Mohammad Arif Vs Directorate Of Enforcement, Govt. of India (Orissa High Court)
High Court of Orissa held that The offence of Money Laundering is nothing but an act of financial terrorism that poses a serious threat not only to the financial system of the country but also to the integrity and sovereignty of a nation. The International Monetary Fund estimates that laundered money generates about $590 billion to $1.5 trillion per year, which constitutes approximately two to five percent of the world’s gross domestic product. The Supreme Court of India has consistently held that economic offences are sui generis in nature as they stifle the delicate economic fabric of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world. The offences, such as this, are committed with a deliberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum left behind to be borne by the unfortunate “starry eyed” petty investors. The perpetrators of such deviant “schemes,” including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial “Faustian bargain” and are grossly unmindful of untold miseries of the faceless multitudes who are left high and dry and consigned to the flames of suffering.
The abuse of financial system, like in the instant case, has great potential to negatively impact a country’s macro economic performance and may also adversely impact its cross-border externalities. Further, such actions by the petitioner can inflict reputational damage of the country in the world of business and commerce both inside the country and abroad. The act of money laundering is done in an exotic fashion encompassing a series of actions by the proverbial renting of credibility from the innocent investors. The offenders often target the unsuspecting, rural and economically distressed populations of our state who while hoping for a dreamy return, part with their hard-earned monies.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. The petitioner has approached this court seeking bail in connection with Complaint Case C.M.C. (PMLA) No.47 of 2017 arising out of ECIR/07/2009/BBSR pending before the Ld. Sessions Judge, Khorda-cumSpecial Court under PMLA, Khorda at Bhubaneswar under Section 439 of the Code of Criminal Procedure, 1973.
2. A brief factual background of the case demonstrates that a case was registered at Sahadevkhunta Police Station, District – Balasore, Odisha bearing FIR No.118/2009 dated 17/07/2009 U/s. 406/420/468/471/34, I.P.C. and Sections 4, 5 and 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 on the basis of a written complaint dated 17/07/2009 lodged by one Niranjan Sahoo, alleging that he had been cheated and defrauded by alluring to invest 10,000/- in the attractive investment Scheme of M/s. Fine Indisales Pvt. Ltd (hereinafter referred as to M/s. “FIPL”). It is further alleged that he has been the receiving end of such deceptive Scheme once again and deposited of Rs.40,000/- therein. He also introduced 20 other persons to invest in such schemes. But he had neither received the said financial product nor the product voucher as per the agreement with M/s. FIPL and the said M/s. FIPL collected huge amounts of money from the public and ultimately duped huge amount from innocent public by giving false assurance of high return for their deposit of money. Thus, he requested for an investigation regarding the money circulation scheme which culminated into registration of a case by the said police station. Subsequently, the investigation of the aforesaid P.S. Case No.118/2009 dt. 17.07.2009 got transferred to CB, CID of Odisha as per order No.189/CID dated 18.07.2009 by registering CB, CID Case No.17 dated 18.07.2009 against officials of M/s. FIPL under the aforesaid sections.
3. On 12.12.2012, this Court while hearing W.P.(C) No.7693/2011,1 directed that looking at the massive financial impact in the case, the investigation of the aforesaid case be handed over to the CBI. In compliance with the said direction, the Central Bureau of Investigation (hereinafter referred to as “CBI”) took over the investigation. Accordingly, CBI Economic Offence Wing, Kolkata registered a case vide No.-RC 02/E/2013-KOL on 01.03.2013 after duly taking over the FIR of CB, CID, Odisha Case No.17/2009 registered U/s. 406/420/468/471/34 of IPC, read with Secs. 4, 5 & 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 against the officials of the said FIPL.
4. Case corresponding to the original FIR was also recorded by the Enforcement Directorate (ECIR/07/2009/BBSR dated 18.11.2009) on the basis of the aforesaid P.S. Case No.118 dated 17.07.2009 as the said FIR revealed the commission of certain Scheduled Offences under PML Act, 2002 and investigation was taken up under various provisions of The Prevention of Money Laundering Act, 2002 (hereinafter referred as “PML Act”).
5. The investigation, thus far, has revealed that M/s. FIPL had floated a fraudulent scheme of their company on 28.08.2008 inviting deposits from public for the said scheme deceitfully and advertised as a “Multi-level marketing scheme” with a terminal ulterior motive to siphon off the funds collected from public. The advertised scheme of FIPL, ex-facie appears to be a bodacious Ponzi scheme, inducing the susceptible depositors by way of misrepresentation, promising immediate refund in case of any default and timely payment of return on the part of FIPL. Investigation, therefore, has prima facie established that the accused persons connected with M/s. FIPL not only criminally conspired and cheated the depositors but also lured them into the scheme with a rogue mindset. This sort of an economic demonology at the hands of M/s. FIPL, its Directors and Shareholders has been instrumental in making a windfall gain of about Rs.703 crores, as revealed from their own
6. Investigation further reveals that the aforesaid sum of money, stained with the sweat, tears and blood of multitudes of innocent people has since been moved around and subjected to Machiavellian layering through a myriad of shell companies and bogus transactions. The money collected from such scheme immediately got transferred to different bank accounts of individuals as well as firms under the management and control of the Promotors/Directors/Shareholders of the said M/s. FIPL which is nothing but an act of sheltering the said “proceeds of crime” as envisaged under Section 2 (u) of the PML Act. The Forensic Audit conducted by the CBI during the course of investigation reveals that the total money invested by the depositors adds up to Rs.703, 50, 00,079/-. The modus operandi adopted while transferring such prodigious sum of ill-gotten wealth with the singular intention of concealing the original source of funds and to project the tainted money as untainted ex facie constitute the offence of money laundering.
7. Scrutiny of the books of account of FIPL further reveals that about Rs.152 Crores were transferred to one M/s. Eve Industries which were further layered by laundering the same to one M/s. Great Entertainments and further to the accounts of M/s. Lemon Entertainment Ltd. where the petitioner was also a Director at the relevant point of time (financial year 2009-10). In this way, the complicity of the petitioner in the instant case is quite visible. This money was transferred to the Bank A/c No.00421300000134 of M/s. Lemon Entertainment whose account was being maintained in DCB Bank, Andheri, Mumbai and A/c. No.020010200044907 maintained in Axis Bank, Lokhandwala Branch, Mumbai. The details of cheques through which the money was transferred from the accounts of M/s. Great Entertainments to the above accounts of M/s. Lemon Entertainment Ltd. are as under:
