No Acts & Articles mentioned in this case
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
A.B.A. No. 7842 of 2023
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Rajkumari … … Appellant
Versus
Union of India through Directorate of Enforcement, Ranchi
… … Respondent
with
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Genda Ram … … Appellant
Versus
Union of India through Directorate of Enforcement, Ranchi
… … Respondent
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CORAM: HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD
----
For the Petitioner : Mr. Jitendra S. Singh, Advocate
: Mr. Shubhashis Rasik Soren, Advocate
: Ms. Shobha Gloria Lakra, Advocate
For the Opp. Party : Mr. Prashant Vidyarthy, Sr.P.C. UOI
----
C.A.V. on 22.03.2024 Pronounced on 12/04/2024
Since both these applications are arising out of the
common ECIR therefore with the consent of the parties
disposed of by this common order.
Prayer
1. The instant applications have been filed under
Section 438 of the Code of Criminal Procedure, 1973
praying for grant of pre-arrest bail in ECIR Case No.2 of
2023 arising out of ECIR-RNZO/16/2020 dated 17.09.2020
registered for the offence under Sections 3 punishable
under section 4 of the Prevention of Money Laundering Act,
2002, pending in the court of learned Additional Judicial
Commissioner-VIII-cum-Special Judge, PML Act, Ranchi.
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Case of the Prosecution
2. The prosecution case, in brief, is that the
investigation under the Prevention of Money Laundering
Act, 2002 was initiated by recording the
ECIR/RNSZO/16/2020 dated-17.09.2020 against the
accused persons on the basis of information received from
FIR No. 13/2019 dated-13.11.2019 registered by the ACB,
Jamshedpur.
3. Subsequently the Final Report has been filed by the
investigating agency bearing no. 01/2020 dated-
11.01.2020 under Section 120-B and 201 IPC and under
Section 7 (b) of the P.C. Act, 1988 against the accused
persons, namely, Alok Ranjan and Suresh Prasad Verma.
4. Further, in course of search proceeding conducted in
relation to the instant case at different places under Section
17 PML Act to investigate the role of the accused persons
and their close associates, it is found that part of the
proceeds of crime acquired in the form of commission/bribe
in lieu of allotment of tenders by the accused Veerendra
Kumar Ram, a public servant. The said bribe money was
getting routed to the bank accounts of family members of
Veerendra Kumar Ram with the help of bank accounts of
Delhi based CA Mukesh Mittal 's employees/relatives.
5. It is also ascertained that Veerendra Kumar Ram
used to give cash to Mukesh Mittal who with the help of
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other entry providers used to take entries in the bank
accounts of his employees and relatives and then such fund
was transferred by Mukesh Mittal into the bank accounts of
the co-accused Rajkumari (wife of Veerendra Kumar Ram)
and Genda Ram (father of Veerendra Kumar Ram). Both are
the petitioners herein.
6. Further, it is also ascertained that some bank
accounts opened (at Delhi) on the basis of forged documents
were also being used in such routing of funds. Therefore,
findings related to such routing of funds were shared with
the Delhi Police u/s 66(2) of the PMLA by the I.O. Further,
on the basis of the information shared U/s 66(2) of PMLA,
2002, an FIR No. 22/2023, was registered by Economic
Offence Wing (EOW), Delhi against (i) Veerendra Kumar
Ram, (ii) Mukesh Mittal and (iii) unknown Others under
Sections 419, 420, 465, 466, 468, 471, 473, 474, 476, 484,
and 120-B of IPC, 1860, and Section 7 and 5 of Specified
Bank Notes (Cessation of Liabilities) Act; 2017.
7. The prosecution complaint shows that various
records, documents, digital devices, cash, jewellery, vehicles
were recovered and seized during course of search
conducted on 21.02.2023 and during investigation they
were found accumulated through proceeds of crime.
8. Accordingly, prosecution has submitted prosecution
complaint in the matter and based upon that cognizance
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has been taken on 29.04.2023 for the offence u/s 3 and u/s
4 of PML Act, 2002 against the present petitioners and
others.
9. There are specific allegations against the
petitioner/accused namely Rajkumari that she knowingly
assisted to her husband who is co-accused to purchase
immovable properties at New Delhi in her name and the
purchase consideration was paid from the proceeds of crime
generated by her husband Veerendra Kumar Ram.
10. Against the petitioner/accused namely Genda Ram
there is specific allegation that he knowingly assisted his
son Veerendra Kumar Ram who is co-accused to purchase
immovable properties at New Delhi in his own name to the
tune of Rs 22.5 Crore from the commission/bribe amount,
which was acquired by his son Veerendra Kumar Ram.
Further, the bank account statements of the said petitioner
reflect huge credits to the tune of Rs 4.525 crores.
11. Accordingly, in connection of alleged crime, the
present petitioners had preferred Anticipatory Bail petition
no. 1551 of 2023 and 1549 of 2023 for grant of pre-arrest
bail but the same was rejected vide order dated 22.07.2023
passed by the court of, learned Additional Judicial
Commissioner-XVIII-cum-Special Judge, PML Act, Ranchi.
12. Hence the present applications have been filed.
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Argument advanced by learned counsel for the
petitioners:
13. Mr. Jitendra S. Singh, learned counsel for the
petitioners has argued inter alia on the following grounds:
I. The petitioners are quite innocent and have falsely
been implicated in this case with oblique motive and
mala fide intention to harass the petitioners.
II. There is no allegation said to be committed so as to
attract the offence under Section under Section 3 of
the PML Act since there is no allegation of laundering
of money against the petitioners.
III. In alternate, submission has been made that even if
the allegations leveled against petitioners are
accepted then also it would not constitute offence
under Section 3/ 4 of the PML Act inasmuch as the
allegations fall short of the essential ingredients for
offence of money laundering.
IV. That the Enforcement Directorate has exceeded its
jurisdiction in arraigning the petitioners as an
accused in the present case when they cannot even
be remotely linked to the predicate offence which in
the present case is FIR No. 13/2019 dated
13.11.2019 registered by ACB.
V. FIR No. 13/2019 dated 13.11.2019 registered by
ACB was registered subsequent to a trap laid down
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against Mr. Suresh Prasad Verma and the aforesaid
FIR entails investigation arising out of the said cause
of action. Therefore, FIR no. 13/2019 dated
13.11.2019 is not emanating from a cause of action
purportedly connected with the petitioner's husband.
Therefore, the petitioners do not even have a
purported connection to the predicate offence of the
present ECIR.
VI. The Petitioners are not involved in laundering of
money as they have disclosed their wealth to the
Income Tax Department which is apparent from the
records.
VII. It is the settled assumption that person
having/dealing with financial transactions cannot
know at the outset that the funds involved in the
financial transaction are proceeds of crime and the
petitioners are the wife and father of that accused
hence, it does not lead to an automatic inference that
the money given by that accused are proceeds of
crime. However, in the instant case Veerendra Kumar
Ram (accused no.1) and the petitioners themselves
are not even accused in predicate offence.
VIII. That the twin conditions of section 45 PMLA are not
applicable to the petitioner namely Rajkumari as she
is a woman and falls within the proviso to section
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45(1) of the PMLA which appears to further the
constitutional mandate of Article 15(3) of the
Constitution of India which enables framing of laws
for the benefit of women and children.
IX. In the aforesaid context reliance is placed by the
learned counsel for the petitioners on the judgment
of the Delhi High Court rendered in Devki Nandan
Garg v. Directorate of Enforcement, (2022) 6 HCC
(Del) 67 and it has been contended that the proviso
to Section 45(1) has been incorporated as relaxation
for persons below sixteen years of age; a woman; or
one who is sick or infirm.
14. Learned counsel for the petitioners based upon the
aforesaid grounds has submitted that in the aforesaid view
of the matter as per the ground agitated hereinabove, it is a
fit case where the petitioners are to be given the benefit of
privilege of pre-arrest bail.
Argument advanced by learned counsel for the opposite
party-Enforcement Directorate:
15. While on the other hand, Mr. Amit Kumar Das,
learned counsel for the opposite party - Enforcement
Directorate has seriously opposed the said
submission/ground both based upon the fact and the law
as referred hereinabove.
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(I) So far as subsequent FIR is concerned, submission
has been made that it is incorrect on the part of
the petitioner to take the ground that since the
first FIR is dated 13.11.2019 and subsequent
thereto it was found that the money was being
routed in Delhi then the second FIR was instituted
on 03.03.2023. Hence, there is no illegality since
as per the allegation made in the complaint that
the first FIR which is against Alok Ranjan who has
informed to be the custodian of the money which
was being illegally given by the co-accused
Veerendra Kumar Ram. While the second FIR
being FIR No. 22/2023 is for investigating the
routing of the said money illegally procured by the
said Veerendra Kumar Ram. Then in such
circumstances, the complaint has been instituted
by the Enforcement Directorate, which cannot be
said to suffer from any illegality.
(II) Further, it has been submitted by referring to the
imputation as has come in course of investigation
conducted against the present petitioners wherein,
the direct involvement of the petitioners have been
found in laundering the money.
(III) Learned counsel for the Enforcement Directorate
has referred the imputation as has come against
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the petitioners in the prosecution complaint
wherein it is alleged that the accused Veerendra
Kumar Ram was actively and directly indulged in
the process of acquisition, possession and
concealment of proceeds of crime to the tune of Rs.
48,94,10,877/- and he arranged the bogus entries
of Rs. 9.3 crores into the bank account of his wife
Rajkumari and of Rs. 4.535 into the bank account
of his father Genda Ram and the amount was
utilized for purchasing vehicles, other properties
and living a luxurious life.
(IV) Learned counsel for the respondent- ED has
further submitted that regular bail petition of co-
accused Tara Chand and Harish Yadav has been
rejected by this Court vide order dated 01.03.2024
passed in B.A. No. 11095 of 2023 and BA No. 9734
of 2023 respectively and anticipatory bail petition
of co-accused, Mukesh Mittal has also been
rejected by this Court vide order dated 16.02.2024
passed in ABA No. 10671 of 2023, looking into the
gravity of offence and applying the rigours of
Section 45 of PML Act, 2002.
(V) The Petitioners have directly indulged in the
process of possession, concealment, & use of
proceeds of crime and also knowingly assisted
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Veerendra Kumar Ram (Accused no 1) in
projecting the same as untainted, hence, the
present petitioners have committed the offence of
Money Laundering as defined under section 3 of
PML Act 2002.
(VI) The provisions of the PMLA are an independent
offence as the PMLA is a different special statute.
The investigation conducted by the Enforcement
Directorate under the PMLA,2002 is triggered after
committing, the commission of a scheduled
offence, out of which proceeds have been
generated. During investigation, active involvement
of the Petitioners in the layering, transfer and use
of proceeds of crime has surfaced.
(VII) Further during the investigation, the petitioners
have never divulged the actual source of their
income during their statements recorded u/s 50 of
PMLA, 2002. Further, the petitioners namely
Rajkumari has only submitted a copy of Form No.
BA as well as the notices that were issued to her
by the Income Tax Department. However, in the
said petition itself, she has not disclosed the
source of funds/income used in investment in
shares and securities as well as investment in
jewelry, gold and silver bullion and in business
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which clearly established that the said credits were
acquired out of Proceeds of Crime generated
through commission of criminal activities.
(VIII) Further, without prejudice to the arguments raised
above, it is submitted that merely declaring income
and paying tax without providing a source does
not absolve the charges of money laundering. It is
an admitted fact that the Petitioner's husband is
involved in huge corruption which is base of all the
properties acquired by the Petitioner or family
members.
(IX) Petitioner namely Rajkumari, during her statement
u/s 50 of PMLA, has inter alia stated that source
of all the funds received in her bank accounts
would be explained by husband Veerendra Kumar
Ram, and Veerendra Kumar Ram in his statement
u/s 50 of PMLA has stated that aforesaid credits
are out of the entries received in the said accounts
against cash, the source of which was the
commission received by Veerendra Kumar Ram
which clearly established that the said credits were
acquired out of Proceeds of Crime generated
through commission of criminal activities.
(X) Hence, the averments raised by the Petitioner do
not hold any merit, and there are documentary
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evidence and statement of witnesses to corroborate
or substantiate the charges on the Petitioner.
(XI) Further the learned counsel for the respondent put
his reliance on the judgment rendered by the
Hon’ble Apex Court in Rohit Tandon v.
Directorate of Enforcement, (2018) 11 SCC 46
wherein the Hon’ble Supreme Court observed that
the provisions Section 24 of the PMLA provide that
unless the contrary is proved, the authority or the
Court shall presume that proceeds of crime are
involved in money laundering and the burden to
prove that the proceeds of crime are not involved,
lies on the Petitioner.
(XII) It is submitted that the contention of the learned
counsel for the petitioner that the proviso to
section 45 cannot be attracted in the present case
only on account of the Applicant being a woman is
totally misplaced. The learned counsel for the
respondent ED put his reliance upon the judgment
as rendered by the Delhi High Court in Shivani
Rajiv Saxena v. Directorate of Enforcement &
Anr. vide order dated 15.09.2017 in Bail
Appln.1518/2017 wherein bail was denied to the
accused, who was a woman, as the court observed
that the application of discretion described in
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proviso to section 45(1) has to be applied consider
the unique circumstances surrounding specif ic
groups of individuals, rather than being applied
universally as a standard rule that all those
categories of people in the said proviso must be
granted bail.
(XIII) Further, drawing an analogy with Section 437(1)
Cr.P.C. and also relying upon the judgment of
Delhi High Court in Meenu Dewan v. State in
Bail Appl. No.736/2008 wherein it was held that
there is no absolute or unconditional rule that bail
should be granted if the accused is a woman, but
the nature and gravity of the offence and
heinousness of such offence also has to be
considered and the same varies from circumstance
to circumstance.
(XIV) it is submitted that the Hon'ble Supreme Court
has not passed a blanket order to give anticipatory
bail to the accused if not arrested during the
course of the investigation and in Sanjay Chandra
v. CBI (2012) 1 SCC 40, Hon'ble Supreme Court
has observed that the seriousness of charges shall
be considered before considering the bail of the
accused.
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16. Learned counsel for the respondent-Enforcement
Directorate, based upon t he aforesaid grounds, has
submitted that it is not a fit case where the prayer for pre-
arrest bail is to be allowed taking into consideration their
involvement in directly acquiring the proceeds of crime.
Analysis of the submissions made on behalf of parties:
17. This Court has heard the learned counsel for the
parties, gone across the pleading available on record as also
the finding recorded by learned court.
18. This Court, before appreciating the argument
advanced on behalf of the parties, deems it fit and proper to
discuss herein some of the provisions of law as contained
under the Act, 2002 with its object and intent.
19. The Act was enacted to address the urgent need to
have a comprehensive legislation inter alia for preventing
money-laundering, attachment of proceeds of crime,
adjudication and confiscation thereof including vesting of it
in the Central Government, setting up of agencies and
mechanisms for coordinating measures for combating
money-laundering and also to prosecute the persons
indulging in the process or activity connected with the
proceeds of crime.
20. The issues were debated threadbare in the United
Nation Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances, Basle Statement of Principles
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enunciated in 1989, the FATF established at the summit of
seven major industrial nations held in Paris from 14
th to
16
th July, 1989, the Political Declaration and Noble
Programme of Action adopted by United Nations General
Assembly vide its Resolution No. S-17/2 of 23.2.1990, the
United Nations in the Special Session on countering World
Drug Problem Together concluded on the 8
th to the 10
th
June, 1998, urging the State parties to enact a
comprehensive legislation. This is evident from the
introduction and Statement of Objects and Reasons
accompanying the Bill which became the 2002 Act. The
same reads thus:
“INTRODUCTION
Money-laundering poses a serious threat not only to the
financial systems of countries, but also to their integrity
and sovereignty. To obviate such threats international
community has taken some initiatives. It has been felt
that to prevent money-laundering and connected
activities a comprehensive legislation is urgently
needed. To achieve this objective the Prevention of
Money-laundering Bill, 1998 was introduced in the
Parliament. The Bill was referred to the Standing
Committee on Finance, which presented its report on 4
th
March, 1999 to the Lok Sabha. The Central Government
broadly accepted the recommendation of the Standing
Committee and incorporated them in the said Bill along
with some other desired changes.
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STATEMENT OF OBJECTS AND REASONS
It is being realised, world over, that money-laundering
poses a serious threat not only to the financial systems
of countries, but also to their integrity and sovereignty.
Some of the initiatives taken by the international
community to obviate such threat are outlined below:—
(a) the United Nations Convention Against Illicit Traffic
in Narcotic Drugs and Psychotropic Substances, to
which India is a party, calls for prevention of
laundering of proceeds of drug crimes and other
connected activities and confiscation of proceeds
derived from such offence.
(b) the Basle Statement of Principles, enunciated in
1989, outlined basic policies and procedures that
banks should follow in order to assist the law
enforcement agencies in tackling the problem of money-
laundering.
(c) the Financial Action Task Force established at the
summit of seven major industrial nations, held in Paris
from 14
th to 16
th July, 1989, to examine the problem of
money-laundering has made forty recommendations,
which provide the foundation material for
comprehensive legislation to combat the problem of
money-laundering. The recommendations were
classified under various heads. Some of the important
heads are—
(i) declaration of laundering of monies carried through
serious crimes a criminal offence;
(ii) to work out modalities of disclosure by financial
institutions regarding reportable transactions;
(iii) confiscation of the proceeds of crime;
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(iv) declaring money-laundering to be an extraditable
offence; and
(v) promoting international co-operation in investigation
of money-laundering.
(d) the Political Declaration and Global Programme of
Action adopted by United Nations General Assembly by
its Resolution No. S-17/2 of 23
rd February, 1990, inter
alia, calls upon the member States to develop
mechanism to prevent financial institutions from being
used for laundering of drug related money and
enactment of legislation to prevent such laundering.
(e) the United Nations in the Special Session on
countering World Drug Problem Together concluded on
the 8
th to the 10
th June, 1998 has made another
declaration regarding the need to combat money-
laundering. India is a signatory to this declaration.
21. It is thus evident that the Act 2002 was enacted to
answer the urgent requirement to have a comprehensive
legislation inter alia for preventing money-laundering,
attachment of proceeds of crime, adjudication and
confiscation thereof for combating money-laundering and
also to prosecute the persons indulging in the process or
activity connected with the proceeds of crime.
22. It needs to refer herein the definition of “proceeds of
crime” as provided under Section 2(1)(u) of the Act, 2002
which reads as under:
“2(u) “proceeds of crime” means any property derived or
obtained, directly or indirectly, by any person as a result of
criminal activity relating to a scheduled offence or the value
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of any such property or where such property is taken or
held outside the country, then the property equivalent in
value held within the country or abroad;
[Explanation.—For the removal of doubts, it is hereby
clarified that "proceeds of crime" include property not only
derived or obtained from the scheduled offence but also
any property which may directly or indirectly be derived or
obtained as a result of any criminal activity relatable to the
scheduled offence;]”
23. It is evident from the aforesaid provision by which
the “proceeds of crime” means any property derived or
obtained, directly or indirectly, by any person as a result of
criminal activity relating to a scheduled offence or the value
of any such property or where such property is taken or
held outside the country, then the property equivalent in
value held within the country or abroad.
In the explanation it has been referred that for the
removal of doubts, it is hereby clarified that "proceeds of
crime" include property not only derived or obtained from
the scheduled offence but also any property which may
directly or indirectly be derived or obtained as a result of
any criminal activity relatable to the scheduled offence.
The aforesaid explanation has been inserted in the
statute book by way of Act 23 of 2019.
24. It is, thus, evident that the reason for giving
explanation under Section 2(1)(u) is by way of clarification to
the effect that whether as per the substantive provision of
Section 2(1)(u), the property derived or obtained, directly or
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indirectly, by any person as a result of criminal activity
relating to a scheduled offence or the value of any such
property or where such property is taken or held outside the
country but by way of explanation the proceeds of crime has
been given broader implication by including property not only
derived or obtained from the scheduled offence but also any
property which may directly or indirectly be derived or
obtained as a result of any criminal activity relatable to the
scheduled offence.
25. The “property” has been defined under Section
2(1)(v) which means any property or assets of every
description, whether corporeal or incorporeal, movable or
immovable, tangible or intangible and includes deeds and
instruments evidencing title to, or interest in, such property
or assets, wherever located.
26. The schedule has been defined under Section 2(1)(x)
which means schedule to the Prevention of Money Laundering
Act, 2002. The “scheduled offence” has been defined under
Section 2(1)(y) which reads as under:
“2(y) “scheduled offence” means—
(i) the offences specified under Part A of the Schedule; or
(ii) the offences specified under Part B of the Schedule if the
total value involved in such offences is [one crore rupees] or
more; or
(iii) the offences specified under Part C of the Schedule.”
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27. It is evident from the meaning of “scheduled offence”
that the offences specified under Part A of the Schedule; or
the offences specified under Part B of the Schedule if the
total value involved in such offences is [one crore rupees] or
more; or the offences specified under Part C of the Schedule.
28. The offence of money laundering has been defined
under Section 3 of the Act, 2002 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 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.
[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 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
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or projecting it as untainted property or claiming it as
untainted property in any manner whatsoever.]”
29. It is evident from the aforesaid provision that
“offence of money-laundering” means 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.
30. It is further evident that 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.
31. The punishment for money laundering has been
provided under Section 4 of the Act, 2002.
32. Section 50 of the Act, 2002 confers power upon the
authorities regarding summons, production of documents
and to give evidence. For ready reference, Section 50 of the
Act, 2002 reads as under:
“50. Powers of authorities regarding summons,
production of documents and to give evidence, etc. —
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(1) The Director shall, for the purposes of section 13, have
the same powers as are vested in a civil court under the
Code of Civil Procedure, 1908 (5 of 1908) while trying a
suit in respect of the following matters, namely:—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any
officer of a [reporting entity] and examining him on oath;
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination of witnesses and
documents; and
(f) any other matter which may be prescribed.
(2) The Director, Additional Director, Joint Director, Deputy
Director or Assistant Director shall have power to summon
any person whose attendance he considers necessary
whether to give evidence or to produce any records during
the course of any investigation or proceeding under this
Act.
(3) All the persons so summoned shall be bound to attend
in person or through authorised agents, as such officer
may direct, and shall be bound to state the truth upon any
subject respecting which they are examined or make
statements, and produce such documents as may be
required.
(4) Every proceeding under sub-sections (2) and (3) shall be
deemed to be a judicial proceeding within the meaning of
section 193 and section 228 of the Indian Penal Code (45 of
1860).
(5) Subject to any rules made in this behalf by the Central
Government, any officer referred to in sub-section (2) may
impound and retain in his custody for such period, as he
thinks fit, any records produced before him in any
proceedings under this Act:
Provided that an Assistant Director or a Deputy Director
shall not—
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(a) impound any records without recording his reasons for
so doing; or
(b) retain in his custody any such records for a period
exceeding three months, without obtaining the previous
approval of the [Joint Director].”
33. The various provisions of the Act, 2002 alongwith
interpretation of the definition of “proceeds of crime” has
been dealt with by the Hon’ble Apex Court in the case of
Vijay Madanlal Choudhary and Ors. Vs. Union of India
and Ors., (2022) SCC OnLine SC 929 wherein the Bench
comprising of three Hon’ble Judges of the Hon’ble Supreme
Court has decided the issue by taking into consideration the
object and intent of the Act, 2002. The definition of
“proceeds of crime” as under paragraph-251.
34. The interpretation of the condition which is to be
fulfilled while arresting the person who said to be involved
in the predicate offence has been made as would appear
from paragraph-265. For ready reference, relevant
paragraphs are being referred as under:
“265. To put it differently, the section as it stood prior to
2019 had itself incorporated the expression “including”,
which is indicative of reference made to the different
process or activity connected with the proceeds of crime.
Thus, the principal provision (as also the Explanation)
predicates that if a person is found to be directly or
indirectly involved in any process or activity connected with
the proceeds of crime must be held guilty of offence of
money-laundering. If the interpretation set forth by the
petitioners was to be accepted, it would follow that it is
only upon projecting or claiming the property in question as
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untainted property, the offence would be complete. This
would undermine the efficacy of the legislative intent
behind Section 3 of the Act and also will be in disregard of
the view expressed by the FATF in connection with the
occurrence of the word “and” preceding the expression
“projecting or claiming” therein. This Court in Pratap Singh
v. State of Jharkhand, enunciated that the international
treaties, covenants and conventions although may not be a
part of municipal law, the same be referred to and followed
by the Courts having regard to the fact that India is a party
to the said treaties. This Court went on to observe that the
Constitution of India and other ongoing statutes have been
read consistently with the rules of international law. It is
also observed that the Constitution of India and the
enactments made by Parliament must necessarily be
understood in the context of the present-day scenario and
having regard to the international treaties and convention
as our constitution takes note of the institutions of the
world community which had been created. In Apparel
Export Promotion Council v. A.K. Chopra, the Court
observed that domestic Courts are under an obligation to
give due regard to the international conventions and norms
for construing the domestic laws, more so, when there is no
inconsistency between them and there is a void in domestic
law. This view has been restated in Githa Hariharan, as
also in People's Union for Civil Liberties, and National Legal
Services Authority v. Union of India.”
35. The implication of Section 50 has also been taken
into consideration. Relevant paragraph, i.e., paragraphs-
422, 424, 425, 431, 434 reads as under:
“422. The validity of this provision has been challenged on
the ground of being violative of Articles 20(3) and 21 of the
Constitution. For, it allows the authorised officer under the
2002 Act to summon any person and record his statement
during the course of investigation. Further, the provision
mandates that the person should disclose true and correct
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facts known to his personal knowledge in connection with
the subject matter of investigation. The person is also
obliged to sign the statement so given with the threat of
being punished for the falsity or incorrectness thereof in
terms of Section 63 of the 2002 Act. Before we proceed to
analyse the matter further, it is apposite to reproduce
Section 50 of the 2002 Act, as amended. -----:
424. By this provision, the Director has been empowered to
exercise the same powers as are vested in a civil Court
under the 1908 Code while trying a suit in respect of
matters specified in sub-section (1). This is in reference to
Section 13 of the 2002 Act dealing with powers of Director
to impose fine in respect of acts of commission and
omission by the banking companies, financial institutions
and intermediaries. From the setting in which Section 50
has been placed and the expanse of empowering the
Director with same powers as are vested in a civil Court for
the purposes of imposing fine under Section 13, is
obviously very specific and not otherwise.
425. Indeed, sub-section (2) of Section 50 enables the
Director, Additional Director, Joint Director, Deputy Director
or Assistant Director to issue summon to any person whose
attendance he considers necessary for giving evidence or to
produce any records during the course of any investigation
or proceeding under this Act. We have already highlighted
the width of expression “proceeding” in the earlier part of
this judgment and held that it applies to proceeding before
the Adjudicating Authority or the Special Court, as the case
may be. Nevertheless, sub-section (2) empowers the
authorised officials to issue summon to any person. We fail
to understand as to how Article 20(3) would come into play
in respect of process of recording statement pursuant to
such summon which is only for the purpose of collecting
information or evidence in respect of proceeding under this
Act. Indeed, the person so summoned, is bound to attend in
person or through authorised agent and to state truth upon
any subject concerning which he is being examined or is
expected to make statement and produce documents as
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may be required by virtue of sub-section (3) of Section 50 of
the 2002 Act. The criticism is essentially because of
subsection (4) which provides that every proceeding under
sub-sections (2) and (3) shall be deemed to be a judicial
proceeding within the meaning of Sections 193 and 228 of
the IPC. Even so, the fact remains that Article 20(3) or for
that matter Section 25 of the Evidence Act, would come into
play only when the person so summoned is an accused of
any offence at the relevant time and is being compelled to
be a witness against himself. This position is well-
established. The Constitution Bench of this Court in M.P.
Sharma had dealt with a similar challenge wherein
warrants to obtain documents required for investigation
were issued by the Magistrate being violative of Article
20(3) of the Constitution. This Court opined that the
guarantee in Article 20(3) is against “testimonial
compulsion” and is not limited to oral evidence. Not only
that, it gets triggered if the person is compelled to be a
witness against himself, which may not happen merely
because of issuance of summons for giving oral evidence or
producing documents. Further, to be a witness is nothing
more than to furnish evidence and such evidence can be
furnished by different modes. The Court went on to observe
as follows:
“Broadly stated the guarantee in article 20(3) is against
“testimonial compulsion”. It is suggested that this is
confined to the oral evidence of a person standing his trial
for an offence when called to the witness-stand. We can
see no reason to confine the content of the constitutional
guarantee to this barely literal import. So to limit it would
be to rob the guarantee of its substantial purpose and to
miss the substance for the sound as stated in certain
American decisions. The phrase used in Article 20(3) is “to
be a witness”. A person can “be a witness” not merely by
giving oral evidence but also by producing documents or
making intelligible gestures as in the case of a dumb
witness (See section 119 of the Evidence Act) or the like.
“To be a witness” is nothing more than “to furnish
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evidence”, and such evidence can be furnished through the
lips or by production of a thing or of a document or in other
modes. So far as production of documents is concerned, no
doubt Section 139 of the Evidence Act says that a person
producing a document on summons is not a witness. But
that section is meant to regulate the right of cross-
examination. It is not a guide to the connotation of the word
“witness”, which must be understood in its natural sense,
i.e., as referring to a person who furnishes evidence.
Indeed, every positive volitional act which furnishes
evidence is testimony, and testimonial compulsion connotes
coercion which procures the positive volitional evidentiary
acts of the person, as opposed to the negative attitude of
silence or submission on his part. Nor is there any reason
to think that the protection in respect of the evidence so
procured is confined to what transpires at the trial in the
court room. The phrase used in article 20(3) is “to be a
witness” and not to “appear as a witness”. It follows that
the protection afforded to an accused in so far as it is
related to the phrase “to be a witness” is not merely in
respect of testimonial compulsion in the court room but may
well extend to compelled testimony previously obtained
from him. It is available therefore to a person against
whom a formal accusation relating to the
commission of an offence has been levelled which in
the normal course may result in prosecution. Whether
it is available to other persons in other situations does not
call for decision in this case.”
(emphasis supplied)
431. In the context of the 2002 Act, it must be remembered
that the summon is issued by the Authority under Section
50 in connection with the inquiry regarding proceeds of
crime which may have been attached and pending
adjudication before the Adjudicating Authority. In respect
of such action, the designated officials have been
empowered to summon any person for collection of
information and evidence to be presented before the
Adjudicating Authority. It is not necessarily for initiating a
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prosecution against the noticee as such. The power
entrusted to the designated officials under this Act, though
couched as investigation in real sense, is to undertake
inquiry to ascertain relevant facts to facilitate initiation of
or pursuing with an action regarding proceeds of crime, if
the situation so warrants and for being presented before
the Adjudicating Authority. It is a different matter that the
information and evidence so collated during the inquiry
made, may disclose commission of offence of money-
laundering and the involvement of the person, who has
been summoned for making disclosures pursuant to the
summons issued by the Authority. At this stage, there
would be no formal document indicative of likelihood of
involvement of such person as an accused of offence of
money-laundering. If the statement made by him reveals
the offence of money-laundering or the existence of
proceeds of crime, that becomes actionable under the Act
itself. To put it differently, at the stage of recording of
statement for the purpose of inquiring into the relevant
facts in connection with the property being proceeds of
crime is, in that sense, not an investigation for prosecution
as such; and in any case, there would be no formal
accusation against the noticee. Such summons can be
issued even to witnesses in the inquiry so conducted by the
authorised officials. However, after further inquiry on the
basis of other material and evidence, the involvement of
such person (noticee) is revealed, the authorised officials
can certainly proceed against him for his acts of
commission or omission. In such a situation, at the stage of
issue of summons, the person cannot claim protection
under Article 20(3) of the Constitution. However, if his/her
statement is recorded after a formal arrest by the ED
official, the consequences of Article 20(3) or Section 25 of
the Evidence Act may come into play to urge that the same
being in the nature of confession, shall not be proved
against him. Further, it would not preclude the prosecution
from proceeding against such a person including for
consequences under Section 63 of the 2002 Act on the
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basis of other tangible material to indicate the falsity of his
claim. That would be a matter of rule of evidence.
434. It is, thus, clear that the power invested in the
officials is one for conducting inquiry into the matters
relevant for ascertaining existence of proceeds of crime and
the involvement of persons in the process or activity
connected therewith so as to initiate appropriate action
against such person including of seizure, attachment and
confiscation of the property eventually vesting in the
Central Government.
36. It is evident from the observation so made as above
that the purposes and objects of the 2002 Act for which it
has been enacted, is not limited to punishment for offence
of money-laundering, but also to provide measures for
prevention of money-laundering. It is also to provide for
attachment of proceeds of crime, which are likely to be
concealed, transferred or dealt with in any manner which
may result in frustrating any proceeding relating to
confiscation of such proceeds under the 2002 Act. This Act
is also to compel the banking companies, financial
institutions and intermediaries to maintain records of the
transactions, to furnish information of such transactions
within the prescribed time in terms of Chapter IV of the
2002 Act.
37. The predicate offence has been considered in the
aforesaid judgment wherein by taking into consideration the
explanation as inserted by way of Act 23 of 2019 under the
definition of the “proceeds of crime” as contained under
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Section 2(1)(u), whereby and whereunder, it has been
clarified for the purpose of removal of doubts that, the
"proceeds of crime" include property not only derived or
obtained from the scheduled offence but also any property
which may directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the scheduled
offence, meaning thereby, the words “any property which
may directly or indirectly be derived or obtained as a result of
any criminal activity relatable to the scheduled offence” will
come under the fold of the proceeds of crime.
38. So far as the purport of Section 45(1)(i)(ii) is
concerned, the aforesaid provision starts from the non-
obstante clause that notwithstanding anything contained in
the Code of Criminal Procedure, 1973, 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
Sub-section (2) thereof puts limitation on granting
bail specified in sub-section (1) in addition to the limitations
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under the Code of Criminal Procedure, 1973 or any other
law for the time being in force on granting of bail.
The explanation is also there as under sub-section
(2) thereof which is for the purpose of removal of doubts, a
clarification has been inserted that the expression "Offences
to be cognizable and non-bailable" shall mean and shall be
deemed to have always meant that all offences under this
Act shall be cognizable offences and non-bailable offences
notwithstanding anything to the contrary contained in the
Code of Criminal Procedure, 1973, and accordingly the
officers authorised 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.
39. The implication of Section 45 has been interpreted
by the Hon’ble Apex Court in Vijay Madanlal Choudhary
and Ors. Vs. Union of India and Ors. (supra) at
paragraphs-371-374. For ready reference, the said
paragraphs are being referred as under:
“371. The relevant provisions regarding bail in the 2002
Act can be traced to Sections 44(2), 45 and 46 in Chapter
VII concerning the offence under this Act. The principal
grievance is about the twin conditions specified in Section
45 of the 2002 Act. Before we elaborate further, it would be
apposite to reproduce Section 45, as amended. The same
reads thus:
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“45. Offences to be cognizable and non-bailable.—(1)
[Notwithstanding anything contained in the Criminal
Procedure Code, 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 authorised in writing in this behalf by the
Central Government by a general or special order made in
this behalf by that Government.
[(1A) Notwithstanding anything contained in the Criminal
Procedure Code, 1973 (2 of 1974), or any other provision of
this Act, no police officer shall investigate into an offence
under this Act unless specifically authorised, by the
Central Government by a general or special order, and,
subject to such conditions as may be prescribed.]
(2) The limitation on granting of bail specified in [***] sub-
section (1) is in addition to the limitations under the
Criminal Procedure Code, 1973 (2 of 1974) or any other
law for the time being in force on granting of bail.
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[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 offences under this Act shall be cognizable
offences and non-bailable offences notwithstanding
anything to the contrary contained in the Criminal
Procedure Code, 1973 (2 of 1974), and accordingly the
officers authorised 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.]”
372. Section 45 has been amended vide Act 20 of 2005,
Act 13 of 2018 and Finance (No. 2) Act, 2019. The provision
as it obtained prior to 23.11.2017 read somewhat
differently. The constitutional validity of Sub-section (1) of
Section 45, as it stood then, was considered in Nikesh
Tarachand Shah. This Court declared Section 45(1) of the
2002 Act, as it stood then, insofar as it imposed two further
conditions for release on bail, to be unconstitutional being
violative of Articles 14 and 21 of the Constitution. The two
conditions which have been mentioned as twin conditions
are:
(i) that there are reasonable grounds for believing that he is
not guilty of such offence; and
(ii) that he is not likely to commit any offence while on bail.
373. According to the petitioners, since the twin conditions
have been declared to be void and unconstitutional by this
Court, the same stood obliterated. To buttress this
argument, reliance has been placed on the dictum in State
of Manipur.
374. The first issue to be answered by us is: whether the
twin conditions, in law, continued to remain on the statute
book post decision of this Court in Nikesh Tarachand Shah
and if yes, in view of the amendment effected to Section
45(1) of the 2002 Act vide Act 13 of 2018, the declaration
by this Court will be of no consequence. This argument
need not detain us for long. We say so because the
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observation in State of Manipur in paragraph 29 of the
judgment that owing to the declaration by a Court that the
statute is unconstitutional obliterates the statute entirely as
though it had never been passed, is contextual. In this
case, the Court was dealing with the efficacy of the
repealing Act. While doing so, the Court had adverted to
the repealing Act and made the stated observation in the
context of lack of legislative power. In the process of
reasoning, it did advert to the exposition in Behram
Khurshid Pesikaka and Deep Chand
7
including American
jurisprudence expounded in Cooley on Constitutional
Limitations and Norton v. Shelby County.”
40. Subsequently, the Hon’ble Apex Court in the case of
Tarun Kumar vs. Assistant Director Directorate of
Enforcement, (2023) SCC OnLine SC 1486 by taking into
consideration the law laid down by the Larger Bench of the
Hon’ble Apex Court in Vijay Madanlal Choudhary and
Ors. Vs. Union of India and Ors.(supra), has laid down
that since the conditions specified under Section 45 are
mandatory, they need to be complied with. The Court is
required to be satisfied that there are reasonable grounds
for believing that the accused is not guilty of such offence
and he is not likely to commit any offence while on bail.
It has further been observed that as per the statutory
presumption permitted under Section 24 of the Act, the
Court or the Authority is entitled to presume unless the
contrary is proved, that in any proceedings relating to
proceeds of crime under the Act, in the case of a person
charged with the offence of money laundering under Section
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3, such proceeds of crime are involved in money laundering.
Such conditions enumerated in Section 45 of PML Act will
have to be complied with even in respect of an application
for bail made under Section 439 Cr. P.C. in view of the
overriding effect given to the PML Act over the other law for
the time being in force, under Section 71 of the PML Act.
For ready reference, paragraph-17 of the said judgment
reads as under:
“17. As well settled by now, the conditions specified under
Section 45 are mandatory. They need to be complied with.
The Court is required to be satisfied that there are
reasonable grounds for believing that the accused is not
guilty of such offence and he is not likely to commit any
offence while on bail. It is needless to say that as per the
statutory presumption permitted under Section 24 of the
Act, the Court or the Authority is entitled to presume unless
the contrary is proved, that in any proceedings relating to
proceeds of crime under the Act, in the case of a person
charged with the offence of money laundering under Section
3, such proceeds of crime are involved in money laundering.
Such conditions enumerated in Section 45 of PML Act will
have to be complied with even in respect of an application for
bail made under Section 439 Cr. P.C. in view of the
overriding effect given to the PML Act over the other law for
the time being in force, under Section 71 of the PML Act.”
41. The Hon’ble Apex Court in the said judgment has
further laid down that the twin conditions so as to fulfil the
requirement of Section 45 of the Act, 2002 before granting
the benefit of bail is to be adhered to which has been dealt
with by the Hon’ble Apex Court in Vijay Madanlal
Choudhary and Ors. Vs. Union of India and Ors.(supra)
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wherein it has been observed that the accused is not guilty
of the offence and is not likely to commit any offence while
on bail.
42. In the judgment rendered by the Hon’ble Apex Court
in Vijay Madanlal Choudhary and Ors. Vs. Union of
India and Ors.(supra) as under paragraph-284 thereof, it
has been held that the Authority under the 2002 Act, is to
prosecute a person for offence of money-laundering only if it
has reason to believe, which is required to be recorded in
writing that the person is in possession of “proceeds of
crime”. Only if that belief is further supported by tangible
and credible evidence indicative of involvement of the person
concerned in any process or activity connected with the
proceeds of crime, action under the Act can be taken
forward for attachment and confiscation of proceeds of
crime and until vesting thereof in the Central Government,
such process initiated would be a standalone process.
So far as the issue of grant of bail under Section 45 of
the Act, 2002 is concerned, as has been referred
hereinabove, at paragraph-412 of the judgment rendered in
Vijay Madanlal Choudhary and Ors. Vs. Union of India
and Ors.(supra) it has been held therein by making
observation that whatever form the relief is couched
including the nature of proceedings, be it under Section 438
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of the 1973 Code or for that matter, by invoking the
jurisdiction of the Constitutional Court, the underlying
principles and rigors of Section 45 of the 2002 must come
into play and without exception ought to be reckoned to
uphold the objectives of the 2002 Act, which is a special
legislation providing for stringent regulatory measures for
combating the menace of money-laundering.
43. The Hon’ble Apex Court in the case of Gautam
Kundu vs. Directorate of Enforcement (Prevention of
Money-Laundering Act), Government of India through
Manoj Kumar, Assistant Director, Eastern Region,
(2015) 16 SCC 1 has been pleased to hold at paragraph -30
that the conditions specified under Section 45 of PMLA are
mandatory and need to be complied with, which is further
strengthened by the provisions of Section 65 and also
Section 71 of PMLA. Section 65 requires that the provisions
of CrPC shall apply insofar as they are not inconsistent with
the provisions of this Act and Section 71 provides that the
provisions of PMLA shall have overriding effect
notwithstanding anything inconsistent therewith contained
in any other law for the time being in force. PMLA has an
overriding effect and the provisions of CrPC would apply
only if they are not inconsistent with the provisions of this
Act. Therefore, the conditions enumerated in Section 45 of
PMLA will have to be complied with even in respect of an
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application for bail made under Section 439 CrPC. That
coupled with the provisions of Section 24 provides that
unless the contrary is proved, the authority or the Court
shall presume that proceeds of crime are involved in money-
laundering and the burden to prove that the proceeds of
crime are not involved, lies on the appellant. For ready
reference, paragraph-30 of the said judgment reads as
under:
“30. The conditions specified under Section 45 of PMLA
are mandatory and need to be complied with, which is
further strengthened by the provisions of Section 65 and
also Section 71 of PMLA. Section 65 requires that the
provisions of CrPC shall apply insofar as they are not
inconsistent with the provisions of this Act and Section 71
provides that the provisions of PMLA shall have overriding
effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force.
PMLA has an overriding effect and the provisions of CrPC
would apply only if they are not inconsistent with the
provisions of this Act. Therefore, the conditions
enumerated in Section 45 of PMLA will have to be
complied with even in respect of an application for bail
made under Section 439 CrPC. That coupled with the
provisions of Section 24 provides that unless the contrary
is proved, the authority or the Court shall presume that
proceeds of crime are involved in money-laundering and
the burden to prove that the proceeds of crime are not
involved, lies on the appellant.”
44. Now adverting into fact of the instant case and the
allegation leveled against the present petitioner which
according to learned counsel for the petitioner is being said
that the same cannot be said to attract the ingredient of
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Section 3 of PMLA 2022 while on the other hand, the
learned counsel appearing for the ED has submitted by
referring to various paragraphs of prosecution complaint
that the offence is very much available attracting the offence
under provision of PML Act.
45. This Court, in order to appreciate the rival
submission, deems it fit and proper to refer various
paragraphs of prosecution complaint upon which the
reliance has been placed on behalf of both the parties,
needs to be referred herein so as to come to the conclusion
as to whether the parameter as fixed under Section 45(ii) of
the PMLA is being fulfilled in order to reach to the
conclusion that whether it is a fit case where anticipatory
bail is to be granted or not. Relevant paragraphs of
prosecution complaint are referred herein :
2.3 As per case diary 3941459 dt. 24.12.2019, Suresh
Prasad Verma in his statement before ACE claimed that the
cash amount seized belonged to Veerendra Kumar Ram,
then Chief Engineer, Subernrekha project and that his wife
Rajkumari used to visit the rented-out premises of Alok
Ranjan. Later, Alok Ranjan in his written submission to the
Superintendent of Police, ACB, Jamshedpur vide Letter no
3929 dt 30.12.2019 issued by Jail Superintendent,
Chaibasa, W. Singhbhum, Alok Ranjan stated that he used
to stay alone as a tenant in the first floor room rented out
by Smt. Pushpa Verma at the premises located at Dev Hari
Kunj, Anand Vihar Colony, Road No. 11. PS M.G.M.,
Jamshedpur and the room was furnished by Sh. S.P.
Verma including almirah from where the cash of Rs 2.67
crores was seized and Alok Ranjan also claimed that the
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said cash amount seized belonged to S.P. Verma since he
used to visit Alok's rented premises at times and used
Almirah with the key in Verma's possession as and when
he needed. As per Alok Ranjan, the Almirah was even
accessed by SP Verma in Alok absence and on objecting,
S.P. Verma used to say that his personal belongings were
kept in the said almirah. Alok further claimed that he only
used the bed and kept his belongings in the trunk.
2.4 However, S.P. Verma and his family members claimed
that the said cash belongs to Veerendra Kumar Ram and
alleged that Veerendra Kumar Ram himself and his wife
Rajkumari used to visit Alok Ranjan at the rented premises
and Alok Ranjan is cousin of Veerendra Kumar Ram.
4.1.2 During the course of investigation, Suresh Prasad
Verma had also submitted a call recording vide email
dated 31.01.2022 between Kapil Dev Yadav, Pushpa
Verma and son of Suresh Prasad Verma In the said call
recording, Kapil Dev Yadav was confronted by Pushpa
Verma several times with the fact that Kapil Dev Yadav
brought Alok Ranjan, Veerendra Kumar Ram, Rajkumari
(wife of Veerendra Kumar Ram) and others for taking the
said portion of house at 1st floor on rent. Kapil Dev Yadav
did not deny the said fact in the said call recording.
7.1 EVIDENCES GATHERED DURING THE COURSE OF
SEARCH PROCEEDING U/S 17 OF THE PMLA WHICH
ESTABLISHES ALOK RANJAN’S ASSOCIATION WITH
VEERENDRA KUMAR RAMAND HIS INVOLVEMENT IN
THE PROCESS OF MONEY LAUNDERING
-----------------
In fact, during the course of post search investigation under
the PMLA, it is ascertained that Alok Ranjan used to go to
Delhi with Veerendra Kumar Ram during the year 2019.
Veerendra Kumar Ram himself in his statement dated
15.04.2023 has accepted that he used to go to Delhi during
2019 for the purpose of giving cash to one CA Mukesh
Mittal who used to provide him the entries in his bank
account held jointly with his wife Rajkumari and such cash
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was acquired by Veerendra Kumar Ram from the
commission amount received by him in lieu of allotment of
tenders.
It is also gathered that many train tickets of Alok Ranjan
and VEERENDRA KUMAR RAM from Ranchi to Delhi, were
booked by Veerendra Kumar Ram through one travel agent
and the payment for which was done in cash by Veerendra
Kumar Ram.
Further statement of one contractor Rajesh Kumar, director
of M/s Rajesh Kumar construction Pvt Ltd and M/s
Parmanand Singh Builders Private limited was also
recorded u/s 50 of PMLA on 07.04.2023 wherein he stated
that on the day of search i.e. on 15.11.2019 conducted by
ACB Jamshedpur at the rented flat of Alok Ranjan, (house
owned by Pushpa Verma, wife of S.P. Verma), Veerendra
Kumar Ram called him and asked him to go to flat of Alok
Ranjan and also stated that his (Veerendra Kumar Ram's)
cash was kept at the flat of Alok Ranjan, but he could not
enter the flat as the police were there.
All such evidences, which will also be discussed in detail
in paras below, proves that Rs 2.67 crores found and
seized by ACB Jamshedpur from the possession of Alok
Ranjan was the ill earned money of Veerendra Kumar Ram
only.
7.1.1 Other evidences and findings of the
investigation are discussed below
The bank account statement of account no. 11008836933
in the name of Veerendra Kumar Ram (Accused no.1)
maintained with state bank of India was analyzed-----
When Alok Ranjan was asked to explain the source of such
cash deposited by him, he stated in his statement dated
24.02.2023, that this cash was handed over to him by
Veerendra Kumar Ram for depositing in the above-
mentioned bank account.
When Alok Ranjan was asked how many times and how
much cash has been given to him by Veerendra Kumar
Ram, he stated in his statement dated 24.02.2023, that he
has not received cash from Veerendra Kumar Ram apart
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from the cash received by him for depositing the above-
mentioned account.-------
PROCEEDS OF CRIME IN POSSESSION OF ALOK
RANJAN
7.1.9 During the course of analysis of mobile phone
(iPhone 13 pro max with no 9431117311) of Veerendra
Kumar Ram, it was found that he had a chat with one
contractor Shri Anup Kumar Rai (9431301759) dated
03.02.2020 wherein Anoop Kumar Rai has sent Veerendra
Kumar Ram one message that "3 crore taken away by
Bablu Singh by fortuner” and also sent two vehicle detail
one of Innova JH 05 CC 1000 and other of Toyota Fortuner
bearing Registration no. JH0SCM1000, to Veerendra
Kumar Ram through WhatsApp. Further Anoop Kumar Rai
was summoned and statement of Anoop Kumar Rai, one of
the contractors for mechanical works, was recorded u/s 50
on 07.04.2023 wherein he was asked to explain the
context of said messages and, in reply to which, he stated
that he sent details of these two vehicles because he has
not seen any previous Chief Engineer using such high-end
vehicles so he just asked Veerendra Kumar Ram to be
cautious. Anup Kumar Rai further stated in his statement
dated 05.04.2023 that he is aware of the fact that
Veerendra Kumar Ram used to keep money at the
premises of Alok Ranjan where the search was conducted
on 15.11 2019 by ACB. He further stated in his statement
dated 07.04.2023 that there was a discussion in the office
of WRD Chandil Complex that Bablu (Rajesh Kumar was
found near the search premises on the date of the search ie
on 15.11.2019 conducted by ACB Jamshedpur at the
rented premise of Alok Ranjan and he had also taken
away two bags full of money from there. It is pertinent to
mention that both the said vehicles were found in the
possession of Veerendra Kumar Ram on the day of search
ie. 21/02/2023 and both these vehicles were frozen u/s
17(1-A) of the PMLA, 2002.
7.2 GENERATION OF PROCEEDS OF CRIME BY
VEERENDRA KUMAR RAM
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7.2.2 Veerendra Kumar Ram was arrested on 23.02.2023
u/s 19 of PMLA for the commission of the offence of money
laundering as defined u/s 3 of PMLA and punishable u/s 4
of PMLA. Later he was se nt to Judicial custody and
currently is languishing in Hotwar Jail, Ranchi. During his
custodial interrogation, he disclosed that he was taking
bribes in the name of commission against the allotment of
tenders from the contractors. He further disclosed in his
statement dated 14.04.2023 that the commission amount
taken from the contractors is 3.2% of the total tender value
and that his share was 0.3% of the total tender value
which at some postings was higher than 0.3%. However,
given the total Proceeds of crime acquired by him, it is
believed that his percentage (%) in the commission bribe
must have been higher, as he himself stated in his
statement dated 15.04.2023 that his commission varied
from 03% to 1% of the tender value.
7.2.3 During the course of search on 21.02.2023 at the
residential premises of Veerendra Kumar Ram located at
447/A, 2nd Floor, Road No. 4, Ashok Nagar, Ranchi cash
amounting to Rs 7,82,500 was recovered and seized and
when Veerendra Kumar Ram was asked to explain the
source of the said cash, he stated in his statement dated
15.04.2023 that the said cash was the commission
received by him in lieu of allotment of tenders.
7.2.4 During the course of search on 21.02.2023 at the
Government residential premises of Sh. Veerendra Kumar
Ram, Bungalow No.CE/1. Road No. 7, CH. Area East, Near
Jubilee Park, Bistupur, Jamshedpur 831001, one Toyota
Innova Car having registration number JH-05-CC-1000
having registered owner M/s Rajesh Kumar Constructions
Pvt. Ltd (Director-Rajesh Kumar, as also discussed above
was recovered. Further, during the course of the search at
the residential premises of Smt Rajkumarı located at 4th
Floor, C-334, Opposite Dabra Park, Block C, Defence
Colony, New Delhi, one Toyota Fortuner Car having
registration number JHOSCM1000 and registered owner
M/s Parmanand Singh Builders Pvt Ltd was recovered. Mr.
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Rajesh Kumar is the director in both the companies namely
M/s Rajesh Kumar Constructions Pvt. Ltd and M/s
Parmanand Singh Builders Pvt Ltd. In this regard,
Veerendra Kumar Ram in his statement dated 24.02.2023
stated that during Covid period he was avoided travel via
flights and trains and so he required a four-wheeler to
reach Delhi. Therefore, he contacted Rajesh Kumar (one of
the contractors) who provided him the above-mentioned
Toyota Fortuner He further stated that since he returned by
train, therefore, the said vehicle remained in Delhi. Thus,
Fortuner was intentionally left in Delhi and story in relation
to avoid covid is afterthought to justify the act and such
vehicles were provided by Rajesh Kumar to Veerendra
Kumar Ram as Veerendra Kumar Ram has allotted many
tenders to the companies/firm of Rajesh Kumar, which he
later himself has disclosed in his statement dated
07.04.2023. Further, Veerendra Kumar Ram could not
explain the reason for using the above- mentioned Toyota
Innova for 2 years and stated that he was using this
vehicle for his official duty and he had even allotted a
tender to the company of Rajesh Kumar recently.
7.3.3 During further investigation it has also been found
that huge amounts have been received at the bank
accounts of wife and father of Veerendra Kumar Ram, first
in the joint account (2577257010412) of Rajkumari &
Veerendra Kumar Ram to the tune of Rs. 9.30 crore
approximately during the period FY 2014-15 to FY 2018-
19, and then by the account of his father Genda Ram to the
tune of Rs. 4.5 crores in a span of 31-32 days from
21/12/22 till 23/01/23, all these huge sums were
transferred from account of the employees/relatives of one
Delhi based CA Mukesh Mittal, these accounts are only
opened for accommodating the funds and laundering the
illicit money of V K Ram.
7.4.3 As it is evident from the above analysis of the
account statement that the majority of the funds were
credited into the joint bank account of Veerendra Kumar
Ram and Raj Kumari, from the two firms named RK
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Investments and Consultancy and RP Investment and
Consultancy Search u/s 17 of the PMLA was conducted at
the residence of Rakesh Kumar Kedia and Reena Pal and
the Statements of Reena Pal and Rakesh Kumar Kedia
were recorded u/s 17 of PMLA on 21.02.2023 wherein
Beena Pal denied having any firm existing in her name or
any bank account operating in the name of such firm. She
simply stated that her husband Vijay Pal handles all her
financial dealings whereas Rakesh Kumar Kedia in his
statement dated 21.02.2023stated that Mukesh Mittal, his
relative, is handling all his financial dealings Rakesh
Kumar Kedia further stated that he is not aware about
existence of any firm in his name and simply stated that he
was paid an amount in lieu of giving consent to operate his
account. Vijay Pal, an employee of CA Mukesh Mittal,
further stated in his statement dated 29.03.2023 that he
helped Rakesh Kumar Kedia to open two bank accounts in
his name and also opened a/c in the name of his wife
Reena Pal. He also stated that he opened the firm M/s RP
Investment and Consultancy and bank account in its name
at the instruction of Mukesh Mittal such bank accounts
were used by CA Mukesh Mittal and not by the respective
account holders. He also stated that he knows Veerendra
Kumar Ram as his men used to bring cash to the office of
Mukesh Mittal.
FUND RECEIVED IN THE BANK ACCOUNTIA/C-
127000628767) OF GENDA RAM (DOB 04.05.1941,
PAN ACNPR4525L)
7.4.10 during scrutiny of the bank accounts of Rakesh
Kumar Kedia, the aforementioned bank account of Genda
Ram (father of Veerendra Kumar Ram and also uncle of
accused Alok Ranjan) surfaced which we opened on
12.12.2022 and the account received high valued funds As
the bank accounts of Rakesh Kumar Kedia. Further
investigation revealed that huge wars has been received in
the thank account of Genda Ram recently in 30 days anil
same was used in purchasing an immovable property at
Land measuring 2 bigha, 8 biswa comprised to Khasra No
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770 Min (1-06)778 Min (1-2) with all the amenities situated
in village satbari known as E-8 Satbari Ansal, Tehsil
Saket, New Delhi.
7.4.12-----
Thus, it is found that a total of Rs 4.435 crores, transferred
from bank account of Rakesh Kumar Kedia, Manish, Neha
Shrestha and Genda Ram a/ no 110089477752) into the
bank a/c of Genda Ram 127000628767) and out of this
sum of Rs. 4.43 crores, a sum of Rs. 3.39 crores was
funded from three proprietorship bank accounts, namely (i)
Shri Khatushyam Traders (079205500560), (ii) Anil Kumar
Govind Ram Traders and (082705001671) (iii) Om Traders
(072405001740) & Rs 13 lakhs from one bank account of
Tarachand. All these bank a/c of three proprietorship are
being maintained in ICICI Bank which are all operating
under a single proprietor named, Sachin Gupta, s/o
Ashrafi Lal Gupta Strangely enough, the proprietor Sachin
Gupta has submitted three different PAN details in these
three of his proprietorship firms and never filed Income Tas
Return till date (later in was found that Tara Chand and
Sachin Gupta are the same person). The rest source of Rs.
91 lakhs are as follows Rs. 48.75 lakhs were transferred
through the Canara bank account of Mukesh Mittal
(2577101050981), Rs. 18:00 lakhs transferred from Axis
Bank Account (922020004021785) of Jamidara Trading
which was also found to be non-existing on field
verification, Rs. 10 lakhs transferred from ICICI bank
account (425405000759) of Oyecool Technologies (Prop.
Harish Yadav) a/c ICICI Bank 425405000759, Rs9.99
lakhs from Krishna Enterprise (Equitas Small Finance
Bank, 200000747964) and Rs 45 lakh from Decent
Traders (Equitas Small Finance Bank, 200001383885).
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8. Brief detail of persons examined Under Section 17
& 50 of PMLA:
During the course of search and investigation, statements
of several persons were recorded under the provisions of
PMLA. The gist of the statements relevant to this
investigation is as under: -
8.1 Veerendra Kumar Ram (Accused No. 1):
Veerendra Kumar Ram (Accused No. 1) is a chief engineer
in Rural Department Special Zone and also in an additional
charge of Rural Works Department. In his statement
recorded u/s 50 of PMLA during custodial interrogation
and in judicial custody on different dates wherein he
interalia accepted that commission was taken in lieu of
allotment of tenders and that the total commission was
3.2% of tender value and that his share of commission was
0.3% of the total tender amount which varies from 0.3% to
1%. He admitted that he acquired two immovable
properties in Delhi in the name of his wife Rajkumari and
one immovable property in Delhi in the name of his father
Genda Ram out of the commission amount against
allotment of tenders. He and his family were also found in
the possession of jewellery worth Rs. 1,51,60,982/-,
expenses incurred on overseas education of his children
were Rs. 1.25 crores and cash of Rs. 19,45,100/- which
were also acquired from the commission amount. He was
also found in the possession of three vehicles in the name
of contractors/companies which were under the use of
Veerendra Kumar Ram and his family about which he
could not explain satisfactorily. He along with his family
were having lavish lifestyle and he accepted that all the
expenses have been incurred by him through commission
amount received by him against allotment of tenders.
Further, in his statement he accepted that the cash
deposits in his bank accounts and in the bank accounts of
his family members, 3 immovable properties in Delhi, 4
luxury cars, jewellery, cash seized from him and his family
members during the course of search of 21.02.2023 are out
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of the commission received by him against allotment of
tenders.
8.2 Genda Ram (Accused No. 4): Genda Ram is father of
Veerendra Kumar Ram who is a retired school teacher and
is aged about more than 82 years. Statement of Genda
Ram was recorded u/s 17 of PMLA on 21.02.2023 wherein
he stated that his son could explain the transactions
executed in his Canara Bank account and he was unaware
of any properties purchased in his name. However, his
signatures were found on all the cheques that were used to
purchase the property located at E-8, SatbariAnsal, New
Delhi.
8.3 Ayush Rapson: Ayush Rapson is son of Veerendra
Kumar Ram and his statement was recorded u/s 50 on
31.03.2023 and 01.04.2023 wherein he stated that Rs.
56.21 lakhs cash deposit in his bank account
017101527226 since last 5 financial years was made by
his father. He also has one Audi and one Fortuner in his
name but he could not explain the source of such income.
He has also stated that his father Veerendra Kumar Ram
has arranged payment of a sum of Rs. 13,51,958/- for him.
8.4 Mukesh Mittal: Mukesh Mittal is a Delhi based
Chartered Accountant of Veerendra Kumar Ram who
managed to provide the fake business entries in the bank
account of Genda Ram. His statement was recorded u/s 17
on 21.02.2023 and u/s 50 on 29.03.2023 and 30.03.2023
wherein he stated that Veerendra Kumar Ram approached
him around 6 months ago to route his ancestral money
which was actually the commission money of about Rs. 5
crores to the account of his father Genda Ram to purchase
a farm house in Delhi. Later, Mukesh Mittal later arranged
the routing of the said Rs. 5 crores into the bank account of
Genda Ram.
11. Role of Accused in offence of money laundering
under Section 3 of PMLA, 2002
11.1 Accused No. 1-Veerendra Kumar Ram
A) Shri Veerendra Kumar Ram is a Government Employee
posted as Chief Engineer in Rural development Special
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Zone and Rural Works Department, both under Govt. of
Jharkhand.
b) He acquired huge movable and immovable assets by
misusing his official position. He used to take commission
for every tender work allotted thereby directly involved in
generation of proceeds of crime.
c) He acquired the ill-gotten funds or the proceeds of crime
and arranged routing to the bank accounts of his family
members and further used those funds in acquiring
immovable and movable properties in their name thus
projecting untainted money as tainted.
d) Veerendra Kumar Ram and his family is also found to be
living a luxurious lifestyle which is not possible with the
salary income of Veerendra Kumar Ram who was the only
the earning member of his family. Although, his father gets
pension that is in no way can support even part of the
lavish lifestyle their family was having. Therefore, he was
directly involved in the use, possession and the acquisition
of proceeds of crime generated by the commission.
e) During investigation, the claim of Veerendra Kumar Ram
as his fixed commission percentage of 0.3% was found
misleading and alter in his own statement he admitted that
his commission varied from 0.3% to 1% of tender value. A
contractor named Mahendra Gope stated that he usually
had a percentage of 10%, a contractor Rajesh Kumar
stated that he had paid him commission not below 3% of
the tender amount and further one contractor stated that
he had to pay commission of 14% to Veerendra Kumar
Ram. Apart from the commission, Veerendra Kumar Ram
and his wife Rajkumari also availed various facilities and
vehicles from the contractors which was further proved
from the three vehicles frozen registered in the name of
contractors/companies. Various contractors have stated
that they frequently receive calls from the Rajkumari and
Veerendra Kumar Ram to provide vehicles and other
facilities to her.
f) The claim of Veerendra Kumar Ram with regard to
securing loan from contractors named Rajesh Kumar
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Megotia, MahendraGope and Ajeet Singh was also found
misleading as two of these contractors have simply denied
of giving loans to him and even one contractor Mahendra
Gope stated that he used to safekeep the commission
money on the instructions of Veerendra Kumar Ram.
g) Therefore, Accused No. 1 i.e. Veerendra Kumar Ram has
directly indulged in the process of acquisition, possession,
use and concealment to the tune of at least Rs
48,94,10,877/- by receiving the said Rs 48,94,10,877
crores from the Commission/ bribe amount by misusing his
post while working and posted in different capacity at
Rural Development (Special Zone) and Rural Works
Department, Government of Jharkhand. He was also found
to be directly indulged in projecting the Delhi based
immovable properties (mentioned at Sr no 1 of table of para
9) to the tune of Rs.38.8 crores and his 3 vehicles
(mentioned at Sr no 2 of table of para 9) in the name of his
wife Rajkumari and son Ayush Rapson to the tune of
Rs1.27 crores approx., as untainted property by routing the
same from Delhi based accounts. Further he also projected
cash deposits in the bank accounts of his family members
as untainted by filing ITRs and showing income from cash
sales of vegetables etc. which found to be just a tool to
project his tainted money as untainted.
h) Hence, Veerendra Kumar Ram had directly indulged,
knowingly is as party and 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
u/s 3 of PMLA, 2002. Therefore, Veerendra Kumar Ram is
guilty of the offence of money laundering u/s 3 of PMLA,
2002 and punishable under section 4 of PMLA.
11.3 Accused No. 3- Rajkumari (wife of Veerendra
Kumar Ram)
On perusal bank account statements of Rajkumari bearing
account number 2577101052100, it is seen that there is
credit of Rs 9.90,000 from M/s RP Investment and
Consultancy and Re 4,00,000 from Manoj Kumar Singh.
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Further, it is also seen from the statement of bank account
no 2577257010412 in her name that there are credits of
Rs 5,70,49,910.00 from M/s RK Investment and
consultancy and Rs 3,59,72,230.00 from M/s RP
Investment and Consultancy, Veerendra Kumar Ram has
admitted in his statement that these credits are out of the
entries received in the sand accounts against cash, the
source of which was the commission received by Veerendra
Kumar Ram. Out of this sum credit of Rs.9.3 crores approx.
in her bank a/c (2577257010412) Rajkuma ri purchased
immovable properties at Saket, New Delhi and another one
in Defence Colony, New Delhi in her name to the tune of Rs
1.72 Crores (additional cash of Rs.3.2 crores and Rs. 5
crores (additional cash of Rs.6.3 crores respectively which
was actually the proceeds of crime generated by Veerendra
Kumar Ram which subsequently were routed to her bank
account and further paid through the banking channel to
the respective first part thereby projecting the untainted
money as tainted. She also used to live a lavish lifestyle
which also got confirmed from the statements of various
contractors. It was also established that Rs. 3.28 crores
and Rs. 6.3 crores were directly given in cash for the afore
stated properties
(b) Hence, Rajkumari has directly indulged in the process
of possession, concealment, & use of proceeds of crime to
the tune of at least Rs 19.02 crores and also knowingly
assisted Veerendra Kumar Ram in projecting the same as
untainted. Hence, the accused person Rajkumari has
committed the offence of Money Laundering as defined
under section 3 of PMLA and is, therefore, liable to be
punished under section 4 of PMLA, 2002.
11.4 Accused No. 4 - Genda Ram
a) Genda Eam is father of Veerendra Kumar Ram and is a
retired school teacher who receives pension to the tune of
less than Rs. 25,000/- per month. He knowingly assisted
his son to purchase immovable properties at Chhatarpur,
New Delhi in his own name Le. Genda Ram to the tune of
Rs 22.5 Crore (Rs 4 crore from bank channel and Rs.18.5
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crores cash from the commission/bribe amount, which was
acquired by his son Veerendra Kumar Ram (accused
number 1). He used to sign the blank cheques which
subsequently reached Mukesh Mittal through Alok Ranjan
(Accused No. 4) which were later used in crediting the
funds into the bank accounts of Preeti Singh thereby
knowingly assisting in the process or activity connected
with the proceeds of crime. Further, he had only used
around Rs. 4.5 crores through banking channel and rest
were paid directly in cash to the first party thereby is
directly a party in concealment of proceeds of crime.
b) From the bank account statements of Gerda Ram
maintained with Canara Bank as explained above, it is
seen that there are credits to the tune of Rs 4.525 crores
and Veerendra Kumur Ram has admitted in his statement
that the same are out of the commission received by him.
c) Hence, Genda Ram has directly indulged in the process
or activities of possess, concealment, & use of proceeds of
crime to the tune of at least Rs 22.5 crores. Hence, the
accused person Genda Ram has committed the offence of
Muney Laundering as defined under section 3 of PMLA and
is, therefore, liable to be punished under section 4 of PMLA,
2002.
46. It is evident from the prosecution complaint that the
petitioner namely, Rajkumari, is the wife of prime accused
Veerendra Kumar Ram and on perusal bank account
statements of the petitioner it is seen that there are huge
credits in her bank accounts from M/s RP Investment and
Consultancy, Manoj Kumar Singh and M/s RK Investment
& Consultancy. The co-accused Veerendra Kumar Ram has
admitted in his statement that these credits are out of the
entries received in the said accounts against cash, the
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source of which was the commission received by Veerendra
Kumar Ram. The petitioner has purchased immovable
properties at Saket and Defence Colony, New Delhi, in her
name and the purchase consideration is paid from the
proceeds of crime generated by the co-accused Veerendra
Kumar Ram. The petitioner knowingly tried to directly
conceal the proceeds of crime acquired by her husband and
claimed it to be untainted in the guise of taking entries in
her bank accounts from the companies providing entries by
charging commission.
47. Thus, it prima-facie appears that the petitioner
knowingly assisted to her husband who is co-accused to
purchase immovable properties at New Delhi in her name
and the purchase consideration was paid from the proceeds
of crime generated by her husband Veerendra Kumar Ram.
The petitioner knowingly tried to directly conceal the
proceeds of crime acquired by her husband and claimed it
to be untainted in the guise of taking entries in her bank
accounts from the companies providing entries by charging
commission. The materials on record reflects that bank
account statements of the petitioner, there are huge credits
from M/s RP Investment and Consultancy, Manoj Kumar
Singh and M/s RK Investment & Consultancy. The co-
accused Veerendra Kumar Ram has admitted in his
statement under section 50 of PML Act 2002 that these
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credits are out of the entries received in the said accounts
against cash, the source of which was the commission
received to him. There are materials against the present
petitioner regarding her specific role in the offence which is
mentioned at Para-11.3 of the prosecution complaint that
she committed the offence of money laundering with respect
to the proceeds of crime.
48. The petitioner namely Genda Ram is the father of
prime accused Veerendra Kumar Ram a nd he knowingly
assisted his son to purchase immovable properties at
Chhatarpur, New Delhi in his own name i.e. Genda Ram, to
the tune of Rs 22.5 Crore from the commission/bribe
amount, which was acquired by his son Veerendra Kumar
Ram (A-1). Further, the bank account statements of the
petitioner it is seen that there are huge credits in his bank
accounts to the tune of Rs 4.525 crores and the co-accused
Veerendra Kumar Ram has admitted in his statement that
these credits are out of the entries received in the said
accounts against cash, the source of which was the
commission received by Veerendra Kumar Ram. It is
submitted that the petitioner knowingly tried to directly
conceal the proceeds of crime acquired by his son and
claimed it to be untainted in the guise of taking entries from
the companies providing entries by charging commission.
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49. Thus, prima-facie, it appears that the petitioner
knowingly assisted his son who is co-accused to purchase
immovable properties at New Delhi in his own name to the
tune of Rs 22.5 Crore from the commission/bribe amount,
which was acquired by his son Veerendra Kumar Ram.
Further, the bank account statements of the petitioner
reflect huge credits to the tune of Rs 4.525 crores. There are
materials against the petitioner regarding his specific role in
the offence which is mentioned in Para-11.4 of the
prosecution complaint that he committed the offence of
money laundering with respect to the proceeds of crime.
50. It is pertinent to mention here that this Court is
dealing herein with the petition of pre-arrest bail which is to
be granted in exercise of power conferred under Section 438
of Cr.P.C. The law is well settled so far as the consideration
of the prayer of the pre-arrest bail is concerned, what is the
requirement to be looked into for the purpose of granting
the said benefit.
51. It has been settled by Hon’ble Apex Court time and
again in its various pronouncements that the powers under
Section 438 Cr.P.C., is of extra-ordinary character and must
be exercised sparingly in exceptional cases only and
therefore, the anticipatory bail can be granted only in
exceptional circumstances where the court is prima facie of
the view that the applicant has falsely been implicated in
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the crime, as grant of anticipatory bail to some extent, is
interference in the sphere of investigation of an offence and
hence, the court must be cautious while exercising such
powers.
52. It is also settled connotation of law that the grant or
refusal of the application should necessarily depend on the
facts and circumstance of each case and there is no hard
and fast rule and no inflexible principles governing such
exercise by the Court.
53. It is pertinent to mention here that the law on grant
of anticipatory bail has been summed up by the Hon’ble
Apex Court in Siddharam Satlinappa Mhetre vs. state of
Maharashtra & Ors. reported in (2011)1 SCC 694 after
due deliberation on the parameters as evolved by the
Constitution Bench in Gurubaksh Singh Sibbia vs. State
of Punjab reported in (1980) 2 SCC 565. The relevant
paragraphs of the said judgment as rendered by the Hon’ble
Apex Court is being quoted hereunder:-
“111. No inflexible guidelines or straitjacket formula can
be provided for grant or refusal of anticipatory bail. We
are clearly of the view that no attempt should be made to
provide rigid and inflexible guidelines in this respect
because all circumstances and situations of future cannot
be clearly visualised for the grant or refusal of
anticipatory bail. In consonance with the legislative
intention the grant or refusal of anticipatory bail should
necessarily depend on the facts and circumstances of
each case. As aptly observed in the Constitution Bench
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decision in Sibbia case [(1980) 2 SCC 565 : 1980 SCC
(Cri) 465] that the High Court or the Court of Session has
to exercise their jurisdiction under Section 438 CrPC by a
wise and careful use of their discretion which by their
long training and experience they are ideally suited to do.
In any event, this is the legislative mandate which we are
bound to respect and honour.
112. The following factors and parameters can be taken
into consideration while dealing with the anticipatory bail:
(i) The nature and gravity of the accusation and the exact
role of the accused must be properly comprehended
before arrest is made;
(ii) The antecedents of the applicant including the fact as
to whether the accused has previously undergone
imprisonment on conviction by a court in respect of any
cognizable offence;
(iii) The possibility of the applicant to flee from justice;
(iv) The possibility of the accused's likelihood to repeat
similar or other offences;
(v) Where the accusations have been made only with the
object of injuring or humiliating the applicant by arresting
him or her;
(vi) Impact of grant of anticipatory bail particularly in
cases of large magnitude affecting a very large number of
people;
(vii) The courts must evaluate the entire available material
against the accused very carefully. The court must also
clearly comprehend the exact role of the accused in the
case. The cases in which the accused is implicated with
the help of Sections 34 and 149 of the Penal Code, 1860
the court should consider with even greater care and
caution because overimplication in the cases is a matter
of common knowledge and concern;
(viii) While considering the prayer for grant of anticipatory
bail, a balance has to be struck between two factors,
namely, no prejudice should be caused to the free, fair
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and full investigation and there should be prevention of
harassment, humiliation and unjustified detention of the
accused;
(ix) The court to consider reasonable apprehension of
tampering of the witness or apprehension of threat to the
complainant;
(x) Frivolity in prosecution should always be considered
and it is only the element of genuineness that shall have
to be considered in the matter of grant of bail and in the
event of there being some doubt as to the genuineness of
the prosecution, in the normal course of events, the
accused is entitled to an order of bail.
114. These are some of the factors which should be taken
into consideration while deciding the anticipatory bail
applications. These factors are by no means exhaustive
but they are only illustrative in nature because it is
difficult to clearly visualise all situations and
circumstances in which a person may pray for
anticipatory bail. If a wise discretion is exercised by the
Judge concerned, after consideration of the entire
material on record then most of the grievances in favour
of grant of or refusal of bail will be taken care of. The
legislature in its wisdom has entrusted the power to
exercise this jurisdiction only to the Judges of the
superior courts. In consonance with the legislative
intention we should accept the fact that the discretion
would be properly exercised. In any event, the option of
approaching the superior court against the Court of
Session or the High Court is always available.”
54. In Sushila Aggarwal v. State (NCT of Delhi)
reported in (2020) 5 SCC 1 the Constitution Bench of the
Hon’ble Apex Court has reiterated that while deciding
applications for anticipatory bail, Courts should be guided
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by factors like the nature and gravity of the offences and the
role attributed to the applicant and the facts of the case.
55. The Hon’ble Supreme Court, in catena of decisions, has
categorically held that the judicial discretion of the Court
while considering the anticipatory bail shall be guided by
various relevant factors and largely it will depend upon the
facts and circumstances of each case. Reference in this
regard may be taken from the judgment rendered by the
Hon’ble Apex Court in the case of Central Bureau of
Investigation Vs Santosh Krnani and Another reported
in 2023 SCC OnLine SC 427. For ready reference the
relevant paragraph of the aforesaid judgment is being
quoted herein under:
“24. The time-tested principles are that no straitjacket
formula can be applied for grant or refusal of anticipatory
bail. The judicial discretion of the Court shall be guided
by various relevant factors and largely it will depend upon
the facts and circumstances of each case. The Court must
draw a delicate balance between liberty of an individual
as guaranteed under Article 21 of the Constitution and
the need for a fair and free investigation, which must be
taken to its logical conclusion. Arrest has devastating and
irreversible social stigma, humiliation, insult, mental pain
and other fearful consequences. Regardless thereto, when
the Court, on consideration of material information
gathered by the Investigating Agency, is prima facie
satisfied that there is something more than a mere needle
of suspicion against the accused, it cannot jeopardise the
investigation, more so when the allegations are grave in
nature.”
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56. Further, it is evident by taking into consideration the
provision of Section 19(1), 45(1), 45(2), the conditions which
is required to be considered while granting the benefit of
bail in exercise of power conferred under Section 438 or 439
of Cr.P.C., apart from the twin conditions which has been
provided under Section 45(1) of the Act, 2002, the
conditions or the requirement which has been followed
while granting the bail under Section 439 or 438, as the
case may be, is required to be considered.
57. The Larger Bench of the Hon'ble Apex Court in Vijay
Madanlal Choudhary and Ors. Vs. Union of India and
Ors.(supra) has taken into consideration while dealing with
the issue of anticipatory bail by taking aid of the judgement
rendered by the Hon'ble Apex Court in P. Chidambaram
vs. Directorate of Enforcement, (2019) 9 SCC 24 wherein
it has been observed at paragraph-409 which reads as
under:
“409. In P. Chidambaram, this Court observed that the
power of anticipatory bail should be sparingly exercised in
economic offences and held thus:
“77. After referring to Siddharam Satlingappa Mhetre and
other judgments and observing that anticipatory bail can
be granted only in exceptional circumstances, in Jai
Prakash Singh v. State of Bihar, the Supreme Court held
as under : (SCC p.386, para 19)
“19. Parameters for grant of anticipatory bail in a serious
offence are required to be satisfied and further while
granting such relief, the court must record the reasons
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therefor. Anticipatory bail can be granted only in
exceptional circumstances where the court is prima facie
of the view that the applicant has falsely been enroped in
the crime and would not misuse his liberty. (See D.K.
Ganesh Babu v. P.T. Manokaran, State of Maharashtra v.
Mohd. Sajid Husain Mohd. S. Husain and Union of India
v. Padam Narain Aggarwal)
Economic Offences
78. Power under Section 438 CrPC being an extraordinary
remedy, has to be exercised sparingly; more so, in cases
of economic offences. Economic offences stand as a
different class as they affect the economic fabric of the
society. In Directorate of Enforcement v. Ashok Kumar
Jain, it was held that in economic offences, the accused is
not entitled to anticipatory bail.
83. Grant of anticipatory bail at the stage of
investigation may frustrate the investigating agency
in interrogating the accused and in collecting the
useful information and also the materials which might
have been concealed. Success in such interrogation
would elude if the accused knows that he is protected
by the order of the court. Grant of anticipatory bail,
particularly in economic offences would definitely
hamper the effective investigation. Having regard to
the materials said to have been collected by the
respondent Enforcement Directorate and considering the
stage of the investigation, we are of the view that it is not
a fit case to grant anticipatory bail.
84. In a case of money-laundering where it involves
many stages of “placement”, “layering i.e. funds
moved to other institutions to conceal origin” and
“interrogation i.e. funds used to acquire various
assets”, it requires systematic and analysed
investigation which would be of great advantage. As
held in Anil Sharma, success in such interrogation
would elude if the accused knows that he is protected
by a pre-arrest bail order. Section 438 CrPC is to be
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invoked only in exceptional cases where the case
alleged is frivolous or groundless. In the case in hand,
there are allegations of laundering the proceeds of the
crime. The Enforcement Directorate claims to have certain
specific inputs from various sources, including overseas
banks. Letter rogatory is also said to have been issued
and some response have been received by the
Department. Having regard to the nature of allegations
and the stage of the investigation, in our view, the
investigating agency has to be given sufficient freedom in
the process of investigation. Though we do not endorse
the approach of the learned Single Judge in extracting the
note produced by the Enforcement Directorate, we do not
find any ground warranting interference with the
impugned order. Considering the facts and circumstances
of the case, in our view, grant of anticipatory bail to the
appellant will hamper the investigation and this is not a
fit case for exercise of discretion to grant anticipatory bail
to the appellant.” (emphasis supplied)
58. It is evident from the reference so made in the case
of P. Chidambaram vs. Directorate of Enforcement
(supra) which has been taken note by the Hon'ble Apex
Court in Vijay Madanlal Choudhary and Ors. Vs. Union
of India and Ors. (supra) taking the principle to be applied
for consideration of pre-arrest bail under Section 438 of
Cr.P.C. in the matter of economic offence has also been
dealt with at paragraph-84 of the aforesaid judgment. The
specific condition has been made in the case of money
laundering where it involves many stages of “placement”,
“layering i.e. funds moved to other institutions to conceal
origin” and “interrogation i.e. funds used to acquire various
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assets”, it requires systematic and analysed investigation
which would be of great advantage.
59. The Hon'ble Apex Court by making reference of the
judgment rendered by the Hon'ble Apex Court in State rep.
by the CBI vs. Anil Sharma, (1997) 7 SCC 187, has been
pleased to hold that success in such interrogation would
elude if the accused knows that he is protected by a pre-
arrest bail order. Section 438 CrPC is to be invoked only in
exceptional cases where the case alleged is frivolous or
groundless.
60. Now coming to the facts of instant case, this Court,
based upon the imputations as referred in preceding
paragraphs which has been discovered in course of
investigation, is of prima-facie view that what has been
argued on behalf of the learned counsel for the petitioner
that proceeds cannot be said to be proceeds of crime but as
would appear from the imputations , money which has been
obtained by the accused person Veerendra Kumar Ram has
been obtained in the form of the commission and same was
utilized and concealed by the petitioners despite knowing
that it is the proceeds of crime.
61. The foremost argument as made by the learned
counsel for the petitioners that according to the proviso to
section 45(1) PMLA, the twin conditions of section 45 PMLA
are not applicable to the petitioners as one of the petitioners
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namely Rajkumari is a woman and another petitioner
namely Genda Ram is the sick person.
62. In the aforesaid context it will be profitable to
discuss the first proviso to Section 45 of the PMLA, which
reads as under:—
“45. Offences to be cognizable and non-bailable. - (1)
…………………………..
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:”
63. From bare perusal of the aforesaid proviso, it is
evident that the use of the expression “may be” in the first
proviso to Section 45 clearly indicates that the benefit of the
said proviso to the category of persons mentioned therein
may be extended at the discretion of the Court after
considering the facts and circumstances of each case, and
could not be construed as a mandatory or obligatory on the
part of the Court to release them. There is no doubt that the
courts should be more sensitive and sympathetic towards
the category of persons included in the first proviso to
Section 45 and similar provisions in the other Acts but the
extent of involvement of the persons falling in such category
in the alleged offences, the nature of evidence collected by
the investigating agency etc., would be material
considerations.
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64. It is pertinent to mention here that the similar
provision for granting bail to the category of persons below
the age of sixteen years, women, sick or infirm has been
stipulated in Section 437 of Criminal Procedure Code and
many other special enactments also, but if such provision
be construed as an obligatory or mandatory in nature, then
all serious offences under such special Acts would be
committed involving women and persons of tender age
below 16 years.
65. Recently, a Three-Judge Bench of the Hon’ble Apex
court in the case of Enforcement Directorate v. Preeti
Chandra has observed in the order dated 04.08.2023 in
SLP (Crl.) No. 7409 of 2023 as under: —
“The proviso to Section 45 of the Prevention of Money
Laundering Act, 2002 confers a discretion on the Court to
grant bail where the accused is a woman. Similar
provisions of Section 437 of the Criminal Procedure
Code, 1973 have been interpreted by this Court to mean
that the statutory provision does not mean that person
specified in the first proviso to sub-section (1) of Section
437 should necessarily be released on bail. (See Prahlad
Singh Bhati v. NCT, Delhi (2001) 4 SCC 280).”
66. Further, the Hon’ble Apex Court in the case of
Saumya Chaurasia v. Director of Enforcement, 2023
SCC OnLine 1674 has categorically held that first proviso
to Section 45 clearly indicates that the benefit of the said
proviso to the category of persons mentioned therein may
be extended at the discretion of the Court considering the
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facts and circumstances of each case, and could not be
construed as a mandatory or obligatory on the part of the
Court to release them. For ready reference the relevant
paragraph of aforesaid judgment is quoted as under:
“24. The use of the expression “may be” in the first
proviso to Section 45 clearly indicates that the benefit of
the said proviso to the category of persons mentioned
therein may be extended at the discretion of the Court
considering the facts and circumstances of each case,
and could not be construed as a mandatory or obligatory
on the part of the Court to release them. Similar
benevolent provision for granting bail to the category of
persons below the age of sixteen years, women, sick or
infirm has been made in Section 437 Cr. P.C. and many
other special enactments also, however by no stretch of
imagination could such provision be construed as
obligatory or mandatory in nature, otherwise all serious
offences under such special Acts would be committed
involving women and persons of tender age below 16
years. No doubt the courts need to be more sensitive and
sympathetic towards the category of persons included in
the first proviso to Section 45 and similar provisions in
the other Acts, as the persons of tender age and women
who are likely to be more vulnerable, may sometimes be
misused by the unscrupulous elements and made
scapegoats for committing such Crimes, nonetheless, the
courts also should not be oblivious to the fact that
nowadays the educated and well placed women in the
society engage themselves in the commercial ventures
and enterprises, and advertently or inadvertently engage
themselves in the illegal activities. In essence, the courts
should exercise the discretion judiciously using their
prudence, while granting the benefit of the first proviso
to Section 45 PMLA to the category of persons mentioned
therein. The extent of involvement of the persons falling
in such category in the alleged offences, the nature of
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evidence collected by the investigating agency etc., would
be material considerations.
67. In the instant case as discussed hereinabove, there
is sufficient evidence collected by the respondent
Enforcement Directorate to prima facie come to the
conclusion that the petitioners were actively involved in the
offence of Money Laundering as defined in Section 3 of the
PMLA. As against that there is nothing on record to satisfy
the conscience of the Court that the petitioners are not
guilty of the said offence and the special benefit as
contemplated in the proviso to Section 45 should be granted
to the petitioners who are the lady and sick person
respectively.
68. Thus, on the basis of aforesaid discussion the Court
does not find any substance in the submission of the
learned counsel for the petitioners.
69. This Court, in view of the aforesaid material
available against the petitioners, is of the view that in such
a grave nature of offence, which is available on the face of
the material, applying the principle of grant of anticipatory
bail wherein the principle of having prima facie case is to be
followed, this Court is of the view that the nature of
allegation since is grave and as such, it is not a fit case of
grant of anticipatory bail.
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70. Accordingly, based upon the aforesaid discussion,
this Court is of the view that the instant applications are fit
to be dismissed and as such, stand dismissed.
71. Consequently, pending interlocutory application(s), if
any, also stand(s) disposed of.
72. However, it is made clear that the aforesaid findings
are restricted only for the purpose of grant of anticipatory
bail to the appellants and the trial court shall not be
influenced by these observations during trial.
(Sujit Narayan Prasad, J.)
Birendra/A.F.R.
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