Ramesh Manglani Vs Directorate of Enforcement (Delhi High Court)
Delhi High Court granted regular bail on the reasonable grounds based on which it can be believed that the petitioner is not guilty of offence under section 3 of PMLA and also that petitioner has materially co-operated in the investigation.
Facts- By way of the present petition under section 439 of the Code of Criminal Procedure, 1973 read with section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), the petitioner seeks regular bail in proceedings arising from case registered by the Enforcement Directorate (ED) under Sections 3 and 4 of the PMLA.
The FIR was registered on the complaint of Vinod Rajagopalan in his capacity as the Authorised Signatory of M/s. Malav Holdings Private Limited (MHL, for short), alleging that the accused persons had siphoned-off an amount of Rs.18.88 crores from one M/s. Ligare Aviation Limited (Ligare Aviation) in 2014-15 on the basis of fake/fictitious invoices.
The petitioner, who is admittedly a resident of Dubai, arrived in India on 02.04.2022, when he was intimated by the immigration authorities about a look-out-circular issued against him. The petitioner was summoned by the ED on 05.04.2022 to join investigation and joined investigation on 07.04.2022. The petitioner was subsequently arrested by the investigating agency on 03.08.2022 from his residence in Mumbai.
Notably, the main thrust of the petitioner’s submission is that the petitioner exercised no control over the affairs of Phoenix FZC and that he was neither an employee, nor did he hold any key position in the management of the company. Moreover, it was contended that the petitioner had no knowledge as regards the nature of the transactions and was only functioning as an Authorised Signatory to operate the bank account of Phoenix FZC, and was acting on instructions received from Sahil Mehta and Sohan Mehta, who were his family friends.
It is further submitted that the petitioner’s wife was appointed as the General Manager of Phoenix FZC at the time of establishing the company, since a resident of the UAE is required for purposes of setting-up a company in that country. The petitioner was only appointed as the Authorised Signatory for managing the banking operations of Phoenix FZC as he was residing in the UAE. However, it is argued that the petitioner was never involved in the affairs of Phoenix FZC, other than executing banking transactions through its bank account on instructions of the persons mentioned above.
Conclusion-In the circumstances, for the purpose of grant of regular bail to the petitioner, this court is satisfied that there are reasonable grounds to believe that the petitioner is not guilty of the offence under section 3 of the PMLA. Further, considering that the prosecution complaint has been filed before the learned trial court; that the petitioner has materially co-operated in the investigation; and in view of the nature of the alleged role played by the petitioner in the allegedly offending transactions, this court is also satisfied that the petitioner is not likely to commit any offence under PMLA while on bail.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
By way of the present petition under section 439 of the Code of Criminal Procedure, 1973 (‘Cr.P.C.’ for short) read with section 45 of the Prevention of Money Laundering Act, 2002 (‘PMLA’ for short), the petitioner seeks regular bail in proceedings arising from ECIR No. DLZO-II/35/2020/721 dated 24.09.2020 registered by the Enforcement Directorate (‘ED’ for short) under Sections 3 and 4 of the PMLA.
2. The matter arises from FIR No. 1/2020 dated 01.01.2020 registered at P.S. Economic Offences Wing (‘EOW’ for short), in respect of the predicate offences alleged under sections 409, 467, 468, 471, 477A and 120B of the Indian Penal Code, 1860 (‘IPC’ for short). The FIR was registered on the complaint of one Mr. Vinod Rajagopalan in his capacity as the Authorised Signatory of M/s. Malav Holdings Private Limited (‘MHL‟ for short), alleging that the accused persons had siphoned-off an amount of Rs.18.88 crores from one M/s. Ligare Aviation Limited (‘Ligare Aviation‟ for short) in 2014-15 on the basis of fake/fictitious invoices.
3. The complainant company is stated to be aggrieved since it is an indirect shareholder in Ligare Aviation, in that the complainant company statedly holds 50% shares in RHC Holding Pvt. Ltd., which in turn holds a 30% stake in Ligare Aviation. Further, RHC Holding Pvt. Ltd. also holds 67.27% in RHC Finance Pvt. Ltd., which in turn holds the rest 70% in Ligare Aviation.
4. The petitioner, who is admittedly a resident of Dubai, arrived in India on 02.04.2022, when he was intimated by the immigration authorities about a look-out-circular issued against him. The petitioner was summonsed by the ED on 05.04.2022 to join investigation. He joined investigation on 07.04.2022. The petitioner was subsequently arrested by the investigating agency on 03.08.2022 from his residence in Mumbai.
5. The petitioner had previously filed a petition seeking bail before the learned trial court, which came to be dismissed on 31.08.2022. Thereafter, the petitioner filed a petition bearing Bail Application No. 2658/2022 before this court, which was withdrawn by the petitioner vide order dated 13.10.2022 with liberty to file for the same relief before the learned ASJ, Patiala House Courts, New Delhi since the respondent had filed the prosecution complaint before that court on 01.10.2022. A second bail application filed before the learned ASJ was also dismissed on 26.11.2022.
