Gujarat High Court
Shailesh Babulal Bhatt S/O Babulal ... vs State Of Gujarat on 21 February, 2025
NEUTRAL CITATION
R/CR.MA/22347/2024 ORDER DATED: 21/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR REGULAR BAIL - AFTER
CHARGESHEET) NO. 22347 of 2024
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SHAILESH BABULAL BHATT S/O BABULAL BHATT
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR JAL UNWALA, SENIOR COUNSEL with MR CHETAN K PANDYA(1973)
for the Applicant(s) No. 1
MR. KISHAN H DAIYA(6929) for the Applicant(s) No. 1
MR ANKIT SHAH(6371) for the Respondent(s) No. 2
MS. ASMITA PATEL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE M. R. MENGDEY
Date : 21/02/2025
ORAL ORDER
1. This application is filed under Sections 187(2) and 483 of the Bharatiya Nagarik Suraksha Sanhita for regular bail in connection with File No.ECIR/AMZO/01 of 2019 registered with Directorate of Enforcement, Ahmedabad, for the offences punishable under Section 3 r/w. 4 of the Prevention of Money Laundering Act, 2002.
2. Learned senior counsel Mr. Jal Unwala with learned advocate Mr. Chetan Pandya appearing for the applicant has submitted Page 1 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined that the present applicant was arrested on 14.08.2024 and since then he is in the custody. The complainant on completion of investigation has filed private complaint being PMLA Case No.14 on 10.10.2024, and relied on 3 Annextures of the complaint wherein the Annexure-I is mix of documentary evidence including statements of the applicant and the co-accused recorded under Section 50 of the Prevention of Money Laundering Act, 2002 (PML Act) which are in all 17 documents/statements, whereas, Annexure-II is relied upon documents in addition to the documents mentioned in Annexure-I which is also consist of documents plus statements which are in number 17. The Annexure-III is the list of witnesses which suggests that the complainant would examine in total 18 witnesses. Upon the aforesaid Charge-sheet, the Honourable Designated Court has taken cognizance of the offence under Section 3 r/w Section 4 of the PML Act.
2.1 Learned senior counsel has further submitted that the applicant had invested Page 2 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined his hard earned money in the virtual currency floated by M/s. Bit Connect Limited having its office at Surat and regional offices in various countries. The Director and officials of the said company offered and assured the applicant of high returns and commissions against the investment in the coin floated by them and represented that, the said coin would be maintained, governed, mined and regulated by their own exchange in India. Thereafter, the applicant has invested in the coin and on 16.01.2018, M/s. Bit Connect Limited closed its lending site of Bit Connect Exchange and the price of coin gone to USD 0.50 from USD 363 in single day which resulted huge loss to the investors including the present applicant and the Directors and officials of the company disappeared and the website was closedown. Thereafter, the present applicant through its sources approached the Director Mr. Dhaval Mavani and requested him to arrange for the value of coin invested in the company and the said Mr. Dhaval Mavani requested the investors that, not to initiate any legal Page 3 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined proceedings against him fearing that, the other investors would make hue and cry to get their invested money return-back. Thereafter, the present applicant got return-back his investments from the Director Mr. Dhaval Mavani.
2.2 Learned senior counsel has further submitted that, since the applicant received huge amount against his investment, the applicant was abducted on 11.02.2018 by the personnel of LCB Police Station, Amreli and was detained illegally for days together, mercilessly beaten up and threatened at gun point. The applicant was subjected to torture and the police personnel extorted Rs.12 Crores in the form of Bitcoin and further demanded a ransom of Rs.50 Crores and after agreeing to the demand of the LCB personnel by the applicant, the applicant was released from the illegal custody of the LCB personnel. He has further submitted that, immediately on release of the applicant, a complaint was given on dated 23.02.2018 by the applicant to the Honourable Home Minister of Gujarat, who transferred the complaint Page 4 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined for investigation to DIG, CID Crime, Gujarat State. He has further submitted that pursuant to the complaint, an FIR was registered on 08.04.2018 with the CID Crime Police Station, Gandhinagar being I- CR No.02 and after investigation of the offence, the Charge-sheet came to be filed on 13.02.2019 against the officials of the LCB, Amreli.
2.3 Learned senior counsel has further submitted that even though there was no FIR or any inquiry pending against the present applicant, the applicant was called by Mr. Sunil Kumar Nair, Inspector of CBI, ACB, Gandhinagar, in collusion with one Mr. Kirit Madhubhai Paladia to extort money from the applicant. The said Mr. Sunil Kumar Nair compelled the applicant to attend the CBI, ACB, Gandhinagar office and threatened with dire consequences of getting raided by Enforcement Directorate and Income Tax Department and extorted Rs. 4 Crore from the present applicant and for the same the applicant had complained to the superior officers of the CBI about the extortion by Page 5 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined Mr. Sunil Kumar Nair, Inspector of CBI, ACB, Gandhinagar and pursuant to the complaint made by the applicant and based on the statement recorded of the applicant, a Report No.DSP/CBI/AC/II/Delhi, dated 01.11.2019 was made to register an FIR against Mr. Sunil Kumar Nair and accordingly, an FIR was registered at New Delhi on 04.11.2019 being I-CR No.217201980008.
2.4 Learned senior counsel has further submitted that meanwhile an FIR being I-CR No.3 of 2018 was registered on 19.05.2018 by the Detective Police Inspector, CID Crime, Surat Zone, Gujarat for the offences punishable under Sections 364A, 365, 384, 387, 343, 323, 504, 506(2), 170, 193, 201 and 120B of the Indian Penal Code, 1860 and under Sections 25(1)(A) of the Arms Act, 1959 against the applicant and nine others. On 21.07.2018, an another FIR being I-CR No.06 of 2018 was registered with CID, Crime, Surat Zone for the offences punishable under Sections 409, 406, 420 and 120B of the Indian Penal Code, 1860, Section 3 of the Gujarat Page 6 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined Protection of Interest of Depositors (In Financial Establishments) Act, 2003, Sections 4,5 and 6 of the Price Chits and Money Circulation Scheme (Banning) Act, 1978 against Mr. Dhaval Mavani and others. The Charge-sheets in the said offence has been filed by the concerned investigating agency against the arrested persons. The anticipatory bail application of the present applicant was rejected by the Learned Sessions Court, Surat, and Honourable High Court of Gujarat, the applicant approached to the Honourable Apex Court by way of Special Leave Petition (Criminal) Dairy No.43165 of 2019 inter alia praying for anticipatory bail and the Honourable Apex Court by order dated 10.12.2019 was pleased to issue notice and further was pleased to grant interim relief of no coercive steps to be taken against the applicant provided the applicant's cooperation with the investigation and the Honourable Apex Court then by an order dated 15.02.2023 was pleased to make absolute the interim order dated 10.12.2019 and was pleased to take into consideration the allegations Page 7 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined against the applicant and cooperation of the applicant in the investigation.
2.5 Learned senior counsel has further submitted that, since 30.09.2019 an ECIR No.ECIR/AMZO/01/2019 with Directorate of Enforcement, Ahmedabad Zonal Office, Ahmedabad was registered based on the two FIR being I-CR No.03 of 2018 and FIR being I-CR No.06 of 2018 treating them as Scheduled Offence, the Investigation Officers of Enforcement Directorate had also started issuance of summons to the applicant for recording of statement under Section 50 of the PML Act, and the applicant appeared in-person on 9 occassions before the Investigation officer and supplied the documents called for and on one or two occassions, the applicant was not able to appear before the Investigating Officer, the applicant had informed in writing with the reasons of non-appearance. The applicant had co- operated with the Investigation Officer for all time and despite the same the applicant had been arrested on dated 13.08.2024.
Page 8 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined 2.6 Learned senior counsel has further submitted that the Investigating Officer had recorded more than one statements of the present applicant during the investigation and was extensively interrogated on all the occassions by the officers of the Enforcement Directorate and though, the applicant had truthfully answered all the questions as required under Section 50 of PML Act, 2002 to the best of his ability before his arrest on dated 13.08.2024, the applicant was arrested on the ground of non-cooperation during the investigation.
2.7 Learned senior counsel has further submitted that as per the complaint, registered against the applicant, it is alleged that the applicant had derived following properties by committing Scheduled Offence being FIR No.I/3 of 2018, dated 19.05.2018;
"I. On 01.02.2018, 2091 Bitcoins in the Bitcoins wallet address bearing No. 1P2QDxC5Gq5YbZ8ZH9RMZGdvXtsyNKCubr.Page 9 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025
NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined II. On 01.02.2018, 11,000 Litecoins (equivalent to 166 Bitcoins) in the Litecoin wallet address bearing No. Ld7KJZAidw9h4xpeV5qVkvMNKrtxR7NCB.
III. INR 14.5 Crores cash in an account with M/s. P. Umeshchandra & Sons (Angadiya), Surat."
2.8 Learned senior counsel has further submitted that the Honourable Apex Court has granted Anticipatory bail in the said FIR being I-CR No.03 of 2018 and till the date Charge-sheet in the aforesaid FIR is not being filed so far as the present applicant is concerned.
2.9 Learned senior counsel has submitted that even the complainant Mr. Dilip Kumar an Assistant Director did not arrest any of the accused in connection with an FIR being I-CR No.06 of 2018 registered with CID Crime, Surat which is also part of the same ECIR. Therefore, he has submitted that the Investigating Officer had arrested the applicant as the applicant has challenged the actions of the Page 10 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined officials of the Police and CBI and filed FIRs against them and who were charge sheeted and facing prosecution. He has, therefore, submitted that by allowing present application, the applicant may be enlarged on regular bail by imposing suitable conditions.
