Allahabad High Court
Pankaj Grover vs Assistant Director, Directorate ... on 14 December, 2022
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 10 Case :- APPLICATION U/S 482 No. - 9209 of 2022 Applicant :- Pankaj Grover Opposite Party :- Assistant Director, Directorate Enforcement, Lko. Counsel for Applicant :- Amarjeet Singh Rakhra,Bashisth Muni Mishra Counsel for Opposite Party :- Kuldeep Srivastava Hon'ble Dinesh Kumar Singh,J.
1. Heard Mr. Amarjeet Singh Rakhra along with Ms. Anumita Chandra, learned counsels representing the accused-applicant, as well as Mr. Kuldeep Srivastava, learned counsel for the respondent-Enforcement Directorate, and gone through the record.
2. The present application under Section 482 CrPC has been filed for quashing of entire proceedings of Complaint Case No.115 of 2018, under Section 3/4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the "PMLA"), pending against the accused-applicant before the Special Judge, PMLA, Lucknow.
3. Brief facts of the present case are that the Government of India launched a scheme, named and styled as 'National Rural Health Mission' (hereinafter referred to as the "NRHM") on 12.04.2003 with a view to provide accessible, adequate and affordable health service to all persons, particularly, to vulnerable section of the society, residing in remote areas. The separate Memorandum of Understandings were entered into between the Central Government and the State Governments for decentralizing the implementation of the scheme and mobilizing the resources for implementing the said scheme. Such a Memorandum of Understanding with the Government of Uttar Pradesh was entered into on 12.11.2006. As per the said Memorandum, 85% funds were to be provided by the Central Government whereas the State Government was to contribute 15% of the total funds for the Mission.
4. The State Health Society (hereinafter referred to as the "SHS") was established under the Chairmanship of Chief Secretary, Government of Uttar Pradesh and the existing State Agencies involved in implementation of tuberculous, blindness and leprosy eradication as well as other State Empowered Committee for RCH etc. were merged with he SHS.
5. On the allegation of large scale bungling, misappropriation and cheating of public funds, while implementing the NRHM by the government officials, in active connivance and conspiracy with private persons, Public Interest Litigation Petition Nos. 3611 (M/B) of 2011, 3301 (M/B) of 2011 and 2647 (M/B) of 2011 came to be filed. This Court vide order 15th November, 2011 directed as under:-
".....................We are prima facie convinced that gross irregularities financial and administrative appear to have been committed in the execution and implementation of NRHM including the matter of award of contracts, procurement of goods, article and etc. at various levels.
.................The facts and circumstances, aforesaid make out a case for reference to CBI for making a preliminary enquiry in the affairs of NRHM in the entire State of U.P. right from the very inception of the NRHM.
We, therefore, direct the Director, CBI to conduct a preliminary enquiry in the matter of execution and implementation of the NRHM and utilization of funds at various levels during such implementation in the entire State of U.P. and register regular case in respect of persons against whom prima facie cognizable offence is made out and proceed in accordance with law. The preliminary enquiry shall be conducted from the period commencing year 2005-06 till date....."
6. In compliance of the directions issued by this Court, the CBI, after making preliminary inquiries, registered FIR bearing RC No.01(A)/2012 dated 02.01.2012 in the matter of irregularities in utilization of funds allocated to the UP Small Scale Industries Corporation for supply/procurement of various items under the NRHM during the year 2009-2010.
7. M/s Surgicoin Medequip Private Limited, Ghaziabad and its Director/Representative, Mr. Naresh Grover was also accused in the FIR. The CBI, after completing the investigation, filed charge-sheet dated 25.02.2013 in respect of Crime/RC No.01(A)/2012. The charge-sheet was filed for commission of offence punishable under Section 120-B read with Sections 409 and 420 IPC read with Sections 13(2)(1)(c) and 13(2)(1)(d) of the PC Act and substantive offence thereof against the accused, Abhai Kumar Bajpai, Raja Ram Bharti, Sunil Kumar Chauhan, Naresh Grover and M/s Surgicoin Medequip Private Limited, Ghaziabad.
8. The CBI, in its charge-sheet, has alleged that the accused had entered into criminal conspiracy to cheat the Government by misusing the funds allocated under the NRHM so as to illegal gains and corresponding loss to the Government.
9. Enforcement Directorate (hereinafter referred to as the "ED") undertook the investigation under the PMLA. During the course of investigation, two properties situated at B-42, Ashok Vihar, Phase-I, New Delhi (valued Rs.17,11,42,000/-) and Factory of M/s Surgicoin Medequip Private Limited, 1703-4, HSIDC, Rai, Sonepat, Haryana, (valued Rs. 5,50,00,000/- )were attached.
10. The allegations against the present accused-applicant is that he disposed of half of the Factory situated at 1701-1702, HSIDC, Industrial Area, Rai, Sonepat, Haryana to one Mr. Sachin Gupta of M/s Sain Packing Private Limited for a sum of Rs.5,48,59,200/- on 04.08.2014. However, no satisfactory explanation was given either by Mr. Naresh Grover or by his son, Pankaj Grover (present accused-applicant) for the end use of the said proceed. The ED, therefore, concluded that the accused-applicant and his father, Naresh Grover have siphoned off and launder the proceeds of crime, with a view to avoid its disclosure or attachment under the PMLA.
11. The accused-applicant is not an accused in the predicate offence for which the CBI had filed the charge-sheet. However, the accused-applicant is one of the two Directors of M/s Surgicoin Medequip Private Limited. Allegation against M/s Surgicoin Medequip Private Limited is that it had received payment of Rs.31,39,23,140/- for supplies made by it at exorbitant rates against NRHM in the State of Uttar Pradesh and generated proceeds of crime to the tune of Rs. 21,20,87,617/-. It was also said that the tender process was manipulated in favour of M/s Surgicoin Medequip Private Limited for commission/bribery to be paid to the Minister, officials and their associates and cohorts, showing fictitious translocation to conceal the deployment of the same. In lieu of this proceeds of crime, properties in the hands of M/s Surgicoin Medequip Private Limited and its Promoters/Directors, Naresh Grover and Pankaj Grover have been identified and attached which are the two properties, mentioned above.
12. It is submitted by Mr. Amarjeet Singh Rakhra, learned counsel for the accused-applicant, that only allegation against the accused-applicant in the complaint is that he disposed of half of the Factory situated at 1701-1702, HSIDC, Industrial Area, Rai, Sonepat, Haryana, which was alleged to have been acquired by proceeds of crime and no explanation could be offered by him or his father regarding end use of proceed of sale of the factory. It is submitted that the attachment order was set-aside by the Appellate Authority vide detailed judgment and order dated 22.11.2018. The appellate Authority has recorded a finding of fact that the said two properties, which were attached by the ED, treating them to have been acquired by proceeds of crime, were purchased in the year 2003-2005, whereas the alleged offence was committed in the 2009-2010 and, therefore, the two properties, which were attached by the ED, could not be said to be the proceeds of crime. The order passed by the appellate Authority dated 22.11.2018 was assailed by the ED before the Delhi High Court by way of filing Criminal Appeal No.508 of 2019 under Section 42 of the PMLA, and the Delhi High Court has rejected the said appeal vide judgment and order dated 11.12.2019. Paragraphs 15, 17, 18 and 19 of the said judgment passed by the Delhi High Court would read as under:-
"15. Admittedly, the factory premises were purchased in the year 2005. Therefore, the Tribunal accepted the contention that the said property, which was mortgaged to Bank of Baroda, could not be subject to attachment as proceeds of crime. Admittedly, the said properties had been acquired prior to the commission of the alleged crime, which is stated to be committed somewhere in 2011-12. Thus, the said properties could not be stated to be assets which were derived from any criminal activity.
17. It is contended on behalf of the appellant that ''proceeds of crime' would not only mean the property derived or obtained directly as a result of criminal activity, but also the value of any such property. It is thus contended that notwithstanding that any asset may not be derived by criminal activity; nonetheless, if it represents the value thereof, it can be attached as proceeds of crime. In addition, it is submitted that the provisions of the PMLA override the provisions of other statutes, including the SARFAESI Act, as well as Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
18. As noticed above, the proceeds of crime are defined to mean any property derived or obtained directly or indirectly by any person, as a result of criminal activity relating to a scheduled offence. Indisputably, the properties involved in this petition were not derived or obtained as a result of any criminal activity as the same had been acquired much prior to commission of the alleged scheduled crime. The contention that the value of any property derived from criminal activity can also be attached as proceeds of crime, is misconceived in the facts of this case. Even if it is accepted that assets, which are not derived or obtained as a result of criminal activity, can be attached in lieu of any assets having equivalent value derived or obtained from any criminal activity, the same can be attached only from the hands of a person who is guilty of committing a scheduled crime or otherwise holds proceeds of crime.
19. It is an admitted fact that the properties, as sought to be attached by the appellant, had been acquired and mortgaged by respondent no.1 prior to the commission of any scheduled offence. Thus, on the date of commission of the offence and on the date of the attachment order, the said properties did not vest with respondent no.1. Respondent no.1, being the mortgagor, was left with equity of redemption and all interest in the said property stood transferred to the mortgagee (respondent no.2), prior to the order of provisional attachment. There is no dispute that the respondent no.2 bank had acquired the mortgage of the property in question for valuable consideration. Therefore, any interest in the property acquired by them cannot, by any stretch, be considered as proceeds of crime in the hands of the mortgagee bank.
