1

2025:CGHC:2385

AFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

ORDER RESERVED ON 13.12.2024

ORDER DELIVERED ON 15.01.2025

MCRC No. 6369 of 2024

1 - Roshan Chandrakar S/o Late Sh. Homendra Chandrakar Aged About

44 Years R/o Sandha Chowk, Sanjay Nagar, Kurud, Distt- Dhamtari,

Chhattisgarh.

... Applicant

versus

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

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

... Respondent(s)

For Applicant :Shri Akshat Gupta, Advocate

For Respondent/ED :Dr.Saurabh Pandey, Advocate

(HON’BLE SHRI JUSTICE ARVIND KUMAR VERMA)

C A V ORDER

The applicant has come up before this Court under Section 483 of

the Bhartiya Nagrik Suraksha Sanhita [BNSS] 2023 read with Section

45 of the PMLA on behalf of the applicant originating from Case File

2

bearing No. ECIR/RPZO/04/2023 dated 14.10.2023 registered with

Enforcement Directorate Office [ED] for the offence punishable under

Section 3 read with Section 4 of the Prevention of Money Laundering

Act, 2002.

FACTUAL ASPECTS

2.Facts of the case as revealed against the applicant is that he was

engaged in the business of rice milling. On 15.05.2024, the applicant

was arrested in the ECIR and was remanded to the police custody of

the ED on 21.05.2024 to 27.05.2024 and thereafter the applicant has

been remanded to judicial custody and now he is incarcerated in

judicial custody at Central Jail, Raipur. Earlier, the applicant had filed

application seeking regular bail before the learned Special Judge

(PMLA) ASJ-04, Raipur and vide order dated 07.08.2024 dismissed the

application. On 18.07.2023, a search operation under Section 132 of the

IT Act was carried out by the officials of the Income Tax Department at

various premises including the residential premises of the applicant as

well as at the premises of firms owned and controlled by the family

members of the applicant. However, no incriminating documents or

material or any cash was recovered during the search. Thereafter on

21.08.2023, the Income Tax Department filed complaint case through

the Deputy Director of Income Tax (Inv.)-II Raipur interalia arraying the

applicant as accused No.3 for the alleged commission of offences under

Section 277 of the IT Act and under Sections 181,191, 193, 196, 200,

383, 384,417,418,420 and 120-B/34 of the IPC. The applicant along

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with seven other accused persons have been made accused in the said

IT complaint. As per the prosecution, following three criminal cases are

pending against him :

1. Income Tax prosecution complaint dated 21.08.2023 under Section

277 of the Income Tax Act and Sections 181,191,193,417 and 418 of

IPC.

2. ECIR/RPZO/04/2023 dated 14.10.2023 under Section 3 read with 4

of the PMLA and was arrested on 15.05.2024 and is in judicial custody.

Prosecution Complaint filed on 28.06.2024.

3. FIR bearing No. 01/2024 dated 16.01.2024 (PS-ACB/EOW, Raipur)

under Sections 120-B and 409 IPC and Section 13(1)(a) and 13 (2) read

with Section 11 of the PC Act, 2018.

3.On 20.10.2023, a search under Section 17 of the PMLA was

carried out at the resident of the applicant and two rooms were sealed.

Thereafter, summons under Section 50 of the PMLA directing his

personal appearance on 20.10.2023 itself was issued and since the

applicant was not present in the house, certain documents including the

search Panchnama, sealing notice and the summons were affixed

outside his resident. Likewise twice the summons were affixed outside

his resident for his personal appearance on 25.10.2023, 28.10.2023.

The applicant filed reply through his advocate pointing out the reasons

for his non availability at his residence at the time of search by the ED

on 20.10.2023. The applicant requested for providing copy of the ECIR

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and the details of the predicate offence on the basis of which it has been

registered.

4.Thereafter on 16.01.2024, the ACB/EOW registered an FIR

bearing No. 01/2024 for commission of the offence under Sections 120-

B and 409 IPC and Section 13 (1) (a) and Section 13(2) read with

Section 11 of the Prevention of Corruption Act, 2018 inter alia arraigning

the applicant as an accused. On 18.02.2024, the competent court took

cognizance of some of the offence alleged against the applicant in the IT

Complaint. On 19.04.2024, the ED registered an addendum ECIR

based on the FIR No. 01/2024 registered by ACB/EOW, which is turn

was registered on the ED’s complaint letter dated 09.01.2024. summons

were issued to the applicant on 30.04.2024 and the applicant appeared

before the Investigating Officer on 30.04.2024, his statement was

recorded under Section 50 of the PMLA. The applicant was further

directed to appear on 08.05.2024 however, he could not appear on the

said date and on 10.05.2024, the ED officials came to the resident of the

applicant and summons were served for his appearance on 15.05.2024.

On 15.05.2024, the applicant appeared before the ED and he was

arrested by the ED and produced before the Special PMLA Court and

was remanded to ED custody till 21.05.2024 which was further extended

till 27.05.2024.

5.After completion of investigation, the ED filed its complaint in the

subject ECIR before the learned PMLA Court, arraigning the applicant

as accused No.2 on 28.06.2024. The applicant filed a written retraction

5

before the PMLA court retracting from the statements and preferred

application under Section 439 Cr.P.C. read with Section 45 of the PMLA

before the learned trial court seeking grant of regular bail in the subject

ECIR. However, the bail application for dismissed on 23.07.2024. Hence

constrained by the said order of dismissal, the applicant has come

before this Court by filing the instant application under Section 483 of

the BNSS read with Section 45 of the PMLA seeking bail.

SUBMISSIONS ON BEHALF OF APPLICANT

6.Contention of Shri Gupta, learned counsel for the applicant is that

the case pertains to the alleged custom rice milling levy scam. The

allegation is that in the year 2022, the Govt. increased the special

incentive for custom milling from Rs. 40/- to Rs. 120/- per quintal. It is

alleged that the applicant and co-accused conspired with other office

bearers of the State as well as District Rice millers association and

hatched a plan to collect illegal kickback amount from rice millers. As

per prosecution, this alleged conspiracy comprised of three stages:

i) Stage 1- In December 2021, a meeting was

held wherein an unofficial and illegal diktat was

given to all the rice millers to pay kick back

amounts of Rs. 40/- per quintal for clearance of

their bills by MARKFED.

ii) Stage 2- Bills of only those rice millers who

paid kick back amount were forwarded by the

DMOs to Manoj Kumar Soni for clearance.

Iii) Stage 3 – The applicant collected the illegal

kick back amount.

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Thereafter searched were being conducted by the IT Department

from December 2022 to July 2023. The total POC is estimated by the

prosecution to be R. 147 crores. This amount has been calculated out of

the total special incentive amount of Rs. 439.77 crores disbursed

between the said period.

7.It is contended by learned counsel for the applicant that the

applicant has suffered long period of pretrial custody and the trial has

not yet commenced and is not likely to conclude. He has contended that

time and again it has been reiterated by the Hon’ble Apex Court that

right to speedy trial is a facet of the Fundamental Right to life of an

accused under Article 21 of the Constitution of India. He has referred to

the decision of the Apex Court in the matter of Manish Sisodia Vs. CBI

and ED (2023) SCC OnLine SC1393 in para 27 as under:

“27. However, we are also concerned about the

prolonged period of incarceration suffered by the

appellant – Manish Sisodia. In P. Chidambaram v.

Directorate of Enforcement48, the appellant

therein was granted bail after being kept in

custody for around 49 days, relying on the

Constitution Bench in Shri Gurbaksh Singh Sibbia

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

and Sanjay Chandra v. Central Bureau of

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

allegation is one of grave economic offence, it is

not a rule that bail should be denied in every

case. Ultimately, the consideration has to be

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

primary object is to secure the presence of the

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accused to stand trial. The argument that the

appellant therein was a flight risk or that there

was a possibility of tampering with the evidence

or influencing the witnesses, was rejected by the

Court. Again, in Satender Kumar Antil v. Central

Bureau of Investigation and Another, (2022) 10

SCC 51 this Court referred to Surinder Singh

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

SCC 387 and Kashmira Singh v. State of Punjab,

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

speedy trial is a fundamental right within the

broad scope of Article 21 of the Constitution. In

Vijay Madanlal Choudhary (supra), this Court

while highlighting the evil of economic offences

like money laundering, and its adverse impact on

the society and citizens, observed that arrest

infringes the fundamental right to life.

49 In P. Chidambaram v. Central Bureau of

Investigation, (2020) 13 SCC 337, the appellant

therein was granted bail after being kept in

custody for around 62 days.

This Court referred to Section 19 of the

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

to by the authorized officers to ensure fairness,

objectivity and accountability. Vijay Madanlal

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

the Code can apply to offences under the PML

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

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

such as where the trial is delayed at the instance

of the accused himself.

In our opinion, Section 436A should not be

8

construed as a mandate that an accused should

not be granted bail under the PML Act till he has

suffered incarceration for the specified period.

This Court, in Arnab Manoranjan Goswami v.

State of Maharashtra and Others (2021) 2 SCC

427, held that while ensuring proper enforcement

of criminal law on one hand, the court must be

conscious that liberty across human eras is as

tenacious as tenacious can be.

29. Detention or jail before being pronounced

guilty of an offence should not become

punishment without trial. If the trial gets protracted

despite assurances of the prosecution, and it is

clear that case will not be decided within a

foreseeable time, the prayer for bail may be

meritorious. While the prosecution may pertain to

an economic offence, yet it may not be proper to

equate these cases with those punishable with

death, imprisonment for life, ten years or more

like offences under the Narcotic Drugs and

Psychotropic Substances Act, 1985, murder,

cases of rape, dacoity, kidnaping for ransom,

mass violence, etc. Neither is this a case where

100/1000s of depositors have been defrauded.

The allegations have to be established and

proven. The right to bail in cases of delay,

coupled with incarceration for a long period,

depending on the nature of the allegations,

should be read into Section 439 of the Code and

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

constitutional mandate is the higher law, and it is

the basic right of the person charged of an

9

offence and not convicted, that he be ensured

and given a speedy trial. When the trial is not

proceeding for reasons not attributable to the

accused, the court, unless there are good

reasons, may well be guided to exercise the

power to grant bail. This would be truer where the

trial would take years.”

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

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

Surinder Singh Alias Shingara Singh Vs. State of Punjab (1977) 4

SCC 291. In the matter of Manish Sisodia Vs. ED and CBI (supra) it

has been held that :

37. Insofar as the contention of the learned ASG

that since the conditions as provided under

Section 45 of the PMLA are not satisfied, the

appellant is not entitled to grant of bail is

concerned, it will be apposite to refer to the first

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

first order in paragraph 25, after recapitulating in

paragraph 24 as to what was stated in the

charge-sheet filed by the CBI against the

appellant, observed that, in view of the aforesaid

discussion, the Court was not inclined to accept

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

certain paragraphs of the said order cannot be

read in isolation from the other paragraphs. The

order will have to be read in its entirety. In

paragraph 28 of the said order, this Court

observed that the right to bail in cases of delay,

coupled with incarceration for a long period,

depending on the nature of the allegations,

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

Section 45 of the PMLA.

The Court held that the constitutional mandate is

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

10

person charged of an offence and not convicted

that he be ensured and given a speedy trial. It

further observed that when the trial is not

proceeding for reasons not attributable to the

accused, the court, unless there are good

reasons, would be guided to exercise the power

to grant bail. The Court specifically observed that

this would be true where the trial would take

years. It could thus clearly be seen that this

Court, in the first round of litigation between the

parties, has specifically observed that in case of

delay coupled with incarceration for a long period

and depending on the nature of the allegations,

the right to bail will have to be read into Section

45 of PMLA.

XXXX XXXX XXXX

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

Ramkripal Meena v. Directorate of Enforcement5

was considering an application of the petitioner

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

dated 30.07.2024 to receive a bribe of rupees five

crore and from whom, an amount of

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

case, the petitioner was arrested on 26th January

2022 in connection with FIR No. 402/2021

registered against him for the offences punishable

under Sections 406, 420, 120B of IPC and

Section 4/6 of the Rajasthan Public Examination

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

released on bail by this Court vide order dated

18th January 2023. Thereafter, the petitioner was

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

observed thus:

“7. Adverting to the prayer for grant of

bail in the instant case, it is pointed out

by learned counsel for ED that the

complaint case is at the stage of

framing of charges and 24 witnesses

are proposed to be examined. The

conclusion of proceedings, thus, will

take some reasonable time. The

petitioner has already been in custody

11

for more than a year. Taking into

consideration the period spent in

custody and there being no likelihood of

conclusion of trial within a short span,

coupled with the fact that the petitioner

is already on bail in the predicate

offence, and keeping in view the

peculiar facts and circumstances of this

case, it seems to us that the rigours of

Section 45 of the Act can be suitably

relaxed to afford conditional liberty to

the petitioner. Ordered accordingly.”

44. The learned Special Judge and the learned

Single Judge of the High Court have considered

the applications on merits as well as on the

grounds of delay and denial of right to speedy

trial. We see no error in the judgments and orders

of the learned Special Judge as well as the High

Court in considering the merits of the matter. In

view of the observations made by this Court in the

first order, they were entitled to consider the

same. However, the question that arises is as to

whether the trial court and the High Court have

correctly considered the observations made by

this Court with regard to right to speedy trial and

prolonged period of incarceration. The courts

below have rejected the claim of the appellant

applying the triple test as contemplated under

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

ignorance of the observations made by this Court

in paragraph 28 of the first order wherein this

Court specifically observed that right to bail in

cases of delay coupled with incarceration for a

long period should be read into Section 439

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

9.In another decision of the Apex Court, Prem Prakash Vs. ED

vide order dated 28.08.2024 in SLP (Crl.) No. 5416 of 2024 it has

been observed as under:

12

12. Independently and as has been emphatically

reiterated in Manish Sisodia (II) (supra) relying on

Ramkripal Meena Vs Directorate of Enforcement

(SLP (Crl.) No. 3205 of 2024 dated 30.07.2024) and

Javed Gulab Nabi Shaikh Vs. State of Maharashtra

and Another, 2024 SCC online 1693, where the

accused has already been in custody for a

considerable number of months and there being no

likelihood of conclusion of trial within a short span,

the rigours of Section 45 of PMLA can be suitably

relaxed to afford conditional liberty. Further, Manish

Sisodia (II) (supra) reiterated the holding in Javed

Gulam Nabi Sheikh (Supra), that keeping persons

behind the bars for unlimited periods of time in the

hope of speedy completion of trial would deprive the

fundamental right of persons under Article 21 of the

Constitution of India and that prolonged

incarceration before being pronounced guilty ought

not to be permitted to become the punishment

without trial. In fact, Manish Sisodia (II) (Supra)

reiterated the holding in Manish Sisodia (I) Vs.

Directorate of Enforcement (judgment dated

30.10.2023 in Criminal Appeal No. 3352 of 2023)

where it was held as under:-

“28. Detention or jail before being

pronounced guilty of an offence should

not become punishment without trial. If the

trial gets protracted despite assurances of

the prosecution, and it is clear that case

will not be decided within a foreseeable

time, the prayer for bail may be

meritorious. While the prosecution may

pertain to an economic offence, yet it may

not be proper to equate these cases with

those punishable with death,

imprisonment for life, ten years or more

like offences under the Narcotic Drugs

and Psychotropic Substances Act, 1985

murder, cases of rape, dacoity, kidnapping

for ransom, mass violence, etc. Neither is

this a case where 100/1000s of depositors

13

have been defrauded. The allegations

have to be established and proven. The

right to bail in cases of delay, coupled with

incarceration for a long period, depending

on the nature of the allegations, should be

read into Section 439 of the Code and

Section 45 of the PML Act. The reason is

that the constitutional mandate is the

higher law, and it is the basic right of the

person charged of an offence and not

convicted, that he be ensured and given a

speedy trial. When the trial is not

proceeding for reasons not attributable to

the accused, the court, unless there are

good reasons, may well be guided to

exercise the power to grant bail. This

would be truer where the trial would take

years.” It is in this background that

Section 45 of PMLA needs to be

understood and applied. Article 21 being a

higher constitutional right, statutory

provisions should align themselves to the

said higher constitutional edict.

10.He further contended that time and again it has been reiterated by

the Apex Court that in cases where the fundamental right to speedy trial

of the accused is violated, the State or any other prosecuting agency

should not oppose the plea for bail on the ground that the crime

committed is serious. Article 21 of the Constitution applied irrespective

of the nature of the crime. He has referred to the decision of the Apex

Court in the matter of Javed Gulam Nabi Shaikh Vs. State of

Maharashtra, 2024 SCC OnLine SC 1693 wherein it has been

observed that :

“19. If the State or any prosecuting agency including

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the court concerned has no wherewithal to provide or

protect the fundamental right of an accused to have

a speedy trial as enshrined under Article 21 of the

Constitution then the State or any other prosecuting

agency should not oppose the plea for bail on the

ground that the crime committed is serious. Article

21 of the Constitution applies irrespective of the

nature of the crime.”

11.He contended that Section 436-A Cr.P.C. should not be construed

as a mandate that an accused should not be granted bail under the

PMLA till he has suffered incarceration for the specified period of half of

the maximum period of imprisonment. The detention or jail before being

pronounced the guilty of an offence should not become punishment

without trial. As has been held by the Apex Court in the case of Manish

Sisodia 1, (2023) SCC OnLine 1393. He submits that under the BNSS,

Section 479 has further reduced the period of pre-trial incarceration for

eligibility of statutory bail to 1/3

rd

of maximum period of imprisonment for

first time offenders. Acknowledging this as a beneficial provision, the

Apex Court in Re: Inhuman conditions in 1382 prisons, order dated

23.08.2024 in W.P (C) No. 4062013 has held that Section 479 of the

BNSS will have retrospective applicability.

12.It is next contended that time and again it has been reiterate that

the right to bail in cases of delay, coupled with incarceration for a long

period should be read into Section 439 Cr.P.C and Section 45 of the

PMLA. The reason is that the constitutional mandate is the higher law

and it is the basis right of the person charged of an offence and not

convicted, that he be given a speedy trial. When the trial is not

15

proceeding for the reasons no attributable to the accused, the court,

unless there are good reasons may well be guided to exercise the

power to grant bail. This would be true where the trial would take years.

He contended that the applicant was illegally arrested by the ED on

15.05.2024 and has already undergo more than seven and half months

of pre-trial incarceration. The investigation qua the applicant stands

concluded and the prosecution complaint has been filed by the ED on

28.06.2024. It is trite law that once the investigation qua an accused is

complete and charge sheet has been filed, there is no apprehension of

violation of triple test. Hence he may be granted bail. He has placed his

reliance in the matter of Kavalakunta Kavita Vs. ED in SLP (Crl.) No.

10778 of 2024, wherein it has been observed as under:

10. On perusal of the record, we find that in CBI

case charge-sheet has been filed and in ED case

complaint has been filed. As such, the custody of

the appellant herein is not necessary for the

purpose of investigation.

11. The appellant has been behind the bars for the

last five months. As observed by us in the case of

Manish Sisodia(supra), taking into consideration

that there are about 493 witnesses to be examined

and the documents to be considered are in the

range of about 50,000 pages, the likelihood of the

trial being concluded in near future is impossible.

12. Relying on the various pronouncements of this

Court,we had observed in the case of Manish

Sisodia (supra) that the prolonged incarceration

before being pronounced guilty of an offence

should not be permitted to become punishment

without trial.

13. We had also reiterated the well-established

principle that “bail is the rule and refusal is an

exception”. We had further observed that the

16

fundamental right of liberty provided under Article

21 of the Constitution is superior to the statutory

restrictions.

13.Further in the case of Krishnan Subramanian Vs. State NCT of

Delhi, 20-22 SCC OnLine Del 1384, it has been observed that :

24. A perusal of record shows that charge sheet

has already been filed, all materials have been

collected by the investigating authorities and the

evidence against the applicant is documentary in

nature. In the considered opinion of this Court, the

applicant is neither a flight risk, nor can there be

any propensity on his part to tamper with any

evidence or influence any witness inasmuch as

the entire domain of evidence is documentary in

nature, which exists as it is from the year 2008

onwards, unhindered, and untampered. The

applicant is a permanent resident of Delhi and has

clean antecedents. He has been languishing in jail

since 8th December 2021. In that background

considering the charge sheet, first supplementary

charge sheet and second supplementary charge

sheet as well as the fact that other co-accused

persons having been enlarged on bail by the

Coordinate Bench which stand confirmed by the

Hon‟ble Supreme Court; and the facts and

circumstances and discussion as aforesaid, this

Court is inclined to allow the instant bail

application seeking regular bail.”

14.It is contended that there are as many as 17 witnesses cited and

about 108 documents relied upon by the ED running into 3,433 pages,

the investigation against other persons is still going on and cognizance

has been taken recently on 5.10.2024 the documents have to be

scrutinized before the trial court and as such the trial is not likely to

conclude. He contended that the applicant is entitled for grant of bail on

17

the ground of delay in trial coupled with long pre-trial incarceration

despite the alleged gravity of offences. He has referred to the decisions

of Vijay Nair Vs. ED in SLP (Crl.) No. 8439 of 2024; Manish Sisodia 3

(2-24) SCC OnLine SC920; K.Kavitha Vs. ED in SLP (Crl.) NO. 10778

of 2024; Neeraj Singhal Vs. ED in SLP (Crl.) No. 8439 of 2024; Prem

Prakash Vs. ED in SLP (Crl.) NO. 5416 of 2024 and Ramkripal

Meena Vs.ED in SLP (Crl.) NO. 3205 of 2024.

15.He contended that it is well settled that the object of bail is neither

punitive nor preventative. The primary purpose of bail in a criminal case

is to ensure that the accused will submit the jurisdiction of the court and

be in attendance whenever his presence is required. Deprivation of

liberty must be considered punishment unless it can be required to

ensure that an accused person will stand trial when called upon.

Punishment can only begin after conviction and necessity is the

operative test. He referred to the decision of Manish Sisodia 3 (2024)

SCC Online SC920 wherein it has been observed as under:

“54. In the present case, in the ED matter as well

as the CBI matter, 493 witnesses have been

named. The case involves thousands of pages of

documents and over a lakh pages of digitized

documents. It is thus clear that there is not even

the remotest possibility of the trial being

concluded in the near future. In our view, keeping

the appellant behind the bars for an unlimited

period of time in the hope of speedy completion

of trial would deprive his fundamental right to

liberty under Article 21 of the Constitution. As

observed time and again, the prolonged

incarceration before being pronounced guilty of

an offence should not be permitted to become

18

punishment without trial.

