Patna High Court - Orders
Baban Singh vs Union Of India Through Enforcement ... on 13 November, 2024
Author: Anshuman
Bench: Anshuman
IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.34015 of 2024
Arising Out of PS. Case No.-14 Year-2023 Thana- E.C.I.R (GOVERNMENT OFFICIAL)
District- Patna
======================================================
Baban Singh
... ... Petitioner/s
Versus
Union Of India Through Enforcement Directorate Government Of India
... ... Opposite Party/s
======================================================
with
CRIMINAL MISCELLANEOUS No. 34485 of 2024
Arising Out of PS. Case No.-14 Year-2023 Thana- E.C.I.R (GOVERNMENT OFFICIAL)
District- Patna
======================================================
Mithilesh Kumar Singh
... ... Petitioner/s
Versus
Union of India Through Enforcement Directorate Government of India, Bank
Road, Chandpura Place,
... ... Opposite Party/s
======================================================
with
CRIMINAL MISCELLANEOUS No. 34951 of 2024
Arising Out of PS. Case No.-14 Year-2023 Thana- E.C.I.R (GOVERNMENT OFFICIAL)
District- Patna
======================================================
Surendra Kumar Jindal
... ... Petitioner/s
Versus
Union Of India Through Enforcement Directorate, Govt. Of Inda, Bank Road,
Chandpura Place, Patna-1
... ... Opposite Party/s
======================================================
with
CRIMINAL MISCELLANEOUS No. 43608 of 2024
Arising Out of PS. Case No.-14 Year-2023 Thana- E.C.I.R (GOVERNMENT OFFICIAL)
District- Patna
======================================================
Krishna Mohan Singh
... ... Petitioner/s
Versus
Union of India Through Enforcement Directorate Govt. of India, Bank Road,
Chandpura Place, Patna
... ... Opposite Party/s
Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024
2/17
======================================================
with
CRIMINAL MISCELLANEOUS No. 49347 of 2024
Arising Out of PS. Case No.-14 Year-2023 Thana- E.C.I.R (GOVERNMENT OFFICIAL)
District- Patna
======================================================
Subhash Prasad Yadav
... ... Petitioner/s
Versus
The Union Of India, Through The Assistant Director, Enforcement
Directorate, Patna Zonal Office
... ... Opposite Party/s
======================================================
Appearance :
(In CRIMINAL MISCELLANEOUS No. 34015 of 2024)
For the Petitioner/s : Mr. Anshuman Sinha, Adv.
Mr. Md. Nadim Seraj, Adv.
Mr. Vijay Kr. Pandey, Adv.
Mr. Prakhar Prakash, Adv.
Mr. Shailesh Kumar, Adv.
Mr. Ali M. Ahmad, Adv.
For the Opposite Party/s : Mr. Krishna Nandan Singh, Sr. Advocate (A.S.G.)
Mr. Manoj Kumar Singh, Advocate for E.D.
Mr. Shivaditya D. Sinha, Advocate
Mr. Abhijeet Gautam, Advocate, JC to A.S.G.
Mr. Vivek, Advocate
(In CRIMINAL MISCELLANEOUS No. 34485 of 2024)
For the Petitioner/s : Mr. Md. Nadim Seraj, Adv.
For the Opposite Party/s : Mr. K.N. Singh, Sr. Adv. (A.S.G.)
(In CRIMINAL MISCELLANEOUS No. 34951 of 2024)
For the Petitioner/s : Mr. Nadim Seraj, Adv.
For the Opposite Party/s : Mr. K.N.Singh, Sr. Adv. (A.S.G)
(In CRIMINAL MISCELLANEOUS No. 43608 of 2024)
For the Petitioner/s : Mr. Shailesh Kumar, Adv.
For the Opposite Party/s : Mr. Dr Krishna Nandan Singh, Sr. Adv. (A.S.G.)
(In CRIMINAL MISCELLANEOUS No. 49347 of 2024)
For the Petitioner/s : Mr. Suraj Samdarshi, Adv.
For the Opposite Party/s : Mr. Dr. K.N Singh, Sr. Adv. (A.S.G.)
Mr. Manoj Kumar Singh, Adv.
======================================================
CORAM: HONOURABLE MR. JUSTICE DR. ANSHUMAN
ORAL ORDER
11 13-11-2024Learned Counsel Mr. Anshuman Sinha with Md. Nadim Seraj, Mr. Vijay Kr. Pandey, Mr. Prakhar Prakash, Mr. Shailesh Kumar, Mr. Ali M. Ahmad and Mr. Suraj Samdarshi for the petitioners and Learned Senior Counsel Mr. Krishna Nandan Singh, A.S.G. with Mr. Manoj Kumar Singh, Mr. Shivaditya D. Sinha, Mr. Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 3/17 Abhijeet Gautam and Mr. Vivek, for the Enforcement Directorate, Government of India are present.
2. Learned Senior Counsel for the Union of India submits that Bihar Police has registered 19 F.I.Rs under Sections 378, 379, 411 and 420 of the Indian Penal Code, 1860 and Section 39(3) of Bihar Mineral (Concession, Prevention of Illegal Mining, Transportation & Storage) Rule, 2019. The specific allegation has been made against M/s Broad Son Commodities Private Limited and its Directors who are indulged in illegal mining and selling of sand without using the departmental Pre-paid transportation E-Challan, issued by the Mining Authority, Bihar and this caused revenue loss to the tune of Rs. 77,63,16,095/- to the Government exchequer. It has also been submitted that the Income Tax Department, during search, has seized the documents from the premises of the Director which was requisitioned from Income Tax Department by the Enforcement Directorate, under Section 54 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as PMLA). Senior Counsel further submits that upon analysis of those documents it has arisen that sand worth Rs. 253,28,25,882/- was sold from the ghats of Patna, Bhojpur and Saran Districts of Bihar and upon comparison with the sands of E-Challan it has Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 4/17 been revealed that sand worth Rs. 83,52,45,069/- has been sold without generation of Challan, during this period which was resulted in additional revenue loss to the Government exchequer and generation of "Proceeds of Crime" took place.
3. Learned Senior Counsel further submits that the petitioners are the Directors of the Company, namely, M/s Broad Son Commodities Private Limited and in different statements recorded under Section 50 of the PMLA, it has been revealed that there is a syndicate behind the illegal sand mining and sell of sands. The syndicate mainly controls the FIR of the Company and the petitioners are the syndicate members and become well aware of the fact that the Company is being controlled by the syndicate for generation of "Proceeds of Crime".
4. Learned Senior Counsel further submits that the petitioner, namely, Baban Singh used to provide financial data of the Company, namely, M/s Broad Son Commodities Private Limited, as such, he was involved in maintaining the account of the Company and it has also come in the statement that 31% of the share of the syndicate belongs to Dhanbad party, which includes accused Mithilesh Kumar Singh, Baban Singh, Surendra Kumar Jindal and other persons based in Dhanbad District.
Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 5/17
5. Learned Senior Counsel specifically mentioned that the investigation in the present case is based on 19 F.I.Rs. registered against M/s Broad Son Commodities Private Limited for illegal sand mining, illegal selling of sand without issuing of E-Challan and other discrepancies found in K-License sites of M/s Broad Son Commodities Private Limited. Counsel further submits that the petitioners were not only the directors but also the syndicate members and have been deceiving profit from both legal and illegal sell of sand as per their profit sharing percentage and thus, they are in possession of "Proceeds of Crime".
6. Learned Senior Counsel further put emphasis that for the period February 2020 to August 2020, sand worth Rs. 83,52,45,069/- had been sold without generation of Challan and the syndicate members misused the Company for illegal activities relating with the offence of money laundering. Senior Counsel further submits that the Directors are actively indulged in the offence of money laundering in terms of Section 70 of the PMLA and syndicate members-cum-Directors are involved in commission of the offence. Senior Counsel further submits that during the course of physical verification by Mining Inspectors of the sand stored at K-License site and it is observed that the Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 6/17 quality of sand available at the site of K-Licenses were different as per the available data provided by the Project Management Unit and the same has been sold or purchased without issuing of E-Challan. It has been further observed that the sand available at the site of K-License were also less than the quantity as per the available data. Senior Counsel further submits that it is true that the arbitration proceeding was going on between the Mining Department/State Government and the Company but it is also true that the Directors of Enforcement is not party to the said arbitral proceeding and it is well settled position of law that criminal proceedings cannot be subjected to arbitration.
7. In support of his argument, Learned Senior Counsel relied on a judgment rendered in the case of Trisuns Chemical Industry vs. Rajesh Agarwal and Ors. MANU/SC/0581/199, wherein the Hon'ble Apex Court observed that:
"8. In the last referred Case this Court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations:
It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 7/17 But that is hardly a reason for holding that the offence of cheating would elude from such a transaction.
In fact, many a cheatings were
committed in the course of
commercial and also money
transactions.
9. We are unable to
appreciate the reasoning that the
provision incorporated in the
agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own.
8. Learned Counsel further relied on the judgment of Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 8/17 Booz Allen and Hamilton Inc. vs. SBI Home Finance Ltd. and Ors. MANU/SC/0533/2011, wherein the Apex Court while discussing the question i.e. Whether the subject matter of the suit is 'arbitrable', that is capable of being adjudicated by a private forum (arbitral tribunal), categorically observed that:
22. Arbitral tribunals are private for a chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non-
contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for adjudication by a public fora (courts and Tribunals), may by necessary Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 9/17 implication stand excluded from the purview of private fora.
Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes.
The well recognized examples of non-arbitrable disputes are:
(i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences;
..........."
23. It may be noticed that the cases referred to above relate to actions in rem. A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals Actions in personam refer to actions determining the rights and interests of the parties themselves in the subject matter of the case, whereas actions in rem refer to actions determining the title to Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 10/17 property and the rights of the parties, not merely among themselves but also against all persons at any time claiming an interest in that property.
Correspondingly, judgment in personam refers to a judgment against a person as distinguished from a judgment against a thing, right or status and judgment in rem refers to a judgment that determines the status or condition of property which operates directly on the property itself. (Vide: Black's Law Dictionary). Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or inflexible rule.
Disputes relating to sub-ordinate rights in personam arising from rights in rem have always been considered to be arbitrable.
9. Learned Senior Counsel further submits that on the basis of above said quoted judgment of the Hon'ble Supreme Court, it becomes crystal clear that criminal dispute cannot be Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 11/17 the subject matter of arbitration.
10. Learned Senior Counsel further submits that the incriminating documents were seized from the premises of accused persons and Section 22 of the PMLA clearly states that where any record of property rather which is found in the possession or control of any accused in course of survey or search belongs to such person then, in that case presumption shall be casted against the said person.
11. Learned Senior Counsel further submits that the judgment of P.R. Metrani Vs. Commissioner of Income Tax, Bangalore reported in AIR 2007 SC 386 on which the petitioners relied, shall not help the petitioners in any manner, as the documents seized under I.T. Department under Section 132(4A) of I.T. Act are called and used as documents seized under Section 54 of the PMLA.
12. Learned Senior Counsel further submits that the judgment of Opto Circuit India Ltd. Vs. Axix Bank & Ors. reported in AIR 2021 SC 753 is also not applicable in the case of the petitioners.
13. Learned Senior Counsel further relied on a judgment rendered in the case of Y.S. Jagan Mohan Reddy vs. CBI, reported in (2013) 7 SCC 439, wherein it was held as Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 12/17 under:
"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and there by posing serious threat to the financial health of the country."
14. Learned Senior Counsel further relied on a judgment rendered in the case of Gautam Kundu vs. Manoj Kumar, Govt. of India MANU/SC/1453/2015, categorically observed that:
"29. Section 45 of the PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in the case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail to any person accused of an offence punishable for a term of Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 13/17 imprisonment of more than three years under Part-A of the Schedule of the PMLA:
(i) That the prosecutor must be given an opportunity to oppose for application for bail and
(ii) That 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 likely to commit any offence while on bail.
30. The conditions specified under Section 45 of the PMLA are mandatory and needs to be complied with which is further strengthened by the provisions of Section 65 and also Section 71 of the PMLA. Section 65 require that the Provisions of Cr.P.C shall apply in so far as they are not inconsistent with the provisions of this effect not withstanding anything inconsistent there with contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr.P.C would apply only if they are not inconsistent with the provisions of the Act. Therefore, the conditions enumerated in Section 45 Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 14/17 of PMLA will have to be complied with even in respect of an application of bail made under Section 439 of Cr.PC. That coupled with the provisions of Section 24 provides that unless the contrary is proved. The authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant."
15. Learned Senior Counsel further submits that neither at the time of arrest nor at the time of custody any major health issues have come. It has been submitted that the prison authorities are well equipped to attend the necessary medical requirements of the petitioners as per the applicable Prison Law. Senior Counsel further submits that the special PMLA Court has already rejected the bail application of the petitioners and every observations made by the said PMLA Court has made completely in accordance with law. Senior Counsel further submits that judgment of V. Senthil Balaji Vs. State (Criminal Appeal no. 4011 of 2024) is completely based on different facts and similarly the case of Pankaj Bansal Vs. E.D. (Criminal Appeal Nos 3051-3052 of 2023) with (Criminal Appeal Nos. 3053-3054 of 2023) talks about the ground of arrest under Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 15/17 Section 19 under which due communication has to be made. Here, in the present case, due communication of arrest has already been communicated to the petitioners. Learned Counsel further submits that the Hon'ble Apex Court in case of Tarun Kumar vs. Enforcement Directorate reported in 2023 SCC OnLine SC 1486 has observed that:
17. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 16/17 Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act."
16. Learned Senior Counsel further submits the total proceeds of crime is at the tune of Rs. 161 Crore in the present case whereas the properties worth Rs. 26.19 Crore only have been identified and attached whereas substantial amount of proceeds of crime are in the hands of the petitioners is yet to be identified and attached and there is every likelyhood if the petitioners shall be enlarged on bail they will alienate the proceeds of crime which will lead to frustration of confiscation proceeding. Senior Counsel further submits that under Section 45 of the PMLA there are twin conditions necessarily to be fulfilled for grant of bail and the petitioners are not in a position to provide those twin conditions in their favour. Learned Senior Counsel further submits that it is true that Article 21 of the Constitution of India grants every person right to personal liberty, but it is also true that such right of personal liberty is not absolute rather it is always subject to the procedure established by law. Senior Counsel further submits that the Enforcement Patna High Court CR. MISC. No.34015 of 2024(11) dt.13-11-2024 17/17 Directorate while arresting the petitioners duly followed the law contained in Section 19 of the PMLA and therefore, Article 21 of the Constitution of Indian shall not help the petitioners in any manner.
17. Learned Senior Counsel for the Union of India further submits that he is not feeling well and hence, he seeks a short adjournment in this case for further argument.
18. As such, put up this case on 22.11.2024 within top five cases, for further argument on behalf of the Union of India through Enforcement Directorate.
(Dr. Anshuman, J) Aman Kumar/-
U