1

2025:CGHC:9256

AFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

ORDER RESERVED ON 06.02.2025

ORDER DELIVERED ON 21.02.2025

MCRC No. 8961 of 2024

1 - Anil Tuteja S/o Late H.L.Tuteja Aged About 61 Years R/o House No.

35/1396 Beside Farishta Nursing Home Katora Talab Civil Lines Raipur

(C.G.)

... Applicant

versus

1 - Directorate Of Enforcement Through Assistant Director E.D. Raipur

Zonal Office Raipur District - Raipur (C.G.)

... Respondent(s)

For Petitioner(s) :Shri Arshdeep Khurana, Advocate through

VC assisted by Shri Sourabh Dangi and

Shri Sajal Kumar Gupta, Advocates

For Respondent(s) :Dr.Saurabh Kumar Pandey, ED

(Hon’ble Shri Justice Arvind Kumar Verma)

C A V Order

By way of present application under Section 483 of the Bhartiya

Nagrik Suraksha Sanhita, 2023 (‘BNSS’) read with Section 45 of the

PMLA on behalf of the applicant herein, is seeking grant of regular bail

in ECIR/RPZO/04/2024 dated 11.04.2024 for the alleged offence under

Sections 3 and 4 of the PMLA. The applicant was arrested in

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pursuance of ECIR/RPZO/04/2024 of 2024 registered with Raipur Zone

dated 11.04.2024 by the Directorate of Enforcement. The applicant has

been involved in the same which involves laundering of proceeds of

crime of more than 2000 crores approximately. As such the accused in

involved in a grave and heinous financial crime.

FACTUAL ASPECTS

2.Facts of the case relevant for adjudication of the instant bail

application are as follows:

The applicant is a retired officer of the Indian Administrative

Services with a distinguished and unblemished service record. He

retired as Joint Secretary in the Department of Commerce and Industry,

Chhattisgarh in May 2023. The ECIR is a second ECIR and the first

being ECIR/RPZO/11/2022 which was quashed by the Hon’ble

Supreme Court vide order dated 08.04.2021 with a categorical finding

that no scheduled offence is made out and there were no proceeds of

crime in relation to ECIR 11 and the Prosecution Complaint filed therein.

The said ECIR was registered merely 3 days after the quashing of the

first ECIR on the same alleged liquor scam making the same allegations

arising out of the same transactions.

3.Chhattisgarh State police registered FIR bearing No. 04/2024

dated 17.01.2024 at EOW/ACB, Raipur under Sections for the offence

punishable under Sections 120-B, 420,467,468,471 of IPC and Section

7 & 12 of the Prevention of Corruption Act against Mr. Anil Tuteja (retired

IAS) then Joint Secretary in CG State, Anwar Dhebar, Mr. Arunpati

Tripathi (ITS) then Special Secretary, Government of Commerce and

industry Department and MD CG State Marketing Corporation Ltd. Mr.

Vikas Agarwal @ Subbu, Mr. Sanjay Diwan and Others for collecting

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commissions and supplying unaccounted liquor to government liquor

shops resulting in an approximate loss of Rs. 2161 crores to the

government.

4. The manufacturers of country liquor in Chhattisgarh namely CG

Distilleries Ltd., M/s. Bhatia Wine Merchant Private ltd. And Welcome

Distilleries Pvt. Ltd. Are licensed to supply country liquor in the State. It

is alleged that Co-accused Anwar Dhebar took advantage of his political

influence and family relations with Anil Tuteja and in association with

Arunpathi Tripathi, the Managing Director of CSMCL lead to increase in

the rate of liquor production and supply and in return gained illegal

commissions amounting to lakhs of rupees from the distillery owners

which is called Part -A.

5.Similarly, a new system which ran parallel to the existing system

of selling country liquor through government shops was created without

any records from distillery operators, which involved constructing

duplicate holograms and selling them separately through government

liquor shops. The illegal sale of these duplicate holograms resulted in

earning worth crores of rupees in which several individuals were

implicated including distillery owners, bottle supplier agencies, duplicate

hologram supplying agencies, agencies involved in the collection of

money. These illicit sale took place during the years 2019-20,2020-21

and 2021-22 and is called Part-B.

6.Additionally, the collection of bribes from foreign liquor

manufacturers FL-10A license was implemented, which was granted to

three favoured firms of Anwar Dhebar. The license FL-10A was granted

to Mr. Sanjay Mishra and Manish Mishra of M/s. Nexgen power

Engitech Pvt. Ltd. , Mr. Atul Kumar Singh and Mr. Mukesh Manchanda

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of M/s. Om Sai Beverage Pvt. Ltd. And Mr. Ashish Saurabh Kedia of

M/s. Dishita Ventures Pvt. Ltd. These license holders were granted

tender for the supply of foreign liquor through a conspiracy. All the three

licence holding firms procured liquor from foreign liquor manufacturing

Companies and made it available to the State government, making a

profit of 10%. Out of this profit, 60% was given to the syndicate and the

remaining 40% was received by the license holders.

7.The liquor syndicate of the present applicant Mr. Anil Tuteja, Arun

Pati Tripathi and Anwar Dhebar was working under the aegis of retired

Indian Administrative officer Mr. Vivek Dhand who was also the

beneficiary of the scam. The syndicate received commission from the

distillery owners by increasing, parallel manufacturing and supplying

duplicate liquor through the FL-10A license between February 2019 to

June 2022 by making illegal earning of Rs. 2161 crores.

8.The FIR for the predicate offence as discussed above is

registered by ACB/EOW, Raipur Chhattisgarh under Sections 120-B,

420,467 and 471 IPC and Sections 7 & 12 of the P?C Act which are

scheduled offence included in Part A of the schedule to PMLA ,2002 as

defined under Section 2(1)(y) of the Act. Enquiries were initiated under

PMLA against the suspected persons after recording brief facts of the

scheduled offence and initiating money laundering investigation in file

No. ECIR/RPZO/04/2024 on 11.04.2024 by the officials of the

Directorate of Enforcement, Raipur.

9.The respondent/ED has analyzed the predicate offence FIR,

documents including the statements recorded under Section 50 of the

PMLA, 2002 shared by the Assistant Director, Prosecution Complaint

filed by IT and the date shared by the Income Tax Department. During

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the investigation, statement of Distillers, FL-10A licenses, manpower

supplier agencies and others were recorded under Section 50 of the

PMLA, 2002 and it has been established that a well planned systematic

conspiracy was executed by the syndicate to earn illegal commission in

the sale and licensing of liquor in the State of Chhattisgarh.

10.The excise policy in the State of Chhattisgarh was amended in

the year 2017 The excise policy in the State of Chhattisgarh was

amended in the year 2017 and CSMCL in February, 2017, was thus

created with the responsibility to exclusively retail liquor in the State of

Chhattisgarh through its stores. The CSMCL was established with the

vision to provide genuine liquor, to stop sale of illegal Liquor, to provide

liquor on MRP. It established its own stores to retail the

liquor/beer/wine/country liquor after procuring liquor from manufacturers

directly and IMFL from another State PSU CSBCL.

11.It has also been revealed that with the advent of new policy in the

State, CSMCL was incorporated and it established its own stores to

retain the liquor/beer/wine/country liquor after procuring country liquor

directly from manufacturers and IMFL was procured from suppliers and

stored in warehouses of another State Public Sector Undertaking,

Chhattsigarh State Beverage Corporation Limited (CSBCL). The shops

were supposed to be run by outsourced staff and cash collected was to

be done by private vendors/Bank representatives.

12.Liquor was divided into two categories namely Country liquor and

Indian Manufactured Foreign Liquor (IMFL). Country Liquor was

produced in the State of Chhattisgarh through three distilleries :

I) M/s. Chhattisgarh Distilleries Ltd.

ii) M/s. Bhatia Wines and Merchants Pvt. Ltd.

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iii) M/s. Welcome Distilleries Pvt. Ltd.

The CSMCL became the tool in the hands of the syndicate which

was used by it to enforce a parallel excise department. The syndicate

comprises of senior bureaucrats of State, politicians and officials of

excise department. In February 2019, Arun Pati Tripathi (ITS Offier) was

chosen by the syndicate to lead the CSMCL and later on he was made

the Managing Director of the organization at the behest of accused

Anwar Dhebar.

13.It is submitted that the as part of the conspiracy, Arun Pati Tripathi

was assigned with the task to maximize the bribe commission collected

on liquor procured by M/s.CSMCL and to make necessary arrangement

for sale of non-duty paid liquor in the CSMCL run shops. Arun Pati

Tripathi was supported by Anwar Dhebar and Senior IAS Officer in this

operation. In furtherance of his plans, Anwar Dhebar gave the task of

cash collecting to Vikas Agrawal @ Subbu and the logistics were set to

be the responsibility of the present applicant - Arvind Singh.

14.In the investigation, it has been established that it has come that

massive corruption has taken place in the Excise Department since

2019 to 2023 in multiple ways. The total extortion amount is around Rs.

2000 crores. This amount is nothing but rightful amount which should

have gone to the State Exchequer and have been taxed and yielded

revenue for Central and State government. Thus this is the proceeds of

crime which ED is investigating and trying to establish money trial and

trace the assets created out of these proceeds of crime.

SUBMISSION ON BEHALF OF THE APPLICANT

15.Contention of Shri Khurana, learned counsel for the applicant is

that the application of the applicant has been erroneously dismissed by

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the learned Special Judge under Section 438 of the BNSS. Apart from

the recording of arguments made on behalf of the applicant, bail has

been frivolously denied on the seriousness of the alleged offence and

allegations against him. It has also been stated that the applicant may

repeat the alleged offence while on bail as well as the mere

apprehension that the applicant may influence the witnesses, as one of

the reasons for rejecting his application for bail. He contended that

even if the allegation is one of the grave economic offence, it is not a

rule that bail should be denied in every case. Ultimately, the

consideration has to be made on a case to case basis on the facts. The

primary object is to secure the presence of the acused to stand trial. He

has placed his reliance in the matter of P.Chidambaram Vs. Ed (2020)

13 SCC 791.

16.Next contention of learned counsel for the applicant is that the

investigation against the applicant is over, the applicant has suffered a

long period of incarceration and therefore, there is no reason to keep

the applicant in further custody. It is a trite law that once the

investigation against an accused is complete and there is no

apprehension of violation of the triple test, the applicant is entitled to be

released on bail. If bail is denied at this stage, the applicant will remain

in custody for an indefinite period. He has relied upon the judgment in

the matter of Satendra Kumar Antil Vs. CBI SLP No. 5191 /2021;

Krishnan Subramanian Vs.State NCT of Delhi 2022 SCC Online Del

1384.

17.He contended that even a Prosecution Complaint in the instant

case has been filed by the ED on 19.06.2024 wherein the applicant has

been arraigned as accused. The investigation against the applicant is

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concluded and the custody of the applicant is no longer required for the

purpose of investigation. The applicant has not been question even

once after his ED custody was over and no new material has been

relied upon by the ED.

18.He contended that the trial in the said ECIR is likely to take time

and the applicant cannot be kept in custody for the entire period of trial.

It has time and against reiterated by the Apex court that the Right to ?

Speedy Trial is a facet of the Fundamental Right to life of an accused

under Article 21 of the Constitution of India. The Apex Court in the

matter of Manish Sisodia Vs. CBI and ED (2023) SCC OnLine

SC1393 has held that :

“27. However, we are also concerned about the

prolonged period of incarceration suffered by the

appellant – Manish Sisodia. In P. Chidambaram v.

Directorate of Enforcement48, the appellant

therein was granted bail after being kept in

custody for around 49 days, relying on the

Constitution Bench in Shri Gurbaksh Singh Sibbia

and Others v. State of Punjab, (1980) 2 SCC 565.

and Sanjay Chandra v. Central Bureau of

Investigation, (2012) 1 SCC 40 that even if the

allegation is one of grave economic offence, it is

not a rule that bail should be denied in every

case. Ultimately, the consideration has to be

made on a case to case basis, on the facts. The

primary object is to secure the presence of the

accused to stand trial. The argument that the

appellant therein was a flight risk or that there

was a possibility of tampering with the evidence

or influencing the witnesses, was rejected by the

Court. Again, in Satender Kumar Antil v. Central

Bureau of Investigation and Another, (2022) 10

SCC 51 this Court referred to Surinder Singh

Alias Shingara Singh v. State of Punjab (2005) 7

SCC 387 and Kashmira Singh v. State of Punjab,

(1977) 4 SCC 291 to emphasize that the right to

speedy trial is a fundamental right within the

broad scope of Article 21 of the Constitution. In

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Vijay Madanlal Choudhary (supra), this Court

while highlighting the evil of economic offences

like money laundering, and its adverse impact on

the society and citizens, observed that arrest

infringes the fundamental right to life.

49 In P. Chidambaram v. Central Bureau of

Investigation, (2020) 13 SCC 337, the appellant

therein was granted bail after being kept in

custody for around 62 days.

This Court referred to Section 19 of the

PML Act, for the in-built safeguards to be adhered

to by the authorized officers to ensure fairness,

objectivity and accountability. Vijay Madanlal

Choudhary (supra), also held that Section 436A of

the Code can apply to offences under the PML

Act, as it effectuates the right to speedy trial, a

facet of the right to life, except for a valid ground

such as where the trial is delayed at the instance

of the accused himself.

In our opinion, Section 436A should not be

construed as a mandate that an accused should

not be granted bail under the PML Act till he has

suffered incarceration for the specified period.

This Court, in Arnab Manoranjan Goswami v.

State of Maharashtra and Others (2021) 2 SCC

427, held that while ensuring proper enforcement

of criminal law on one hand, the court must be

conscious that liberty across human eras is as

tenacious as tenacious can be.

29. Detention or jail before being pronounced

guilty of an offence should not become

punishment without trial. If the trial gets protracted

despite assurances of the prosecution, and it is

clear that case will not be decided within a

foreseeable time, the prayer for bail may be

meritorious. While the prosecution may pertain to

an economic offence, yet it may not be proper to

equate these cases with those punishable with

death, imprisonment for life, ten years or more

like offences under the Narcotic Drugs and

Psychotropic Substances Act, 1985, murder,

cases of rape, dacoity, kidnapping for ransom,

mass violence, etc. Neither is this a case where

100/1000s of depositors have been defrauded.

The allegations have to be established and

proven. The right to bail in cases of delay,

coupled with incarceration for a long period,

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depending on the nature of the allegations,

should be read into Section 439 of the Code and

Section 45 of the PML Act. The reason is that the

constitutional mandate is the higher law, and it is

the basic right of the person charged of an

offence and not convicted, that he be ensured

and given a speedy trial. When the trial is not

proceeding for reasons not attributable to the

accused, the court, unless there are good

reasons, may well be guided to exercise the

power to grant bail. This would be truer where the

trial would take years.”

19.Further he has relied upon the decisions of Satender Kumar

Antil Vs. Central Bureau of Investigation (2002) 10 SCC 561;

Surinder Singh Alias Shingara Singh Vs. State of Punjab (2005)7

SCC387 and Kashmira Singh Vs. State of Punjab (1977) 4 SCC 291.

In the matter of Manish Sisodia Vs. ED and CBI (supra), it has been

held that :

37. Insofar as the contention of the learned ASG

that since the conditions as provided under

Section 45 of the PMLA are not satisfied, the

appellant is not entitled to grant of bail is

concerned, it will be apposite to refer to the first

order of this Court. No doubt that this Court in its

first order in paragraph 25, after recapitulating in

paragraph 24 as to what was stated in the

charge-sheet filed by the CBI against the

appellant, observed that, in view of the aforesaid

discussion, the Court was not inclined to accept

the prayer for grant of bail at that stage. However,

certain paragraphs of the said order cannot be

read in isolation from the other paragraphs. The

order will have to be read in its entirety. In

paragraph 28 of the said order, this Court

observed that the right to bail in cases of delay,

coupled with incarceration for a long period,

depending on the nature of the allegations,

should be read into Section 439 Cr.P.C. and

Section 45 of the PMLA.

The Court held that the constitutional mandate is

the higher law, and it is the basic right of the

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person charged of an offence and not convicted

that he be ensured and given a speedy trial. It

further observed that when the trial is not

proceeding for reasons not attributable to the

accused, the court, unless there are good

reasons, would be guided to exercise the power

to grant bail. The Court specifically observed that

this would be true where the trial would take

years. It could thus clearly be seen that this

Court, in the first round of litigation between the

parties, has specifically observed that in case of

delay coupled with incarceration for a long period

and depending on the nature of the allegations,

the right to bail will have to be read into Section

45 of PMLA.

XXXX XXXX XXXX

39. A Division Bench of this Court in the case of

Ramkripal Meena v. Directorate of Enforcement5

was considering an application of the petitioner

therein who was SLP(Crl.) No. 3205 of 2024

dated 30.07.2024 to receive a bribe of rupees five

crore and from whom, an amount of

Rs.46,00,000/- was already recovered. In the said

case, the petitioner was arrested on 26th January

2022 in connection with FIR No. 402/2021

registered against him for the offences punishable

under Sections 406, 420, 120B of IPC and

Section 4/6 of the Rajasthan Public Examination

(Prevention of Unfair Means) Act, 1992. He was

released on bail by this Court vide order dated

18th January 2023. Thereafter, the petitioner was

arrested by the ED on 21st June 2023. The Court

observed thus:

“7. Adverting to the prayer for grant of

bail in the instant case, it is pointed out

by learned counsel for ED that the

complaint case is at the stage of

framing of charges and 24 witnesses

are proposed to be examined. The

conclusion of proceedings, thus, will

take some reasonable time. The

petitioner has already been in custody

for more than a year. Taking into

consideration the period spent in

custody and there being no likelihood of

conclusion of trial within a short span,

coupled with the fact that the petitioner

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is already on bail in the predicate

offence, and keeping in view the

peculiar facts and circumstances of this

case, it seems to us that the rigours of

Section 45 of the Act can be suitably

relaxed to afford conditional liberty to

the petitioner. Ordered accordingly.”

44. The learned Special Judge and the learned

Single Judge of the High Court have considered

the applications on merits as well as on the

grounds of delay and denial of right to speedy

trial. We see no error in the judgments and orders

of the learned Special Judge as well as the High

Court in considering the merits of the matter. In

view of the observations made by this Court in the

first order, they were entitled to consider the

same. However, the question that arises is as to

whether the trial court and the High Court have

correctly considered the observations made by

this Court with regard to right to speedy trial and

prolonged period of incarceration. The courts

below have rejected the claim of the appellant

applying the triple test as contemplated under

Section 45 of the PMLA. In our view, this is in

ignorance of the observations made by this Court

in paragraph 28 of the first order wherein this

Court specifically observed that right to bail in

cases of delay coupled with incarceration for a

long period should be read into Section 439

Cr.P.C. and Section 45 of the PMLA.

20.Further it has been reiterated that in cases where the fundamental

right to speedy trial of the accused is violated, the State or any other

prosecuting agency should not oppose the plea for bail on the ground

that the crime committed is serious. Article 21 of the Constitution applies

irrespective of the nature of the crime. He has referred to the judgment

of Gulam Nabi shaikh Vs. State of Maharastra, 2024 SCC OnLine

SC1693, wherein it has been observed that :

“19. If the State or any prosecuting agency including

the court concerned has no wherewithal to provide or

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protect the fundamental right of an accused to have

a speedy trial as enshrined under Article 21 of the

Constitution then the State or any other prosecuting

agency should not oppose the plea for bail on the

ground that the crime committed is serious. Article

21 of the Constitution applies irrespective of the

nature of the crime.”

21.It is well settled that the object of bail is neither punitive nor

preventive. The primary purpose of bail in a criminal case is to ensure

that the accused will submit tot the jurisdiction of the court and be in

attendance whenever his presence is required. Deprivation of liberty

must be considered punishment unless it can be required to ensure that

an accused person will stand trial when called upon. Punishment can

only begin after conviction and necessity is the operative test. in the

matter of Manish Sisodia 3 (2024) SCC OnLine SC920, it has been

held as under:

“54. In the present case, the appellant is having

deep roots in the society. There is no possibility

of him fleeing away from the country and not

being available for facing the trial. In any case,

conditions can be imposed to address the

concern of the State.

55. Insofar as the apprehension given by the

learned ASG regarding the possibility of

tampering the evidence is concerned, it is to be

noted that the case largely depends on

documentary evidence which is already seized

by the prosecution. As such, there is no

possibility of tampering with the evidence.

Insofar as the concern with regard to

influencing the witnesses is concerned, the

said concern can be addressed by imposing

stringent conditions upon the appellant.”

22.In the matter of Gudikanti Narasimhulu Vs. Public Prosecutor,

High Court of Andhra Pradesh (1978) 1 SCC 240 it has been held as

under:

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The significance and sweep of Art. 21 make

the deprivation of liberty 'a matter of grave

concern and permissible only when the law

authorizing it is reasonable, even-handed and

geared to the goals of community good and

State necessity spelt out in Art. 19. Indeed, the

considerations I have set out as criteria are

germane to the constitutional proposition I

have deduced. Reasonableness postulates

intelligent care and predicates that deprivation

of freedom- by refusal of bail is not for punitive

purpose but for the bi-focal interests of justice-

to the individual involved and society affected.”

23.Next contention of the learned counsel for the applicant is that

the applicant shall be severely prejudiced and prejudged if he is

continually remanded to custody. It is imperative for the proper and

effective defence of the applicant and as a step to ensure the fair trial of

the applicant that he be released on bail unless there are overwhelming

considerations otherwise. He contended that over 70 witnesses have

been named in the prosecution complaint itself filed by the ED. As per

settled law, since the further investigation is going on in the instant case,

no charges can be framed and the trial cannot commence in the near

future because as per the submission of the investigating agency, in the

scheduled offence at least 3-4 chare sheets are yet to be filed.

24.Another contention of the learned counsel for the applicant is that

the arrest of the applicant is completely malafide and cannot be

continued in custody. The only material available with the ED was the

material collecting during an illegal investigation which has been

quashed by the Apex Court on 08,04.2024. The grounds of arrest

recorded and served upon the applicant as well as a comparison of the

summary of investigation conducted by the ED as outlined in the

Prosecution Complaint dated 04.07.2023 in the first ECIR and the

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Prosecution Complaint dated 19.06.2024 in the second ECIR. He

further contended that none of the statements which formed the basis of

the said ECIR has been recorded by the investigating officer in his

presence at the time of his arrest. There was no independent

application of mind by the investigating officer in the said ECIR

informing his grounds of arrest which contained no new facts. He

submits that the arrest under the PMLA can be effected only when an

accused/individual is considered to be guilty of the offence under

Section 3 of the PMLA and guilt can only be established on admissible

material. No search and seizure operation under Section 17 of the

PMLA has been carried out by the officers of ED in relation to the said

ECIR nor has any summons been sent to any person whose statements

are being relied upon by the ED now in the said ECIR.

25.He contended that the ED has been acting in a vindictive manner

and trying to implicate the applicant without any admissible material.

There is no recovery of any unaccounted money, incriminating material,

illegal liquor bottles or counterfeit holograms from the applicant and thus

the entire case of the ED is based on completely inadmissible material.

There is absolutely no material to show any proximity of the applicant

with the erstwhile Chief Minister of Chhattisgarh or any role played by

him in the working or appointment of any individual either at CSMCL or

in the Excise Department or any involvement in the liquor trade in the

State of Chhattisgarh. He submits that the very individuals who gave

incriminating statements against the applicant have retracted solely for

the reason that the same were coerced out of them by the ED. It is

submitted that the alleged chats being relied upon by the ED, it is

submitted that the same has been derived from the devices which have

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been accessed by various authorities at various instances without any

intimation to the applicant and without due process and thus the

possibility of tampering with the same cannot be denied.

26.He further contended that the applicant satisfies the twin

conditions for grant of bail in terms of Section 45 of the PMLA. In terms

of Section 45 of the PMLA, two conditions are to be satisfied before a

person is granted bail for offence under Section 3 of the PMLA ie. firstly

the public prosecution is given an opportunity to oppose the application

and second if public prosecutor opposes it, the court is satisfied that

there are reasonable grounds for believing that he is not guilty of

offence of money laundering. The applicant unequivocally and stoutly

refutes all allegations levelled against him. The applicant is not involved

in the commission of or in any activity relating to the alleged offences.

The applicant was never posted in the Excise Department and has

never processed any filed or dealt with any matter related to

excise/liquor. Since he was not involved in the functioning of the

Department he cannot be involved in any such scam and therefore

cannot be a recipient of any “proceeds of crime”.

27.He submits that on the departmental enquiry being conducted by

the Commercial Tax (Excise) Department which examined specific

allegations of payment of bribe to certain government officials, illegal

sale of liquor in the State of Chahttisgarh and loss to the Public

Exchequer on account of the same and the following findings have been

come:

I) Sale of liquor in the State of Chhattisgarh has been

conducted in accordance with the applicable rules.

(ii) the liquor shops of Chhattisgarh State Marketing

Corporation Ltd. are audited every month by

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professional chartered accountants and no

irregularities have been reported by them. The same

is also supervised by the Comptroller and Auditor

General of India.

(iii) the stock, sale and cash registers are regularly

updated and maintained and all liquor shops of

CSMCL are under constant CCTV surveillance.

(iv) the purchase and sale of liquor by the SCMCL are

conducted exclusively through the Track and Trace

portal developed by NIC.

(v) there has been no discrepancy/illegality in the

allotment of any tender in relation to the liquor trade in

the State of Chhattisgarh.

(vi) The ED has recorded coerced statements from

various officials of the Excise Department.

28. He submits that according to the statement of the erstwhile

Secretary of the Excise Department, no loss has ben caused to the

Government Exchequer and the liquor trade had taken place in

compliance of law. In fact the profits have been unprecedented, as also

recorded in the Departmental Enquiry Report. The revenue in the year

2019-20 was higher than the revenue in the financial year 2018-19 of rs.

3900 crores. The allegation that the applicant had a key role to play in

the increase in price of liquor is completely false and that the prices

were in fact increased at the request of the Distillers themselves. It is

well settled law that the statement of co-accused person is an extremely

weak piece of evidence and cannot be treated as substantive evidence

against the other co-accused persons. Therefore all the statements

under Section 50 of the PMLA sought to be relied upon by the ED to

substantiate its allegations against the applicant are inadmissible and

does not form the basis for denial of bail. He has relied upon the

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judgment of Haricharan Kurmi Vs. State of Bihar, AIR 1964 SC 1184,

wherein it has been held that:

“13. As we have already indicated. this question

has been considered on several occasions by

judicial decisions and it has been consistently held

that a confession cannot be treated as evidence

which is substantive evidence against a co-

accused person. in dealing with a criminal case

where the prosecution relies upon the confession

of one accused person against another accused

person, the proper approach to adopt is to

consider the other evidence against such an

accused person, and if the said evidence appears

to be satisfactory and the court is inclined to hold

that the said evidence may sustain the charge

framed against the said accused person, the court

turns to the confession with a view to assure itself

that the conclusion which it is inclined to draw from

the other evidence is right. As was observed by Sir

Lawrence Jenkins in Emperor v. Lalit Mohan

Chuckerbutt y (1) a confession can only be used to

"lend assurance to other evidence against a co-

accused". In In re. Peryaswami Noopan,(2) Reilly

J. observed that the provision of s. 30 goes not

further than this : "where there is evidence against

the co-accused sufficient, if,. believed, to support

his conviction, then the kind of confession

described in s. 30 may be thrown into the scale as

an additional reason for believing that evidence."

In Bhuboni Sahu v. King(1) the Privy Council has

expressed the same view. Sir. John Beaumont

who spoke for the Board observed that a

confession of a co-accused is obviously evidence

of a very weak type. It does not indeed come

within the definition of "evidence" contained in s. 3

of the Evidence Act. It is not required to be given

on oath, nor in the presence of the accused, and it

cannot be tested by cross-examination. It is a

much weaker type of evidence than the evidence

of an approver, which is not subject to any of those

infirmities. Section 30, however, provides that the

Court may take the confession into consideration

and thereby, no doubt, makes it evidence on which

the court may act; but the section does not say

that the confession is to amount to proof. Clearly

19

there must be other evidence. The confession is

only one element in the consideration of all the

facts proved in the case, it can be put into the

scale and weighed with the other evidence." It

would be noticed that as a result of the provisions

contained in s. 30, the confession has no doubt to

be regarded as amounting to evidence in a

general way, because whatever is considered by

the court is evidence; circumstances which are

considered by the court as well as probabilities do

amount to evidence in that generic sense. Thus,

though confession may be regarded as evidence

in that generic sense because of the provisions of

s. 30, the fact remains that it is not evidence as

defined by s. 3 of the Act. The result, therefore, is

that in dealing with a case against an accused

person, the court cannot start with the confession

of a co-accused person; it must (1) (1911) I.L.R.

38 Cal. 559 at p. 588. begin with other evidence

adduced by the prosecution and after it has

formed its opinion with regard to the quality and

effect of the said evidence, then it is permissible to

turn to the confession in order to receive

assurance to the conclusion of guilt which the

judicial mind is about to reach on the said other

evidence. That, briefly stated, is the effect of the

provisions contained in s. 30. The same view has

been expressed by this Court in Kashmira Singh v.

State of Madhya Pradesh(1) where the decision of

the Privy Council in Bhuboni Sahu's(2) case has

been cited with approval.

16. Considering the evidence from this point of

view, we must first decide whether the evidence

other than the confessional statements of the co-

accused persons, particularly Ram Surat, on

whose confession the High Court has substantially

relied, is satisfactory and tends to prove the

prosecution case. It is only if the said evidence is

satisfactory and is treated as sufficient by us to

hold the charge proved against the two appellants,

that an occasion may arise to seek for an

assurance for our conclusion from the said

confession. Thus considered, there can be no

doubt that the evidence about the discovery of

blood stains on which the prosecution relies is

entirely insufficient to justify the prosecution

charge against both the appellants. In our opinion,

20

it is impossible to accede to the argument urged

before us by Mr. Singh that the said evidence can

be said to prove the prosecution case. In fact, the

judgment of the High Court shows that it made a

finding against the appellants substantially

because it thought that the confessions of the co-

accused persons could be first considered and the

rest of the evidence could be treated as

corroborating the said confessions. We are,

therefore, satisfied that the High Court was not

right in confirming the conviction of the two

appellants under S. 396 ,of the Indian Penal

Code.”

29.Next submission on behalf of the applicant is that the applicant

was not posted in the Excise Department and there is no material to

suggest that the applicant had any role to paly in the functioning of the

Excise Department or that the applicant had received any monetary

benefit from the so called liquor syndicate. The applicant had neither

interfered in any policy matter of the Excise Department nor provided

any kind of favour to any stake holder related to liquor trade in the State

of Chhattisgarh. He submits that the applicant had no role in the

appointment of Arun Pati Tripathi as Commissioner, Secretary or any

other individual in the Excise Department or CSMCL and had no relation

to the Excise Department or the liquor trade.

30.It is next submitted by the learned counsel for the applicant that

the ED has been conducting the investigation in a pick and choose

manner. The ED has proceeded in a selective and pick and choose

manner in its investigation which clearly shows the targeted nature of

the investigation conducted by it. He submits that no attempt has been

made to initiate any legal action against the distillers including

registering any FIR inter alia under Section 8 of the Prevention of

Corruption Act. In relation to these distillers, it appears that no

21

information has been shared with other departments ie. the Income Tax

Department, GST etc. for collection of tax and duty on the alleged large

scale unaccounted sale of liquor allegedly undertaken by these distillers

and businessmen. He submits that none of the District Excise officers

have been made accused in the instant case. Various other stake

holders are being protected by the different prosecuting agencies with

the aim and hope of extracting false statements implicated inter alia

from them which clearly shows the mala fide and pick and choose

manner of investigation being conducted by the Prosecuting Agency.

He submits that while the allegations of a multi crore syndicate has

caused loss of the State exchequer in the State of Chhattisgarh, neither

any change has been brought about to the existing liquor policy nor any

license of any hologram manufacturer/distiller/cash collection agency

etc. has been cancelled. No action under Section 8 of the Prevention of

Corruption Act has taken against these individuals by the prosecuting

agency and the liquor trade has been continuing as usual. He submits

that even otherwise, any apprehension regarding the applicant being a

flight risk or tampering with evidence or influencing witnesses can be

taken care of by imposing suitable conditions on the applicant while

granting bail. He contended that the there is no material on record to

suggest that the applicant does not satisfy the triple test as there is no

allegation that he would either tamper with any evidence or influence

any witness if granted bail. Mere apprehension of the investigating

agency without any substantial basis for the same cannot be a ground

for denying bail to the applicant. In the matter of P. Chidambaram Vs.

Central Bureau of Investigation (2020) 13 SCC 337, wherein it has

been observed as under:

22

“31. It is to be pointed out that the respondent - CBI

has filed remand applications seeking remand of

the appellant on various dates viz. 22.08.2019,

26.08.2019, 30.08.2019, 02.09.2019, 05.09.2019

and 19.09.2019 etc. In these applications, there

were no allegations that the appellant was trying to

influence the witnesses and that any material

witnesses (accused) have been approached not to

disclose information about the appellant and his

son. In the absence of any contemporaneous

materials, no weight could be attached to the

allegation that the appellant has been influencing

the witnesses by approaching the witnesses. The

conclusion of the learned Single Judge “…that it

cannot be ruled out that the petitioner will not

influence the witnesses directly or indirectly……” is

not substantiated by any materials and is only a

generalized apprehension and appears to be

speculative. Mere averments that the appellant

approached the witnesses and the assertion that

the appellant would further pressurize the

witnesses, without any material basis cannot be the

reason to deny regular bail to the appellant; more

so, when the appellant has been in custody for

nearly two months, co-operated with the

investigating agency and the charge sheet is also

filed.

32. The appellant is not a “flight risk” and in view of

the conditions imposed, there is no possibility of his

abscondence from the trial. Statement of the

prosecution that the appellant has influenced the

witnesses and there is likelihood of his further

influencing the witnesses cannot be the ground to

deny bail to the appellant particularly, when there is

no such whisper in the six remand applications filed

by the prosecution. The charge sheet has been

filed against the appellant and other co-accused on

18.10.2019. The appellant is in custody from

21.08.2019 for about two months. The co-accused

were already granted bail. The appellant is said to

be aged 74 years and is also said to be suffering

from age related health problems. Considering the

above factors and the facts and circumstances of

the case, we are of the view that the appellant is

entitled to be granted bail.”

23

31.It is submitted that the applicant is a senior citizen suffering

various medical ailments including osteoarthritis, liver disorder, raised

GGTP, hyponatremia, hypertension, hypothyroidism, anxiety and

prolonged custody will have deleterious effect on his health. He has also

filed certain documents to this effect. As per settled law, no case under

the PMLA can continue without an underlying scheduled offence and

therefore prays that the applicant may be granted regular bail in

ECIR/RPZO/04/2024 dated 11.04.2024 registered by the Enforcement

Directorate under Sections 3 & 4 of the Prevention of Money Laundering

Act, 2002.

SUBMISSION ON BEHALF OF THE RESPONDENT/ED

32.It has been contended by Dr. Saurabh Pandey, learned counsel

for the respondent/ED that the applicant was a promotee IAS officer

who retired in the year June 2023. He was the most powerful bureaucrat

in Chhattisgarh, wielding enough power to control the police, mining,

environment and liquor departments by placing the individuals of his

choice in key position. The applicant was the chief architect of the liquor

scam. He was strongly associated with co-accused Anwar Dhebar, the

main perpetrator of the illegal collection. From the strong support of the

State executives for extortion of money from the liquor manufacturers,

the applicant controlled the postings of all the IAS-IPS and other

government officials. From the investigation it has bee revealed that he

was the one who placed Arunpati Tripathi as the MD of CSMCL. The

real power which allowed Anwar Dhebar to run this extortion syndicate

was the present applicant’s undue and over arching influence.

Investigation has also revealed that the applicant was casting his

influence in the excise department in multiple manner. Several hats

24

were recovered from his mobile phone wherein he was indulged in

effecting transfers of excise officers, selection of top level officials in

excise department, final approval of draft response to various

complaints received in relation to excise department. The applicant was

fully aware of Part-B liquor sale and part-C scheme of liquor syndicate.

He was also aware of the Part C mode of collecting commission/bribe

by the liquor syndicate.

33.He submits that from the investigation it has been revealed that

he used his influence to scuttle investigation into Part-B liquor sale

when seizure of such liquor was made by the police he made it vanish.

The presence of the applicant was crucial in allowing the liquor scam to

continue unabated for such a long period. He was influencing the police

personnel to favour persons involved in the liquor scam; preparing

replies to counter the allegations of the previous hologram suppliers,

tackling the distillers regarding dispute in market share. It was because

of this pivotal role played by the applicant, he had a substantial share in

the illegal earning generated out of supply of Part-B liquor. It has been

revealed that about Rs. 300 per case was the share of the duo (Anil

Tuteja and Anwar Dhebar) out of the illegal sale proceeds of the

unaccounted liquor. Asper the distillers they have supplied a total of Rs.

40.67 lacs cases of Part-B liquor which is about 120 crores

approximately. Thus, Mr Anil Tuteja had received proceeds of crime

worth Rs. 14.41 crores from Anwar Dhebar through Mr. Nitesh Purohit.

34.It has been evidence from the fact that the family members of the

applicant have been recipient of the funds indirectly from the FL-10A

license companies on the directions of Anwar Dhebar. The properties

worth Rs. 15.82 crores acquired by the accused and his family

25

members, during the period of the scam, have already been attached

vide PAO bearing No. 04/2024 dated 02.05.2024. It is by this way the

applicant has actively and willingly participated in the liquor scam and

generated proceeds of crime owing to the role played by him. He had

acquired the proceeds of crime and is involved in their concealment,

layering and use of the proceeds of crime and ha committed the offence

of money laundering as defined under Section 3 of the PMLA, 2002

punishable under Section 4 of the PMLA, 2002.

35.Next contention of learned counsel for the respondent/ED is that

the mandatory provisions of Section 45 of the PMLA are not being

satisfied. One of the conditions prescribed by the Section pertains to a

finding by the Court that the accused is “not guilty of the offence of

Money Laundering” and that he is not likely to commit any offence while

on bail. Thus, in view of the facts putforth, the possibility of the

applicant being “not guilty of the offence of Money Laundering” is highly

unlikely. In the light of the judgment of the Apex Court in the in Vijay

Madanlal Chouhdary and Others Vs. Union of India and Others

Special leave Petitioner (Criminal) No. 4634 of 2014 has held that it

is no longer res integra that the twin conditions under Section 45 of the

PMLA have to be met before grant of bail under PMLA. The relevant

observation of the Hon’ble Court is as under:

“135. We are conscious of the fact that in

paragraph 53 of the Nikesh Tarachand

Shah642, the Court noted that it had struck

down Section 45 of the 2002 as a whole.

However, in paragraph 54, the declaration is

only in respect of further (two) conditions for

release on bail as contained in Section 45(1),

being unconstitutional as the same violated

26

Articles 14 and 21 of the Constitution. Be that as

it may, nothing would remain in that observation

or for that matter, the declaration as the defect

in the provision [Section 45(1)], as existed then,

and noticed by this Court has been cured by the

Parliament by enacting amendment Act 13 of

2018 which has come into force with effect from

19.4.2018. We, therefore, confined ourselves to

the challenge to the twin conditions in the

provision, as it stands to this date post

amendment of 2018 and which, on analysis of

the decisions referred to above dealing with

concerned enactments having similar twin

conditions as valid, we must reject the

challenge. Instead, we hold that the provision in

the form of Section 45 of the 2002 Act, as

applicable post amendment of 2018, is

reasonable and has direct nexus with the

purposes and objects sought to be achieved by

the 2002 Act to combat the menace of money-

laundering having transnational consequences

including impacting the financial systems and

sovereignty and integrity of the countries.”

36.It is submitted that the accused with proceeds of crime and deep

roots in the society is in a position to influence witness. Allahabad high

Court in the matter of Pankaj Grover V. ED Criminal Misc. Anticipatory

Bail application under Section 438 Cr.P.C. No. 7661 of 2021, has clearly

held that the accused in economic offences/PMLa cases are in

possession huge proceeds of crime and may use those to influence

witnesses. Further the Court also held that since such offences are

committed mostly by influential persons, there is a high likelihood of

their using influence to tamper with evidence and influence witnesses.

27

Relevant observation is as under:

“38…. Crimes are now committed by influential

persons belonging to upper class in organized

manner after well planning by use of modern

gadgets in course of performance of their official,

professional, business activities in which they have

expertise. Criminal Acts committed by professionals,

businessmen and public servants, it is very difficult to

identify whether sober and civilized activity was

committed or criminal act was committed. Such

criminals have o criminal self image, further by

societal members there is no labelling which affect

seriously pursuits to cope with crime and criminality,.

Economic offenders are only concerned with their

personal gain even at the cost of irreparable and

serious loss to society.

“40…. Criminal acts committed by such persons are

creating a serious challenge before criminal justice

system; It is difficult to identify whether crime was

committed, when it is identified that crime was

committed, it is difficult to find out clues and thereby

evidences; when evidences are available, nature of

evidences is completely different as not possible to

be collected by simple investigating presented by

prosecution agency and ultimately to convict and

sentence; when sentenced simple sentence is not

effective to deal with such modern criminals and their

criminality. A criminal of such modern criminality are

respected and influential persons with position,

status, standing and means thereby they are always

in situation to influence proceeding in investigation

and prosecution, taper with the evidences and

pressurize witnesses.

42. …. Usually socio economic offenders abscond to

some other country and after that it becomes difficult

to bring them back and complete the criminal

28

proceeding against them. Further, their monetary

sound condition particularly proceed of crime

obtained not by honest working but by deceiving

others causes more prone situation for influencing

witnesses and other evidences. Furthermore, status

and position of offender provides opportunity to

influence investigation and prosecution.”

37.It is contended by the learned counsel for the respondent/ED that

bail should not be granted in the present case as the present case

pertains to the offence of Money laundering to the tune of more than Rs.

2100 crores approximately. In catena of judgments it has been held that

economic offences constitute a separate class of offences and bail

should normally not be granted in such cases. Orissa High Court in the

matter of Mohd. Arif Vs. ED BLAPL No. 2606 of 2020 has observed

that the impact of the offence of money laundering is an act of financial

terrorism not only posing a serious threat to the financial system of the

country but also to the integrity and sovereignty of a nation and has

observed as under:

“22. 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 country but

also 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

29

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.”

38.In yet another decision, ie. in the case of Y.S. Jagan Mohan

Reddy Vs. Central Bureau of Investigation; (2013) 7 SCC 439,

wherein Hon’ble the Apex Court in paragraphs 34 & 35 has held as

under:-

“34. Economic offences constitute a class apart

and need to be visited with a different approach

in the matter of bail. The economic offences

having deep-rooted conspiracies and involving

huge loss of public funds need to be viewed

seriously and considered as grave offences

affecting the economy of the country as a whole

and thereby posing serious threat to the financial

health of the country.

35. While granting bail, the court has to keep in

mind the nature of accusations, the nature of

evidence in support thereof, the severity of the

punishment which conviction will entail, the

character of the accused, circumstances which

are peculiar to the accused, reasonable

possibility of securing the presence of the

accused at the trial, reasonable apprehension of

the witnesses being tampered with, the larger

interests of the public/State and other similar

considerations.”

30

39.Next contention of the counsel for the applicant is that the

investigation conducted by the ED is mala fide and fictitious. The right

to fair trial and investigation is a facet of the right to life and liberty under

Article 21 of the Constitution of India. This right can be taken away by

procedure established by law which must be just, fair and reasonable.

He has referred to Babubhai Vs. State of Gujarat and Others (2010)

12 SCC 254 and Gangadhar Vs. State of Madhya Pradesh (2020) 9

SCC 202.

40. The Apex Court in the matter of State of Gujarat Vs. Mohanlal

Jitamalji Porwal & Others, (1987) 2 SCC 364, it has been specifically

held that :

“...5. The Community or the State is not a person-

non-grata whose cause may be treated with

disdain. The entire Community is aggrieved if the

economic offenders who ruin the economy of the

State are not brought to books. A murder may be

committed in the heat of moment upon passions

being aroused. An economic offence is committed

with cool calculation and deliberate design with an

eye on personal profit regardless of the

consequence to the Community.

41. Dr. Pandey, learned counsel for the respondent/Ed submits that the

contention of the applicant regarding long incarceration of the applicant

is concerned, he denied the submission and submits that the guilt of the

applicant in commission of the offence of money laundering is

established. The applicant does not qualify the conditions mentioned in

Section 436A of the Code of Criminal Procedure, 1973 and therefore

cannot take the benefit of the said Section. The applicant has been

arrested in the present case on 21.04.2024 and he has been arraigned

as accused in the Prosecution Complaint dated 19.06.2024 filed by the

31

Enforcement Directorate. The applicant has to satisfy the conditions

provided in Section 45 of the PMLA prior to grant of bail and it is highly

likely that if the applicant is granted bail, he would further launder or

alienate the proceeds of crime which would frustrate the further

proceedings. He submits that satisfaction of triple test is not sufficient

for persons arrested under PMLA, 2002 as this triple test stage will

come when the applicant satisfy the twin conditions given under Section

45 of the PMLA, 2002.

42. The contention of the applicant that there is long delay in trial is

misconceived and therefore it has been denied by the counsel for the

respondent. He submits that the Prosecution Complaint has been filed

against the applicant on 19.06.2024 and cognizance has been taken by

the Special Court on 5.10.2024 and ED had demonstrated complete

modus operandi adopted by the applicant for omission of the offence of

money laundering and investigation against the applicant is complete

but the investigation on money trial and identification of remaining

proceeds of crime and the persons involved therein. It has been

submitted that the trial in the PMLA is at appearance Stage and the next

date of hearing is scheduled for 22.03.2025. the delay in trial is no

ground for claiming bail. It is submitted that there are only 35 witnesses

in the Prosecution Complaint filed by the Directorate and since there are

less witnesses it would considerably take less time during trial.

43. Another contention of the applicant that the arrest of the applicant is

completely malafide and ill founded, to this it is submitted by the ED that

the applicant was the chief architect of liquor scam in the State of

Chhattisgarh. During investigation, it has been gathered that Rs. 14.41

32

crores has been received by the applicant out of proceeds of crime. In

the matter of Sajjan Kumar Vs. Directorate of Enforcement,

MANU/DE/2155/2022, it has been held that “in matter of regular bail, the

Court must consider aspects, including but not limited to, the larger

interest of the State or public-another factor relevant would be the

gravity of alleged offence and /or nature of allegations levelled -

Economic offences constitute a class apart and need to be visited with a

different approach, given their severity and magnitude.”

44. It is submitted that there is no iota of doubt that the Right to Speedy

Trial is a foundational facet of the Right to life and Personal Liberty given

under Article 21 of the Constitution of India. However, it is humbly

submitted that if the accused is enlarged on bail, then being such an

influential person, there would be a chance that he would induce the

witnesses and tamper with the evidences. In the matter of State of

Bihar Vs. Amit Kumar reported in (2017) 13 SCC 751, it has been

held that:

“11. Although there is no quarrel with respect to the

legal propositions canvassed by the learned counsels,

it should be noted that there is no straight jacket

formula for consideration of grant of bail to an

accused. It all depends upon the facts and

circumstances of each case. The Government's

interest in preventing crime by arrestees is both

legitimate and compelling. So also is the cherished

right of personal liberty envisaged under Article 21 of

the Constitution. Section 439 of The Code of Criminal

Procedure, 1973, which is the bail provision, places

responsibility upon the courts to uphold procedural

fairness before a person’s liberty is abridged.

Although ‘bail is the rule and jail is an exception’ is

well established in our jurisprudence, we have to

measure competing forces present in facts and

circumstances of each case before enlarging a

33

person on bail.

14.Further we cannot lose sight of the fact that the

investigating agency is going to file additional charge

sheet. Therefore, the respondent’s presence in the

custody may be necessary for further investigation.

Furthermore we cannot approve the order of the High

Court, in directing the concerned investigating

authority to file the charge sheet within a month, as

the case involves almost 32 accused and a complex

modus operandi.”

45. So far as the submission on behalf of the applicant that he had filed

Special leave petition (SLP) No.12124/2024 against the order dated

20.08.2024 passed by this Court, the petitioner had raised several

points including illegal arrest, the illegality of the ECIRs, malafide

investigation etc. before the Apex Court however, the same was

withdrawn by the applicant on 6.12.2024. Thus, from the perusal of the

material on record, the arrest and subsequent order of remand passed

by the learned Magistrate or the Special Judge is non-violative of any of

the provisions of the PMLA Act or the Cr.P.C. The Apex Court in the

matter of State of Orissa Vs. Mahimanda Mishra 2018 (10) SCC 516,

has held that

“It is by now well settled that at the time of

considering an application for ail, the Court

must take into account certain factors such as

the existence of a prima facie case against the

accused, the gravity of the allegations, position

and status of the accused, the likelihood of the

accused fleeing from justice and repeating the

offence, the possibility of tampering with the

witnesses and obstructing the courts as well as

the criminal antecedents of the accused. It is

also well settled that the Court must not go into

deep into merits of the matter while considering

an application for bail. All that needs to be

established from the record is the existence of a

prima facie case against the accused.”

34

46. Lastly, it is submitted that grant of bail on medical ground is

concerned, as per the law laid down in the matter of Amrutbhai

Bholidasbhai Patel Vs. State of Gujarat, 2000 SCC Online Guj 299, it

has been held as under

21. It is true that under trial prisoners shall be

dealt with sympathy and court's approach

should be humane towards them but the

sympathy does not mean that by showing

misplaced sympathy the Court should bud in

need.

22. The whole prosecution case is at the

threshold. Though medical certificates would

indicate that the petitioner is suffering from

health problem the record shows that he has

been provided with medical aid by

Superintendent of Central Prison, Sabarmati,

Ahmedabad as and when necessary. The

petitioner has not given concrete data as to

when he proposes to undergo angioplasty or

bypass surgery. Though the petitioner states

that he has been advised angioplasty, the

petitioner is not able to state as to when he

wants to undergo angioplasty. It may be stated

that facility of angioplasty is now available in

Ahmedabad at Krishna Heart Institute and

Rajasthan Hospital, etc. In case of need the

petitioner can always be referred to any of these

institutes by the Superintendent of Central

Prison, Sabarmati, Ahmedabad, after obtaining

necessary certificate from the Civil Hospital or

U.N. Mehta Institute of Cardiology and

Research Centre. The record of the case does

not show that proper medical aid is not available

to the petitioner while he is in judicial custody.

Affidavit filed by the wife of the petitioner on

September 22, 2000 would show that as per the

medical advise surgery of prostate is to be

performed after the petitioner undergoes

angioplasty and surgery for heart ailment.

Therefore, grant of bail on the ground of need

for surgery of prostate at this stage need not be

35

considered. Moreover, in view of what is stated

in para 6 of her affidavit, no doubt, possibility of

cancer of prostate is raised but no specific

diagnosis about the cancer of prostate is made.

24. The attempt of the petitioner is to get bail for

unspecified period on medical ground which

cannot be entertained in view of the serious

charges made against him and well-founded

possibility of tampering with the evidence.”

47. Another contention is that the averments made by the counsel for

the applicant that the grounds of arrest and the reasons to believe do

not meet the threshold of Section 19 of the PMLA an are grossly

insufficient and there an be no necessity of arrest in the case is strongly

denied by the learned counsel for the respondent and it is submitted

that role of the applicant in the offence of money laundering is clearly

established. The applicant was found to have committed the criminal

activities related to the scheduled offence and thereby generating and

possessing the proceeds of crime as defined under Section 2 (i)(u) of

PMLA, 2002. The IO had reasons to believe on the basis of matter in his

possession that the applicant was involved in money laundering activity

and had acquired proceeds of crime in relation to liquor scam and the

investigating officer deemed his arrest necessary on multiple counts

which includes:

i) to prevent the destruction of evidence

ii) to confront him with various persons who are

involved in these activities.

Iii) to trace out proceeds of crime acquired by

him during his custodial interrogation.

iv) to prevent him from influencing the witnesses.

v) to identify other persons involved in the

syndicate during his custodial interrogation

36

48.It is thus, contended by the learned counsel for the

respondent/ED that the ED has substantive evidences to prove the

guilt of the accused in the trial and prima facie in the investigation, the

applicant is actually involved in all the activities connected with the

offence of money laundering ie. use or acquisition possession,

concealment and projecting or claiming as untainted property as defined

under Section 3 of the PMLA, 2002 and therefore the applicant is guilty

of the offence of money laundering under Section 3 of the PMLA, 2002

and punishable under Section 4 of the PMLA.

ANALYSIS

49. Heard learned counsel for the parties at length and perused the

records as well as the documents annexed with utmost circumspection.

50. In the instant case, there are nearly 70 accused persons while

charge sheet has only been filed against 11 persons. There are 457

witnesses in the scheduled offence and the trial is not likely to conclude.

However, the ED has submitted that at least 3 to 4 charge sheets are

yet to be filed in the scheduled offence. It appears that the applicant

was involved in the criminal acts of the syndicate and is in possession of

the proceeds of crime and that he received commission from the liquor

suppliers. The applicant was the key player in the syndicate. However,

no recovery of unaccounted money has been made in this regard.

Prima facie, the involvement of the applicant in the present case has

been established as massive corruption had taken place in the Excise

Department by way of extorting amount of Rs. 2000 crores

approximately and causing huge loss to the State Exchequer which

37

otherwise would have yielded revenue for Central and State

government.

51. However,the Apex Court has held that the power of ED to arrest

must be based on objective and fair consideration of material against a

person. Under the PMLA, ED officers can arrest a person if they have

reasons to believe based on the material in their possession that the

individual is guilty. It has been held by the Apex Court that PMLA

allowed arrests on the subjective opinion of ED officer, the court said

an officer’s “reasons to believe” that a person was guilty an deserved

arrest should not be based on mere suspicion. “Suspicion requires a

lower degree of satisfaction and does not amount to belief. Belief is

beyond speculation or doubt…. Existence and validity of the ‘reasons

to believe’ goes to the root of the power to arrest. The subjective

opinion of the arresting officer must be founded and based upon fair

and objective consideration of the material, as available with them on

the date of arrest.

52. The judiciary’s interpretative role in shaping due process within the

PMLA represents a significant stride. Emphasizing the written

communication of arrest grounds is vital for transparency and

accountability. However, this positive development raises practical

questions for the ED. The nuanced compromise between oral

communication and subsequent provision of written grounds reflects the

judiciary’s understanding of law enforcement challenges.

53.An analysis of section 19 of the PMLA unveils a delicate interplay

between legal principles, enforcement challenges, and evolving due

38

process standards. The judiciary’s commitment to balancing prompt law

enforcement with the protection of individual rights, particularly the right

to receive timely notification of arrest grounds, not only adds value but

also amplifies the ongoing conversation about the equitable

consideration of security and justice in the context of any crime, whether

financial or otherwise. On perusal of the records, I found that the ED

has shown the reason to believe that the applicant is guilty of the

proceeds of crime. On the basis of statements recorded under Section

50 of the PMLA however, retraction statement is made by the co-

accused persons namely Arun Pati Tripathi, Nitesh Purohit and Arvind

Singh.

54. The confessional statement of a co-accused under Section 50 of the

PMLA is otherwise, not a substantive piece of evidence and can be used

only for the purpose of corroboration in support of other evidence to

impart assurance to the Court in arriving at a conclusion of guilt.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

39

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:

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 a State

Government 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 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.”

55. The Apex Court in the matter of Directorate of Enforcement Vs.

Aditya Tripathi (Criminal Appeal No. 1401/2023) decided on

12.05.2023 has held 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

40

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:

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 a State Government

authorized in writing in this behalf by

41

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 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.” 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, 2002he Supreme Court on July

12 held that the power to arrest under the

Prevention of Money Laundering Act (PMLA)

cannot be exercised on the “whims and fancies”

of Directorate of Enforcement (ED) officers.

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

42

order(s) passed by the High Court, it appears that

what is weighed with the High Court is that

charge sheet has been filed against respective

respondent No. 1 – accused and therefore, the

investigation is completed. However, the High

Court has failed to notice and appreciate that the

investigation with respect to the scheduled

offences under the PML Act, 2002 by the

Enforcement Directorate is still going on. Merely

because, for the predicated offences the charge

sheet might have been filed it cannot be a ground

to release the accused on bail in connection with

the scheduled offences under the PML Act, 2002.

Investigation for the predicated offences and the

investigation by the Enforcement Directorate for

the 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.”

56. The Apex Court has held that the power to arrest under the

Prevention of Money Laundering Act (PMLA) cannot be exercised on

the “whims and fancies” of Directorate of Enforcement (ED) officers.

The court wondered if the ED even had a consistent, uniform and ”one-

rule-for-all” policy on when they should arrest people. It said the ED’s

43

power to arrest must be based on objective and fair consideration of

material against the accused.

CONCLUSION

57. From the documents and submissions of the counsel for the

applicant, it appears that there is no attachment of property against

accused persons being distillers despite quantifying the same at over

200 crores and no proceedings under Section 8 of the PC Act has been

initiated against them. The distillers, Excise officers, Siddarth Singhania

and FL-10A license holders have not been made accused which shows

that there is pick and choose manner in the investigation. It has been

revealed that the utilization of the proceeds of crime in purchase of

assets by the applicant cannot be ruled out. The fact that the applicant

had actively participated in the commission of predicate offence; had

acquired proceeds of crime and had substantial share in proceeds of

unaccounted liquor cannot be ignored. It is also true that the applicant

has suffered long period of incarceration and the trial has not yet

commenced and is not likely to conclude but the right to bail in cases of

delay, coupled with incarceration for a long period, depending on the

nature of the allegations, should be read into Section 439 of the Code

of Criminal Procedure and Section 45 of the PML Act.

58. Thus, it is held that after examining the entire documents, it is

revealed that there is substantial material indicating a strong nexus

between the applicant and the other accused persons in the

commission of the crime. There were documents and evidences that

reflected the involvement of the applicant who is the key conspirator

and beneficiary from the said scam. Records show that the grounds of

44

arrest was communicated to the applicant by the ED in writing. Thus,

without giving any observation as to whether the statement recorded

under Section 50 of the PMLA are admissible in evidence, but their

thorough consideration should be reserved for the trial court. It

emphasized that at the bail stage, these statements can be examined

to ascertain whether there are reasonable grounds to believe that the

applicant is not guilty. There is a difference between the admissibility of

a statement of an accused recorded under Section 50 of the Prevention

of Money Laundering Act (PMLA) and its evidentiary value.

59. In the specific facts and circumstances (where there was prima

facie material against the applicant) came to the conclusion that mere

possession of proceeds of crime and upholding such proceeds as

untainted would be sufficient to invoke the provisions of PMLA,

however, the ratio of the said judgment may have the potential to have

an unintended fallout in a different set of facts.

60. It is prima facie clear that on the one hand, it is claimed that the

matter is of a huge economic loss to the State Exchequer and the

offence is of highly serious nature and on the other hand, the distillers

who are allegedly supplying illegal liquor causing huge financial loss to

the State exchequer, have not been made accused despite the fact that

their names have been mentioned in the complaint made by the ED as

member of the syndicate. It has also been revealed that the assets

purchased in the name of entities controlled by the applicant and in the

name of his family member during the relevant period were procured

out of the proceed of crime. The digital evidence, flow of funds and

statements of multiple entities under Section 50 of the PMLA, 2002

45

collected during the course of investigation clearly establishes the role

of the applicant. Undoubtedly, the offence of money- laundering relates

to the process or activity connected with the proceeds of the crime

including its concealment possession, acquisition etcetra and 'proceeds

of crime' would mean any property derived or obtained directly or

indirectly as a result of criminal activity relating to scheduled offence.

Once Section 120-B is held to be a distinct, independent and stand

alone offence and is one of the scheduled offences under PMLA, any

property derived or obtained by any person directly or indirectly as a

result of criminal activity relating to the offence of conspiracy would

come within the definition of 'proceeds of crime'. A fortiori, any process

or activity connected with 'proceeds of crime' including its concealment,

possession, acquisition etcetra as untainted property, shall come within

the purview of offence of money-laundering as defined under Section 3

of PMLA.

61. After going through the records and the rival submissions on

behalf of the parties, prima facie it appears that in the investigation

conducted during the predicate office, the applicant had a key role in

the liquor syndicate and was involved in money laundering and

proceeds of crime along with other co-accused therefore, the

entitlement of the applicant to get bail under PMLA, 2002, is not

acceptable and considering the 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 for the reasons mentioned

hereinabove.

46

62.Accordingly, the prayer for bail made by the applicant under

Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (‘BNSS’)

read with Section 45 of the PMLA, for the alleged offence punishable

under Sections 3 & 4 of the PMLA, 2002 is hereby rejected.

Sd/-

(Arvind Kumar Verma)

Judge