Gujarat High Court
Rakesh Manekchand Kothari vs Deputy Director on 31 March, 2015
Author: Paresh Upadhyay
Bench: Paresh Upadhyay
R/CR.MA/3637/2015 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR REGULAR BAIL)
NO. 3637 of 2015
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RAKESH MANEKCHAND KOTHARI ....Applicant
Versus
DEPUTY DIRECTOR,
ENFORCEMENT DIRECTORATE & ANR ....Respondents
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Appearance:
MR VIKRAM CHAUDHARY, SENIOR ADVOCATE with
MR SANJAY AGARWAL, ADVOCATE with
MR CHETAN K PANDYA, ADVOCATE for the Applicant
MR DEVANG VYAS, ASSISTANT SOLICITOR GENERAL
for the Respondent No. 1
MR L.B.DABHI, ADDITIONAL PUBLIC PROSECUTOR
for the Respondent No. 2
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CORAM: HONOURABLE MR.JUSTICE PARESH UPADHYAY
Date : 31/03/2015
CAV JUDGMENT
1. This is an application for Regular Bail. The applicant is accused of having committed offence punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 (for short 'the PML Act'). The case is registered as PMLA Case No.4 of 2014 in the Court of the Principal District and Sessions Judge, Ahmedabad (Rural), which is the designated Court under the Act. The applicant had Page 1 of 15 R/CR.MA/3637/2015 CAV JUDGMENT already moved the designated Court for regular bail by filing Criminal Misc. Application No.1293 of 2014 which is rejected by the Court vide order dated 08.10.2014.
2.1 Mr.Vikram Chaudhary, learned senior advocate for the applicant has submitted that the rigorous of Section 45 of the PML Act is not applicable qua the applicant, inasmuch as no offence is committed by the applicant, the applicant is not accused of having committed any scheduled offence. It is further submitted that, even if it is assumed that, rigorous of Section 45 do apply qua the applicant, on the ground of parity as well, the applicant needs to be enlarged on bail. In this regard, reference is made to the cases of (i) Mr.Bilal Haroon Galani and (ii) Mr.Praful Patel. Reliance is also placed on the order passed by the Co-ordinate Bench of this Court in the case of Sunil Deepakkumar Agarwal Vs. State of Gujarat recorded on Criminal Misc. Application No.15636 of 2014 dated 19.11.2014 and in the case of Afroz Mohd. Hasan Fatta Vs. State of Gujarat recorded on Criminal Misc. Application No.2191 of 2015 dated 05.03.2014.
2.2 Learned senior advocate for the applicant has alternatively submitted that, the applicant is entitled to bail on the ground that both the conditions of Section 45 of the PML Act are satisfied in the facts of this case. In support of this, it is submitted that, there is no antecedent against the applicant and that there is no material to substantiate that the applicant is guilty of the offences alleged against him. It is submitted that the Court need not arrive at the positive finding that the applicant has not committed the offence under the PML Act. It is submitted that the word 'reasonable' needs to be Page 2 of 15 R/CR.MA/3637/2015 CAV JUDGMENT understood and interpreted reasonably. In this regard, reliance is placed on the decision of the Bombay High Court in the case of Shri Ashok Zende Vs. State of Maharashtra in Criminal Bail Application No.1817 of 2014 dated 17.11.2014. It is also contended that the maximum sentence prescribed for the offence in question is 7 years, and therefore the decision of Honourable the Supreme Court of India in the case of Arnesh Kumar Vs. State of Bihar reported in (2014) 8 SCC 273, will apply with full force in the present case. Reliance is also placed on various decisions, including the following.
(I) Nirmal Singh Pehlwan @ Nimma Vs. Inspector, Customs, Customs House, Punjab - 2011 (8) Scale
430.
(ii) Vinod Solaki Vs. Union of India reported in (2008) 16 SCC 537.
(iii) Tofan Singh Vs. State of Tamil Nadu reported in (2013) 16 SCC 31.
(iv) Noor Aga Vs. State of Punjab - 2008 (9) Scale 681 2.3 Learned senior advocate for the applicant has submitted that, the applicant be enlarged on bail.
3.1 On the other hand, Mr.Devang Vyas, learned Assistant Solicitor General of India for the contesting respondent Authority has opposed this application and has submitted that the rigorous of Section 45 of the PML Act would apply with full force in the facts of this case and there is material on record even to hold that the applicant is guilty of the offence charged with and in any case, this is not the case where at this stage, Court may record finding that there are reasonable ground to Page 3 of 15 R/CR.MA/3637/2015 CAV JUDGMENT believe that the applicant is not guilty of the offence charged with. Reference is made to the affidavit in reply dated 04.03.2015 filed on behalf of the respondent No.1 through Deputy Director of Enforcement Directorate. It is submitted that, this application be dismissed.
3.2 It is further submitted that on the face of the decision of the Division Bench of this Court (Coram:-Hon'ble Mr.Justice Anant S. Dave & Hon'ble Mr.Justice G.B.Shah) in the Writ Petition filed by this applicant himself, being Special Criminal Application No.4496 of 2014 dated 16.01.2015, the present application could not be considered on merits at all. During the course of hearing however, learned Assistant Solicitor General has conceded that in view of the clarification given by the Division Bench dated 04.03.2015 in Criminal Misc. Application (for review) No.3715 of 2015 in Special Criminal Application No.4496 of 2014, the present application can not be termed to be not maintainable. However, it is submitted that, the said decision of the Division Bench of this Court would bind the present applicant and on that additional ground as well, this application be dismissed. Reliance is also placed on the following decisions.
(i) Ram Singh Vs. Central Bureau of Narcotics - 2011 (0) GLHEL - SC 50045
(ii) Customs, New Delhi Vs. Ahmadalieva Nodira - 2004 (0) GLHEL - SC 6972
(iii) Naresh J. Sukhawani Vs. Union of India - 1995 (0) GLHEL - SC 19209.
Page 4 of 15 R/CR.MA/3637/2015 CAV JUDGMENT(iv) Union of India Vs. Shiv Shanker Kesari - 2007 (0) GLHEL - SC 39851
(v) K.T.M.S.Mohd. Vs. Union of India - 1992 (0) GLHEL -
SC 13569
(vi) K.I.Pavunny Versus Assistant Collector (Hq.), Central Excise Collectorate, Cochin - 1997 (0) GLHEL - SC 13291.
(vii) Bipinbhai A. Patel Vs. State of Gujarat - 1998 (1) G.L.H. 704.
4. Having heard learned advocates for the respective parties, this Court finds as under.
4.1 At the outset, it needs to be recorded that the present applicant was the petitioner of Special Criminal Application No.4496 of 2014. The prayers made in the said petition read as under.
"[a] To strike down Section 45 of the Prevention of MoneyLaundering Act, 2002 [hereinafter referred to as `PMLA'] [as inserted / substituted by Amendment Act 2005 [20 of 2005] dt. 21.5.2005, as the said provision does not bear any reasonable and rational nexus with variety of Scheduled offences mentioned in the Schedule under the Act which may even be noncognizable, bailable and on much lighter pedestal, for being Page 5 of 15 R/CR.MA/3637/2015 CAV JUDGMENT unreasonable and ultra vires, and consequently unconstitutional, illegal, arbitrary, discriminatory, and thus being violative of Articles 14, 19 and 21 of the Constitution of India, and this Hon'ble Court may read down, lay down, expound, interpret and deliberate upon the scope and perspective of Section 45 of PMLA so as to harmonize the same in juxtaposition with various scheduled offences [under amended Part A of the Schedule], [b] To read down, expound, deliberate and interpret the scope and perspective of Section 19 of PMLA in light of section 49(3) read with Rules notified by GSR 446[E] dated 1.7.2005, in consonance and harmony with settled constitutional mandate of Articles 14, 21 and 22 of Constitution of India as also in the context of various provisions under the Code of Criminal Procedure, 1973, as amended from to time and the Guidelines laid down by the Hon'ble Apex Court in D.K.Basu vs State of West Bengal 1997(1) SCC 416, [c] For issuance of an appropriate writ of quo warranto, calling upon Respondent No.3, who being an Assistant Director, Enforcement Directorate, appointed under Foreign Exchange Management Act, 1999, can under Section 54 of PMLA only assist any officer investigating under PMLA, to show cause as to how and under what authority has he exercised the power of arrest under Section 19 of Page 6 of 15 R/CR.MA/3637/2015 CAV JUDGMENT PMLA, while effecting arrest of the Petitioner on 01.09.2014 in ECIR/01/SRT/2014, without producing till date, despite specific objection by the Petitioner [i] any authorization conferring upon him by way of any notification or order issued by the Central Government in terms of