Brief Facts
6. A brief conspectus of the facts and allegations leading-up to the filing of the present bail petition is as follows :
6.1. As per the FIR, the accused persons hatched a conspiracy “to cheat the complainant company” by siphoning-off funds from the bank accounts of Ligare Aviation, causing a loss to the tune of Rs.18.88 crores to the complainant company.
6.2. The FIR was registered against 16 individuals and companies, inter-alia against one Sanjay Godhwani (former Managing Director of Ligare Aviation) and his close associate Sunil Godhwani, and a company by name M/s. Phoenix International FZC („Phoenix FZC‟ for short), with which company, the petitioner is alleged to be connected.
6.3. The petitioner however, was not named as an accused in the FIR.
6.4. Sections 467, 471 and 120B IPC mentioned in the FIR are offences under Part-A of the Schedule to the PMLA; and accordingly, ECIR bearing No. ECIR/DLZO-II/35/2020/721 was registered on 24.09.2020, which culminated in the filing of prosecution complaint dated 01.10.2022.
6.5. The petitioner was also not named as an accused in the ECIR; but stands accused in the prosecution complaint as Accused No. 5.
6.6. The allegation against the petitioner in the present case is in relation to his role in Phoenix FZC, which company was incorporated on 08.04.2013 with three Directors and Shareholders, viz. Rajesh Bhatia, Kunal Desai and Sandeepkumar Vipinchandra Maniar having 25%, 50% and 25% equity shareholding respectively. The substratum of the allegation is that the petitioner exercised ultimate control over Phoenix FZC, in which company his wife, Darshana Manglani, was appointed as the General Manager. It is further the allegation that subsequently, Darshana Manglani became the owner of Phoenix FZC, whereupon the company became M/s. Phoenix International FZE („Phoenix FZE‟ for short).
6.7. Shorn of unnecessary detail, based on its investigation, the ED has alleged the following against Phoenix FZC; and it is alleged in the prosecution complaint that since the petitioner exercised ultimate control over Phoenix FZC, he is implicated in the offending transactions that are subject matter of the complaint:
“21.6 Phoenix International FZC: It is established that M/s Phoenix International FZC had assisted and conduit for laundering USD 1.3 million. It transferred USD 1.3 million to Eximius Business Middle East FZC which ultimately vested with Sanjay Godhwani and Sandeep Bhatt. It siphoned off money to the tune of Rs.1.85 million USD which was derived out of the criminal activities relating to scheduled offence and assisted in projecting it as untainted on the strength of fictitious invoices knowingly fully well that they neither had the capability nor did they supply such product/services. Therefore, M/s Phoenix International is involved in assisting and utilization of proceeds of crime generated out of criminal activity and its projection as untainted property, thereby has committed the offence of money laundering as defined under Section 3 of the PMLA,2002 and the accused Phoenix International is liable to be prosecuted and punished under Section 4 read with Section 70 of the act and attached property, if any, involved in the money laundering are liable to be confiscated in terms of Section 8(5) of the PMLA,2002.“
(emphasis in original)
The Allegedly Offending Transactions
7. The allegations against the petitioner in the prosecution complaint are founded on certain allegedly offending transactions, which may be summarised as follows :
7.1. On 04.12.2014 an amount of USD 954,751.79 was received by Phoenix FZC from one M/s. Metal and Steel Solutions FZC. The money was received against an invoice bearing No. PHX/001/2014-15 dated 03.12.2014 raised towards ―Supply of Spares and Equipment for HS – 125” for the amount of USD 960,000.00.
7.2. On 24/25.12.2014, an amount of USD 599,995.00 was received by Phoenix FZC from Ligare Aviation against an Invoice bearing No. Phoenix/001/2014 dated 22.12.2014 towards ―slot co-ordination and Easy II kit procurement for Falcon 7X Easy 2 Registration No. VT-RGX” for the amount of USD 600,000.00.
7.3. On 13.01.2015, an amount of USD 299,995.00 was received by Phoenix FZC from one M/s. Eximius Business Aviation Pvt. Ltd., against which no invoice has been recovered.
7.4. Subsequently, a sum of USD 1,300,000.00 was transferred by Phoenix FZC to M/s. Eximius Business Middle East FZC in the following three tranches:
i. On 11.01.2015, an amount of USD 300,000.00 was transferred, against which no invoice has been recovered;
ii. On 14.01.2015, an amount of USD 500,000.00 was transferred against an invoice dated 12.01.2015 for USD 500,000.00 towards ―Management Fees For Consultancy Services Provided“; and
iii. On 19.01.2015, USD 500,000.00 was transferred against an invoice dated 14.01.2015 for USD 500,000.00 towards ―Management Fees For Consultancy Services Provided” 5. The allegedly offending transactions are summarised in a table at page 84 of the prosecution complaint, which reads as follows:
