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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (Crl.) No. 2397-2398 OF 2019

ANOOP BARTARIA & ETC. .....PETITIONER(S)

VERSUS

DY. DIRECTOR ENFORCEMENT

DIRECTORATE & ANR. .....RESPONDENT(S)

J U D G M E N T

BELA M. TRIVEDI, J.

1. The petitioners by way of these petitions have challenged the

common judgment and order dated 21.02.2019 passed by the High

Court of Judicature for Rajasthan, Bench at Jaipur, in S.B. Criminal

Writ Petition No. 704 of 2018 and S.B. Criminal Writ Petition No.

757 of 2018, whereby the High Court has dismissed both the

petitions imposing cost of Rs. 50,000/-.

2. The S.B. Criminal Writ Petition No. 704 of 2018 was filed by the

petitioner – Anoop Bartaria, Director of World Trade Park Ltd.

seeking a prayer to quash ECIR No.JPZO/01/2016 registered by

the Jaipur Zonal Office of Enforcement Directorate, with further

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prayer against the respondents not to file any criminal complaint

against the petitioner and not to take any coercive steps against the

petitioner in respect of the said ECIR. The S.B. Criminal Writ

Petition No. 757 of 2018 was filed by the petitioner – Anoop Bartaria,

the Director, World Trade Park Ltd., and by M/s World Trade Park

Ltd, a company registered under the Companies Act, 1956, seeking

a prayer to quash and set aside the prosecution complaint in ECIR

No.JPZO/01/2016.

3. As per the case of the petitioners, the petitioner- Anoop Bartaria is

a leading and an awarded engineer/architect having an expertise in

providing structural, architectural and design consultancy services

and is also the Chairman and Managing Director of the World Trade

Park Ltd., (Erstwhile M/s R.F. Properties & Trading Ltd.) a company

registered under the Companies Act, 1956. The World Trade Park

is one of the most sought-after real estate commercial properties

situated at JLN Marg, Jaipur. The World Trade Park Company is

engaged in the business of selling and leasing commercial spaces

to various interested buyers/purchasers.

4. One Mr. Bharat Bomb and his associates approached the

petitioners for the purchase of commercial units in the said World

Trade Park and booked certain units. Initially the commercial units

were booked in the name of Raj Darbar Material Trading Pvt. Ltd.

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by the said Bharat Bomb, and the amounts thereof in aggregate Rs.

74.02 crores were paid to the petitioners through demand draft

and/or RTGS. Further certain amounts totaling Rs. 1.4 crores were

received by the petitioner- Anoop Bartaria from Bharat Bomb

towards architectural designing and consultancy services towards a

real estate project being brought about by Mr. Bomb in Udaipur.

However, subsequently Mr. Bomb and his associates, asked the

petitioners to register the units in the name of new entities, and

therefore the petitioners returned the amount back deposited by

M/s. Raj Darbar Material Trading Pvt. Ltd. Thereafter in the year

2015, 34 commercial spaces were sold by the petitioners in favour

of Mr. Bharat and his associates by executing 34 registered sale

deeds. According to the petitioners, the amounts were received

through demand drafts and/or RTGS, and all legal formalities

required for registration were also followed in due course. The

possession of the said units was also handed over to the respective

entities/persons as instructed by Mr. Bomb.

5. The petitioners had taken loan/financial assistance from IDBI Bank

and DHFL, as also from UCO Bank, mortgaging the units/spaces of

World Trade Park with the said banks. On 04.10.2014, the

petitioners had obtained NOC from UCO Bank for the release of a

particular immovable property admeasuring 23837 sq.ft. and on

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23.12.2014 had obtained NOC from IDBI Bank, Jaipur for transfer

of a particular units subject to the compliance of the conditions

mentioned therein. Similar, NOC for the sale of area was also

issued by DHFL, Mumbai on 24.03.2015 for transfer of units

admeasuring 11538 sq.ft.

6. As per the further case of the petitioners, the petitioner- Anoop

Bartaria had purchased three offices namely office nos. 407, 408

and 409 in the World Trade Park in his personal capacity and had

paid the amount through his current account which had no

connection with Mr. Bharat Bomb or his associates.

7. An FIR being No. RCBD1/2016/E/0002 came to be registered by

CBI, BS&FC, New Delhi, on 07.03.2016 against the said Bharat

Bomb, his associates and the officials of three branches of the

Syndicate Bank namely:- (1) Bapu Bazar, Udaipur (2) Malviya

Nagar, Jaipur and (3) MI Road, Jaipur and certain other persons for

the offences under the 120B, 420, 467, 468, 471, 472 and 474 of

IPC and Section 13(2) read with 13(1)(d) of the Prevention of

Corruption Act, 1988. It was alleged inter alia in the said FIR that

during 2011-2015, to defraud the bank, the accused Bharat Bomb

and his associates, in collusion with the officials of Syndicate Bank

had misused the KYC documents of his clients/employees/family

members as well as the existing customers of the Syndicate Bank

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to launder the money to the tune of about more than 18,000 crores

which resulted in siphoning off Rs. 1055.79 crores. On 14.06.2016,

the CBI, BS&FC filed charge-sheet before the Designated CBI

Court, Jaipur against Mr. Bharat Bomb and some of the officers of

the Syndicate Bank for the said offences.

8. Since some of the offences registered by the CBI in the said FIR

were scheduled offences under the Prevention of Money

Laundering Act, 2002 (PMLA), the Directorate of Enforcement (ED)

Jaipur, initiated investigation for the offence of money laundering by

registering an Enforcement Case Information Report (ECIR) on

11.07.2016.

9. During the course of investigation, it was revealed that the petitioner

Anoop Bartaria, his companies M/s World Trade Park Ltd. and M/s

Sincere Infrastructure Private Ltd. had received more than Rs. 160

crores defrauded funds from the accounts of fictitious firms/

companies created and operated by Bharat Bomb namely M/s B.K.

Builders, M/s Raj Darbar Material Trading Pvt. Ltd., M/s Raj Darbar

Material Trading LLP, Jai Hanuman Construction & M/s Omnia

Entertainment and Hospitality etc.

10. The petitioner- Anoop Bartaria therefore filed the writ petition being

S.B. Criminal Writ Petition No. 704 of 2018 before the High Court,

seeking prayer to quash the said ECIR dated 11.07.2016. However,

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pending the said petition, the Prosecution complaint based on the

said ECIR came to be filed against several persons including the

present petitioners on 17.07.2018. The petitioners therefore filed

S.B. Criminal Writ Petition No. 757 of 2018 seeking prayer to quash

the said Prosecution complaint. Both the writ petitions came to be

dismissed with cost of Rs. 50,000/- by the High Court vide the

impugned order.

11. The bone of contention raised by the learned counsel Mr. Swadeep

Hora for the petitioners is that the petitioners were neither named in

the FIR registered by the CBI against the officers of the Syndicate

Bank and Mr. Bharat Bomb nor they were named in the subsequent

ECIR registered by the ED, however, the ED after the investigation

of the said ECIR has filed the Prosecution complaint falsely

involving the petitioners in the same. According to him, the sine qua

non and the essential ingredient for the offence of money laundering

as defined in Section 3 read with Section 4 of the PMLA is that the

person must be knowingly or actually involved in any process or

activity connected with the proceeds of crime as defined under

Section 2(1)(u) of the said Act and, therefore, unless the said

essential ingredient of knowledge is met out, no complaint or

proceedings under the said Act could be initiated. In the instant

case, the said pre-requisite for filing the complaint against the

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petitioners being missing, the complaint was not tenable in the eye

of law, and that the continuation of any proceedings against the

petitioners under the PMLA would be an abuse of process of law.

12. Elaborating his submissions on the allegations made against the

petitioners, Mr. Hora submitted that the petitioners had only “buyer-

seller” relationship with Mr. Bharat Bomb and his associates, and

that the petitioners had no knowledge that the money received by

them was the proceeds of crime. In this regard Mr. Hora has placed

reliance on Nikesh Tarachand Shah Vs. Union of India and

Another

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. He further submitted that though initially Mr. Bharat

Bomb had requested the petitioners to book certain units in the

name of M/s Raj Darbar Material Trading Pvt. Ltd., subsequently he

had requested to execute sale deeds in the name of various

associated entities, and therefore 34 separate registered sale

deeds were executed by the petitioners, and respective amounts

were received separately from each of the entity through demand

drafts or RTGS, after refunding the amount received from M/s. Raj

Darbar Material Trading Pvt. Ltd. In the said transactions, the

petitioners had received the sale consideration of INR 76.72 crores

and not INR 150 crores as alleged.

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(2018) 11 SCC 1

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13. Mr. Hora further submitted that the petitioners had sold the units

after obtaining valid NOCs from UCO Bank, IDBI AND DHFL and

none of the banks has raised any grievance against the petitioners,

as all the dues were cleared in respect of the units mentioned

therein by the petitioners before obtaining NOCs from the said

banks. He further submitted that the petitioner- Anoop Bartaria

being a renowned architect had provided architectural services to

Mr. Bharat Bomb for his Royal Raj Villas project at Udaipur and the

amount of fees received from Mr. Bomb was also reflected in the

income tax and service tax returns of the petitioners.

14. According to Mr. Hora, the alleged offences under the PMLA are not

cognizable offences and the entire investigation carried out by the

ED was without any authority of law. Lastly, he submitted that the

petitioners who are absolutely unconnected to Mr. Bharat Bomb are

suffering the business loss and the credibility and therefore the

complaint deserves to be quashed in view of the judgment of this

Court in case of Pepsi Foods Ltd. and Another vs Special

Judicial Magistrate and Others

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.

15. Per contra, the learned Additional Solicitor General appearing for

the respondents vehemently submitted that the petitioners having

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(1998) 5 SCC 749

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filed frivolous petitions before the High Court, the same were

dismissed by the High Court with cost, which order being just and

proper should not be interfered with by this Court. Relying upon the

State of Haryana and Others. vs. Bhajan Lal and Others

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he

submitted that the power of quashing a complaint can only be

exercised in rarest of rare case where allegations taken on face

value do not prima facie constitute any offence. In the instant case,

there are specific allegations of money laundering against the

petitioners which had surfaced during the course of investigation

carried out by the authorized officer under the PMLA, which prima

facie constitute offence against the petitioners under the said Act.

16. Placing reliance on the Prosecution complaint filed by the

Directorate of Enforcement, the learned ASG pointed out that the

petitioner- Anoop Bartaria had availed fraudulent loan of Rs. 4.80

crores from the Syndicate Bank under the guise of purchasing three

offices in his name in the World Trade Park, for which the Syndicate

Bank had lodged FIR with CBI on 23.03.2017. It was also revealed

that the instalment of the said term loan to the extent of 1.50 crores

were being paid by getting money from the fictitious firms controlled

by Mr. Bharat Bomb and his associates. He also pointed out that

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1992 Suppl. (1) SCC 335

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the said current bank account opened by the petitioner- Anoop

Bartaria with Syndicate bank on 30.09.2014 was exclusively

operated for receiving tainted money from Mr. Bharat Bomb and no

other transactions had taken place in the said account. The said

account was also not declared in ITR of Anoop Bartaria filed for the

assessment year 2015-16.

17. He submitted that the petitioner- Anoop Bartaria and his company

had availed the loans for the project of World Trade Park from IDBI

Bank/DHFL and UCO Bank, by mortgaging the units of the said

project to the said banks. In line with terms of sanction, the World

Trade Park Ltd. had opened an escrow account with IDBI Bank, in

which all sale proceeds were to be deposited in that account only.

However, Mr. Bartaria did not deposit any amount in the said escrow

account and facilitated Mr. Bharat Bomb and his associates in

parking the tainted money by opening the account in the Syndicate

bank. In the request letters to IDBI for issuing NOC in respect of

office nos. 407, 408 and 409, the name of the customer shown was

M/s Raj Darbar Material Ltd. showing the status of the properties as

unsold.

18. Learned ASG has also placed reliance on the counter affidavit to

buttress his submissions that the petitioner- Anoop Bartaria, this

company M/s. World Trade Park Ltd., earlier named as M/s. R.F

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Trading and Properties, and M/s. Sincere Infrastructure Pvt. Ltd.

had received more than 160 crores of defrauded fund since October

2013 till unearthing of the fraud, from the accounts of fictitious

firms/companies created and operated by Bharat Bomb and his

associates.

19. The learned ASG has placed heavy reliance on the prosecution

complaint filed by the ED, more particularly on para nos. 10.5 and

10.8 to show as to how the petitioner-Anoop Bartaria was complicit

in the crime and sharing the fruit of the crime with Bharat Bomb; and

as to how he was directly involved in the activity connected with

proceeds of crime including generation, acquisition and use of

proceeds of crime by commission of scheduled offence.

20. Pressing into service the provisions contained in Section 45 read

with the explanation to the said provision inserted by the Finance

(No.2) Act, 2019, he submitted that the offences under the PMLA

are “cognizable and non-bailable”. Learned ASG lastly submitted

that because of the order passed by this Court on 25.03.2019

directing the respondents not to take coercive action against the

petitioners, the proceedings before the competent Court are stayed

and the investigations have also come to stand still, which has

caused great prejudice to the case filed by the ED under the PMLA.

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21. Now, adverting to the first and foremost contention raised as to

whether the offences of money laundering under PMLA are

cognizable or not, it may be noted that sub-section (1) of Section 45

pertaining to the offences was amended by Act 20 of 2005. Sub-

section 1 of Section 45 prior to amendment read as under:

“Section 45- Offences to be cognizable and

non- bailable-

(1) Notwithstanding anything contained in

the Code of Criminal Procedure, 1973 (2 of

1974),

(a) Every offence punishable under this Act

shall be cognizable;

(b) No person accused of an offence

punishable for a term of imprisonment of more

than three years under Part A of the Schedule

shall be released on bail or on his own bond

unless.”

22. Subsequently, sub-section (1) was substituted by the Act 20 of 2005

w.e.f. 1.7.2005.

“(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…”

23. It may be noted that for removal of doubts, the Explanation to Section

45 was inserted by the Finance (No.2) Act, 2019 w.e.f. 1.8.2019

which reads as under:

“Explanation- For the removal of doubts, it is

clarified that the expression “Offences to be

cognizable and non-bailable” shall mean and

shall be deemed to have always meant that all

the offences under this Act shall be cognizable

offences and non -bailable offences

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notwithstanding anything to the contrary

contained in the Code of Criminal Procedure,

1973 (2 of 1974), and accordingly the officers

authorized under this Act are empowered to

arrest an accused without warrant, subject to

the fulfilment of conditions under Section 19 and

subject to the conditions enshrined under this

Section”.

24. From the afore-stated substitution of sub-section (1) and insertion

of the Explanation to Section 45, and non-amendment in the short

title of Section 45 – “offences to be cognizable and non-bailable”,

there remains no shadow of doubt that all the offences under the

PMLA were, are and shall be “cognizable and non-bailable

offences” notwithstanding anything to the contrary contained in the

Code of Criminal Procedure Code, 1973. Accordingly, the officers

authorized under the PMLA Act are empowered to arrest an

accused without warrant, subject to the fulfilment of conditions

under Section 19 which deals with power to arrest and subject to

the conditions enshrined under Section 45. The Prosecution

complaint no.12/2018 in ECIR No.JPZO/01/2016 having been

lodged by the authorized officer competent to file the complaint

under Section 45 of the Act read with order dated 11.11.2014 issued

by the Government of India, Ministry of Finance, Department of

Revenue, New Delhi, as stated in the complaint itself, the Court

does not find any substance in the submissions made by Mr. Hora

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that the Prosecution complaint was not lodged by the authorized

officer.

25. The submissions by Mr. Hora, learned counsel for the petitioners

that the knowledge of the petitioners that they were dealing with the

proceeds of crime was sine qua non and essential ingredient for the

offence of money laundering as defined under Section 3 of the

PMLA, and that in the instant case, in absence of any material to

show that the petitioners had the knowledge that they were dealing

with the proceeds of crime committed by Bharat Bomb and his

associates, continuation of the proceedings under the PMLA

against the petitioners would be an abuse of process of law, have

also no legs to stand. It may be noted that offence of money

laundering has been defined in Section 3 of the PMLA, which reads

as under:

“3. Offence of money -laundering. —

Whosoever directly or indirectly attempts to

indulge or knowingly assists or knowingly is a

party or is actually involved in any process or

activity connected [proceeds of crime including

its concealment, possession, acquisition or use

and projecting or claiming] it as untainted

property shall be guilty of offence of money-

laundering.

[Explanation. — For the removal of doubts, it

is hereby clarified that, —

(i) a person shall be guilty of offence of money-

laundering if such person is found to have

directly or indirectly attempted to indulge or

knowingly assisted or knowingly is a party or is

actually involved in one or more of the following

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processes or activities connected with proceeds

of crime, namely: —

(a) concealment; or

(b) possession; or

(c) acquisition; or

(d) use; or

(e) projecting as untainted property; or

(f) claiming as untainted property,

in any manner whatsoever;

(ii) the process or activity connected with

proceeds of crime is a continuing activity and

continues till such time a person is directly or

indirectly enjoying the proceeds of crime by its

concealment or possession or acquisition or use

or projecting it as untainted property or claiming

it as untainted property in any manner

whatsoever.]”

26. Section 2(u) defines what is “proceeds of crime” and Section 2(y)

defines what is “Scheduled offence”. As discernable from the

record, the Prosecution complaint in ECIR was lodged against the

petitioners and others under the PMLA by the ED, pursuant to the

investigation carried out by the CBI in the FIR No.

RCBD1/2016/E/0002 dated 07.03.2016 and the charge-sheet dated

14.06.2016 filed by the CBI against Bharat Bomb and others for the

offences under Sections 120B, 420, 467, 468, 471, 472 and 474 of

IPC and Section 13(2) read with Section 13(1)(d) of the Prevention

of Corruption Act, 1988 at the Designated CBI Court at Jaipur. All

the said offences are scheduled offences within the meaning of

Section 2(y) of the said Act. The allegations against the petitioner

no.1-Anoop Bartaria (Accused No.5) as the Chairman and

Managing Director of M/s. World Trade Park Ltd. and the petitioner

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no.2- World Trade Park Ltd. (accused No.8) are stated in detail in

para 10.5 and 10.8 respectively in the Prosecution complaint. The

Court at this juncture is not required to go into the merits of the said

allegations. Suffice it to say that serious allegations of money

laundering are alleged against both the petitioners in the

Prosecution complaint and sufficient material particulars have been

narrated in the said complaint to substantiate the said allegations,

which prima facie show the direct involvement of the petitioners in

the alleged offences of money laundering as defined in Section 3 of

the said PMLA.

27. Having regard to the definition contained in Section 3, it would be a

folly to hold that the knowledge of the accused that he was dealing

with the proceeds of crime, would be a condition precedent or sine

qua non required to be shown by the prosecution for lodging the

complaint under the said Act. As the definition itself suggests

whosoever directly or indirectly attempts to indulge or knowingly

assists or knowingly is a party or is actually involved in any process

or activity connected with the proceeds of crime including its

concealment, possession, acquisition or use and projecting or

claiming it as untainted property shall be guilty of offence of money-

laundering. Hence, apart from having knowledge, if a person who

directly or indirectly attempts to indulge or is actually involved in the

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process or activity connected with the proceeds of crime, is also

guilty of the offence of money laundering. In the instant case, the

direct involvement of the petitioners in the activities connected with

the proceeds of crime has been alleged, along with the material

narrated in the complaint which would require a trial to be conducted

by the competent court.

28. It is axiomatic that the power to quash complaint under Section 482

of Cr.P.C. should be exercised very sparingly and with

circumspection, and that too in the rarest of rare cases. In State of

Haryana and Others vs. Bhajan Lal and Others (supra), this

Court has laid down certain guidelines as to when the powers under

Section 482 could be exercised either to prevent abuse the process

of any court or otherwise to secure ends of justice.

“102. In the backdrop of the interpretation of the

various relevant provisions of the Code under

Chapter XIV and of the principles of law

enunciated by this Court in a series of decisions

relating to the exercise of the extraordinary

power under Article 226 or the inherent powers

under Section 482 of the Code which we have

extracted and reproduced above, we give the

following categories of cases by way of

illustration wherein such power could be

exercised either to prevent abuse of the process

of any court or otherwise to secure the ends of

justice, though it may not be possible to lay

down any precise, clearly defined and

sufficiently channelised and inflexible guidelines

or rigid formulae and to give an exhaustive list

of myriad kinds of cases wherein such power

should be exercised.

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(1) Where the allegations made in the first

information report or the complaint, even if they

are taken at their face value and accepted in

their entirety do not prima facie constitute any

offence or make out a case against the accused.

(2) Where the allegations in the first information

report and other materials, if any, accompanying

the FIR do not disclose a cognizable offence,

justifying an investigation by police officers

under Section 156(1) of the Code except under

an order of a Magistrate within the purview of

Section 155(2) of the Code.

(3) Where the uncontroverted allegations made

in the FIR or complaint and the evidence

collected in support of the same do not disclose

the commission of any offence and make out a

case against the accused.

(4) Where, the allegations in the FIR do not

constitute a cognizable offence but constitute

only a non-cognizable offence, no investigation

is permitted by a police officer without an order

of a Magistrate as contemplated under Section

155(2) of the Code.

(5) Where the allegations made in the FIR or

complaint are so absurd and inherently

improbable on the basis of which no prudent

person can ever reach a just conclusion that

there is sufficient ground for proceeding against

the accused.

(6) Where there is an express legal bar

engrafted in any of the provisions of the Code or

the concerned Act (under which a criminal

proceeding is instituted) to the institution and

continuance of the proceedings and/or where

there is a specific provision in the Code or the

concerned Act, providing efficacious redress for

the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly

attended with mala fide and/or where the

proceeding is maliciously instituted with an

ulterior motive for wreaking vengeance on the

accused and with a view to spite him due to

private and personal grudge.”

29. The case of the petitioners does not fall under any of the above

categories. The petitioners have also failed to make out any case of

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abuse of process of the court at the instance of the respondent

authorities. There being enough material to show prima facie

involvement of the petitioners in the alleged offence of money

laundering, as contemplated under the PMLA the High Court had

rightly dismissed the petitions filed by the petitioners. As stated in

the statement of objects and reasons of the Act, money laundering

poses a serious threat not only to the financial systems of the

countries but also to their integrity and sovereignty. Hence any

lenient view in dealing with such offences would be a travesty of

justice.

30. Before parting, it may be noted that the petitioners in the SLPs while

praying for the main relief of quashing the impugned judgment and

order dated 21.02.2019 passed by the High Court, had sought

interim relief seeking stay of the entire proceedings and the

prosecution complaint no. 12/2018 in ECIR No.JPZO/01/2016

pending before the Special Judge (PMLA cases) Jaipur, without

producing the said complaint along with the SLP paper books. The

SLPs appear to have been filed on 8

th

March, 2019 declaring that

all the defects have been cured, and thereafter on 25.03.2019, by

way of an application seeking permission to file additional

documents, the petitioners had produced the said Prosecution

complaint no.12/2018 on record. Apart from the fact that after filing

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of the SLPs, no documents could have been filed without the

permission of the Court, which in the instant case does not appear

to have been sought for by the petitioners nor granted by the Court,

the very practice of not filing the essential and relevant documents,

more particularly, the documents in respect of which a relief is

sought in the SLPs, is strongly deprecated. It may be noted that

non-production of the relevant documents especially the documents

in respect of which the relief is sought, along with the SLPs could

be the sole ground for rejection of the SLPs at the outset.

31. The Registry is also directed to verify at the time of registration of

SLPs as to whether all the relevant documents, more particularly,

the documents in respect of which the relief is sought, have been

produced at the first instance by the petitioners along with the SLPs

or not.

32. In that view of the matter, the petitions are dismissed. The interim

relief granted earlier stands vacated forthwith. It is needless to say

that the observations made against the petitioners in this order are

only prima facie and the trial court shall decide the case on merits

without being influenced by the said observations.

33. Learned counsel for the respondents, on instructions, informs this

Court that since the investigation is over and charge-sheet has been

filed, no custodial interrogation of the petitioner is required.

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34. The E.D shall be at liberty to proceed further with the Prosecution

complaint in accordance with law.

35. Copy of this judgment be sent to the Secretary General and the

Registrar (J-I) for doing the needful.

..………………………. J.

[AJAY RASTOGI]

…..................................J.

[BELA M. TRIVEDI]

NEW DELHI;

21.04.2023