considered by the Special Court and the same was allowed vide order dated 01.02.2023 granting anticipatory bail subject to conditions. The petitioner is before this Court seeking cancellation of the said anticipatory bail granted by the Special Court.
2. The admitted facts of the case are that, the complainant one Sri. Sanjay Dhanchand Ghodawat filed the first information as per Annexure-C against the accused making several allegations. On the basis of same, FIR came to be registered against accused Nos.1 to 14 including respondent Nos.1 and 2 as accused Nos.1 and 2, for the offences punishable under Sections 424, 506, 120B, 403, 406, 468, 471, -3- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 420, 415 R/w 149 of IPC with Ashok Nagar Police Station, Hubli, North Sub-Division. It is stated that after investigation, the final report has been submitted by the Investigating Officer. In the meantime, the petitioner herein registered ECIR/BGZ0/85/2022 against the respondents and other accused alleging commission of the offences punishable under Sections 120B, 409, 420, 411 R/w Section 34 and 37 of IPC.
3. It is the specific contention of the petitioner that respondent No.1 being accused No.1, introduced the complainant to some builders and he was induced by accused No.1 to invest huge sums of Rs.546 crores in various real estate projects with 8 builders. The accused have failed to repay the amount of Rs.394 crores and cheated the complainant. It is the specific contention of the petitioner that there was diversion of this huge amount by the accused and there is money laundering. It is the specific contention of the petitioner that respondent No.1 has received crores of rupees through his bank accounts from the complainant and the same was being used for his personal benefits. Similarly, respondent No.2 has also received more than Rs.8 crores from the complainant through the builders and used it for her personal -4- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 benefits, which amounts to deviation of the fund. Since the investigation is to be conducted pertaining to money laundering committed by the respondents, they are to be subjected to interrogation.
4. Learned Special Public Prosecutor for the petitioner submitted that in view of Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the 'PMLA Act'), the burden is on the accused-respondents to make out a reasonable ground that they are not guilty of the offence alleged and that there is no possibility of accused committing such crime, while on bail. The respondents after getting an order of anticipatory bail, are evading investigation and are not co-operating with the Investigating Officer. The Special Court has not recorded its reasoning as required under Section 45 of the PMLA Act, which is sine qua non for grant of bail. Unless the twin conditions mentioned in Section 45 of the PMLA Act are satisfied, the Special Court could not have proceeded to grant anticipatory bail ignoring the seriousness of the allegations.
5. Learned counsel further submitted that the Special Court has given a clean chit to the respondents even though it -5- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 was not the stage to weigh the evidence meticulously but only to consider the probabilities of the case and possibility of the accused committing a crime, while on bail. The reasoning assigned by the Special Court is per say erroneous. Therefore, the said order is liable to be set aside and the anticipatory bail granted to the respondents is to be cancelled.
6. He further submitted that even though it is contended by the respondents that there was stay of further proceedings in the criminal case registered by the police for the predicate offence, the same will not apply to the present case as the petitioner was not a party to the said stay order granted in the criminal case that was registered under the FIR. The charge sheet filed in the said case prima facie discloses, commission of the offence and regarding the process of money laundering, acquisition, layering, possession and concealment committed by the respondents under the Act. A detailed investigation will have to be undertaken, as it constitutes an offence independent of commission of predicate offence. The statements of the respondents recorded under Section 50 of PMLA makes out prima-facie case for commission of the offence under Sections 3 and 4 of the said Act. Ignoring all these facts, -6- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 granting of anticipatory bail by the special Court would interfere in the investigation and it will frustrate the efforts of the petitioner in unearthing the commission of the offence.
7. Learned counsel further submitted that even though the Special Court has referred to the decision of the Hon'ble Apex Court in 'Vijay Madanlal Choudhary and others Vs.Union of India and others'1, it failed to take into consideration the principles of law enunciated by the Court for grant of anticipatory bail as contained in para 408 to 410. The Court has made it very clear that on consideration of the materials on record, in the light of Section 45 of the Act, if it prima-facie forms an opinion that frivolous case is registered without any grounds, then only anticipatory bail could be granted. But the Special Court has not formed such an opinion but on the other hand, admittedly the charge sheet is filed for the predicate offence and the provisional attachment order was passed in respect of Rs.40 crores where it is alleged that over Rs.394 crores is involved. The Special Court on superfluous consideration has committed grave error in granting anticipatory bail without considering the seriousness of the 1 2022 SCC Online SC 929 -7- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 offence. Therefore, he prays for allowing the petition in the interest of justice by canceling the anticipatory bail and directing the respondents to surrender before the Court.
8. Learned Special Prosecutor placed reliance on the decision of the Hon'ble Apex Court in 'Sikandar Singh Vs.Directorate of Enforcement and another'2 in support of his contention that stay of further proceedings/investigation of the scheduled offence, where the Enforcement Directorate is not a part, will not operate as a stay for either investigation or registration of the offence under the Act.
9. Learned counsel further submitted that, the respondents have challenged initiation of the proceedings by the petitioner by filing the writ petition. The said writ petition came to be dismissed. Therefore, initiation of proceedings by the petitioner cannot be considered once again in this petition. Therefore, he prays for allowing the petition.
10. Per contra, learned counsel for the respondents opposing the petition submitted that the complaint came to be lodged at Hubli, even though the complainant and all the 2 CRM-M-51250-2023 -8- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 accused are the residents of Kolhapur. There was no reason to file the complaint at Hubli. It is a simple case of money transaction as the complainant invested some amount with the various companies under the agreements. Even though the complaint was filed on 10.06.2018, later the complainant has entered into a tripartite agreement with the accused in the criminal case on 10.04.2019. At the most, it may be a case of violation of the terms of the written agreement, but it do not constitute a criminal offence. The respondents were not parties to the agreement entered into between the complainant and other accused. He also submitted that the further proceedings in predicate offence is stayed as per order dated 12.03.2024 passed in Crl.P.No.103202/2023. Under such circumstances, the petitioner could not have proceeded with the present matter.
11. Learned counsel further submitted that prima-facie when the matter is of civil nature, the provisions of PMLA Act could not have been invoked for recovery of money. The respondents have never violated any of the conditions imposed by the Special Court, while granting anticipatory bail. On the other hand, they have co-operated with the Investigating -9- NC: 2024:KHC:19474 CRL.P No. 41 of 2024 Officer. Under such circumstances, no grounds are made out for cancellation of the bail.
12. Learned counsel also submitted that in view of Sections 2(y) and 2(u), the offence is not a distinct offence. Considering all these facts and circumstances, the Special Court has rightly granted anticipatory bail and there are no reasons to cancel the same. Hence, prays for dismissal of the petition.
13. In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is:
"Whether the petitioner has made out any grounds for cancellation of bail granted in favour of the respondents?"
My answer to the above point is in 'Negative' for the following:
REASONS
14. The primary grievance of the petitioner is that the learned Sessions Judge has not considered the requirement of law as initiated in para Nos.408 and 410 of Vijay Madanlal Choudhary's case (supra) and granted anticipatory bail. In
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 para No.408 of the said case, the Hon'ble Apex Court held that ordinarily anticipatory bail is granted in an exceptional cases, where the accused has been falsely implicated in an offence with an intention to harass and humiliate him. In para No.409, the Hon'ble Apex Court referring to the decision in 'P. Chidambaram Vs. Directorate of Enforcement'3, observed that the power to grant anticipatory bail should be sparingly exercised in economic offences. Referring to the decision in 'Siddharam Satlingappa Mhetre Vs. State of Maharashtra & Ors.'4 and other judgments, it is reiterated that anticipatory bail can be granted only in exceptional circumstances.
15. It also referred to the decision in 'Jai Prakash Singh Vs. State of Bihar & Anr.5, where there is reference to parameters for grant of anticipatory bail in a serious offence and reiterated that anticipatory bail can be granted only in exceptional circumstances where the Court is prima-facie of the opinion that the applicant has falsely been enroped in the crime. The Court also considered the damages that could be caused by grant of anticipatory bail at the initial stage and that 3 (2019) 9 SCC 24 4 (2011) 1 SCC 694 5 (2012) 4 SCC 379
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 it may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. It has observed that grant of anticipatory bail particularly in economic offence will definitely hamper the effective investigation. The Court also referred to money laundering which involves many stages. Para 410 of the said judgment is with regard to investigation in an economic offence, more so in case of money laundering, which requires a systematic approach and also that the rigors of Section 45 of Money Laundering Act will apply in the case of anticipatory bail.
16. If the dictum laid down by the Hon'ble Apex Court is taken into consideration while appreciating the facts of the present case, admittedly, the complainant entered into several agreements with the builders who are also accused in the present case. Admittedly, the respondents are not parties to any of those agreements. Learned counsel for the respondents on instruction submits that arbitration proceedings are initiated in respect of those agreements entered into between the complainant and the builders at Mumbai. However, it is the allegation made by the petitioner that the respondents who are
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 not parties to any of the agreements, had induced the complainant to invest his huge amount with the builders and have taken kickbacks and there is money laundering.
17. Learned Sessions judge after considering all these facts and circumstances of the case, formed an opinion that it is purely a civil dispute and further, charge sheet is already filed for the scheduled offence. Section 45 of the PMLA Act requires the learned Sessions Judge to form such an opinion regarding the reasonable grounds for believing that he is not guilty of such offence. The finding recorded by the learned Sessions Judge cannot be a finding which is binding on the trial Court at the time of trial. But it is only for the purpose of deciding the application for grant of anticipatory bail. If the contentions taken by both the parties are reconsidered, admittedly, the respondents have subjected themselves for interrogation after appearing before the Investigating Officer and thereby, obeyed the condition imposed while granting anticipatory bail. The only grievance raised by the petitioner is that the respondents might have concealed some information regarding their assests purchased from the amount which they
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 got through money laundering. But there are no reasonable grounds to accept such contention.
18. The Hon'ble Apex Court in Aslam Babalal Desai (supra) held that the ground for cancellation stands on a different footing from the ground for rejection of the bail and hence, the criteria applied for both these scenarios are also different.
19. In 'Aslam Babalal Desai Vs. State of Maharastra'6, the Hon'ble Apex Court held that it is easier to reject a bail application than to cancel a bail once granted. Because, cancellation of bail interferes with the liberty already secured by the accused either on the exercise or discretion by the Court or by thrust of law. Therefore, the discretion to cancel a bail of person who is already enlarged on bail is to be exercised with all care and circumspection.
20. In 'Abdul Basit V. Mohd Abdul Kadir Chaudhary'7, the Hon'ble Apex Court had short listed the grounds for cancellation of bail as follows. 6 (1992) 4 SCC 272 7 (2014) 10 SCC 754
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 i. the accused misuses his liberty by indulging in similar criminal activity ii. interferes with the course of investigation iii. attempts to tamper with evidence or witnesses iv. threatens witnesses or indulges in similar activities which would hamper smooth investigation v. there is likelihood of his fleeing to another country vi. he makes an attempts to make himself scare by going underground or becoming unavailable to the investigating agency vii. accused makes an attempts to place himself beyond the reach of his surety. Of course this list is only illustrative but not exhaustive.
However, judicial pronouncements have broadened the horizons of the powers of the Courts under Section 439(2) of Cr.P.C.
21. It is clarified that an order granting bail, which is patently illegal or perverse and which does not assign reasons for the order can definitely be set aside in a proceeding initiated
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 as held in 'Dr.Narendra K Amin Vs. State of Gujarat, Puran V.Rambilal'8.
22. An order granting bail based on irrelevant material or an order which does not take into consideration relevant materials, can also be cancelled under the said provision.
23. In 'Prakash Kadam V.Ram Prasad Vishwanath Gupta'9, the Hon'ble Apex Court held that if there are serious allegations against the accused, bail may be cancelled even if he has not misused the bail granted to him. If the Court granting bail has not considered the relevant facts, would also weigh over the Court as against the apparent compliance of the accused with the conditions of the bail. Therefore, the Courts have tried to differentiate between cancellation of bail and challenge to an order granting bail.
24. If all these principles of law on the subject are taken into consideration by once again appreciating the contention taken by both the parties, I do not find any patent error in the order passed by the learned Sessions Judge. It cannot be termed as patent illegality or perversity. Even it 8 (2008) 13 SCC 584 9 2011 (2) Crimes (SC) 279
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NC: 2024:KHC:19474 CRL.P No. 41 of 2024 cannot be said that the order was passed without assigning any valid reasons. Therefore, I am of the opinion that there are no cogent reasons to recall the order passed by the learned Sessions Judge or to cancel the anticipatory bail granted in favour of the respondents through a considered order. When it is the position of law that the Courts must be slow in committing the respondent to custody by recalling the relief which is already granted in his favour, I do not find any just reason for taking such harsh decision. Therefore, I am of the opinion that the petition is liable to be dismissed. Accordingly, petition is dismissed.
Sd/-
JUDGE BH/PN List No.: 1 Sl No.: 1