Rajasthan High Court - Jaipur
Himansh @ Himanshu Verma S/O Shri Kanwar ... vs Directorate Of Enforcement ... on 22 September, 2023
Author: Praveer Bhatnagar
Bench: Praveer Bhatnagar
[2023:RJ-JP:24584]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Criminal Miscellaneous (Petition) No. 11157/2022
Himansh @ Himanshu Verma S/o Shri Kanwar Ajay Verma,
Resident Of 14, 5Th Floor, Bandstand Apartments, Bandstand
West, Mumbai. (Presently Confined In Central Jail Jaipur).
----Petitioner
Versus
Directorate Of Enforcement, Through Its Assitant Director, 2Nd
Floor, Jeevan Nidhi-II, Lic Building, Bhawani Singh Road, Jaipur
302005.
----Respondent
For Petitioner(s) : Mr. Vikram Chaudhari, Senior Advocate assisted by Mr. Rishi Sehgal Mr. Harshvardhan Nandwana For Respondent(s) : Mr. R.D. Rastogi, ASG with Mr. Akshay Bhardwaj Mr. Devesh Yadav Mr. Vaibhav Jeswani HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order 22/09/2023
1. Petitioner Himanshu through an instant petition under Section 482 Cr.P.C. assailed the action of respondent - Directorate of Enforcement, whereby, the petitioner was arrested under Section 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'PMLA') and further remanded to custody vide order dated 15.10.2022 passed by the learned Special Judge, CBI Court No.3, Jaipur Metro-I, Jaipur.
2. The petitioner prayed for setting aside his arrest (Annexure- P/13) under Section 19 of the PMLA and further remand order (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (2 of 12) [CRLMP-11157/2022] dated 25.10.2022 (Annexure-P/15) passed by the learned Special Judge, CBI Court No. 3 Jaipur Metro-I, Jaipur.
3. In para 3 of the petition, the petitioner illustrates his enterprise profile.
4. In para 4 of the petition, the petitioner describes his association with one Bharat Bomb and Deepak Parihar in the business of Green Cement Technology in terms of the agreement dated 26.03.2014, and further joint venture through agreement dated 26.03.2014 with them. The petition also annotates the transactions received from Bharat Bomb and their companies at particular intervals. The petition likewise catalogues its various pacts with other companies in a joint venture. It also alleges fraud perpetrated by Bharat Bomb Deepak Parihar and its associated companies and so also about the FIR instituted against Bharat Bomb Deepak Parihar under Sections 420, 467, 468 and 471 IPC. The para also gives an account of the FIR registered by CBI Banking Security and Fraud Cell against the officials of Syndicate Banks at Jaipur and the fraud committed by Bharat Bomb in complicity with other individuals in that matter. Para 4 of the petition, conveys the charge sheet filed in the above matter before the concerned designated CBI Court at Jaipur. The petition further mentions that on 11.07.2016 the respondent registered ECIR JPZO/01/2016 and commenced its investigation and the petitioner received a Notice u/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 where it transpired that Deepak Parihar and Bharat Bomb in connivance had opened fake accounts using a (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (3 of 12) [CRLMP-11157/2022] fictitious entity of the petitioner. The petitioner further pleads that properties purchased by Bharat Bomb were provisionally attached by the ED and the provisional attachment has attained conformity vide order dated 01.06.2017 passed by the Adjudicating Authority (PMLA). Eviction notices to the attached properties were issued to the petitioner and the petitioner denied his involvement.
5. The petitioner also narrates that another FIR bearing No.RCBD1/2017/E/001 got registered by CBI under Sections 420, 467, 468 & 471 IPC and Section 13(2) of the PC Act related to Syndicate Bank. The petitioner alleges that the respondent illegally proceeded to attach his properties, whereas, he has no involvement in the fraud committed to the Syndicate Bank. In para 4.14 of the petition, a litany of the petitioner's properties attached under Section 5 of PMLA gets cited and the petitioner also alleges the said attachment is illegal. It also narrates the legal recourse adopted by the petitioner against his attached properties. The petitioner further states that the ED recorded his statement under Section 50 of PMLA.
6. The petition also says that respondent ED filed a complaint arraigning the petitioner as accused along with the other 12 accused specifically alleging connivance with Bharat Bomb in layering and integrating proceeds of crime to the tune of Rs. 58.72 Cr., purchasing immovable assets illicitly syphoning the money to a business, transferring the ownership of the properties for escaping the proceedings under PMLA.
7. The petitioner further questions his arrest on the grounds of violating the mandate of Section 19 of the PMLA and Sections 57, (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (4 of 12) [CRLMP-11157/2022] 41 and 167 of Cr.P.C. while referring to the law laid down in D. K. Basu vs. State of West Bengal : AIR 1977 SC 610 and Ashok Munilal Jain vs. Directorate of Enforcement : (2018) 16 SCC 158, on the footings of pendency of the complaint at the pre- cognizance stage before the Special Court (PMLA)-cum-Special Judge Communal Riots, Jaipur Metro and not seeking the permission to investigate from the Court concerned while quoting the law enunciated in the matter of Directorate of Enforcement vs. Ms Chanda Kochar : Sp Case No.915/2020, Ram Lal Narang vs. State (Delhi Administration) : (2008) 2 SCC 1 and Vinay Tyagi vs. Irhshad Ali : 2012 SCC Online SC 1064.
8. The petitioner also assails his subsequent remand order dated 15.10.2022 (Annexure-P/14) on the grounds of its mechanicality and non-exercising of the mandate laid down in the case of Arnesh Kumar vs. The State of Bihar : (2014) 8 SCC 273.
9. The respondent in reply to the petition questions its maintainability by referring to the judgment of Neeharika Infrastructure Pvt. Limited vs. The State of Maharashtra : (2020) 10 SCC 118 and the State of Telangana vs. Habib Abdulla Jeelani :
(2017) 2 SCC 779.
10. It further repudiates the allegations of the petition of not following the provisions of section 19 of PMLA before arresting the petitioner and the applicability of the provisions of Cr.P.C. before and after the arrest by pointing out the provisions of Section 19 of PMLA and law articulated in the judgment of Vijay Madan Lal vs. Union of India & others : 2022 SCC Online SC 929. (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (5 of 12) [CRLMP-11157/2022]
11. The reply justifies the arrest of the petitioner narrating his non-cooperation in the investigation process with particulars in para 12. It further explains that the permission of the Court to further investigate is not necessary as per Explanation (ii) to Clause (d) of Subsection (1) of Section 44 of the PMLA.
12. The respondent categorically refutes the non-involvement of the petitioner in the commission of the offence along with other persons and points out that the petitioner received the amount of Rs.85.82 Cr. in his company from the Bank accounts of fictitious firms by Bharat Bomb generated from the Syndicate Bank Fraud. It further alleges the petitioner for playing an active role in layering and integrating the proceeds of crime to the tune of Rs.58.72 Cr. to conceal the actual source. It further states that the petitioner transferred the ownership of the properties to evade the proceedings under PMLA.
13. The respondent further justifies the remand order and states that the rulings cited by the petitioner are not applicable and distinguishable.
14. It further states that the proceedings of Sections 3 and 4 of the PMLA are distinct from the provisional attachment proceedings initiated under Section 5 of the PMLA and further its confirmation by the adjudicating authority under Section 8(3) of the PMLA. The burden of proof heavily lies upon the accused under Section 24 of the PMLA to disavow the charges of Section 3 of the PMLA.
15. The entire factual background for commencing the investigation under the Money Laundering Act vide ECIR No.JPZO/01/2016 dated 11.07.2016 and clubbing in the FIR dated (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (6 of 12) [CRLMP-11157/2022] 07.03.2016 and FIR dated 23.03.2017 gets mentioned in para 23 (A) and (B) of the short counter affidavit on behalf of the respondent. The alleged specific modus operandi of syphoning the amount from the Syndicate Bank in connivance with the other accused and petitioner receiving the huge amount to the tune of Rs.85.52 Cr. and Rs.58.72 Cr. from fictitious entities gets catalogued in the chart form on pages 22 to 26 of the short counter affidavit on behalf of the respondent.
16. It is also indicated that proceeds of crime in tune to Rs.43.84 Cr. still need to be recovered from the petitioner. It further mentions that the petitioner is also involved in the crime of forging the passport and the criminal case is under investigation.
17. The respondent prays for the dismissal of the petition.
18. Heard both the counsel and perused the entire record as well as the relevant laws essential for the decision of the case.
19. The factual aspects of filing the complaint under Section 3 of the PMLA and its pendency before the concerned Special Court are not in dispute.
20. After perusing the allegations it is evident that the petitioner with connivance to Bharat Bomb and others syphoned huge amounts in tune to Rs.85.82 Cr. in the name of a fictitious company. The petitioner failed to submit a reasonable explanation regarding the fictitious company and the money received by his companies. The respondent after conducting a thorough investigation has preferred the complaint against the accused petitioner.
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21. The alleged specific modus operandi of syphoning the amount from the Syndicate Bank in connivance with the other accused and petitioner receiving the huge amount to the tune of Rs. 85.82 Cr. from fictitious entities gets catalogued the complaint.
22. In the reasons of belief to arrest after instituting of the complaint, the respondent alleges that the petitioner played an active role in layering and integrating the proceeds of crime and projected the same as untainted thus actively involved in the acquisition possession and use of the proceeds of crime.
23. The core questions required to be dealt with in the case are as under:-
(a) Whether the respondent needed to seek permission for investigation from the concerned designated court?
(b) Whether without taking cognizance of the offence under Section 4 of the PMLA Act the respondent is precluded from further investigating the matter and subsequent arrest and remand of the petitioner is against the law?
24. It is admitted that before the arrest of the petitioner, a complaint under Section 3/4 of the PMLA Act alleging the offence of money laundering was filed against the petitioner and other accused.
25. It is also agreed that on the said complaint the Special Court has yet not taken cognizance.
26. Before delineating the above issues it is relevant to refer to the provision related to the further investigation involving the money laundering offences. The provisions of Section 44 are as under:-
(Downloaded on 11/11/2023 at 08:16:43 PM)
[2023:RJ-JP:24584] (8 of 12) [CRLMP-11157/2022] "Section 44. Offences triable by Special Courts.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
(a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed:
Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or
(b) a Special Court may, upon a complaint made by an authority authorised on this behalf under this Act take [cognizance of offence under section 3, without the accused being committed to it for trial];
Provided that after conclusion of investigation, if no offence of money-laundering is made out requiring filing of such complaint, the said authority shall submit a closure report before the Special Court; or
(c) if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering under sub-clause
(b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed.
(d) a Special Court while trying the scheduled offence or the offence of money laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) as it applies to a trial before a Court of Session.
Explanation.--For the removal of doubts, it is clarified that,-- (i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial;
(ii) the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not."
(emphasis supplied) (2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under Section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (9 of 12) [CRLMP-11157/2022] that section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court"
designated under section 43."
27. Thus the provision of Section 44(ii) of PMLA specifically empowered the concerned ED officials to conduct further investigation and file the subsequent complaint before the Special Court. The provision neither impedes further investigation nor limits the authority to conduct such investigation before the pre- cognizance stage or afterwards.
28. Moreover, the issue about seeking leave of the Court or legality or propriety of the further investigation and charge sheet has already been answered by Hon'ble Apex Court in Pradip Ram vs. State of Jharkhand : 2019 SCC Online SC 825, holding that submission of a supplementary charge sheet cannot be held to be illegal and in view thereof, when the Hon'ble Apex Court has already approved the first supplementary charge sheet taking the same principle, the second supplementary charge sheet cannot be said to suffer from any infirmity.
29. In Hasanbhai Valibhai Qureshi vs. State of Gujarat : (2004) 5 SCC 347, Hon'ble Apex Court held that the hands of the investigating agency or the Court should not be tied down on the ground further investigation may delay the trial, as ultimate object is to arrive at the truth. If the police is not satisfied of the propriety or the manner and nature of the investigation already conducted, it would not stop the police under Section 173(8) Cr.P.C. to further investigate the matter. In State of Orissa vs. Mahimananda Mishra & Ors. : (2007) 15 SCC 580, it was held the investigating agency will be at liberty to investigate further in the (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (10 of 12) [CRLMP-11157/2022] manner as it deems fit and proper in accordance with the law. Similarly, in the State of Andhra Pradesh vs. A.S. Peter : (2008) 2 SCC 383, it was held that re-investigation without prior permission is necessarily forbidden, whereas further investigation is not.
30. Therefore the pith and substance of these judgments are that it is not mandatory to take prior permission from the Magistrate / Special Judge for further investigation even after the filing of the charge sheet/complaint as it is the statutory right of the police/the authorized agency. Therefore, on this facet, the arguments advanced by the learned counsel for the petitioner are not justifiable.
31. Further Section 19 of the Act empowers the concerned officials to arrest the person involved in the offence of money laundering. The provisions of the Section are as under:-
"19. Power to arrest.--(1) If the Director, Deputy Director, Assistant Director or any other officer authorised on this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.
(2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed.
(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a [Special Court or] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:
Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the [Special Court or] Magistrate's Court."(Downloaded on 11/11/2023 at 08:16:43 PM)
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32. In the case in hand, the petitioner was arrested vide arrest memo dated 15.10.2022 at 05:40 AM and before his arrest, the reasons for belief recorded in writing and grounds of arrest were conveyed to the petitioner.
33. As far as the remand order is concerned the petitioner was arrested on 15.10.2022 from Sonauli, Distt. Maharajganj U.P. and was produced within 24 hours before the concerned designated Special Judge, Jaipur having jurisdiction. The respondent did not need to forward the accused for seeking transit remand as the provision of Section 19(3) of the PMLA categorically specifies that the explanation appended to Section 45 of the PMLA unequivocally designates the officer authorized to arrest an accused after the fulfillment of conditions enshrined in section 19 of the PMLA.
34. As far as the applicability of Sections 41 and 41A of Cr.P.C. is concerned the provisions of Section 19 of PMLA read with the provisions of Section 45 of PMLA underscores the difference between Sections 41 and 41A of the Cr.P.C. Section 5 of the Cr.P.C. categorically expresses that nothing contained in the Code of Criminal Procedure shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force.
35. Further, Section 75 stipulates that the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of PMLA, to arrest, search and seizure, attachment, confiscation, investigation, (Downloaded on 11/11/2023 at 08:16:43 PM) [2023:RJ-JP:24584] (12 of 12) [CRLMP-11157/2022] prosecution and all other proceedings under this Act but provision enumerated in Section 71 of PMLA gives an overriding effect over the provisions of Code of Criminal Procedure.
36. In the case of P. Chidambaram vs. Directorate of Enforcement, Hon'ble Apex Court has categorically held that Section 41A of the Cr.P.C. does not apply to arrests made under Section 19 of PMLA. Further, the petitioner can seek regular bail questioning the arbitrariness and illegality of the arrest.
37. It is further submitted by the learned ASG that the petitioner has already moved the application for seeking bail and the conduct of the petitioner comes under forum shopping.
38. It is not appropriate to remark anything about the present petition whether it tumbles within the ambit of forum shopping or not. Suffice it to say that the present petition is sans any merit, hence deserves dismissal.
39. The present criminal misc petition is dismissed.
(PRAVEER BHATNAGAR),J ASHWINI KUMAR CHOUHAN /680 (Downloaded on 11/11/2023 at 08:16:43 PM) Powered by TCPDF (www.tcpdf.org)