Case Law Details
Laxmikant Tiwari Vs Directorate of Enforcement (Chhattisgarh High Court)
Chhattisgarh High Court held that bail application filed u/s. 439 of Cr.P.C. rejected as the applicant is unable to satisfy twin conditions for the grant of bail under Section 45 of the PMLA, 2002.
Facts- This is first bail application filed u/s. 439 of the Code of Criminal Procedure, 1973 for grant of regular bail to the applicant in connection with Crime No. ECIR/RPZO/09/2022 registered at Police Station- Directorate of Enforcement, Zonal Office, Raipur (C.G.) for the offence punishable u/s. 3 & 4 of the Prevention of Money Laundering Act, 2002 (the PMLA, 2002).
The case of the prosecution is that during a search and seizure action u/s. 132 of the Income Tax Act conducted on 30.06.2022 one Mr. Suryakant Tiwari at a hotel room of Hotel Shereton Grand, Bengaluru, certain incriminating materials are said to have been found, based upon which a complaint was lodged by the Income Tax Department at the Kadugodi, Police Station Bengaluru alleging offences u/s. 186, 204 and 353 read with Section120B of the IPC which led to the registration of the FIR. Based up on the further investigation the Enforcement Directorate registered ECIR No. RPZO/09/2022and further investigation was conducted. In the course of the on the present applicant was summoned and finally the applicant was arrested on 13.10.2022.
Conclusion- Hon’ble Karnataka High Court has categorically recorded its finding that no case has been registered against the petitioner in Crime No. 129/2022 and prosecution initiated any proceeding based upon this crime number and the petitioner is not an accused in Crime No. 129/2022, as such, the offence took place at Bengaluru in Crime No. 129/2022 cannot be predicated offence for registering a case under PMLA, 2002 by the ED at Chhattisgarh wherein the applicant along with co-accused Suryakant Tiwari and others are being charged for involving in a money laundering case and the present applicant has been arrested in money laundering case along with co-accused, therefore, even if it is presumed (not accepting it in absence of any better material on record or order from the competent court) that no predicate offence has been levelled, therefore, the applicant is entitled to get bail under PMLA, 2002, is not acceptable and deserves to be rejected.
Held that the applicant is unable to satisfy twin conditions for the grant of bail under Section 45 of the PMLA, 2002, as such, it is not a fit case for grant of bail to the applicant. Accordingly, the bail application filed under Section 439 of the Cr.P.C. is liable to be and is hereby rejected.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. This is first bail application filed under Section 439 of the Code of Criminal Procedure, 1973 for grant of regular bail to the applicant, who has been arrested on 13.10.2022 in connection with Crime No. ECIR/RPZO/09/2022 dated 29.09.2022 registered at Police Station- Directorate of Enforcement, Zonal Office, Raipur (C.G.) for the offence punishable under Section 3 & 4 of the Prevention of Money Laundering Act, 2002 (for short “the PMLA, 2002”).
2. The case of the prosecution is that during a search and seizure action under Section 132 of the Income Tax Act conducted on 30.06.2022 one Mr. Suryakant Tiwari at a hotel room of Hotel Shereton Grand, Bengaluru, certain incriminating materials are said to have been found, based upon which a complaint was lodged by the Income Tax Department at the Kadugodi, Police Station Bengaluru alleging offences under Sections 186, 204 and 353 read with Section120B of the IPC which led to the registration of the FIR. Based up on the further investigation the Enforcement Directorate registered ECIR No. RPZO/09/2022and further investigation was conducted. In the course of the on the present applicant was summoned and finally ant was arrested on 13.10.2022.
3. It is case of the prosecution that the prosecution has recovered diaries from the possession of Smt. Soumya Chourasiya an the main accused- Suryakant Tiwari, which would reveal transaction of cash money between Smt. Soumya Chourasiya and the main accused- Suryakant Tiwari. It is also case of the prosecution that object of Suryakant Tiwari to tamper and destroy the important documents as well as electronic gadgets and Suryakant Tiwari along with his brother, Rajnikant Tiwari and his associates Hemant Jaiswal, Jogendra Singh, Moinuddin Quaraishi, Nikhil Chandrakar, Roshan Singh and others were involved a criminal conspiracy to run a parallel system of collecting illegal levy on coal and were doing illegal and unaccounted cash movement as per instructions of Suryakant Tiwari. All the above mentioned associates of Suryakant Tiwari had admitted in their statements recorded before the Income Tax officials that they were doing the illegal levy collection on the instructions of Suryakant Tiwari. The proceeds received from the above referred to action were being used for taking undue advantage and to influence public servants by corrupt and illegal means and by exercise of personal influence.
4. The role of the present applicant is that he has handled the proceeds of crime as per the instructions of Suryakant Tiwari. He has admitted that on a daily basis, the collected illegal cash as parked at his residence and as per the instructions ant Tiwari, he would pay/move the PoC. Further, as per ail investigation done by ED, it is clear that he used his children’s name to take accommodation entries and he illegal cash and acquired landed assets for the purpose of laundering the PoC. He has also handled the proceeds of crime and helped Suryakant Tiwari in concealing of the same. As per the entries found in the diaries seized, it is clear that there are direct transactions worth Rs. 26 crore in his own name. He has also acquired some properties in his name to acquire immovable properties infusing the proceeds of crime over and above the registered value of property. The registered value of property identified so far, acquired out of proceeds of crime is estimated to be Rs. 13,36,000/- only. Unaccounted cash was layered in these purchases. Thus, the worth of these assets which were purchased and then sold to Sunil Agarwal, is nothing but PoC in the hands of Laxmikant Tiwari is covered in the definition as per Section 2(1)u of PMLA, 2002.
5. It is also case of the prosecution that the present applicant in his statement recorded under Section 50(2) and 50(3) of the PMLA, 2002 has admitted that upon receiving advance information regarding apprehension of ED raid, he got a call from his nephew-Suryakant Tiwari, Mobile No. 6264044804 asking him to leave his house and stay at Shri Anmol Dubey’s house at Anand Nagar, Raipur. He has also admitted that Suryakant Tiwari asked him to move out the amount of Rs. 1.5 crore kept in house of Kumar Chaudhary. He has also admitted that the land purchased in his name in Village- Kharora, Basonda owing unsecured loan by Shri Suryakant Tiwari. The e income earned from these lands was used by Tiwari. He has also admitted that he become partner in firm M/s Maa Bhadrakali and in M/s Bajrangbali Builders at the behest of Suryakant Tiwari and all the documents related to this firms are with Suryakant Tiwari. He also admitted that during IT raid, Rs. 6.5 crores in cash and jewelry worth Rs. 3.25 crores were recovered from his house which belongs to his nephew Suryakant Tiwari.
6. It is also case of the prosecution that Utkarsh Tiwari whose statement recorded under Section 50(2) & 50(3) of the PMLA, 2002, has admitted that Suryakant Tiwari spoke to him and his father- Laxmikant Tiwari night before the search carried out by the Enforcement Directorate asked to move the amount of Rs. 1.5 crores cash from the house of Roop Kumar Chaudhary. It is also case of the prosecution that in the statement given by Ved Prakash Sahu land broker recorded under Section 50(2) & 50(3) of PM LA, 2002 has admitted that Suryakant Tiwari has given him Rs. 15 lac cash which he had deposited in his bank account and on instruction of Suryakant Tiwari, transferred the amount in the account of Laxmikant Tiwari. It is also case of the prosecution that the applicant who is uncle of Suryakant Tiwari and is a lawyer by profession used to hide and keep the illegal cash collected by Suryakant Tiwari in his house on regular basis. On a sis an amount of Rs. 50 lacs to 2 crore cash were kept use and Laxmikant Tiwari would keep & handle & the cash as per instructions of Suryakant Tiwari. This so been admitted by Laxmikant Tiwari in his statement under Section 50 of PMLA, 2002 and is also evident from the entries in the diary seized from Rajnikant Tiwari, This also establishes that the entires in the diary seized by income tax department are true record of cash collected/moved/ handled by Suryakant Tiwari & his associates.
7. It is also case of the prosecution that Laxmikant Tiwari knew that cash obtained by Suryakant Tiwari was out of illegal means, he still helped him in hiding it and also purchased prooperties in his and his family members name out of it. He has been loyally assisting Suryakant Tiwari is also evident from the fact even after the IT raids he had helped in disposing of cash amount of Rs. 1.5 crore belonging to Suryakant Tiwari. Thus, Laxmikant Tiwari has knowingly assisted Suryakant Tiwari in concealment of proceeds of crime and also projecting the same as untainted by purchasing property out of it and hence he is found guilty of offence under Section 3 of the PMLA, 2002 punishable under Section 4 of the said act.
8. Learned Senior counsel for the applicant would submit that it is a case where the applicant would be entitled for the benefit under the exceptions carved out under Section 45 of the PMLA, 2002. He would further submit that now the investigation is completed, there is no further requirement of the applicant to further custody. Moreover, the applicant has cooperated with investigating Agency on all occasions and there is no further of the applicant misusing the bail or would influence in er the investigation or tampering of the evidence nor is possibility of the present applicant absconding either.
9. On the basis of the aforesaid information/ documents, prima facie a case for offence of the PMLA, 2002 punishable under Section 4 of the said Act appears to have been made out.
10. The role of the present applicant is also mentioned in the ECIR which provides that there is financial transaction between the present applicant and other associates of Surya Kant Tiwari. It has also been mentioned that Surya Kant Tiwari had purchased various immovable properties in his name and in the name of his family members at Mahasamund, Bemetara, Naya Raipur etc and the entire purchase considerations were provided by Suryakant Tiwari, but the details are not revealed like sale-deed,survey etc. of all these benami assets which have been purchased using proceeds of crime. The further interrogation and confrontation with records from the SRO/IGRS are necessary to trace out the proceeds of crime and hence, an extension of remand is required. The recording of statements under Section 50 of the PM LA, 2002 of various other associates of Suryakant Tiwari is under process, therefore, confrontation of those statements to the accused needs to be done. Hence, further Enforcement Directorate custody of the accused person is required.
11. It has been further stated that on the basis of investigation conducted, it is clear that the present applicant has the know- how about the benami properties/assets of Suryakant Tiwari being a close associate and relative. The further custodial remand of ED of the present applicant is required to find out the real utilization of proceeds of crime generated by way of criminal activities and also to trace the whereabouts of the main accused.
12. The prosecution has also been able to recover diaries from the possession of the applicant and the main accused person, which would reveal transaction of cash money between the applicant and the main accused Suryakant Tiwari and other accused persons like-Manish Upadhyay, the present applicant etc. who are said to be relatives of Suryakant Tiwari.
13. Learned Senior Advocate appearing for the applicant would submit that the charge-sheet has been filed by the prosecution on 16.06.2022 and there is no evidence with regard to conspiracy, therefore, there is no schedule offence neither at Karnataka nor at Chhattisgarh and there is no schedule offence as enumerated in PMLA, 2002 and the proceeding in this act is not maintainable and the investigation has already been completed, therefore, he may be enlarged on bail. He would further submit that on 16th June, 2023 charge-sheet is filed wherein predicated offence has not been mentioned, as such, the applicant is fulfilling the twin conditions which are required to be fulfilled for getting bail, thus, the applicant deserves to be enlarged on bail. He would further submit that in the charge- as been clearly mentioned that since the applicant is of offence under Section 384 of the IPC with his n at Chhattisgarh for which he would be prayed to Chhattisgarh Police through proper channel and also offence is proved due to lack of evidence under Section 120B of IPC from which acquitted from charge-sheet. It has also been mentioned that the applicant is acquitted under Section 186 of IPC from charge-sheet as per Section 195A(1) of the Cr . P.C. It is pertinent to mention here that the charge-sheet was filed in the language of Kannad which is translated into english and english copy has been submitted by the applicant. He would further submit that the offence of money laundering for which the applicant is being tried, is not in the mind of investigation agency and it is complaint case and according to learned Senior counsel the investigation part is over, as such, no custodial remand is required and would pray for releasing the applicant on bail. To substantiate his submission, learned senior counsel for the applicant would refer to the judgment rendered in case of Vijay Madanlal Chaudhary & others Vs. Union of India & others, reported in 2022 SCC OnLine SC 929, Parvathi Kollur Vs. State by Directorate of Enforcement, Crl. A. No. 1254/2022 (decided on 16.08.2022, Indrani Patnaik & another Vs. Directorate of Enforcement & others WP(C) No. 368/2021 decided on 03.11.2022, M/s Deccan Mining Syndicate Pvt. Ltd. & another Vs. Asst. Director, Directorate of Enforcement WP No. 288/2022 decided on 22.04.2022, Asst. Directorate of Enforcement Vs. M/s Deccan Mining e Pvt. Ltd. & another SLP (Crl) Diary No. 34047/2022 on 05.12.2022, Directorate of Enforcement Vs. ep Singh & others SLP (Crl) Diary No. 42315/2022 on 10.02.2023, M. Nagarajan & Anr Vs. Directorate of Enforcement & Ors. SLP (Cr) 10917/2022, Order dt. 23.01.2023, Harish Fabiani & Ors. Vs. Enforcement Directorate & Ors. Reported in 2022 SCC Online Del 3121 (DHC), Sanjay Pandey Vs. Directorate of Enforcement, reported in 2022 SCC Online Del 4279, Naresh Goyal Vs. Directorate of Enforcement & Anr. Crl WP 4037/2022, decided on 23.02.2023, Pushpam Appala Naidu & others Vs. Directorate of Enforcement, Crl. OP 2279/2019 decided on 12.09.2022 (Mad HC), Vijay Sai Reddy Vs. Enforcement Directorate Crl. Petition No. 1216/2021, decided on 08.09.2022 (Tel HC), Jagati Publications Vs. Enforcement Directorate, reported in 2022 SCC Online TS 1607 (Tel HC), M/S Bharathi Cement Corporation Pvt. Ltd. Vs. Directorate of Enforcement & others, Crl. Rev. Case No. 87/2021, decided 08.09.2022 (Tel HC), Rajeev Sharma Vs. ED, reported in 2022 SCC Online Del 47, Ashish Singh & others Vs. State & Ors, Crl.O.P. 30980 of 2019 (Mad HC), RKM Powergen Pvt. Ltd. Vs. ED & another WP No 24700 of 2021 (Mad HC), Chintels India Ltd. Vs. Union of India, W.P. (Crl.) 979/2020, decided on 07.08.2020 (DHC), Yash Tuteja & another Vs. Union of India & others, WP (Crl) 153/2023, 28.04.2023 (SC), Southern Agrifurane Industries Vs. Asst. Director Directorate of Enforcement, SLP . 154-155/ 2023, order dt. 10.04.2023 (SC),Directorate of Enforcement Vs. M/s Obulapuram Mining Pvt. Ltd. Crl. A. No. 1269/2017, Order dt. 02.12.2022 (SC), Adjudicating Authority (PMLA) & others Vs. Ajay Kumar Gupta, Crl. A. 391-392/2018, decided on 02.12.2022 (SC), Omkar Realtors & Developers Vs. AA, PMLA WP (C) No. 11473/2022, decided on 16.02.2023, EMTA Coal Ltd. Vs. Deputy Director, Directorate of Enforcement, WP (C) No. 3821/2022, decided 10.01.2023 (DHC), Richa Saxena Vs. Directorate of Enforcement & others WP 3901/2023 (GM-RES), decided on 30.05.2023 (Karnataka HC), Prakash Industries Ltd. Vs. Directorate of Enforcement, 2022 SCC OnLine Del 2087 (DHC), Mohinder Singh Gill & another Vs. Chief Election Commissioner, New Delhi & others reported in (1978) 1 SCC 405, Commissioner of Police Bombay Vs. Gordhandas Bhanji reported in 1951 SCC OnLine SC 70, Om Prakash Vs. Ministry of Indian Railway reported in 2008 (108) DRJ 462, Abdul Shafiq Hanfi Vs. Deputy Director of Education, Allahabad, reported in 2002 SCC OnLine 344, Surya Kumar Dikshit Vs. DIOS Jalaun, reported in 1991 SCC OnLine All 709, M/s Vijayanagar Educational Trust Vs. Karnataka State Pollution Control Board, reported in ILR 2002 KAR 1231.
14. On the other hand, learned counsel for the respondent opposing pplication would submit that the application filed by the seeking to bring subsequent developments on record filed wherein merely the order dated 16.06.2023 of the icial Magistrate (Rural), Bengaluru taking cognizance annexed without submitting the charge-sheet filed by Karnataka Police. He would further submit that the cognizance order has to be read in the light of the contents of the charge-sheet filed by Karnataka Police and merely reading the cognizance order without the charge-sheet would give an incomplete picture of the findings with respect to investigation conducted under scheduled offence by Karnataka Police. The cognizance order dated 16.06.2023 can at best be relied upon to claim the existence of a prima facie case of the offences submitted as part of the charge-sheet and nothing more. Nothing in this order is there to show that the investigation by Bengaluru Police is complete and has attained finality.
15. He would further submit that the applicant is trying to create a false narrative that the predicate crime has been quashed in this money laundering investigation. Even Hon’ble the Chief Minister of Chhattisgarh has gone through on record before the media proclaiming that the very foundation of the coal levy ECIR is gone. He has grossly misinterpreted the cognizance order-sheet of the lower court at Bengaluru. He has mischievously not produced the certified copies of the charge-sheet filed by the police. The copy of the charge-sheet received by ED has been analyzed and its details would show that the applicant has in perjury and is making shocking and desperate attempts to mislead the court to obtain bail. ED has applied forthe certified and translated copies of the charge-sheet and will he same in due course. In normal course, ED would have waited to get the certified copy of the charge-sheet, but seeing the attempts being made by the applicant to mislead the Hon’ble Court, leave is prayed from the Court to allow the respondent department to bring the succeeding facts to its knowledge on urgent basis. In absence of certified copy, the relevant para i.e. column No. 2 in charge-sheet is freely translated to english which reads as under:- (1) The accused is in judicial custody in the case registered by ED (Enforcement Directorate) and the accused is not arrested. (2) Since it is seen that the accused along with his associates have committed the offence under Section 384 of the IPC in the State of Chhattisgarh for taking action a report will be submitted through proper channel to Chhattisgarh Police. Section 120B of the IPC is dropped in charge-sheet for having no proof and due to lack of evidence. (3) The Section 186 of IPC and Section 195A(1) of Cr.P.C. are dropped in charge-sheet.
16. He would also submit that a plain reading of the above relevant charge, column No. 2 in the charge-sheet filed by Karnataka Police clearly shows that (a) The investigation is not complete. (b) The allegations under See 384 IPC have not been dropped. Infact, Bengaluru Police have not conducted any investigation in that regard and are in the process of writing to Chhattisgarh investigation/assistance. (c) Further, it is not out of mention that ED Raipur had disclosed its detailed on complaint under Section 66(2) of the PMLA to Police on 31.01.2023. There is no whisper about this in the charge-sheet filed by the Police. The seizure of cash etc by IT department at Bengaluru is also not discussed in this charge-sheet. Thus, it is clear that the Police investigation is not complete. Thus, it is clear that the applicant is painting a false narrative to mislead the Hon’ble Court to serve their own purposes. He would also submit that it is also learnt that the complainant in the FIR before the Income Tax Department, Bengaluru, is resorting to avail legal remedies at Bengaluru Court to challenge the removal of Section 120B of IPC and filing of charge-sheet. hurriedly without completing full investigation. Hence, even in the case of removal of Section 120B IPC, no finality has been reached till now. He would further submit that the ED has made a detailed disclosure dated 24.03.2023 under Section 66(2) of the PMLA, 2002 against Sameer Vishnoi IAS and Saumya Chaurasia, one of the main accused persons, to Chhattisgarh State Government explaining findings of ED for the acts done by the aforesaid accused persons in facilitating the Coal Syndicate as well as receipt of the Proceeds of Crime generated by the Syndicate Chhattisgarh State Government should have immediately lodged an FIR & Investigated the disclosures made by ED. The letters of ED disclose very serious predicate allegations. Therefore, till this disclosure by ED is not ed and dealt with, it cannot be concluded that there is ate offence in the instant extortion case.
17. He would further submit that the said FIR was challenged by the in Writ Petition No. 21944/2022 (GM-RES) before High Court challenging registration of FIR dated 12.07.2022 in Crime No. 129/2022 and complaint dated 12.07.2022 for the offence punishable under Section 120B, 353 of IPC pending before the Additional Chief Judicial Magistrate, Bengaluru. The High Court of Karnataka vide its order dated 29.11.2022, has dismissed the same by recording its finding at paragraphs 19, 20, which reads as under:-
“19. But here in this case, the name of the present petitioner has neither appeared in the first information nor in the complaint/first information or in the requisition of the police for investigating for the offence under Section 384 of IPC, in order to challenge the FIR and investigation in Crime No.129/2022 registered by Kadugodi police. This petitioner has no locus standi to question the investigation or quashing the FIR which was registered against the accused Surykanth Tiwari.
20. The police have not registered any case against this petitioner in Crime No.129/2022 and the prosecution initiated any proceedings based upon this crime number, this petitioner is not an accused in the Crime No.129/2022, therefore, he has no authority/right to question the same before this Court. If at all any action was taken by the prosecution and the petitioner aggrieved by that, he has to take the contention before the Court at Chhattisgarh and not in this case, before this Court. The matter requires to be investigated by the police to verify whether the accused/Suryakanth Tiwari is involved in destroying the electronic and other documentary evidence at Bengaluru in respect of offence under section 384 of IPC, which may be committed at Chhattisgarh.
21. As regards to the another contention raised by the learned senior counsel for petitioner that the offence took place at Bengaluru in Crime No.129/22 cannot be a predicate offence for registering case under PML Act by the ED at Chhattisgarh, wherein this petitioner was made as co-accused along with accused Suryakanth Tiwari and others for involving in the money laundering case. In this aspect, when the Suryakanth Tiwari was accused in predicate offence and when money laundering case has been registered against him and this petitioner was arrested in the money laundering case as co-accused, therefore, he has to challenge the same before the Special Court at Chhattisgarh or before the High court of Chhattisgarh against registering of case by the ED by taking the offence committed at Bengaluru as predicate offence. Of course, the petitioner has no role in respect of the offence with respect to the offence under Section 204, 186 and 354 of IPC at present, but Section 120B and 384 of IPC the matter requires to be investigated by the police. If no offence committed at Bengaluru in respect of 384 of IPC or 386 of IPC, then they can transfer the said case to the State of Chhattisgarh police who is having jurisdiction. Therefore, in view of the judgment relied by the learned ASG and principle laid down by the Hon’ble Supreme Court in Neeharikas’s case stated supra and in Dharmaraj’s case and Siddharth Mukehs’s case, I am of the view when the petitioner is not an accused in crime No.120/2022 and his name was neither found in the FIR or the first information statement or in the request made by the police for investigating the offence under Section 384 of IPC, this petitioner cannot question the same. If the ED consider the
Crime No.129/2022 as a predicate offence and Section 384 of IPC has schedule offence for initiating any proceedings it has to be challenged before the Chattisgarh State where this petitioner is an accused. Therefore, the petition filed by this petitioner is liable to be dismissed for the aforesaid reasons.”
18. Learned counsel for the respondent would submit that since the present applicant was not an accused in Crime No. 129/2022, therefore, he cannot take any advantage of not including the predicate offence for invoking the provisions of PMLA, 2002. He would further submit that the person who named as accused in the predicate offence, against whom the prosecution in the predicate offence is quashed or is discharged or acquitted, the benefit cannot be extended to a person not been arraigned as an accused in the offence, because the offence under the a stand alone offence and is different and m predicate offence and would pray for rejection of the bail application. In support of his contention, learned counsel for the respondent would refer to the judgment rendered by Hon’ble the Supreme Court in the case of Lalita Kumari Vs. Govt. of U.P., reported in (2014) 2 SCC 1 wherein it has been held at paragraph 87 as under:-
“87. The Code contemplates two kinds of FIRs the duly signed FIR under Section 154(1) is by the informant to the officer concerned at the police station. The second kind of FIR could be which is registered by the police itself on any information received or other than by way of an informant [Section 157(1)] and even this information has to be duly recorded and the copy should be sent to the Magistrate forthwith. The registration of FIR either on the basis of the information furnished by the informant under Section 154(1) of the Code or otherwise under Section 157(1) of the Code is obligatory…”
Thus, it would therefore be premature, at this stage, to rule out all possibility of commission of the scheduled offences under Sections 384 & 120B of IPC.”
19. He would also refer to the judgment rendered by Hon’ble the Supreme Court held in case of Vijay Madanlal Choudhary Vs. Union of India wherein it has been held at paragraph 33 as under:-
“33. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money- dering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with section 3. Taking any other view would be rewriting hese provisions and disregarding the express language of definition clause “proceeds of crime”, as tains as of now.”
20. He would further submit that the Income Tax Department is the main agency that is also investigating this case and on whose complaint the FIR 129/2022 registered by PS. Kadugodi, White field, Bengaluru had been registered. The Income Tax Department has also filed its Prosecution Complaint against Suryaknat Tiwari, Saumya Chaurasia, Rajnikant Tiwari, Laxmikant Tiwari (the Instant Applicant), Nikhil Chandrakar, Rahul Kumar Singh, Navneet Tiwari, Parekh Kumar Kurrey, Sheikh Moeenuddin Qureshi, Chandra Prakash Jaiswal, Roshan Kumar Singh, Hemant Jaiswal, Jogendra Singh, Manish Upadhyay & Sameer Vishnoi under schedule offence Section 420 & 120B of IPC before the Competent Forum. The complaint filed by IT department also alleges commission of the offences under Sections 420 & 120B of IPC which are the scheduled offences to the PMLA, 2002. This is a new predicate offence which pertains to the coal levy scam in Chhattisgarh and in fact, has leveled serious charges against the named accused persons for indulging in conspiracy to cheat and evasion of tax on illegal extortion of levy from Coal transporters. This new predicate crime has been included in the ongoing Money laundering investigation in file No ECIR/RPZO/9/2022 and the same has been informed to PMLA Adjudicating Authority immediately.
21. He would also submit that Section 420 of IPC being a scheduled nder PMLA, 2002 and having been invoked by IT nt, will also have to be investigated from the angle of eneration of proceeds of crime and layering thereof in violation of Section 3 of PMLA, 2002. Thus, the contention of the accused that there is no predicate offence is factually far from the truth. It is submitted that in the light of the submissions made in the preceding paragraphs, at this stage it cannot be said that there is no existing scheduled offence, as claimed by the applicant. In this regard, attention is invited to the judgment of Hon’ble Supreme Court in Criminal Appeal No. 534 of 2023 (@SLP (Cr) No. 8260/2021) The Directorate of Enforcement Vs. M. Gopal Reddy & another, wherein it has been observed at paragraph 6.1 as under:-
“6.1 Now so far as the submissions on behalf of respondent No. 1 that respondent No I was not named in the FIR with respect to the scheduled offence and that the other accused are discharged/acquitted is concerned merely because other accused are acquitted, it cannot be a ground not to continue the investigation against respondent No. An enquiry/investigation is going on against respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation itself is sufficient at this stage”.
22. He would also submit that the applicant or the accused in the scheduled FIR have neither been acquitted nor discharged of commission of the scheduled offence and neither has the schedule offence FIR been quashed. Hence, it is prayed that the instant anticipatory bail application may kindly be rejected. To substantiate his submission, he would also refer to the judgment Pankaj Grover Vs. ED, Criminal Misc Anticipatory Bail Application under Section 438 of Cr. P.C. No. 7661/2021 on 26.08.2021), Mohd. Arif Vs. Directorate of Enforcement, Govt. of India, BLAPL No. 2607/2020 (decided 2020), Laxmikant Tiwari Vs. State of Karnataka & others, Writ Petition No. 21944/2022 (GM-RES) (decided on 29.11.2022), Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, Department of Revenue, First Appeal No. 527/2010 (decided on 05.08.2010), Y.S. Jagan Mohan Reddy Vs. CBI, reported in (2013) 7 SCC 439.
23. I have heard learned counsel for the parties and perused the documents placed on record including case diary with utmost satisfaction
24. Before adverting to the facts of the case, it is expedient for this Court to extract Section 45 of the PML Act, 2002, which reads as under:-
“Section 45 of PMLA, 2002- 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 [under this Act] 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 [or is accused either on his own or along with other co- used of money- laundering a sum of less than one e rupees], may be released on bail, if the Special rt so directs:
vided further that the Special Court shall not take nizance of any offence punishable under Section cept upon a complaint in writing made by—
(i) the Director; or
(ii) any officer of the Central Government or a State Government t authorised in writing in this behalf by the Central Government by a general or 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 any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, 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.”
25. I have also considered the judgments submitted by learned senior counsel for the applicant, they are distinguishable from the facts and circumstances of the present case as there was closure report submitted by the investigating authorities, which has been accepted by the concerned magistrate. Even since present applicant was not accused in Crime No. 129/2022, therefore, he cannot take any advantage of alleged discharged by the police at Bengaluru under Section 120B of IPC to get bail under the PM LA, 2002 or to fulfill twin conditions for grant of bail. Also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory required. Also considered the judgment rendered by Hon’ble Division Bench of Madras High Court in N. Umashankar Vs. The Assistant Director, Directorate of Enforcement, , reported in MANU/SCOR/25324/2022, wherein Division Bench of Madras High Court has examined 5 of the PMLA, 2002 and has held at paragraph 18 as under;-
18. It is also brought to the notice of this Court by the respondent in the counter affidavit that the documents collected would prima facie disclose that all the accused have committed acts of money laundering under Section 3 of the Prevention of Money Laundering Act and punishable under Section 4 of the said Act and the petitioners, during police custody also, did not co-operate with them and despite the complaint has been filed, further investigation is also in progress. Even before the Hon’ble Supreme Court in S.L.P. (Crl.) Nos. 7563-7565 of 2021, the respondent submitted that the petitioners are not co-operating during the investigation. Even before this court the learned Special Pubic Prosecutor appearing for the respondent submitted that the petitioners never co-operated for the investigation and therefore, the petitioners should not be enlarged on bail. It is also brought to the notice of this Court by the learned Special Pubic Prosecutor that even after the registration of the criminal complaint against the petitioners, they have indirectly started new Companies by using other names. 19. In view of the past conduct of the petitioners, this court does not believe that the petitioner are not guilty of the alleged offences and in Page 38/41 such circumstances, this court cannot give a finding that the petitioners are not likely to commit offence while on bail. It is also alleged that if the petitioners are enlarged on bail, there is every likelihood that the petitioners may flee the jurisdiction of this Court to avoid the process of law. In these circumstances, we are not inclined to grant bail to the petitioners.
In the result, the Criminal Original Petitions are dismissed.
No costs.”
26. Against the judgment passed by Madras High Court, the accused- N. Umashankar has preferred SLP No. 620/2022 before Hon’ble the Supreme Court, which has been dismissed on 25.02.2022. Hon’ble the Supreme Court has passed by order:-
“We are not inclined to interfere in these Special ve Petitions. The Special Leave Petitions are missed accordingly.
However, we direct the prosecution/Investigating ncy to ensure that the trial is concluded with ost expedition. Pending applications, if any, stand disposed of.”
27. Hon’ble the Supreme Court in Directorate of Enforcement Vs. Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on 05.2023 has held at paragraph 6 & 7 as under:-
“6. At the outset, it is required to be noted that respective respondent No. 1 – accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered. Section 45 of the PML Act, 2002 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 [under this Act] 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 [or is accused either on his own or along with other co-accused of money- laundering a sum of less than one crore rupees], may be released on bail, if the Special Court so directs:
vided further that the Special Court shall not take nizance of any offence punishable under Section cept upon a complaint in writing made by—
(i) the Director; or
(ii) any officer of the Central Government or a State ernment authorised in writing in this behalf by the tral Government by a general or special order e in this behalf by that Government.
[(1-A) Notwithstanding anything contained in the code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, 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.”
By the impugned judgment(s) and order(s) and while granting bail, the High Court has not considered the rigour of Section 45 of the PML Act, 2002.
6.1 Even otherwise, the High Court has not at all considered the nature of allegations and seriousness of the offences alleged of money laundering and the offences under the PML Act, 2002. Looking to the nature of allegations, it can be said that the same can be said to be very serious allegations of money laundering which are required to be investigated thoroughly.
6.2 Now so far as the submissions on behalf of the respective respondent No. 1 that respective respondent No. 1 were not named in the FIR with respect to the scheduled offence(s) and/or that all the other accused are discharged/acquitted in so far as the predicated offences are concerned, merely because other accused are acquitted/discharged, it cannot be a ground not to continue the investigation in respect of respective respondent No. 1. An enquiry/investigation is going on against respective respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation for the scheduled offences itself is sufficient at this stage.
6.3 From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that chargesheet has been filed against respective respondent No. 1 – accused and therefore, the investigation is pleted. However, the High Court has failed to ce and appreciate that the investigation with ect to the scheduled offences under the PML Act, 2 by the Enforcement Directorate is still going on. ely because, for the predicated offences the rge sheet might have been filed it cannot be a und to release the accused on bail in connection the scheduled offences under the PML Act, 2. Investigation for the predicated offences and investigation by the Enforcement Directorate for scheduled offences under the PML Act are different and distinct. Therefore, the High Court has taken into consideration the irrelevant consideration. The investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is till going on.
7. As observed hereinabove, the High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications after taking into consideration the observations made hereinabove.”
28. Considering the judgment of High Court of Karnataka in case of Laxmikant Tiwari (present applicant) (supra), wherein Hon’ble High Court of Karnataka has categorically recorded its finding that no case has been registered against the petitioner in Crime 129/2022 and prosecution initiated any proceeding based upon this crime number and the petitioner is not an accused in Crime No. 129/2022, as such, offence took place at Bengaluru in Crime No. 129/2022 cannot be predicated offence for registering case under PMLA, 2002 by the ED at Chhattisgarh wherein the applicant along with co-accused Suryakant Tiwari and others are rged for involving in a money laundering case and the applicant has been arrested in money laundering case along with co-accused, therefore, even if it is presumed (not it in absence of any better material on record or order competent court) that no predicate offence has been levelled, therefore, the applicant is entitled to get bail under PMLA, 2002, is not acceptable and deserves to be rejected and also considering the case diary and other material placed on record, which prima facie shows involvement of the applicant in crime in question, therefore, considering entirety of the matter, this Court is of the opinion that the applicant is unable to satisfy twin conditions for grant of bail under Section 45 of the PMLA, 2002, as such, it is not a fit case for grant of bail to the applicant.
29. Accordingly, the bail application filed under Section 439 of the P.C. is liable to be and is hereby rejected.
30. The observation made by this Court is not bearing any effect on the trial of the case. The learned trial court will decide the criminal trial in accordance with evidence, material placed on record without being influenced by any of the observation made by this Court while deciding the present bail application.
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