13. Further submission made by the learned counsel for the accused-applicant is that the accused-applicant was not arrested during the course of investigation by the ED in exercise of its power under Section 19 of the PMLA; the accused-applicant had fully cooperated in the investigation. The learned counsel has further submitted that after the judgment reported in 2022 SCC OnLine SC 929 (Vijay Madanlal Choudhary and others Vs. Union of India and others, in which it has been held that to prosecute a person under the PMLA, there should be predicate offence registered, and there should be allegation against the person that he has dealt with the proceeds of crime in same manner. The learned counsel has further submitted that in the present case, since the order of attachment of the properties in question, for which allegation against the accused-applicant was that he dealt with the proceeds of crime, has been set-aside, the offence against the accused-applicant would not be made out. The learned counsel has, therefore, submitted that since he has confined his prayer to the extent of enlarging the accused-applicant on bail on his surrender before the trial Court on furnishing a personal bond and two sureties to the satisfaction of the trial Court, this Court, looking at the facts of the case, may grant the said prayer.
14. On the other hand, Mr. Kuldeep Srivastava, learned counsel for the ED, submits that the accused-applicant had approached this Court earlier by filing an application for anticipatory bail being Criminal Miscellaneous Anticipatory Bail Application No. 7661of 2021, however, the said bail application was rejected by this Court by a detailed judgment and order dated 26.08.2021. The accused-applicant assailed the said judgment and order of this Court dated 26 August 2021 before the Supreme Court in Special Leave Petition No. 6684 2021, and the Supreme Court dismissed the said special leave petition on 09.09.2021.
15. Mr. Kuldeep Shrivastava, learned counsel for the respondent-ED has further submitted that the accused-applicant had earlier approached this court by filing a similar application under Section 482 CrPC bearing Application No. 914 of 2021, which was rejected by this Court vide order dated 15th July 2021. The learned counsel, therefore, submits that the present application for the same relief is not maintainable, as the accused-applicant has already approached this Court by filing 482 application and the present application is liable to be dismissed.
16. So far as contention of Mr. Rakhra, learned counsel fort the accused-applicant, regarding attachment of the two properties by the ED and the orders passed by the appellate Authority and the Delhi High Court are concerned, Mr. Srivastava has submitted that merely because the attachment order has been set aside by the appellate Authority, which has been affirmed by the Delhi High Court in appeal, offence under the PMLA, against the accused-applicant, does not get wiped out. The learned counsel has further submitted that there are serious allegations against the accused-applicant regarding his involvement in commission of offence under the PMLA for which complaint had been filed. The accused-applicant has not answered the summons and he has not appeared before the Court of Special Judge (PMLA) and he is avoiding the process of the Court. It is therefore submitted that there is no merit and substance in the present application and the same may be dismissed.
17. I have considered the submissions advanced by the learned counsel counsels for the parties and perused the record of application.
18. It is not in dispute that the accused-applicant is not an accused in the predicate offence and no charge sheet has been filed against him for any predicate offence. In the complaint filed under Section 45 of the PMLA, allegation against the accused applicant is that he, in connivance and active conspiracy with his father and other co-accused, had dealt with the proceeds of crime. There is also allegation that he disposed of half of the factory premises situated at 1701-1702 HSIDC Industrial Area, Rai Sonipat, Haryana, which is in the name of M/s Surgicoin Medequip Private limited, co-accused in which the accused-applicant has been a Director (Marketing) from October 2007 to January 2012. Against the attachment order, there has been a specific finding recorded by the appellate authority as well as Delhi High Court that the factory in question was acquired before commission of predicate offence. Neither the appellate authority nor the Delhi High Court has treated the said property to have been acquired from proceeds of crime.
19. Considering the aforesaid facts and the judgements of Appellate authority as well as Delhi High Court I am prima facie of the view that the twin conditions prescribed under section 45 of the PMLA are satisfied in the present case and, therefore, looking at the facts and circumstances of the case, particularly, the two orders, one by the appellate authority and the other by the Delhi High Court, the interest of Justice would meet, if the applicant is directed to surrender before the trial court within one week from today.
20. In case he surrenders as aforesaid, he may be enlarged on bail on furnishing personal Bond and two sureties to the satisfaction of the trial Court, preferably on the same day.
21. Any observation made herein above is only in respect of disposal of this application and shall have no effect on adjudication of the case on merits.
22. With the above observations/directions this application stands disposed of.
[D.K. SINGH, J.] Order Date :- 14.12.2022 MVS/A NIGAM/-