Section 19 and Section 49 of PMLA, 2002, read with Rules notified by GSR 446(E), dt.1.7.2005, authorizing him to be an Arresting Officer and to exercise power to arrest under section 19, [ii] any notification issued by Central Government for his appointment a Assistant Director under section 49 of PMLA, [iii] any records to show compliance of Rules notified by GSR 446(E) dated 1.7.2005, and [v] any Criminal Proceedings against the Petitioner in the alleged Scheduled offence showing the Petitioner as an accused person; and [d] For issuance of an appropriate writ of Habeas corpus, or order or direction under Article 226 of the Constitution of India, directing forthwith release of the Petitioner from custody, by Page 7 of 15 R/CR.MA/3637/2015 CAV JUDGMENT setting aside the Impugned Arrest Order dated 1.9.2014 and the consequent remand proceedings, as the arrest of the Petitioner is manifestly illegal, without jurisdiction, null and void ab initio, for clear violation of [i] The directives of the Honble Apex Court in D.K.Basu vs. State of West Bengal, 1997 (1) SCC 416 [more particularly those prescribed in subpara (2), (9) and (10) of Para 35 thereof], [ii] The provision of PMLA including amongst others of Section 19(1) of PMLA, which mandatorily prescribe the arrest to be made on the basis of such material in possession, on the basis of which there exists reason to believe that person is guilty of an offence under the PMLA; which shall be recorded in writing; and pursuant to arrest to inform him of the `Grounds' for such arrest, [iii] Rules notified by Central Government vide GSR 446[E], dt.1.7.2005, [iv] notification GSR 441(E) dated 1.7.2005 issued by the Central Government appointing Director to exercise the exclusive power conferred under section 19 of PMLA [v] Article 14, 21, 22 of the Constitution Page 8 of 15 R/CR.MA/3637/2015 CAV JUDGMENT of India.
[e] At the interim / adinterim stage [i] The proceedings under PMLA against the Petitioner may please be stayed, [ii] The Petitioner may please be released on regular bail in the above case in ECIR/01/SRT/2014, [f] Dispense with filing of affidavit in support to this Petition as the Petitioner is in judicial custody;
[g] For such other or further order/s in the peculiar facts of the case."
4.2 The said petition is dismissed vide judgment dated 16.01.2015. Though with the said dismissal, the prayer for bail also stood rejected by the Division Bench of this Court, this application is accepted to be maintainable in view of the clarification given by the Division Bench vide order dated 04.03.2015 in Criminal Misc. Application (for review) No.3715 of 2015 in Special Criminal Application No.4496 of 2014. It is noted that the petition invoking Article 226 of the Constitution of India being Special Criminal Application No.4496 of 2014 was filed by the present applicant, principally challenging some of the provisions of the PML Act being unconstitutional and as the consequence thereof, the arrest was prayed to be held to be illegal, which is not accepted by the Division Bench, Page 9 of 15 R/CR.MA/3637/2015 CAV JUDGMENT but that by itself would not be a ground to disentitle the applicant to ask for bail under Section 439 of the Code of Criminal Procedure. This Court finds that, learned senior counsel for the applicant is right in his submission that, the decision of the Division Bench of this Court noted above, would not disentitle the applicant to press this application. It is held that the decision of the Division Bench of this Court in the Special Criminal Application No.4496 of 2014 would not operate as a bar against the present applicant to press this application. It is noted however that the finding of the Division Bench qua the applicant, on merits, if any, can not be brushed aside.
5.1 Having held that this application needs to be considered on merits, the next question would be as to what are the parameters which need to be kept in view by this Court. Section 45 of the PML Act reads as under.
"45 Offences to be cognizable and non bailable. [1] Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule 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 Page 10 of 15 R/CR.MA/3637/2015 CAV JUDGMENT [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, may be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by [i] the Director; or [ii] any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.
[1A] Notwithstanding anything contained in the Code of Criminal Procedure, 1973, [1973 (2 of 1974], or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorized, by the Central Government by a general or special Page 11 of 15 R/CR.MA/3637/2015 CAV JUDGMENT order, and, subject to such conditions as may be prescribed.
[2] The limitation on granting of bail specified in subsection (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."
5.2 In view of the above provision, this Court need to arrive at the satisfaction that (i) there are reasonable grounds for believing that the applicant is not guilty of the offence, he is charged with, and further that (ii) he is not likely to commit any offence while on bail.
5.3 So far the second part i.e. 'likelihood of not committing any offence' is concerned, there is substantial force in the submission of learned senior advocate for the applicant that, 'the offence' needs to be understood as 'the offence under the PML Act' and not any other offence. However further deliberation in that regard may be required only if the (i) noted above, is satisfied.
5.4 So far the first stipulation, that this Court need to arrive at the satisfaction that, there are reasonable grounds for believing that the applicant is not guilty of the offence he is charged with, is concerned, for that purpose the material on record needs to be considered. Having done so, more particularly having taken into consideration the contents of the complainant filed by the respondent authority dated 29.10.2014 Annexure-A to this application, with specific Page 12 of 15 R/CR.MA/3637/2015 CAV JUDGMENT reference to the role attributed to the present applicant, more particularly para:28 of the said complainant, it is recorded that, this Court is not in a position to record such satisfaction. It is further noted that, while doing so, it is kept in view that the word 'reasonable' needs to be understood and interpreted reasonably and not that acquittal needs to be recorded at this stage. Reliance placed on the decision of the Bombay High Court in the case of Shri Ashok Zende Vs. State of Maharashtra in Criminal Bail Application No.1817 of 2014 dated 17.11.2014, would not take the case of the applicant any further since it was the case of an Assistant Manager in a nationalised bank and he was already placed under suspension and the thrust was that there was no likelihood of him committing that offence again. So far the satisfaction recorded by the Bombay High Court in that case that there were reasonable grounds for believing that the said applicant was not guilty of the offence he was charged with, is concerned, it can not have any bearing in the present case.
5.5 Since this Court is unable to record the first satisfaction as contemplated under Section 45 (1) (ii) of the PML Act, it would be immaterial as to whether the applicant meets with the second requirement, as noted in para:5.3 above. There is no dispute that, both the stipulations need to be met with and if any one is missing, it would not be permissible to release the applicant on bail. At this juncture, reference is also required to be made to the decision of the Division Bench of this Court recorded on Special Criminal Application No.4496 of 2014 dated 16.01.2015, more particularly para : 10.12 and 10.13 thereof. For this reason this application needs to be dismissed.
Page 13 of 15 R/CR.MA/3637/2015 CAV JUDGMENT6.1 So far the parity, as claimed by the applicant is concerned, the same would not take the case of the applicant any further for the reason that it is for each accused that the above noted satisfaction needs to be recorded by the Court. From the material on record, it transpires that, each accused is attributed with different role. Further in no case the Court has recorded satisfaction as noted above. Non-arrest of an individual or conversion of non-bailable warrant into summons qua some of the accused can not be termed as the Court having recorded satisfaction as required under Section 45(1)(ii) of the PML Act. The contention of parity is therefore rejected.
6.2 The argument that the applicant has not committed any scheduled offence can not be gone into by this Court on the face of the decision of the Division Bench of this Court recorded on Special Criminal Application No.4496 of 2014. As noted above, reference needs to be made to para: 10.12 and 10.13 of the said decision. It is noted that, the said decision is in the petition filed by this very applicant.
7. So far the authorities cited by learned senior advocate for the applicant is concerned, there can not be any dispute with regard to the proposition enunciated therein, however none of the authorities can be substitute to the satisfaction to be recorded by this Court as required under Section 45 of the PML Act, as noted above, and the said satisfaction needs to be recorded on the facts and it can not be a question of law.
8.1 For the reasons recorded above, this application is dismissed.
Page 14 of 15 R/CR.MA/3637/2015 CAV JUDGMENT8.2 It is clarified that, the reasons recorded in this order is only for the limited purpose of deciding this application for bail and any observation by this Court may not be construed as this Court having expressed any opinion on merits of the matter and the same shall not have any bearing at the time of trial against the applicant. The Trial Court shall in no way be influenced by the observation of this Court in this order since, as noted above, it is only for the purpose of deciding this application.
(PARESH UPADHYAY, J.) M O Bhati/01 Page 15 of 15