3. Learned advocate Mr. Ankit Shah appearing for the respondent no.2 has submitted that the applicant herein was not arrested on the ground that the applicant had not co- operated with the investigation but he was arrested on the ground of misleading the investigation by not providing details as regards disposal and dissipation of the proceeds of crime. He has further submitted that the arrest memo issued to the applicant on 13.08.2024 explains the circumstances which warranted the arrest of the applicant. Therefore, it is not correct on the part of learned senior counsel appearing for the applicant to contend that the applicant was arrested only on the ground of non-cooperation during the course of investigation. He has further submitted that the applicant Page 11 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined herein had invested amount Rs.1.7 Crores in Bit Connect Ltd. which was owned and controlled by one Satish Kumbhani. He was promised to give return @ 0.5% - 2% over the said amount on daily basis. However, the said BitConnect Ltd. had thereafter been closed which resulted into loss to the present applicant and to overcome the said loss, the applicant along with the other co-accused had hatched a conspiracy and as a part of the said conspiracy, one Piyush Savaliya was kidnapped on 30.01.2018. While one Dhaval Mavani came to be kidnapped on 01.02.2018. These persons were employees of BitConnect at the relevant time. After kidnapping aforesaid two persons, the applicant herein had extorted 2091 Bitcoins, 11,000 Litecoins and Rs.14.5 Crores cash from Dhaval Mavani and thereafter, the said Dhaval Mavani was released from captivity. The applicant herein has not provided correct information as regards disposal of amount which had been extorted by him from the said Dhaval Mavani. He has further submitted that Section 45 of Prevention of Money Laundering Act, 2002, requires this Page 12 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined Court to come to the conclusion that the applicant has not committed an offence in question and he is not likely to commit such an offence if he is ordered to be enlarged on bail. Having regard to material collected during the course of investigation, it cannot be said that the applicant has not committed any offence nor it can be said that the applicant will not commit any offence, if he will be enlarged on bail. He has, therefore, submitted to dismiss the present application.
4. Learned APP has, therefore, submitted that the offences which have been charged, are serious in nature and looking to the facts as well as the allegations made against the applicant, no discretion should be required to be exercised.
5. Heard learned advocates for the respective parties and perused the documents on record. The investigation of the present offence is over and the Charge-sheet is filed.
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6. From the record it appears that the Enforcement Case (Information Report) ECIR came to be registered against the present applicant and the other co-accused on the basis of F.I.R. being C.R.No.I/3 of 2018, dated 19.05.2018 registered with C.I.D. Crime Surat Zone Police Station, District Surat and F.I.R. being C.R.No.I/6 of 2018, dated 21.07.2018 registered with C.I.D. Crime Surat Zone Police Station, District
- Surat.
7. From the material collected during the course of investigation it appears that the applicant herein had invested the amount of Rs.1.7 Crores in M/s. Bit Connect Ltd. which was owned and controlled by one Satish Kumbhani. The applicant was promised to receive return @ 0.5% - 2% daily over the amount invested by him. However, after investment of the aforesaid amount by the present applicant, the lending platform of Bit Connect Coin was closed by the said Satish Kumbhani which had resulted into loss to the present applicant of the amount which he had invested. It is the case of the Page 14 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined prosecution that to overcome the said loss, the applicant and the other co- accused had made a plan for induction of one Piyush Savaliya and Dhaval Mavani who were employees of M/s. Bit Connect Ltd. at the relevant time and accordingly, these two persons were abducted on 30.01.2018 and 01.02.2018 respectively. The applicant with the help of the other co-accused got 2091 Bitcoins, 11,000 Litecoins and Cash worth Rs.14.5 Crores extorted from the said Dhaval Mavani and thereafter, they were released. The amount which was extorted by the present applicant is believed to have been distributed amongst the accomplices of the applicant for playing the respective roles. The record also indicates that several statements of applicant came to be recorded under Section 50 of PML Act and details as regards the utilisation, parking, concealment and possession of proceeds of crime were sought from the applicant and the applicant had given evasive replies to the investigating authorities in this regard. Thus, the applicant is alleged to have withheld the material information as Page 15 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined regards the disposal of proceeds of crime and its possession. The record also indicates that the Investigating Agency has recorded the statement of various persons under Section 50 of the PML Act. The material collected during the course of investigation indicates that the applicant had further transferred Bit Coins and the cash to the other co-accused through various modes.
8. The Hon'ble Apex Court in its recent judgment in the case of Union of India through the Assistant Director vs. Kanhaiya Prasad has held in Para - 12 thus:-
"12. It is well settled position of law that Section 45 of the PMLA starting with a non- obstante clause has an overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 imposes two conditions for the grant of bail to any person, accused of an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule. The two conditions are that (i) the prosecutor must be given an opportunity to oppose the Page 16 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025 NEUTRAL CITATION R/CR.MA/22347/2024 ORDER DATED: 21/02/2025 undefined application for bail; and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not liable to commit any offence while on bail. As well settled, these two conditions are mandatory in nature and they need to be complied with before the accused person is released on bail."
9. Having regard to the facts discussed herein above, it is difficult for this Court, at this stage, to hold that the accused person is not guilty of such an offence and that he is not liable to commit any offence while on bail.
10. Having regard to this aspect, this Court is not inclined to use its judicial discretion in favour of the applicant. The application is dismissed.
(M. R. MENGDEY,J) NABILA Page 17 of 17 Uploaded by NABILA A. VHORA(HC00630) on Fri Feb 21 2025 Downloaded on : Sat Feb 22 03:14:15 IST 2025