Gujarat High Court
Madanlal Manekchand Jain vs State Of Gujarat & on 16 March, 2017
Author: A.J.Desai
Bench: A.J.Desai
R/CR.MA/27277/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR REGULAR BAIL) NO.27277
of 2016
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MADANLAL MANEKCHAND JAIN....Applicant
Versus
STATE OF GUJARAT & 1....Respondents
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Appearance :
MR VIKRAM CHAUDHARY, SENIOR ADVOCATE ASSISTED BY MR JIGESH K
SHAH AND MR KAMLESH B MEHTA, ADVOCATES for the Applicant.
MR MITESH AMIN, PUBLIC PROSECUTOR WITH MS JIRGA JHAVERI, APP for
the Respondent No.1.
MR DEVANG VYAS, ASSISTANT SOLICITOR GENERAL OF INDIA for the
Respondent No.2.
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CORAM : HONOURABLE MR.JUSTICE A.J.DESAI
Date : 16/03/2017
ORAL ORDER
1. By way of the present successive bail application under Section 439 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code') read with Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'PML Act'), the applicant has prayed to release him on regular bail in connection with PMLA Case No.3 of 2014 pending in the Court of learned Designated Judge, Special Court constituted under the provisions of PML Act arising from File No.ECIR/01/SRT/2014 registered at the instance of the respondent No.2 - the authority appointed under the PML Act for the offences punishable under Section 3 read with Section 4 of the PML Act read with Section 120-B of the Indian Penal Code mainly on the ground that the rigors of Section 45 of the PML Act have been interpreted by the Division Bench of the Hon'ble Punjab and Haryana High Court by a decision dated 11.5.2016 rendered in the case of Gorav Kathuria v. Union of India and others, Criminal Writ Petition Page 1 of 45 HC-NIC Page 1 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER No.595 of 2016 as well as on the ground that the applicant is behind bar since April, 2014.
2. The brief facts arise from the record are as under :-
2.1 An information was received from the Joint Commissioner of Customs, Surat vide letters dated 27.2.2014 and 6.3.2014 which revealed that Surat based diamond companies M/s.
Harmony Diamonds Pvt. Ltd., M/s. Agni Gems Pvt. Ltd. and M/s. R. A. Distributors Pvt. Ltd. Have filed fake bills of entry before the ICICI Bank for making foreign remittance through bank accounts with ICICI Bank, Surat. From the information so received it has come to the notice that within a span of two months i.e. January and February, 2014, remittances worth more than Rs.1000 Crore against fake import documents viz. Bills of entry and invoices were made from the said accounts to Hongkong and Dubai. The Customs Department, Surat have confirmed that the bills of entry, in question, did not originate from their offices. Thus, the said bills of entry etc. against which the said remittances were affected were apparently fake. Enquiries made with the banks and the documents obtained from them revealed that the amount as mentioned below were remitted from the following companies having accounts with ICICI Bank. Thus, amount to the tune of Rs.5395.75 Crores (Rupees Five Thousand Three Hundred Ninty Five Crores and Seventy Five Lacs) were remitted to companies in Hong Kong and UAE on the strength of fake bills of entry.
2.2 The investigation revealed that the above mentioned Indian entities had received the above said amounts through RTGS credits in their respective bank accounts with ICICI Bank primarily from certain other Indian firms viz. M/s. Vandana & Co., M/s.
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Natural Trading Co., M/s. Maruti Trading, M/s. Millenium & Co., M/s. Aarzoo Enterprises, M/s. GT Traders, M/s. M. D. Enterprises, M/s. Jash Traders etc. which had transferred the above said amounts from their accounts with Axis Bank held at Mumbai and Surat. These firms in turn had received RTGS Credits into their bank accounts from various other firms based in New Delhi, Mumbai and Surat.
2.3 It is submitted that initially investigation was carried out under the FEMA, 1999. Enquiries revealed that Afroz Mohamed Hasanfatta is the brain behind the entire racket of sending remittances outside India on the basis of forged bills of entry. He was assisted in this racket by Madanlal Jain and Bilal Haroon Gilani. Searches were conducted at the premises of Afroz Fatta in Surat and Madanlal Jain in Mumbai on 21.3.2014 and 28.3.2014 respectively which resulted in the recovery and seizure of documents, mobile phones, CPU etc. Shri Trivedi, an accountant of Shri Madanlal Jain, has on 28.3.2014, during the search operations, stated on oath that he had frequently seen Shri Afroz Fatta visiting the office of Shri Madanlal Jain at 416A & 417A, Panchratna Tower, Opera House, Mumbai in the last couple of months. Further, the forensic analysis of the mobile phone seized from Shri Afroz Fatta revealed Madanlal Jain's whatsapp message to Afroz Fatta about the companies, namely, "Aarzoo Enterprises, Vandana & Co., M.D. Enterprises, Millenium & Co., Maruti Trading". The investigation has revealed that the said companies were used in this case for making RTGS credits for siphoning off the funds as per the modus operandi submitted above. In another whatsapp message sent to Afroz Fatta, Madanlal Jain has passed on the full address of Al Mignas FZE Ltd., Hong Kong which is one of the companies to which remittances have been sent from the ICICI Bank accounts on Page 3 of 45 HC-NIC Page 3 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER strength of forged bills of entry.
2.4 In the meanwhile, a complaint was received by the Crime Branch, Surat from ICICI Bank against M/s. R. A. Distributors Pvt. Ltd and its Directors alleging that the Company had prepared 17 fake bills of entry and presented the same before ICICI Bank for outward remittances based on which FIR No. I/16/2014 dated 11.4.2014 was registered by the Detection of Crime Branch, Surat Police under Sections 420, 465, 467, 468, 471, 477 A of Indian Penal Code. Another FIR No. I/17/2014 dated 13.4.2014 has also been registered by the Detection of Crime Branch, Surat Police against M/s. Harmony Diamonds Pvt. Ltd., M/s. Agni Gems Pvt. Ltd., and their Directors for similar offences.
2.5 Investigations under PML Act, 2002 have been initiated as the offences under Sections 420, 467, 471 of Indian Penal Code are 'scheduled offences' in terms of Section 2(1)(y) of the PML Act which have been registered against the above said companies and its directors. Upon scrutiny of the said two FIRs, a case was registered under ECIR No.01/2014 dated 17.4.2014 for investigation into the offence of money laundering under PML Act, 2002.
2.6 During the course of investigation, it has been revealed from the statements of Madanlal Jain that he had created several firms with name sake partners and that he had created certain companies viz : M/s. R. A. Distributors, M/s. Riddhi Exim Pvt. Ltd. etc. and handed over these companies to Afroz Fatta for importing of diamonds; that Afroz Fatta had opened bank accounts of these companies in ICICI bank, Surat; that no diamonds were imported in these companies and that payments were made on the strength of Page 4 of 45 HC-NIC Page 4 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER fake and fabricated bills of entry presented before ICICI Bank; that remittances amounting to Rs.5000 Crore were fraudulently made from these companies and that Prithviraj Kothari and Rakesh Kothari would ensure credits through RTGS in the firms viz :
Vandana & Co., M/s. Aarzoo Enterprises, M/s. G. T. Traders etc. The funds were further transferred from these firms having accounts with Axis Bank to the accounts of M/s. R. A. Distributors, M/s. Riddhi Exim Pvt. Ltd., etc. with ICICI Bank, Surat from which funds were remitted to Hong Kong and Dubai on the basis of forged bills of entry. Madanlal Jain in his statement dated 18.7.2014 has stated that he has floated more than 60 companies viz. Mohit Gems, Sahil Gems India Ltd., Sahil Diamonds Pvt. Ltd., Seven Star Gems Pvt. Ltd., Blooming Star Diamonds Pvt. Ltd., Clair Diamonds Pvt. Ltd. etc. These companies have transferred huge funds to Axis Bank accounts in ICICI Bank and ultimately these funds were remitted to UAE and Hong Kong on the basis of forged bills of entry. Madanlal Jain has started that he has floated the firms viz. Vandana & Co., M/s. Aarzoo Enterprises, M/s. G. T. Traders etc which are having accounts with Axis Bank.
2.7. These companies / partnership firms have received huge funds through RTGS and further transferred these funds to accounts of the companies in ICICI Bank from where the funds were remitted to UAE and Hong Kong on the basis of forged bills of entry. Shri Madanlal Jain has further stated that original bills of entry of year 2011 belonged to him and xerox copies of the same was handed over to Shri Afroz Fatta by his clerk Shri Amit Kumar working at his office at 417A, Panchratna Tower, Opera House, Mumbai. On their basis duplicate / fake copies of bills of entry were created and presented to ICICI Bank and foreign remittances were made. He has further stated that for these illegal transfers of funds Page 5 of 45 HC-NIC Page 5 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER from India to UAE and Hong Kong through forged bills of entry he has earned Rs.12 Crores as commission for arranging transfers through his companies and further abroad.
2.8. During the course of this statement, Shri Madanlal Jain was confronted with the forensic analysis reports of the CPUs seized from his office premises and he has admitted the contents of the data that the details belong to him and these records were kept by him in his computers to ensure the quantum of fraudulent remittances made abroad in companies i.e. M/s. Mabrook Trading, M/s. Al Saba M/s. Nippon Incorporation and M/s. Cornel etc. and for further calculation of his commission.
2.9 Shri Manish Bhogilal Shah, another accused in this matter, during his statement dated 4.7.2015 has stated that Shri Madanlal Jain went to Dubai and opened a company M/s. Mabrook Trading FZE with his help and that he was working on directions of Shri Jayesh Desai who is his maternal uncle and a very close friend of Madanlal Jain. In his further statement dated 5.7.2015, he has stated that Shri Madanlal Jain and his maternal uncle Shri Jayesh Desai hatched a conspiracy to fraudulently remit thousands of crores from India to Dubai and Hong Kong on the strength of forged documents. He has further stated that Shri Madanlal Jain was handling M/s. Mabrook Trading FZE and M/s. Al Saba General Trading FZE and was involved in illegal transfer of money to Dubai from India.
2.10 Prosecution proceedings against Madanlal Jain, Afroz Fatta and 77 other accused have been initiated vide PMLA Case No.3 of 2014 on 19.7.2014 before the Designated Court, PMLA.Page 6 of 45
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3. The applicant came to be arrested on 24.7.2014. The applicant preferred an application under Section 439 of the Code being Criminal Misc. Application No.1709 of 2015 in the Court of learned District and Sessions Judge, Ahmedabad (Rural) at Ahmedabad. The learned Sessions Judge and Designated Special Judge, Ahmedabad (Rural) by his judgment and order dated 4.11.2015 rejected the said application. Hence, the applicant preferred Criminal Misc. Application No.22552 of 2015 before this Court and this Court vide order dated 25.2.2016 rejected the said application.
3.1 Being aggrieved with the said order of this Court, the applicant preferred Special Leave to Appeal (Criminal) No.2849 of 2016 before the Hon'ble Supreme Court and the Hon'ble Supreme Court vide order dated 8.4.2016 rejected the said petition.
3.2 Thereafter, the applicant preferred bail application before the learned Principal District & Sessions Judge, Ahmedabad (Rural) and vide order dated 21.7.2016, the said application came to be rejected. Against the said order, the applicant again preferred Criminal Misc. Application No.19327 of 2016 which came to be rejected by this Court vide order dated 12.8.2016.
3.3 Hence, the present second successive bail application.
4. Pursuant to the notice of admission issued by this Court, the respondent No.2 i.e. Deputy Director, Directorate of Enforcement, Government of India, Ahmedabad appeared through Mr. Devang Vyas, learned Assistant Solicitor General of India assisted by Mr. Kshitij Amin, learned Central Government Standing Counsel and opposed this application by filing affidavit-in-reply Page 7 of 45 HC-NIC Page 7 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER dated 14.12.2016 through Benjamin Chettiar, Assistant Director, Directorate of Enforcement, Surat.
5. Mr. Vikram Chaudhary, learned Senior Counsel assisted by Mr. K. B. Mehta, appearing for the applicant has vehemently submitted that the applicant has wrongly been arraigned as an accused allegedly having committed offence under Section 3 of PML Act since for the same accusations, co-accused have been enlarged on bail. He would submit that the statements recorded during the inquiry did not complete the chain of so-called transactions, since those persons who have alleged to have been finally transferred the amount in the account of his family members are not available. He would submit that the statement of witnesses have been recorded and those witnesses are also not sure how they had received the amount before two to three years, which were ultimately paid to the family members of the applicant.
5.1 Mr. Chaudhary would further submit that if the Court is not satisfied with regard to the innocence of the applicant, he may be released by considering as if the present application has been filed as a regular bail application under Section 439 of the Code since scheduled offences with which the applicant is charged were included in part B of the Schedule of PML Act, before Amendment of 2013. He would submit that when the PML Act, 2002 was introduced in the year 2003, a schedule was incorporated under Section 2 (x) and it was defined as under 2 (y) of the Act. Three parts, namely, Part A, B and C were made in the said Schedule incorporative various types of offences. The offences were included in different parts to the Schedule as per the severity and gravity of offence. The offences like waging or attempting to wage war, conspiracy to commit offences of waging war, counterfeiting currency notes etc. of Indian Penal Code, certain serious offences under the provisions of Narcotic Drugs and Psychotropic Page 8 of 45 HC-NIC Page 8 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER Substances Act, 1985, offences punishable under Explosive Substances Act, 1908, offences punishable under the Unlawful Activities (Prevention) Act, 1967 etc. were made part A of the Schedule. However, offences punishable under Section 120-B, 255, 302, 304, 412, 467, 471 etc. and offences punishable under the Arms Act, under the Wildlife (Protection) Act, under Immoral Trafficking Act (Prevention) Act, 1956, under the Prevention of Corruption Act, 1988 etc. were made Part A of the Schedule. The applicant is alleged to have committed offences punishable under Sections 420, 465, 467, 468, 471, 477 A and 120-B etc. of Indian Penal Code. Therefore, when a person is arrested for having committed offences under the PML Act, having committed any offence of Part B of the Schedule and arrested for the same and when he comes with a prayer to release him on bail, his application was being considered under Section 439 of the Code read with Section 45 of the PML Act. If the allegations have been made against an accused of PML Act that he has committed any offence of Part B to the Schedule, the rigor of Section 45 were not applicable since non-obstante clause was applicable only when the applicant has committed offences punishable under Part A of the Schedule.
5.2 Mr. Chaudhary would further submit that a Bill was introduced by the Government and the object of introducing the same was putting all offences listed in Part A and B of the Schedule to only one Part A so that the provisions of monetary threshold does not apply to the offences. However, all the offences which were listed in Part B were included in Part A without clarifying the same and, therefore, the Courts are treating all the cases of accused having committed an offence of Part A with applicability of Section 45 of the PML Act, when applicants request for bail. He would submit that the said issue was raised before the Hon'ble Punjab and Haryana High Court about the above aspect. The Page 9 of 45 HC-NIC Page 9 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER Division Bench of the Hon'ble Punjab and Haryana High Court by a decision dated 11.5.2016 rendered in the case of Gorav Kathuria v. Union of India and others, Criminal Writ Petition No.595 of 2016 held that though an accused is charged with the offences alleged to have been committed under Part A, his case is required to be dealt with as per the unamended provisions which were introduced in the year 2002. He would submit that by elaborate judgment, two substantial questions of law for general importance were raised by the Division Bench for decision of the Hon'ble Supreme Court. The Hon'ble Supreme Court confirmed the decision of the Division Bench by passing an order on 8.12.2016 in Criminal Appeal No.737 of 2016. Therefore, the ratio laid down by the Hon'ble Division Bench of the Punjab and Haryana High Court is confirmed by the Hon'ble Supreme Court and, therefore, the applicant alleged to have been committed offences which were included in Part B prior to the amendment, the application is required to be considered as if the same has been filed under Section 439 of the Code and rigors of Section 45 of PML Act would not be applicable, since applicant is facing charges of having committed those offences which were made Part B of Schedule prior to amendment.
5.3 Mr. Chaudhary would further submit that relying upon the decision of the Punjab and Haryana High Court, the coordinate Bench of this Court in an unreported decision dated 17.10.2016 in the case of Kiran Mala Jayantilal v. State of Gujarat, rendered in Criminal Misc. Application No.395 of 2016 with Criminal Misc. Application No.3991 of 2016, has held that application is required to be considered as if the same has been filed under Section 439 of the Code and rigors of Section 45 of the PML Act would not be applicable. He would further submit that the applicant is behind bar since 17.7.2014 and has never misused the liberty granted to him while he was released on Page 10 of 45 HC-NIC Page 10 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER temporary bail. He, therefore, would submit that considering the gravity of offence and the maximum punishment which can be imposed at the end of trial is of seven years as well as the fact that all the co-accused have been enlarged on bail by this Court, he may be released by imposing appropriate terms and conditions.
6. Mr. Devang Vyas, learned Assistant Solicitor General of India assisted by Mr. Kshitij Amin, learned Central Government Standing Counsel appearing for the respondent No.2 would submit that there are no changed circumstances while preferring the present application. He would submit that earlier petition which has been filed by the applicant being Criminal Misc. Application No.22552 of 2015 was decided by this Court by a reasoned order dated 25.2.2016 and the same was dismissed on both the grounds. Being aggrieved with the said order of this Court, the applicant preferred Special Leave to Appeal (Criminal) No.2849 of 2016 before the Hon'ble Supreme Court and the Hon'ble Supreme Court vide order dated 8.4.2016 rejected the said petition. Thereafter also, the applicant preferred successive bail application being Criminal Misc. Application No.19327 of 2016 which also came to be rejected by this Court vide order dated 12.8.2016. Hence, there is no question to entertain the present successive bail application.
6.1 He would further submit that the applicant has committed the offences as stated in the complaint. He would submit that crores of rupees have been transferred in the bank accounts. He, however, would submit that the manner and method adopted by the applicant for transferring Crores of rupees through different countries that too after committing scheduled offences, prima facie, suggests that the amount transferred is proceeds of crime defined under Section 2 (u) of the PML Act. He, therefore, would submit that there is a prima facie case against the applicant having committed offence under Section 3 of PML Act and it is Page 11 of 45 HC-NIC Page 11 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER difficult to believe that the applicant is an innocent person and not guilty of having committed offence under PML Act. He would submit that as per the provisions of Section 24 of PML Act, burden to prove that the proceeds of crime are untainted property lies on accused, which in the present case, the applicant has miserably failed in establishing the same.
6.2 As far as the submissions made by learned Senior advocate Mr. Chaudhary appearing for the applicant with regard to inclusion of the offences which were earlier in Part B to part A and the decision of the Punjab and Haryana High Court referred above, Mr. Vyas would submit that the decision rendered by the Division Bench of the Punjab and Haryana High Court is not applicable in the present case since the observations made in the said judgment are in connection with the prayers made by the applicant of that petition and with regard to the constitutional validity of Section 45 or compounding of the offences in Part A. He would submit that a writ petition was filed before this Court raising similar contentions with regard to the object of a Bill for amendment as well as challenging validity of Section 45 of the PML Act. However, the Division Bench of this Court has dismissed the petition by upholding the validity of the rigors of Section 45 of the PML Act. He would further submit that one Rakesh M. Kothari and others, accused charged for the offences punishable under the provisions of PML Act and offences related to earlier part B of the Schedule challenged the validity of Section 45 by way of filing Special Criminal Application No.4496 of 2014 with Special Criminal Application No.4672 of 2014. By decision dated 16.1.2015, the Division Bench has upheld the validity of the provisions of Section 45 dealing with the submissions of learned advocate about the Bill and object of the amendment Act by which offences of Part B were included in Part A. He would submit that Page 12 of 45 HC-NIC Page 12 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER the said order has been challenged by the accused and the petition is pending before the Hon'ble Supreme Court.
6.3 Mr. Vyas would further submit that the Hon'ble Supreme Court in the case of Gautam Kundu v. Manoj Kumar, Assistant Director, Eastern Region, Directorate of Enforcement, AIR 2016 SC 106, has held that PML Act is a Special statute enacted by Parliament dealing with money lanudering and, therefore, Section 45 of the Act which starts with non obstante clause, indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of of the Code of Criminal Procedure and rigors of Section 45 would be applicable. He would further submit that before the Division Bench of the Punjab and Haryana High Court, a petition was filed by an advocate seeking direction that the inclusion of Section 131 of Customs Act in Part B by the amendment in the year 2015 could have been included in Part A since there is evasion of custom duties worth Crores of Rupees since the offenders are being enlarged on bail, in absence of non- applicability of rigor of Section 45 of the PML Act.
6.4 He would further submit that the Division Bench of the Punjab and Haryana High Court has not declared the provisions of Section 45 of the PML Act, ultra-vires to the Constitution of India. He would submit that the certificate was issued to the petitioner by framing two questions by the Division Bench of Punjab and Haryana High Court. When the petition was disposed of at admission stage, the Union of India was not heard and the appeal was dismissed.
6.5 He would further submit that the decision of the Punjab and Haryana High Court, in the case of Gorav Kathuria (Supra) does not lay down any proposition of law, whereas the decision of Page 13 of 45 HC-NIC Page 13 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER the Division Bench of this Court in the case of Rakesh Manekchand Kothari v. Union of India and others, has specifically laid down a law confirming the validity of the provisions of Section 45 of the PML Act. In support of his submissions, Mr. Vyas has relied upon the decision of the Hon'ble Supreme Court in the case of Poonam v. State of Uttar Pradesh, 2016 (2) SCC 779 wherein the Hon'ble Supreme Court has held that every judgment must be read as applicable to the particular facts proved or assumed to be proved, but governed and qualified by the particular facts of the case which was dealt by the Trial Court. He would submit that when the Criminal Appeal was disposed of by the Hon'ble Apex Court in connection with the judgment of the Division Bench of Punjab and Haryana High Court, the Union of India was not heard and, therefore, as held by the Hon'ble Supreme Court in the case of Kunhayammed and others v. State of Kerala, (2000) 6 SCC 539, the question of merger of the judgment would apply only when the matter is disposed of, if the Hon'ble Supreme Court has considered a case in exercise of its jurisdiction as an Appellate or Revisional jurisdiction, have exercised jurisdiction after issuance of notice and after full hearing in presence of all the parties. In the present case, when the appeal was disposed of by the Punjab and Haryana High Court in the case of Gorav Kathuria, Union of India was not heard. In none of the decisions, either the Punjab and Haryana High Court or any other High Courts or the Hon'ble Supreme Court, it has been held that the provisions of Section 45 of the PML Act and inclusion of the offences of Part B into Part A are unconstitutional and, therefore, the rigors would apply if the accused is found having committed offence which is included in Part A of the Schedule.
6.6 Mr. Vyas has also relied upon the decision of the coordinate Bench of this Court in the case of Afroz Mohmad Hasanfatta v. Deputy Director, 2015 JX (Gujarat) 805 wherein Page 14 of 45 HC-NIC Page 14 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER this Court has dealt with the rigors of Section 45 as well as the provisions of Section 50 of the PML Act under which the statements of the witnesses have been recorded. He would submit that the statement of applicant - accused have also been recorded, but he has not cooperated with the Investigating Officer. However, the Agency has independently investigated the case and could collect material against him through various legal modes.
6.7 Mr. Vyas would further submit that as per Section 24 of the PML Act, burden of proof lies on an accused to prove that he is not involved in an offence of money laundering under Section 3 of the Act. The applicant has miserably failed in even prima facie establishing his case that the Court would be satisfied that there are reasonable grounds for believing that the applicant is not guilty of offences allegedly committed by him. He would further submit that in view of the provisions of Section 45 of the PML Act, a person accused of an offence punishable under Part A of the Schedule shall be released on bail unless the Public Prosecutor has been given an opportunity to oppose the application for such release and when the Public Prosecutor opposes such application and the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offences and he is not likely to commit any such offence while on bail, a person can be released on bail. He would further submit that the authority has collected ample material and is in process of collecting information. Therefore, there is no reason to believe that the applicant is not guilty of having committed any offence and, therefore, he cannot be released on bail and hence, the present application may be rejected.
7. I have heard learned advocates appearing for the respective parties. Firstly, I would like to deal with the contention raised by Senior Counsel Mr. Vikram Chaudhary whether the rigors Page 15 of 45 HC-NIC Page 15 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER of Section 45 of the PML Act would be applicable in view of the decision dated 11.5.2016 of the Punjab and Haryana High Court in the case of Gorav Kathuria v. Union of India and others, rendered in CRWP No.595 of 2016. Section 45 of the PML Act as on today, 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
(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 State Government authorized in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.
(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or Page 16 of 45 HC-NIC Page 16 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER any other provisions 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 order, and subject to such conditions as may be prescribed.
(2) The limitation on granting of bail specified in sub-section (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."
8. I have gone through the judgment of the Punjab and Haryana High Court wherein Division Bench has dealt with several aspects of PML Act including provisions of Section 45. The said writ petition was filed by one Gorav Kathuria who is a practising lawyer who raised several issues including that in Punjab and Haryana, there is huge custom duty evasion with regard to import of Heavy Melting Scrap classifiable under Customs Tariff Heading at Ludhiana and the accused are laundering the proceeds of crime so generated and, therefore, the amendment made by Section 145 (2) of the Finance Act, 2015 enhancing the monetary threshold for the offences specified under Part B of the Schedule from the total value involved in offences from Rs.30 Lacs or more to Rs.1 Crore or more as well as insertion of Section 132 of the Customs Act, 1962 in Part B of the Schedule of PML Act vide Section 151 of the said Finance Act, 2015 are contrary to the constitutional provisions. By raising several contentions by the petitioner, following prayers were made by him in the said petition :-
"(I) Issue appropriate writ, order or direction in the Petitioner's challenge to the vires qua criminal cases, of firstly the sub-clause (ii) of clause (y) of section 2 of PMLA, and secondly, the insertion of Part-B in the Schedule in PMLA, as amended vide section 145(ii) and section 151 of the Finance Act, 2015, with effect from 14.05.2015, for declaring these provisions of PMLA as unconstitutional and ultra vires as the same are contrary to the objects of PMLA warranting stringent conditions for grant Page 17 of 45 HC-NIC Page 17 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER of bail vide Section 45(1) in criminal cases under PMLA, and are unconstitutional and/or
ii) to issue appropriate writ, order or directions while reading down these provisions for criminal cases, so as to make them constitutional by construing criminal offence under Part B of the Schedule inserted in PMLA w.e.f. 14.5.2015, to be amongst the offiences listed in Part-A of the Schedule, so as to apply the stringent pre-conditions for grant of bail vide Section 45(1) in the matters of money laundering irrespective of the magnitude of gravity of the said scheduled offences;
iii) to hold that a private criminal complaint by the petitioner would be maintainable for setting the criminal law into motion and to seek any direction for investigation of offence under Section 3 r/w 4 of PMLA along with the offence under Part B of the Schedule inserted in PMLA w.e.f.
14.05.2015, either under Section 156(3) or under Section 155 (2) of the Code of Criminal Procedure, as the case may be, pending grant of sanction requisite for taking 'cognizance' in said Scheduled Offence or under PMLA,
(iv) Issue any other writ, order or directions, which this Hon'ble Court may deem just and fit."
9. It was his argument that the amount of Rs.30 Lacs and more which was in existence till 2012 and raising to Rs.1 Crore and more is ultra-vires since by various means and method, the amount is shown less than Rs.1 Crore of Rupees with regard to custom duties. It was also his argument that by inclusion of Section 132 of Customs Act in Part B to the Schedule of PML Act, the intention of the Legislature to impose rigors of Section 45 would become redundant even if the accused has committed huge fraud under Section 132 of the Customs Act. While dealing with the submissions made by the applicant, the Division Bench of the Punjab and Haryana High Court observed about the object of the Bill of 2013 i.e. of enhancing the monetary aspect of the offence and it has been observed that there was no need to include all the Page 18 of 45 HC-NIC Page 18 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER offences into part 1 which were made Part B to the Schedule of PML Act. The following observations were made by the Division Bench of Punjab and Haryana High Court :-
"12.13 We have carefully scanned the "Statement of Objects and Reasons" as incorporated in the Prevention of Money- Laundering (Amendment) Bill, 2011, more specifically paragraph 3(j). It is seen that the limited object and reason behind the said proposed amendment was recorded as follows :-
"3. The Prevention of Money-Laundering (Amendment) Bill, 2011, inter alia, seeks to -
(i) putting all the offences listed in Part A and Part B of the Schedule to the aforesaid Act into Part A of that Schedule instead of keeping them in two parts so that the provision of monetary threshold does not apply to the offences.
4. The Bill seeks to achieve the above objects.
New Delhi; PRANAB MUKHERJEE The 16th December, 2011"
12.14. All the offences were thus proposed to be put together in the newly proposed Part-A, irrespective of the magnitude or gravity of the scheduled offence. Entire Part B was thus effectively omitted vide the Bill of 2011.
12.15 We have seen that then existing Section 2(y) of the PMLA imposed monetary threshold of Rs.30 lakhs for invocation of PMLA in respect of the offences listed in Part B of the Schedule. Evidently therefore, as clearly recorded in the "Statement of Objects And Reasons" as incorporated in Para 3(j) in the Prevention of Money-Laundering (Amendment) Bill, 2011, the only object for the amendment carried out in 2013 in the Schedule to PMLA was to overcome this monetary threshold limit of Rs.30 Lakhs so that for invocation of PMLA in respect of the laundering of proceeds of crime involved in offences earlier listed under Part B of Page 19 of 45 HC-NIC Page 19 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER the Schedule, there is no embargo of minimum value of Rs.30 Lacs.
12.16 In our opinion the presumption of the petitioner that rigors in grant of Bail contained in Section 45(1) of PMLA extends to all the offences mentioned in such amended Part A is neither logical nor intended by the legislation. The offences which were in the earlier Part A of the Schedule (prior to 2013 Amendment) are evidently henious offences such as waging war against the country, offences under NDPS Act and Terrorist activities etc. Other scheduled offences, which prior to 2013 amendment were under Part B of the Schedule, cannot be equated with such heinous offences in the context of Section 45(1) of PMLA.
12.17 Despite the above substantive amendment in the Schedule, we find no corresponding amendment simultaneously carried out in 2013, in Section 45(1), in respect of application of the limitations in grant of bail to person accused of Schedule offences earlier falling under Part B of the Schedule. We do not find any legislative intent from the perusal of the aforesaid "Statement of Objects and Reasons" as incorporated in the Prevention of Money-
Laundering (Amendment) Bill, 2011 to apply such stringent limitations in grant of bail to person accused of Scheduled offences earlier falling under Part B of the Schedule, but now existing in Part A thereof. On the contrary, the only object sought to be achieved by the said 2013 amendment in Schedule was to overcome this monetary threshold limit of Rs. 30 lakhs so that for invocation of PMLA in respect of the laundering of proceeds of crime involved in offences earlier falling under Part B of the Schedule, there is no embargo of minimum value of Rs. 30 lacs. This 2013 amendment in Schedule carried out as proposed vide the Prevention of Money-Laundering (Amendment) Bill, 2011 was not intended to introduce a substantive amendment for creating an embargo on grant of bail to a person arrested under PMLA in respect of offences earlier falling under Part B of the Schedule. After having perused the "Statement of Objects and Reasons" as incorporated in the Page 20 of 45 HC-NIC Page 20 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER Prevention of Money-Laundering (Amendment) Bill, 2011 which led to 2013 amendment in Schedule, we are unable to agree with the petitioner that by necessary corollary of the aforesaid 2013 amendment, the stringent limitations in grant of bail were now made applicable to all scheduled offences which are punishable for more than three years and were put together in the new Part-A. If that interpretation as sought to be given by the petitioner, which is devoid of any support from the objects and reasons available on record in the Prevention of Money-Laundering (Amendment) Bill, 2011, is accepted by us, the provision of Section 45(1) would become unreasonable, harsh, oppressive and unconstitutional. We cannot lose sight of the fact that the offences which were in Part B and were shifted in Part A by 2013 amendment also include offences which are compoundable and bailable. The framers of PMLA therefore had placed the offences in two different parts Part A and Part B. We see no legislative intent to apply twin limitations in grant of bail under Section 45(1) of PMLA qua all persons arrested on accusation of commission of even such Scheduled Offences which were earlier listed in Part B. 12.18. Therefore, in our opinion the reference to the offences under Part A of the Schedule in the context of Section 45 (1) requires to read down to apply only to those scheduled offences, which existed under the Part A of the Schedule prior to the said 2013 amendment in Schedule. Having arrived at the said opinion, we have also given our anxious consideration to the issue whether we can simply fold our hands and blame the draftsman, or whether we are duty bound to work on the constructive task of finding the intention of Parliament and to iron out the creases to harmonise the law with the prevailing objects sought to be achieved, reasons and concepts and to make it an effective instrument for delivery of justice eschewing the construction which will lead to absurdity. The Hon'ble Constitution Bench in S.P. Gupta v. Union of India, 1981 Supp SCC 87 had observed as follows:-
Page 21 of 45HC-NIC Page 21 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER "63.............The interpretation of every statutory provision must keep pace with changing concepts and values and it must, to the extent to which its language permits or rather does not prohibit, suffer adjustments through judicial interpretation so as to accord with the requirements of the fast changing society which is undergoing rapid social and economic transformation. The language of a statutory provision is not a static vehicle of ideas and concepts and as ideas and concepts change, as they are bound to do in a country like ours with the establishment of a democratic structure based on egalitarian values and aggressive developmental strategies, so must the meaning and content of the statutory provision undergo a change. It is elementary that law does not operate in a vacuum. It is not an antique to be taken down, dusted, admired and put back on the shelf, but rather it is a powerful instrument fashioned by society for the purpose of adjusting conflicts and tensions which arise by reason of clash between conflicting interests. It is therefore intended to serve a social purpose and it cannot be interpreted without taking into account the social,economic and political setting in which it is intended to operate. It is here that the Judge is called upon to perform a creative function. He has to inject flesh and blood in the dry skeleton provided by the legislature and by a process of dynamic interpretation, invest it with a meaning which will harmonise the law with the prevailing concepts and values and make it an effective instrument for delivery of justice. We need not therefore be obsessed with the fact that Section 123 is a statutory provision of old vintage or that it has been interpreted in a particular manner some two decades ago. It is not as if it has once spoken and then turned into muted silence. It is an instrument which can speak again and in a different voice in the content of a different milieu.
Let us therefore try to understand what voice this statutory provision speaks today in a democratic society wedded to the basic values enshrined in the Constitution".
12.19. .............................
12.20 Guided by the aforesaid principles
laid down by the Hon'ble Supreme Court
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regarding statutory interpretation and the duty of the Court to secure the ends of justice, we have no hesitation in holding that in 2013, Part B of the Schedule was omitted and the Scheduled Offences falling thereunder were incorporated in Part A with the sole object to overcome the monetary threshold limit of Rs.30 lakhs for invocation of PMLA in respect of the laundering of proceeds of crime involved in those offences. No substantive amendment was proposed with express intention to apply limitations on grant of bail as contained in Section 45(1) in respect of persons accused of such offences which were earlier listed in Part B. Therefore, twin limitations in grant of bail contained in Section 45(1) as it stands today, are not applicable qua a person accused of such offences which were earlier listed in Part B. 12.21 ..............................
12.22 Vide Section 145(ii) and Section 151 of the Finance Act,2015 with effect from 14.05.2015, in sub-clause (ii) of section 2(y) of PMLA, for the words "thirty lakh rupees",the words "one crore rupees" were substituted. Moreover, in the Schedule of PMLA after Part-A, Section 132 of the Customs Act, 1962 was inserted in Part-B. The amendment of 2015, increasing the monetary threshold from Rs.Thirty Lakhs to Rs. One Crore for invocation of PMLA, now shows further shift and liberalisation in the earlier legislative intent of removing the monetary threshold for invoking PMLA. If it is construed that the limitation imposed by Section 45(1) on granting bail would apply to the persons arrested on accusation of offences which were earlier listed under Part B, but not to a person arrested on accusation of offence punishable under Section 132 of the Customs Act, 1962 which is now in Part B, the same would be unreasonable and in violation of Article 14 and 21 of the Constitution of India. We find that the intelligible differentia in classification of offences in Part A and Part B in the context of Section 45(1) was absolutely reasonable prior to the said 2013 amendment in Schedule. However, it would not be so in respect of all those offences later shifted from Part B to Part A, which was for a Page 23 of 45 HC-NIC Page 23 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER limited purpose stated in the "Statement of Objects and Reasons" as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011. In this context we may rely on the following observations of the Constitution Bench of the Hon'ble Supreme Court in Kartar Singh v. State of Punjab, (1994) 3 SCC 569 -
"222. As pointed out supra, the persons who are to be tried for offences specified under the provisions of TADA Act are a distinct class of persons and the procedure prescribed for trying them for the aggravated and incensed nature of offences are under different classification distinguishable from the ordinary criminals and procedure. This distinction and classification of grouping of the accused and the offences to be tried under TADA are to achieve the meaningful purpose and object of the Act as reflected from the preamble as well as the 'Statement of Objects and Reasons' about which we have elaborately dealt with in the preceding part of this judgment."
"244. Therefore, the complaint of incorporation of invidious discrimination in the Act has to be turned down. All that the court has to see is whether the power is used for any extraneous purpose i.e. to say not for achieving the object for which the power is granted and whether the Act (TADA) has been made on grounds which are not germane or relevant to the policy and purpose of this Act and whether it is discriminatory so as to offend Article 14. In our considered opinion, the classification have rational nexus with the object sought to be achieved by the TADA Acts and Special Courts Act and consequently there is no violation of Article 14 of the Constitution."
If limitations in grant of bail under Section 45(1) of PMLA are sought to be applied to all those offences under the amended Part A which were earlier listed in Part B, it would offend Article 14 and 21 and would be contrary to the Statement of Objects and Reasons of the 2013 amendment in Schedule as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011.
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12.23 We, therefore, in light of the
"Statement of Objects and Reasons" as
incorporated in the Prevention of Money-
Laundering(Amendment) Bill, 2011 and the above discussion and findings, have no hesitation in holding that the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the Schedule existing prior to 2013 amendment. In other words, the limitations in grant of bail under Section 45(1) of PMLA are not applicable to those persons who are arrested under PMLA on accusation of commission of such scheduled offences which were earlier listed under Part B of the Schedule (prior to amendment in Schedule carried out in 2013).
12.24. Consequently, the provisions containing twin limitations in grant of bail under Section 45(1) would override the normal principles governing bail under Sections 438 and 439 qua the persons arrested on accusation of commission of such Scheduled Offences which were earlier listed under Part A of the Schedule. However, only the normal principles governing bail under Section 438 or 439 of the Code would apply in relation to a person arrested under PMLA on accusation of commission of such scheduled offences, which were earlier listed under Part B of the Schedule. In respect of such persons of latter category, the following observations of the Hon'ble Constitution Bench in Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565, may apply with full force :-
"27. .............It is, however, interesting that as long back as in 1924 it was held by the High Court of Calcutta in Nagendra v. King-Emperor that the object of bail is to secure the attendance of the accused at the trial, that the proper test to be applied in the solution of the question whether bail should be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail is not to be withheld as a punishment. In two other cases Page 25 of 45 HC-NIC Page 25 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER which, significantly, are the 'Merrut Conspiracy cases' observations are to be found regarding the right to bail which deserve a special mention. In K.N. Joglekar v. Emperor it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion should be exercised judiciously. In Emperor v. Hutchinson it was said that it was very unwise to make an attempt to lay down any particular rules which will bind the High Court, having regard to the fact that the legislature itself left the discretion of the court unfettered. According to the High Court, the variety of cases that may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail may be granted but not in other classes. It was observed that the principle to be deduced from the various sections in the Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom in a much better position to look after his case and to properly defend himself than if he were in custody. ..............
30. In AMERICAN JURISPRUDENCE (2nd,Volume 8, p. 806, para 39), it is stated :-
"Where the granting of bail lies within the discretion of the Court, the granting or denial is regulated, to a large extent, by the facts and circumstances of each particular case. Since the object of the detention or imprisonment of the accused is to secure his appearance and submission to the jurisdiction and the judgment of the court, the primary inquiry is whether a recognizance or bond would effect that end."
10. It is important to note that after dealing with the said object, the prayer made by the petitioner challenging the vires of Page 26 of 45 HC-NIC Page 26 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER 2015 Amendments have been rejected which reflects in paragraph 12.25 of the said judgment, which reads as under :-
"12.25 Consequently, we find that the basis on which vires of the 2015 amendments has been challenged do not have any merit and the first two prayers in this regard are accordingly rejected."
11. It is true that in paragraph 16.6 of the said decision, the Division Bench of the Punjab and Haryana High Court has considered the case of Gautam Kundu v. Manoj Kumar, Assistant Director, Eastern Region, Directorate of Enforcement (Supra). Therefore, the prayers made by the petitioner to issue Certificate under Article 134A was issued by framing the following substantial questions of law :-
"a) Whether it would be unreasonable and in violation of Article 14 and 21 of the Constitution of India, if the twin limitations in grant of bail stipulated under Section 45(1) of PMLA would be applied even to those persons arrested under PMLA on accusation of commission of only such scheduled offences, which were listed under Part B of the Schedule omitted in 2013 but only for the limited purpose as specified in the "Statement of Objects and Reasons" in the Prevention of Money-Laundering (Amendment) Bill, 2011.
b) Whether as per the provisions of the Code of Criminal Procedure, 1973 read with the provisions of the PMLA and Rules made thereunder, a private individual can set the criminal law into motion by either seeking registration of case for investigation by the authority under PMLA or by directly approaching the jurisdictional Magistrate for issuance of directions for investigations to the authority under PMLA, when there is neither any report of commission of any Scheduled offence sent under Section 157 of the Code to the Magistrate nor any complaint for taking cognizance of a Scheduled Offence by an officer authorized to Page 27 of 45 HC-NIC Page 27 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER investigate such Scheduled Offence."
12. As stated herein above, the prayers for vires of provisions have been rejected by the Division Bench. Per contra, the decision of this Court in the case of Rakesh Kothari has dealt with all these submissions and has upheld the validity of the provisions of Section 45 etc. The prayers made before this Court in the case of Rakesh Manekchand Kothari reads as under :-
"[a] To strike down Section 45 of the Prevention of Money Laundering 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 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 Page 28 of 45 HC-NIC Page 28 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER 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 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 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 Hon'ble 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"Page 29 of 45
HC-NIC Page 29 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER 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 of India.
[e] At the interim / ad-interim 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, [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."
13. Having considered similar arguments advanced by learned advocate appearing for the petitioner and various decisions of the Hon'ble Supreme Court, the Division Bench of this Court has dismissed the said petition in the case of Rakesh Kothari upholding the validity of vires of Section 45 of the PML Act.
14. It is true that the decision rendered by the Division Bench of the Punjab and Haryana High Court in the case of Gorav Kathuria was challenged by the petitioner himself before the Hon'ble Supreme Court by preferring Criminal Appeal No.737 of 2016 and the Hon'ble Supreme Court has dismissed the appeal vide Page 30 of 45 HC-NIC Page 30 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER order dated 12.8.2016. The order of the Hon'ble Supreme Court reads as under :-
"Though the High Court has granted certificate to appeal, we have heard the learned counsel for some time and are of the opinion that the impugned judgment of the High Court is correct. This appeal is, accordingly, dismissed."
15. It is not denied by the other side that Union of India was ever heard when the said appeal was dismissed by the Hon'ble Supreme Court. Therefore, in my opinion, the ratio laid down by the Hon'ble Supreme Court in the case of Poonam v. State of Uttar Pradesh, 2016 (2) SCC 779 would be applicable in the present scenario when there are two different decisions by two Division Benches of two different High Courts.
16. The Hon'ble Supreme Court in the case of Poonam v. State of Uttar Pradesh, 2016 (2) SCC 779 made following observations in paragraphs 39,40 and 41 :-
"39. The aforesaid decisions do not lay down as a proposition of law that in every case when a termination is challenged, the affected person has to be made a party. What has been stated is when one challenges a provision as ultra vires the persons who are likely to be affected, some of them should be made parties in a representative capacity. That has been the consistent view of this Court in service jurisprudence. Some other decisions, which have been relied upon are directly connected with regard to the selection and selectees. On a perusal of the analysis made in J.S. Yadav (supra), we are disposed to think that the Court has applied the principle pertaining to the constitutional validity by equating it with the interpretation of a provision, whether it is retrospective or prospective. That apart, the Court, as is evident from paragraph 32 of the judgment, has noted that the prayer made by the appellant only related to the declaratory Page 31 of 45 HC-NIC Page 31 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER relief. The said decision has to be understood in the context. A ratio of a decision has to be understood in its own context, regard being had to the factual exposition. If there has been advertence to precedents, the same has to be seen to understand and appreciate the true ratio. The ratiocination in the said decision is basically founded on the interpretation of the statutory provision and the relief claimed. The Court has been guided by the fact that when the interpretation as regards the provision whether it is retrospective or prospective, the selected members are necessary parties.
40. In this regard, we may refer to the rule stated by Lord Halsbury in Quinn v. Leathem, (1901) AC 495, p. 506 :-
"Every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law but govern and are qualified by the particular facts of the case in which such expressions are to be found."
41. A three-Judge Bench in Union of India and others v. Dhanwanti Devi and others (1996) 6 SCC 44 while discussing about the precedent under Article 141 of the Constitution, held that :-
"9. Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Krishan Khosla case[39] is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well- settled theory of precedents, every decision contains three basic Page 32 of 45 HC-NIC Page 32 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER postulates--(i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject- matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.
10. Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot Page 33 of 45 HC-NIC Page 33 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents......"
17. In another decision of the Hon'ble Supreme Court in the case of Official Liquidator v. Dayanand and others, (2008) 10 SCC 1, it has been held in paragraph 78 as under :-
"78. There have been several instances of different Benches of the High Courts not following the judgments/orders of coordinate and even larger Benches. In some cases, the High Courts have gone to the extent of ignoring the law laid down by this Court without any tangible reason. Likewise, there have been instances in which smaller Benches of this Court have either ignored or bypassed the ratio of the judgments of the larger Benches including the Constitution Benches. These cases are illustrative of non- adherence to the rule of judicial discipline which is sine qua non for sustaining the system. In Mahadeolal Kanodia vs. Administrator General of W.B. [1960 (3) SCR 578], this Court observed :-
"If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if Judges of coordinate jurisdiction in a High Court start overruling one another's decisions. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division Bench, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in the High Court is of opinion that the previous decision of another Single Judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench. In such a case lawyers would not know how to advise their clients and all courts subordinate to the High Court would find themselves in an embarrassing position of having to choose between dissentient judgments of their own High Court."Page 34 of 45
HC-NIC Page 34 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER [Emphasis added]"
18. In the case of Government of Karnataka v. Gowramma, 2007 (13) SCC 482, while dealing with a question with regard to precedents, the Hon'ble Supreme Court has observed in paragraphs 9 and 10 as under :-
"9. Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving a judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates - (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent. (See: State of Orissa v. Sudhansu Sekhar Misra and Ors. (AIR 1968 SC 647) and Union of India and Ors. v. Dhanwanti Devi and Ors. (1996 (6) SCC 44). A case is a precedent and binding for what it explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are words in Act of Parliament. In Quinn v. Leathem (1901) AC 495 (H.L.), Earl of Halsbury LC observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found Page 35 of 45 HC-NIC Page 35 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER there are not intended to be exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and a case is only an authority for what it actually decides.
10. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. V. Horton (1951 AC 737 at p.761), Lord Mac Dermot observed :
"The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge."
19. I have also come across unreported decision of the High Court of Karnataka rendered in Criminal Petition No.366 of 2017 dated 23.2.2017 which has dealt with similar questions raised in the petition about the applicability of Division Bench of Punjab and Haryana High Court in the case of Gorav Kathuria. The Karnataka High Court has exhaustively dealt with the judgments which are referred herein above and has also relied upon the decision of the Hon'ble Supreme Court in the case of Kunhayammed and others v. State of Kerala, (2000) 6 SCC
539. Paragraph No.28 of the said decision of the Hon'ble Supreme Page 36 of 45 HC-NIC Page 36 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER Court reads as under :-
"28. Incidentally we may notice two other decisions of this Court which though not directly in point, the law laid down wherein would be of some assistance to us. In Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat [(1969) 2 SCC 74 : AIR 1970 SC 1] this Court vide para 7 has emphasised three preconditions attracting applicability of doctrine of merger. They are: (i) the jurisdiction exercised should be appellate or revisional jurisdiction; (ii) the jurisdiction should have been exercised after issue of notice; and (iii) after a full hearing in presence of both the parties. Then the appellate or revisional order would replace the judgment of the lower court and constitute the only final judgment. In Sushil Kumar Sen v. State of Bihar [(1975) 1 SCC 774 : AIR 1975 SC 1185] the doctrine of merger usually applicable to orders passed in exercise of appellate or revisional jurisdiction was held to be applicable also to orders passed in exercise of review jurisdiction. This Court held that the effect of allowing an application for review of a decree is to vacate a decree passed. The decree that is subsequently passed on review whether it modifies, reverses or confirms the decree originally passed, is a new decree superseding the original one. The distinction is clear. Entertaining an application for review does not vacate the decree sought to be reviewed. It is only when the application for review has been allowed that the decree under review is vacated. Thereafter the matter is heard afresh and the decree passed therein, whatever be the nature of the new decree, would be a decree superseding the earlier one. The principle or logic flowing from the above said decisions can usefully be utilised for resolving the issue at hand. Mere pendency of an application seeking leave to appeal does not put in jeopardy the finality of the decree or order sought to be subjected to exercise of appellate jurisdiction by the Supreme Court. It is only if the application is allowed and leave to appeal granted then the finality of the decree or order under challenge is jeopardised as the pendency of appeal reopens the issues decided and this Court is then scrutinising the Page 37 of 45 HC-NIC Page 37 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER correctness of the decision in exercise of its appellate jurisdiction."
20. By considering the judgment of the Division Bench of the Punjab and Haryana High Court read with the order passed by the Hon'ble Supreme Court in the case of Gorav Kathuria dismissing the appeal as well as considering the decision in the case of Gautam Kundu (Supra), it has been held that if an accused is facing charge for the offences punishable under Section 3of the PML Act, the rigor of Section 45 of the PML Act would be applicable.
21. In the case of Gautam Kundu v. Manoj Kumar, Assistant Director, Eastern Region, Directorate of Enforcement, AIR 2016 SC 106, while dealing with an application under Section 439 of the Code read with Section 45 of PML Act, the following observations have been made by the Hon'ble Supreme Court in paragraphs 28 to 33 :-
"28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with money laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict.
29. Section 45 of the PMLA starts with a non Page 38 of 45 HC-NIC Page 38 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER 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 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 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 the 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 requires that the provisions of Cr.P.C. shall apply in so far as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect notwithstanding anything inconsistent therewith 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 this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 of Cr.P.C. 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.
31. It was submitted on behalf of the appellant that Section 12A read with Section 24 of the SEBI Act does not include Section 24 of the said Act as a scheduled offence but it is only Section 12A which is to be construed as a scheduled offence as the description of offence against Section 24 of Page 39 of 45 HC-NIC Page 39 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER the SEBI Act mentioned under paragraph 11 of the Schedule to PMLA is part of Section 12A of the said Act. In this context it was submitted by the learned Solicitor General that PMLA being a Special Statute cannot be given restricted meaning while interpreting its provisions including the Schedule which is an integral part of this Act. PMLA has been enacted by the Parliament as per commitment of the country to the United Nations and having global dimensions and cannot be confined to national boundaries of our country. Moreover, its legislative intent has to be gathered from the plain reading of the language used in the provisions of the Act and the Schedule appended thereunder. Hence, there is no ambiguity that Section 24 of the SEBI Act is a scheduled offence under Paragraph 11 of the Schedule. The fact remains that Section 24 of the SEBI Act is inclusive in nature and also includes Section 12A within its ambit and scope. Further, on perusal of various offences listed in the Schedule in 28 Paragraphs, it could be seen that only penal provisions of the Statutes have been incorporated in the Schedule. There is no denying the fact that Section 24 of the SEBI Act is a penal provision of inclusive nature and thus it clearly reflects the legislative intent of a scheduled offence under PMLA. Admittedly, the complaint was filed by SEBI against the appellant on the allegation of committing offence punishable under Section 4 of PMLA. The complaint reveals that SEBI received a letter from the Ministry of Corporate Affairs, Office of the Registrar of Companies ("ROC"), West Bengal, with reference to Rose Valley in which the ROC had stated that Rose Valley has repeatedly issued debentures in the years 2001-2002, 2004-2005, 2005-2006 and 2007- 2008 to more than 49 persons in each financial year without filing offer documents with either the ROC or the SEBI and requested SEBI to investigate into the matter. From the information provided by ROC, it was observed that Rose Valley had raised a total sum of Rs.1282.225 lakhs from 2585 persons by issuing secured debentures to the general public without complying with the norms related to IPO of securities as per first provision to Section 67(3) of the Companies Act, 1956. Rose Valley by making public issue of debentures during the Page 40 of 45 HC-NIC Page 40 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER period between 2001-2002 to 2007-2008, without complying with the public issue norms, violated the provisions of erstwhile SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the provisions of Section 117(A) of the Companies Act, 1956 and other provisions of SEBI Act which is a Scheduled Offence under PMLA.
32. We have heard the learned counsel for the parties. At this stage we refrained ourselves from deciding the questions tried to be raised at this stage since it is nothing but a bail application. We cannot forget that this case is relating to "Money Laundering" which we feel is a serious threat to the national economy and national interest. We cannot brush aside the fact that the schemes have been prepared in a calculative manner with a deliberative design and motive of personal gain, regardless of the consequence to the members of the society.
33. With regard to the questions raised by Mr. Gopal Subramanium, learned senior counsel appearing on behalf of the appellant, at this stage, we do not think that we should answer or deal with the same in view of the fact that the matter is pending before a Division Bench of the High Court in writ jurisdiction, as has been pointed out before us. Hence, any observation or remarks made by us may cause prejudice to the case of both the sides. Therefore, we feel that it would be proper for us only to deal with the matter concerning bail. We note that admittedly the complaint is filed against the appellant on the allegations of committing the offence punishable under Section 4 of the PMLA. The contention raised on behalf of the appellant that no offence under Section 24 of the SEBI Act is made out against the appellant, which is a scheduled offence under the PMLA, needs to be considered from the materials collected during the investigation by the respondents. There is no order as yet passed by a competent court of law, holding that no offence is made out against the appellant under Section 24 of the SEBI Act and it would be noteworthy that a criminal revision praying for quashing the proceedings initiated against the appellant under Section 24 of SEBI Page 41 of 45 HC-NIC Page 41 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER Act is still pending for hearing before the High Court. We have noted that Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. As mentioned earlier, Section 45 of the PMLA imposes two conditions for grant of bail, specified under the said Act. We have not missed the proviso to Section 45 of the said Act which indicates that the legislature has carved out an exception for grant of bail by a Special Court when any person is under the age of 16 years or is a woman or is a sick or infirm. Therefore, there is no doubt that the conditions laid down under Section 45A of the PMLA, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of committing offence punishable under Section 4 of the PMLA, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure."
22. Considering the above aspects and when there is no pronouncement by Hon'ble the Supreme Court or of any High Courts that the provisions of Section 45 of the PML Act are ultra- vires or the inclusion of the offences of Part B into Part 1 of the Schedule of PML Act is declared ultra-vires to the provisions of the Constitution of India, in my opinion, the Court is required to read the provisions of law which are applicable on the day. When the Court is dealing with an application of an accused under Section 439 read with Section 45 of the PML Act, the provisions of the PML Act are required to be scrupulously followed. The applicant is facing charges for several offences punishable under the provisions of Indian Penal Code which are of Part A to the Schedule of PML Act and, therefore, rigor of Section 45 would be applicable. Therefore, the Court cannot presume that certain offences which were in part B in past shall be treated in the same Part even though they have been amended in the year 2013. Hence, I hereby hold that the rigors of Section 45 would be applicable in the present Page 42 of 45 HC-NIC Page 42 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER case.
Further, it is pertinent to note that the validity of the provisions as well as amended provisions of Section 45 of the PML Act is under consideration before the Hon'ble Supreme Court since Rakesh Kothari, petitioner before the Division Bench of this Court in Special Criminal Application No.4496 of 2014 has challenged the said decision of this Court before the Hon'ble Supreme Court and the same is pending consideration before the Hon'ble Supreme Court.
23. Now dealing with the case on merits, I would like to reproduce certain provisions of PML Act. Section 2 (u), (x) and (y) read as under :-
"2 (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;"
2 (x) "Schedule" means the Schedule to this Act;
2 (y) "scheduled offence" means --
(i) the offences specified under Part A of the Schedule; or
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh rupees or more; or]
(iii) the offences specified under Part C of the Schedule;"
24. Section 3 of the PML Act reads as under :-
"3. Offence of money-laundering :-
Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a Page 43 of 45 HC-NIC Page 43 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering."
25. Sections 23 and 24 of the PML Act reads as under :-
"23. Presumption in inter-connected transactions :-
Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation, [under Section 8 or for the trial of the money-laundering offence, it shall unless otherwise proved to the satisfaction of the Adjudicating Authority or the Special Court], be presumed that the remaining transactions form part of such inter-connected transactions."
24. Burden of proof :- In any proceeding relating to proceeds of crime under this Act -
(a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and
(b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-
laundering.]"
26. As far as merits of the case are concerned, I have gone through various statements made by several witnesses and the applicant himself which has been recorded under Section 50 of the PML Act. Prima facie, the prosecution is successful to make out a case by collecting relevant documents that Crores of rupees have been transmitted to foreign countries through number of fake companies created by the applicant wherein he was Director and was fully aware about the illegal activities going on through his Page 44 of 45 HC-NIC Page 44 of 45 Created On Mon Aug 14 11:44:26 IST 2017 R/CR.MA/27277/2016 ORDER companies. Considering the evidence collected by the Investigating Agency and produced before the Court, it is difficult to satisfy that there are reasonable grounds for believing that the applicant is not guilty of the offences alleged and, therefore, the applicant cannot be released on regular bail.
27. As far as the submission made by Mr. Chaudhary that the applicant is the only accused who is behind bar and, therefore, he may be released on bail cannot be accepted since the said submission was also made earlier when his bail application came to be rejected by this Court. Further, those accused who have been released by this Court mainly on the ground that they were not facing any charges under scheduled offences and, therefore, it has been held that the rigors of Section 45 of the PML Act would not be applicable and considering the facts and circumstances of the case, they were released on regular bail. As far as order passed by coordinate Bench of this Court is concerned, those persons are not co-accused of the present applicant and are facing charges for cricket betting.
28. Therefore, the present application fails on both the grounds and hence, the same is accordingly dismissed. Rule is hereby discharged.
Sd/-
(A.J.DESAI, J.) Savariya Page 45 of 45 HC-NIC Page 45 of 45 Created On Mon Aug 14 11:44:26 IST 2017