55. As observed by this Court in the case of

Gudikanti Narasimhulu (supra), the objective to

keep a person in judicial custody pending trial or

disposal of an appeal is to secure the attendance

of the prisoner at trial.”

16.He further contended that the existence of a scheduled offence is

a sine qua non for an offence under PMLA to be made out. The IT

complaint it self is not maintainable and liable to be dismissed inter alia

for the reasons that it has been filed by the Deputy Director of Income

Tax, who is not the competent statutory authority to file the complaint.

He further submits that the entire case against the applicant is based on

extortion and the trial court after considering all the allegations and

material on record, did not find any ofence under Sections

200/383/384/420/120-B/34 IPC were made out and as such did not take

cognizance of these offence. The fact that no cognizance of the alleged

offence under Sections 383/384 has been taken which clearly shows

that no extortion has been committed in the instant case. Similarly,

cognizance of the offence of cheating under Section 420 and 120-B IPC

shows that offence of cheating and conspiracy has been committed. He

contended that in the FIR by the ACB, the offence of Section 384 IPC

was not included t the time of registration of the FIR and was only added

later on. Section 409 is not a scheduled offence. Section 120-B IPC

cannot be a scheduled offence when it is not linked to another

scheduled offence. He has referred to the decision of Pavana Dibbur

Vs. ED 2023 SCC OnLine SC1568. Further the offence under Section

19

11 and 13 of the PC Act relates to the public servants and the applicant

is not a public servant therefore there is no scheduled offence against

the applicant.

17.Next contention of Shri Gupta, learned counsel for the applicant is

that a sinister plan to collect illegal kickback amount was allegedly

hatched by the applicant and co-accused Manoj Kumar Soni in

conspiracy with other office bearers of the State as well as District rice

millers association however, they have not been implicated. He

contended that the unaccounted money of Rs. 47.60 lacs has been

made from the possession of one Manoj Agrawal and Rs. 7.30 lacs from

one Sunil Ubhrani however they have not been implicated. Similarly the

recovery of diary from the person, wherein the list of collection of

extortion money was being done have not been implicated. He has

contended that it is a clear case of pick and choose, which is

impermissible under the law. He has referred to the decision of Sanjay

Jain Vs. ED (2024) SCC OnLine Del 1656, in which it has been held

that :

“95. There is merit in the contention of the learned

Senior Counsel for the petitioner that non-arrest of

co-accused is a relevant factor which can be taken

into account in addition to other surrounding factors

to grant the concession of bail to the petitioner.

Reference in this regard may be had to the

judgment of this Court in Dr. Bindu Rana vs.

Serious Fraud Investigation Office in BAIL APPLN.

3643/2022 dated 20.01.2023, wherein it was held

as under:

―45. The fact is that the complaint has

20

been filed by the SFIO without feeling the

need of any custody of the 53 out of 55

accused persons. The main accused

even as per the SFIO has not been

arrested, being protected by the order

passed by this Court in Writ Petition

(Criminal) No. 1242 of 2022. The said

writ petition was filed by accused namely

Vinod Kumar Dandona' and others

including the main accused ‗Shantanu

Prakash' seeking quashing of the order

dated 17.08.2018 passed by the MCA

under Section 212(1)(c) of the

Companies Act, which led to the start of

investigation into the affairs of ESL.

46. The coordinate bench of this court,

considering the facts of the case, by its

order dated 26.05.2022, had directed

SFIO not to take any coercive steps

against the petitioners therein, which

includes the main accused Shantanu

Prakash'.

47. From the perusal of the complaint, it

is apparent that even in relation to the

charges which are alleged against the

present applicant, there are various other

accused persons who have been named

as co-accused. The role assigned to

them at this stage is no different than the

Applicant. However, surprisingly the SFIO

did not feel any need or ground to arrest

21

those co-accused persons and

proceeded to file the complaint praying

the learned Special Court to take

cognizance of the offences.

96. Similarly in Ramesh Manglani vs. ED, 2023

SCC OnLine Del 3234, this Court has held as

under:-

―56. Insofar as the ED not having

arrested similarly placed co-accused

persons; and not even having arraigned

some other persons evidently connected

with the offending transactions as

accused in the prosecution complaint,

though these aspects would not be

dispositive of a bail plea one way or the

other, they are also not wholly irrelevant

and the „doctrine of parity‟ is not

immaterial. As held by this court in Ashish

Mittal (supra) considering the nature of

the offence, where the gravamen of the

offence is that several persons acting in

concert have siphoned-off and laundered'

monies, it is manifestly arbitrary for the

ED to have made selective arrests and

arraignments. It has also been brought to

the notice of this court that Sanjay

Godhwani, who may be viewed as one of

the main accused in this case, has been

granted bail by the learned trial court vide

order dated 09.05.2023 in Bail

Application No. 688/2023 ―... on merits

as well as on medical grounds...‖. This

circumstance must also weigh in favour

of the petitioner being granted bail,

considering that his role in the allegedly

offending transactions is evidently far

more peripheral than that of co- accused,

Sanjay Godhwani. (emphasis supplied)

22

97. This being the position, the petitioner is also

entitled to the benefit of the fact that the main

accused, as well as, some other accused have not

been arrested and bail has already been granted to

other co-accused.”

18.It has been further contended that there is prima facie no

evidence against the applicant that he was running an extortion racket

and has received huge amounts of extortion money and there is no

substantive evidence against the applicant. There is no change in

special incentive amount of Rs. 120/- even after the alleged scam has

come to light. He contended that there is allegations against the

applicant that he received about Rs. 19.39 crores of extortion money out

of Rs. 147 crores but despite the allegation, there is no recovery of any

such huge amount in cash, jewellery or property. In such a case, the no

recovery of unaccounted cash is very relevant factor and this prima

facie shows a strong possibility of falsity of the case against the

applicant. He contended that the recovery of unaccounted money which

is a meagre amount of Rs. 47.60 lacs which was recovered from the

office bearers ie. Manoj Agrawal and Sunil Ubhrani of Rajnandgaon

District Association who are the conspirators but no proceedings have

been initiated against them.

19.It is contended that from perusal of the statements of the rice

millers and other individuals whose statements are being relied upon by

the ED shows that these persons have been tutored by the ED to give

identical statements. The documents seized during investigation failed

23

to disclose any connection of the applicant with the alleged scheme.

There is nothing recorded in the diary to show that the said money, after

having been received from rice millers was handed over to the applicant

and the unaccounted money recovered by the ED was from the

possession of two rice millers-Manoj Agrawal and Sunil Ubhrani. He

contended that there was a conspiracy hatched by some of the office

bearers of State Rice Millers Associations to make the applicant a scape

goat in their plan. He submits that it is a settled law that mere diary

entries cannot be read into evidence and the same are inadmissible in

law, especially without independent evidence of their trustworthiness.

He has referred to the decision of the Apex Court in the matter of

Central Bureau of Investigation Vs. V.C.Shukla, 1998 (3) SCC 410,

wherein it has been observed as under:

“32. Now that we have found ( in disagreement

with the High Court ) that entries in MR 71/91

would be admissible under Section 34 of the Act

we have to next ascertain there probative value.

Mr. Altaf Ahmed took great pains to decode and

analyses the entries in the above book and,

correlating them with the entries in the other three

books and in some of the loose sheets found in

the files, submitted that the intrinsic evidence

furnished by their internal corroboration and inter-

dependence unmistakably demonstrated their

authenticity and trustworthiness. According to Mr.

Altaf Ahmed the entries reflect such periodicity and

regularity as was compatible with the modus

operandi of the business of Jain brothers of

corrupting public servant including Members of

Parliament and Ministers in order to influence their

decisions and seek their favours for promotion of

their (Jain brothers') economic interests. Besides,

24

he submitted, the external independent

corroboration of those entries as required under

Section 34 was also available to the prosecution

from the statements made by Shri Jacob Mathai,

Danial P. Rambal and P. Ghoshal and Ejaj Ilmi

during investigation, in that, they have admitted

receipts of the payments as shown against them in

MR. 71/91. While on this point, he made a

particular reference to those entries in MR 71/91

Which, according to him m if corresponded with

the entries in the other books and the enclose

sheets would prove the payments to Shri Advani

and Shri Shukla. As regard s the proof of

authorship of the entries he drew our attention to

the statements of Pawan Jain , A. V. Pathak and

D.K. Guha who have stated that the entries were

made by J. K. Jain and that the Jain Brothers had

put their signatures against some of these entries

in token of verification thereof. He also drew our

attention to the written opinion given by the hand

writing expert in this regard.

XXXX XXXXX XXXX

XXXX XXXXX XXXX

39. A conspectus of the above decisions makes it

evident that even correct and authentic entries in

books of account cannot without independent

evidence of their trustworthiness, fix a liability

upon a person. Keeping in view the above

principles, even if we proceed on the assumption

that the entries made in MR 71/91 are correct and

the entries in the other books and loose sheets

which we have already found to be not admissible

in evidence under Section 34) are admissible

under Section 9 of the Act to support an inference

about the formers' correctness still those entries

would not be sufficient to charge Shri Advani and

Shri Shukla with the accusations levelled against

them for there is not an iota of independent

evidence in support thereof. In that view of the

matter we need not discuss, delve into or decide

upon the contention raised by Mr. Altaf Ahmed in

25

this regard. Suffice it to say that the statements of

the for witnesses, who have admitted receipts of

the payments as shown against them in MR 71/91,

can at best be proof of reliability of the entries so

far they are concerned and not others. In other

words, the statements of the above witnesses

cannot be independent evidence under Section 34

as against the above two respondents. So far as

Shri Advani is concerned Section 34 would not

come in aid of the prosecution for another reason

also. According to the prosecution case itself his

name finds place only in one of the loose sheets

(sheet No. 8) and not in MR 71/91. Resultantly, in

view of our earlier discussion, section 34 cannot at

all be pressed into service against him.”

20.Similarly, in the matter of L.K.Advani Vs. Central Bureau of

Investigation, Cr.Rv. Petition No. 265 of 1996 and Common Cause

Vs.Union of India (1998) 3 SCC 410, it has been observed as under:

26. In his statements under Section 50 of PMLA

dated 06.12.2021 and 07.12.2021, Subhash

Agarwal corroborated the fact that he arranged

accommodation entries for the applicant and that

06 Kolkata based shell entities did not have any

actual business but were involved in sale and

purchase of unquoted shares and were

essentially paper companies used for laundering

POC generated from illegal coal mining. Rabin

Kalai in his statement under Section 50 admitted

that the ledger entries written by him were on

direction of Anup Majee and Bamapada Dey and

all of them were related to illegal coal collection

and payments. Sanu Mallick in his statement

under Section 50 of PMLA stated that he

prepared debit/credit/payment vouchers and

made entries in them on directions of Bamapada

Dey and Rabin Kalai, who used to later verify

them. Bamapada Dey in his statement admitted

that he knew the applicant as a partner of Anup

26

Majee and was the one who came to his office for

money collection. In his statement under Section

50 of PMLA, Anup Majee admitted that Joydeb

Mondal, Naran Nanda and applicant were

partners with him in coal business and collectively

received money. During confrontation of the

applicant with Subhash Agarwal and Sudhir

Kumar Jhunjhunwala on 01.06.2022, it was

revealed that Subhash Agarwal received Rs.26

crores during 2016-2019 on behalf of the

applicant for acquiring 13 companies through

accommodation entries. In light of the evidence

on record, this Court will be unable to come to a

satisfaction that there are reasonable grounds for

believing that applicant is not guilty of the offence.

Statements under Section 50 of PMLA can be

considered by the Court at the stage of bail in

view of the law laid down by the Supreme Court

in Rohit Tandon v. Directorate of Enforcement,

(2018) 11 SCC 46; Vijay Madanlal Choudhary

(supra); and Satyendar Kumar Jain (supra).

27. With regard to the admissibility of ledgers,

loose pages, etc., applicant relies heavily on the

judgment in V.C. Shukla (supra), however, the

decision is not applicable to the present case.

Complete records seized by the Income Tax

Department are part of relied upon documents of

the ED. Section 34 of the 1872 Act will not be

attracted in view of the presumption in law under

Section 22 of PMLA, which provides that where

any record or property is found in the possession

or control of any person, it shall be presumed that

such record or property belongs to such person

and the contents are true and in the handwriting

of the said person. Rabin Kalai in his statement

dated 12.08.2021 acknowledges his handwriting

on the ledgers and the vouchers are

acknowledged by Sanu Mallick in his statements

on 30.09.2021 and 01.10.2021 and there is thus

sufficient corroboration of the documents by oral

statements.”

27

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

applicant fulfills the triple test. The entire material is documentary and

is in the custody of the Court. The applicant does not have the

propensity to evade the process of law and no such allegation has been

made against the applicant seeking police/judicial custody. He

contended that in catena of judgments including the recent one of

P.Chidambaram Vs. CBI 2020 13 SCC 337, that while dealing with the

bail application it is not in dispute that ‘three factors’ or the ‘triple test’

must be seen /satisfied viz. (I) flight risk; (ii) likelihood of tampering with

evidence and (iii) likelihood of influencing witnesses. Pertinently all the

three facts are satisfied by the applicant and as such the applicant may

be granted bail.

22.The documents have already been seized by the IT department

and the copy of the ECIR and the details of predicate offence on the

basis of which the ECIR had been registered and summons have been

issued to the applicant to which he is cooperating and therefore, as per

settled law that mere cooperation of a witness in response to the

sunmons issued under Section 50 of the Actof 2022 would not be

enough to render him/her liable to be arrested under Section 19 of the

Act and has referred to the decision of the Apex Court in the matter of

Pankaj Bansal Vs. Union of India & Others, 2023 SCC OnLine SC

1244, in which it has been held as under:

“29. In this regard, we may note that Article 22(1) of

the Constitution WP (Crl.) No. 2465 of 2017, decided

28

on 01.12.2017 = 2017 SCC OnLine Del 12108 2017

Cri LJ (NOC 301) 89 = 2017 (1) AIR Bom R (Cri) 929

provides, inter alia, that no person who is arrested

shall be detained in custody without being informed,

as soon as may be, of the grounds for such arrest.

This being the fundamental right guaranteed to the

arrested person, the mode of conveying information

of the grounds of arrest must necessarily be

meaningful so as to serve the intended purpose. It

may be noted that Section 45 of the Act of 2002

enables the person arrested under Section 19

thereof to seek release on bail but it postulates that

unless the twin conditions prescribed thereunder are

satisfied, such a person would not be entitled to

grant of bail. The twin conditions set out in the

provision are that, firstly, the Court must be satisfied,

after giving an opportunity to the public prosecutor to

oppose the application for release, that there are

reasonable grounds to believe that the arrested

person is not guilty of the offence and, secondly, that

he is not likely to commit any offence while on bail.

To meet this requirement, it would be essential for

the arrested person to be aware of the grounds on

which the authorized officer arrested him/her under

Section 19 and the basis for the officer’s ‘reason to

believe’ that he/she is guilty of an offence punishable

under the Act of 2002. It is only if the arrested person

has knowledge of these facts that he/she would be in

a position to plead and prove before the Special

Court that there are grounds to believe that he/she is

not guilty of such offence, so as to avail the relief of

bail. Therefore, communication of the grounds of

arrest, as mandated by Article 22(1) of the

Constitution and Section 19 of the Act of 2002, is

meant to serve this higher purpose and must be

given due importance.

23.Contention of the learned counsel for the applicant is that the

applicant is a businessman and is engaged in the business of rice

milling and he is not a flight risk. There is no likelihood of tampering with

29

evidence or influencing the witnesses. Another paramount consideration

for grant of bail is that there is no likelihood of the applicant to tamper

with the evidence. He submits that the investigation is concluded and

the prosecution complaint has been filed. The allegation that the

applicant is intimidating the witnesses in a predicate offence is baseless.

Even otherwise, statement of one Ms. Pritika Pooja Kerketta is an

extremely weak type of evidence and cannot be treated as substantive

evidence against the accused. He has placed his reliance upon the

decision of the Apex Court in Prem Prakash Vs. ED in SLP (Crl.) Bo.

5416 Of 2024 , it has been held as under:

“37. Being a co-accused with the appellant, his

statement against the appellant assuming there is

anything incriminating against the present appellant will

not have the character of substantive evidence. The

prosecution cannot start with such a statement to

establish its case. We hold that, in such a situation, the

law laid down under Section 30 of the Evidence Act by

this Court while dealing with the confession of the co-

accused will continue to apply.”

24. In the matter of Haricharan Kurmi Vs. State of Bihar

reported in AIR 1964 SC1184, it has been held as under:

“13.As we have already indicated. this question has

been considered on several occasions by judicial

decisions and it has been consistently held that a

confession cannot be treated as evidence which is

substantive evidence against a co-accused person.

in dealing with a criminal case where the prosecution

30

relies upon the confession of one accused person

against another accused person, the proper

approach to adopt is to consider the other evidence

against such an accused person, and if the said

evidence appears to be satisfactory and the court is

inclined to hold that the said evidence may sustain

the charge framed against the said accused person,

the court turns to the confession with a view to

assure itself that the conclusion which it is inclined to

draw from the other evidence is right. As was

observed by Sir Lawrence Jenkins in Emperor v. Lalit

Mohan Chuckerbuttv(1) a confession can only be

used to "lend assurance to other evidence against a

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

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

further than this : "where there is evidence against

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

conviction, then the kind of confession described in

s. 30 may be thrown into the scale as an additional

reason for believing that evidence." In Bhuboni Sahu

v. King(1) the Privy Council has expressed the same

view. Sir. John Beaumont who spoke for the Board

observed that a confession of a co-accused is

obviously evidence of a very weak type. It does not

indeed come within the definition of "evidence"

contained in s. 3 of the Evidence Act. It is not

required to be given on oath, nor in the presence of

the accused, and it cannot be tested by cross-

examination. It is a much weaker type of evidence

than the evidence of an approver, which is not

subject to any of those infirmities. Section 30,

however, provides that the Court may take the

confession into consideration and thereby, no doubt,

makes it evidence on which the court may act; but

the section does not say that the confession is to

amount to proof. Clearly there must be other

evidence. The confession is only one element in the

consideration of all the facts proved in the case, it

can be put into the scale and weighed with the other

evidence." It would be noticed that as a result of the

provisions contained in s. 30, the confession has no

doubt to be regarded as amounting to evidence in a

31

general way, because whatever is considered by the

court is evidence; circumstances which are

considered by the court as well as probabilities do

amount to evidence in that generic sense. Thus,

though confession may be regarded as evidence in

that generic sense because of the provisions of

Section 30, the fact remains that it is not evidence as

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

that in dealing with a case against an accused

person, the court cannot start with the confession of

a co-accused person; it must (1) (1911) I.L.R. 38 Cal.

559 at p. 588. It must begin with other evidence

adduced by the prosecution and after it has formed

its opinion with regard to the quality and effect of the

said evidence, then it is permissible to turn to the

confession in order to receive assurance to the

conclusion of guilt which the judicial mind is about to

reach on the said other evidence. That, briefly

stated, is the effect of the provisions contained in

S.30. The same view has been expressed by this

Court in Kashmira Singh v. State of Madhya

Pradesh(1) where the decision of the Privy Council in

Bhuboni Sahu's(2) case has been cited with

approval.

XXXX XXXXX XXXX

16.Considering the evidence from this point of

view, we must first decide whether the evidence

other than the confessional statements of the co-

accused persons, particularly Ram Surat, on whose

confession the High Court has substantially relied, is

satisfactory and tends to prove the prosecution case.

It is only if the said evidence is satisfactory and is

treated as sufficient by us to hold the charge proved

against the two appellants, that an occasion may

arise to seek for an assurance for our conclusion

from the said confession. Thus considered, there can

be no doubt that the evidence about the discovery of

blood stains on which the prosecution relies is

entirely insufficient to justify the prosecution charge

against both the appellants. In our opinion, it is

32

impossible to accede to the argument urged before

us by Mr. Singh that the said evidence can be said to

prove the prosecution case. In fact, the judgment of

the High Court shows that it made a finding against

the appellants substantially because it thought that

the confessions of the co-accused persons could be

first considered and the rest of the evidence could be

treated as corroborating the said confessions. We

are, therefore, satisfied that the High Court was not

right in confirming the conviction of the two

appellants under S.396 of the Indian Penal Code.

25.He further contended that the only material which the ED has

placed was relying upon the statement recorded under Section 50 of the

PMLA apart from the inadmissible diary entries. It is settled law that the

same cannot be considered at this stage of bail in as much as no

opportunity to cross-examine is given to the applicant. He has placed

his reliance in the matter of Paras Mal Lodha Vs. Directorate of

Enforcement (2017) SCC OnLine Del 8676; Chandra Prakash

Khandelwal Vs. Directorate of Enforcement 20223 SCC OnLine Del

1094 and Sanjay Jain Vs. Directorate of Enforcement, 2024 SCC

OnLine Del 1656. In Sanjay Jain (supra), it has been held that :

“62. Thus, the confessional statement of a co-

accused under Section 50 fo the PMLA is not a

substantive pice of evidence and can ben used only

for the purpose of corroboration in support of other

evidence to lend assurance to the Court in arriving a

to a conclusion of guilt.”

26.Learned counsel for the applicant contended that prima facie the

applicant is not guilty of the offence of money laundering and the entire

case is circumstantial. He submits that the entire case is based upon the

33

allegations of extortion and illegal collection of money inter alia from the

rice millers which is unfounded and baseless. He submtis that while the

allegations of paying bribes have been made in the FIR, no proceedings

under Section 8 of the Prevention of Corruption Act have been initiated

against the persons who have allegedly paid bribe/commission in the

instant case. He contended that all those persons who have been

alleged to have paid the commission to the applicant ought to have

been made an accused as per the allegations of the ED and the

ACB/EOW. Further it has been contended that the investigation which

has been done is unfair, malicious, selective, prejudicial and in a pick

and choose manner. All the accused persons namely Kailash Rungta, ,

Parasmal Chopra, Santosh Agrawal, Amit Agrawal, Prashant Agrawal,

Mnoj Soni, and Pritika Pooja Kerkett and others ought to have been

made accused as per the case of the ED. Lastly, he submits that the

applicant has been suffering from various ailments ie. high blood

pressure, diabetes, fatty liver and reduced kidney functioning due to

high levels of creatinine. During remand to ED custody the applicant

was medically examined and had been referred to Medical College,

Raipur where his blood pressure was found high and the blood sugar

level was recorded to be over 440 mg/dl. He submits that since the

applicant is suffering from health issues, he is a sick person under the

proviso to Section 45 of the PMLA and therefore he is entitled to the

benefit of the proviso. He submits that without prejudice, even as per

ED’s case, only Rs. 47.5 lacs of cash money was used to purchase the

34

immovable properties which is a small amount compared to the alleged

Rs. 19.39 crores of cash money alleged to have been flown to the

applicant. In connection with the CDRs of the applicant, it is submitted

that as per settled law, CDRs can only be used as supporting or

corroborative piece of evidence and the evidentiary value of the CDRs

can be seen only at the time of trial and not at the stage of consideration

of bail. Since there is no substantive evidence against the applicant,

even if the CDRs are taken to be true, do not corroborate. He has

placed his reliance in the matter of State (by NCB) Bengaluru Vs.

Pallulabid Ahmad Arimuttu & another, (2022) 12 SCC 633, Israil Vs.

State of NCT of Delhi, 2024 SCC Online Del 1903, it has been held

that:

“24. Although considerable arguments have been

made by Mr Singhal, on the aspect of CDRs' of the

petitioner, the same are not being adverted to at this

stage. Suffice to say that the CDR's of the petitioner

can only be used as supporting or corroborative

piece of evidence and cannot form the sole basis of

conviction. 2 Likewise, the evidentiary value of the

CDRs can be seen only at the time of trial and not at

the stage of considering the bail application.

Reference may advantageously be had to the

decision of the Supreme Court in State (By NCB)

Bengaluru v. Pallulabid Ahmad Arimutta 3 , the

relevant paragraph of which reads as under:-

"12. ...The CDR details of some of the

accused or the allegations of tampering of

evidence on the part of one of the

respondents is an aspect that will be

examined at the stage trial."

35

27.In the matter of Azad Vs. State of GNCT of Delhi and

Another, 2023 SCC OnLine Del 1769 wherein it has been held

that :

44. The other connecting evidence against the

accused persons are the recoveries effected from

them in pursuant to their disclosure statements. As

already noted in para no. 4 of this order, that part

of robbed cash amount, both cheque books, two

stamps of complainant's firm and one photocopy

of Aadhar Card of his wife were recovered from

the possession of the accused persons. The

accused have failed to explain as to how the

stamps, cheque books and photocopy of Aadhar

Card of complainant's wife came into their

possession which are his (PW-1) personal/private

property over which no one else can have access.

Not even a suggestion has been put to the

witnesses to confront the recoveries effected from

the accused persons. The cash recovered from

the accused persons have already been released

on superdari in favour of PW1 vide order dated

17.07.2017 passed by Ld.MM. The argument of

defence counsels that no independent witness has

joined the proceedings is without any force as

these days no public person CRL.A. 593/2022,

CRL.A. 354/2022 & CRL.A. 367/2022 Page 14

Neutral Citation Number: 2023:DHC:2166 wants to

join the police or court proceedings may be due to

apprehension that they themselves might not get

entangled in any criminal case in future.”

28.To this, Shri Pandey, learned counsel for the respondent/Ed

submits that an ECIR bearing No. RPZO/04/2023 was recorded on the

basis of a prosecution complaint dated 21.08.2023 filed by the Income

Tax Department before the Chief Judicial Magistrate, Raipur wherein it

36

is alleged that Kailesh Rungta, Paras Mal Chopra and the present

applicant who are President,Vice President and Treasurer respectively

of Chhattisgarh State Rice Millers Association along with co-accused

Manoj Soni, the then Managing Director of the CG State Marketing

Federation Ltd., Ms. Pritika Pooja Kerketta, DMO, Korba and others

have conspired and illegally collected cash from rice millers in the State

of CG for clearing their bills at the rate of Rs. 20/- per instalment for

each quintal of paddy milled and had committed the offences under

Sections 120-B, 384,417,418 and 420 IPC. These offences are invoked

in the prosecution complaint filed by the IT department and are

scheduled offences under PMLA, 2002 and investigation was initiated

by recording ECIR/RPZO/04/2023 dated 14.10.2023.

29. During investigation, the ACB/EOW had lodged FIR No.01/2024

dated 16.01.2024 against the applicant and other co-accused persons

under sections 120-b and 409 of IPC and 11 and 13 of the Prevention

of Corruption Act,1988. Later on, the ACB had added Section 384 IPC

in their ongoing investigation in the aforesaid FIR No. 01/2024 which is

also a scheduled offence under the PMLA Act. The instant ECIR was

recorded on the basis of said prosecution complaint filed against the

applicant for the commission of the offence of money laundering as

defined under Section 3 and punishable under Section 4 of the

PMLA,2002.

37

30. The applicant, the then Treasurer of CG State Rice Millers

Association, in active collusion and assistance had come up with a plan

to collect extortion amounts illegally @ Rs. 20/- per quintal of paddy

and accordingly, issued instructions to the office bearers of all the

district rice millers associations and rice millers in the State. From the

Investigation, it was revealed that the applicant with the assistance of

co-accused Manoj Soni used to keep the bills of rice millers who did

not pay the amount pending, got inspection conducted by the Food

Department at the premises of those rice millers who denied to pay the

extortion amounts. The applicant had collected the amount from the

office bearers of District Rice Millers association and sometimes from

the rice millers directly. In the investigation,it has also been revealed

that the applicant along with co-accused Manoj Soni forbade one Ms.

Pritika Pooja Kerketta, the then DMO, Korba to join the investigation

and asked her to go absconding and she was financially assisted by

him. It has been further revealed in the investigation that the list of Rice

Millers who paid extortion amount to the applicant and then then two

DMOs, ie. Gajendra Rathore and Smt Priyanka Dewangan. A whatsapp

chat was also forwarded to them.

31. Shri Pandey, contended that from the investigation, it has been

revealed that the applicant had acquired the proceeds of crime by

extorting the rice millers and utilized them for acquiring properties in his

name and in the name of his family members, which constitute offence

38

of money laundering under Section 3 of the PMLA 2002 and punishable

under Section 4 of the PMLA, 2002.

32.Further contention of Shri Pandey, learned counsel for the

respondent is that during investigation, multiple summons were issued

to the applicant under Section 50 of the PMLA however, he remained

absconding and did not join the investigation which is a complete

disregard to law of the land. It is further contended that since ECIR is

not a legal document and merely an internal departmental document, as

such the accused persons are not entitled to get a copy of ECIR. It is

contended that the the ECIR is legally mandated under PMLA to share

information about any offence surfaced during its investigation with such

authority who are competent to investigate the offence. Keeping in view

this mandate of PMLA, information was shared with the Chhattisgarh

Police under Section 66 of the PMLA about commission of offence of

extortion from rice millers committed by the applicant and other co-

accused persons. It is evidence from the FIR itself that the police had

registered the case only after conducting its due diligence and

verification of the information shared by the ED. He submits that since

the investigation in the FIR lodged by EOW, Raipur is still going on, at

this juncture, when the charge sheet has not been filed, the applicant

may not be granted bail.

33.Next contention of the learned counsel for the respondent is that

since the ECIR is not a statutory document but only an internal

39

document which was amended so that newly registered FIR by

ACB/EOW may be incorporated in the ongoing investigation under

PMLA. Further re registration of FIR has been made in compliance of

the provisions of law. This was duly upheld by the Apex Court in Vijay

Madanlal Choudhary Vs. Union of India SLP (Crl.) NO. 4634/2014,

wherein it has been held as under:

60. As a matter of fact, prior to amendment of

2015, the first proviso acted as an impediment for

taking such urgent measure even by the

authorized officer, who is no less than the rank of

Deputy Director. We must hasten to add that the

nuanced distinction must be kept in mind that to

initiate “prosecution” for offence under Section 3 of

the Act registration of scheduled offence is a

prerequisite, but for initiating action of “provisional

attachment” under Section 5 there need not be a

pre-registered criminal case in connection with

scheduled offence. This is because the machinery

provisions cannot be construed in a manner which

would eventually frustrate the proceedings under

the 2002 Act. Such dispensation alone can secure

the proceeds of crime including prevent and

regulate the commission of offence of money-

laundering. The authorized officer would, thus, be

expected to and, also in a given case, justified in

acting with utmost speed to ensure that the

proceeds of crime/property is available for being

proceeded with appropriately under the 2002 Act

so as not to frustrate any proceedings envisaged

by the 2002 Act. In case the scheduled offence is

not already registered by the jurisdictional police

or complaint filed before the Magistrate, it is open

to the authorized officer to still proceed under

Section 5 of the 2002 Act whilst

contemporaneously sending information to the

jurisdictional police under Section 66(2) of the

40

2002 Act for registering FIR in respect of

cognizable offence or report regarding non-

cognizable offence and if the jurisdictional police

fails to respond appropriately to such information,

the authorized officer under the 2002 Act can take

recourse to appropriate remedy, as may be

permissible in law to ensure that the culprits do not

go unpunished and the proceeds of crime are

secured and dealt with as per the dispensation

provided for in the 2002 Act. Suffice it to observe

that the amendment effected in 2015 in the second

proviso has reasonable nexus with the object

sought to be achieved by the 2002 Act.

34.He further contended that it has been clearly held that as Section

45 of the PMLA uses a generic expression “Bail” without any specific

reference to any kind of bail, no exception can be made with respect of

applicability of the rigors of Section 45 to the different kinds of bail. It

has been observed in Vijay Madanlal (supra) as under:

137. Another incidental issue that had been raised is

about the non- application of rigors of Section 45 of

the 2002 Act in respect of anticipatory bail filed

under Section 438 of the 1973 Code. This

submission presumably is linked to the observation

in paragraph 42 in the case of Nikesh Tarachand

Shah643. Similar argument was considered in The

Asst. Director Enforcement Directorate vs. Dr. V.C.

Mohan 644. We are in agreement with the

observation in this decision that it is one thing to say

that Section 45 of the 2002 Act refers to a

scheduled offence under the general law, but, as

noted earlier, the offence under this Act in terms of

Section 3 is specific to involvement in any process

or activity connected with the proceeds of crime

which is generated as a result of criminal activity

relating to a scheduled offence. It is also true that

41

Section 45 does not make specific reference to

Section 438 of the 1973 Code, but it cannot be

overlooked that sub-section (1) opens with a non-

obstante clause and 643 Supra at Footnote No.3

644 Criminal Appeal No.21 of 2022, decided on

4.1.2022 clearly provides that anything contained in

the 1973 Code (2 of 1974), no person accused of an

offence under this Act shall be released on bail or

on his own bond, unless the stipulations provided

therein are fulfilled. On account of the non-obstante

clause in Section 45(1) of the 2002 Act, the sweep

of that provision must prevail in terms of Section 71

of the 2002 Act. Further, the expression “anticipatory

bail” is not used either in the 1973 Code or the 2002

Act. The relief granted in terms of Section 438 of the

1973 Code is one of directing release of the person

on “bail” in case of his arrest; and such a relief has

been described in judicial pronouncements as

anticipatory bail. Section 45(1) uses generic

expression “bail” without reference to any provision

of the 1973 Code, such as Sections 437, 438 and

439 of the 1973 Code. Concededly, Section 65 of

the 2002 Act states that the provisions of the 1973

Code shall apply to the provisions under the Act

insofar as they are not inconsistent with the

provisions of the 2002 Act. Further, Section 71 of

the Act gives overriding effect to the Act. Section 45

of the Act begins with a non-obstante clause, thus

excluding the application of the 1973 Code in

matters related to “bail”.

XXXX XXXXX XXXX

141. As a result, we have no hesitation in observing

that in whatever form the relief is couched including

the nature of proceedings, be it under Section 438

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.”

42

35.It is next contended that the economic offences constitute a class

apart and need to be visited with different approach therefore in

Y.S.Jagan Mohan Reddy Vs. CBI (2013) 7 SCC 439, the Apex Court

has held as under:

“34.Economic offences constitute a class apart and

need to be visited with a different approach in the

matter of bail. The economic offence having deep

rooted conspiracies and involving huge loss of public

funds needs to be viewed seriously and considered

as grave offences affecting the economy of the

country as a whole and thereby posing serious threat

to the financial health of the country.”

36.In yet another decision of the Apex Court ie. State of Gujarat Vs.

Mohanlal Jitamalji Porwal & Others, (1987) 2 Scc 364, it has been

specifically held that :

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

non-grata whose cause may be treated with

disdain. The entire Community is aggrieved if the

economic offenders who ruin the economy of the

State are not brought to books. A murder may be

committed in the heat of moment upon passions

being aroused. An economic offence is committed

with cool calculation and deliberate design with an

eye on personal profit regardless of the

consequence to the Community.

36. It is further contended that all the statements of the applicant were

recorded in video surveillance without any threat, inducement or

coercion to the applicant by the department and all the statements

tendered by the applicant were voluntary in nature. The statement of

43

the applicant was recorded in english language upon his request and

before signing the statements he read the same. It is submitted that

while his statement was recorded under Section 50 of the PMLA, 2002,

on certain dates, he did not objected and had duly signed the

statements. When the statements were recorded, the applicant was

vague and evasive in his answers therefore in terms of Section 19, the

accused was placed under arrest for his involvement in the offence of

money laundering and his non-cooperative behaviour through out the

investigation.

37.Shri Pandey, learned counsel for the respondent/Ed in reply to the

submission of the learned counsel for the applicant that the applicant

has been suffering from various ailments and is a sick person under the

proviso to Section 45 of the PMLA and therefore he is entitled to the

benefit of the proviso, contended that regular medical check up of the

accused was conducted during his period of custody and medication

was also provide to him as prescribed by the doctor. It thus clearly

demonstrates that frivolous allegations have been leveled by the

applicant against the ED.

38. It is contended that the action of search under PMLA is merely a tool

for investigation and is one of many such tools granted to ED by the Act

which are employed to collect evidences during investigation. The

possibility of parking the proceeds of crime at a secret place through

layering cannot be denied. The applications filed by the applicant to

44

retract the statements recorded are nothing but a deceptive tactic being

employed by the applicant without any evidence to create some sort of

defence for himself. The applicant had filed application under Section

439 Cr.P.C. read with Section 45 of the PMLA before the learned trial

court seeking grant of regular bail in the subject ECIR. Learned trial

court dismissed the bail application which clearly established the role of

the applicant in the offence of money laundering. Since the applicant

has failed to satisfy the twin conditions as per Section 45 of the PMLS

the learned PMLA Court has rightly rejected his bail application.

39.It is contended that the economic crimes are serious offences and

have deep rooted conspiracies which had affected the fibre of country’s

economic structure. These are committed with tool calculation and

deliberate design with an eye on personal profit regardless of the

consequence of the community. It has serious repercussion on the

development of the country as a whole and thereby posing serious

threat to the financial health of the country. That is why the legislature

has enacted special condition under PMLA to grant of bail in addition to

the provision under Cr.P.C. Even the Article 21 of the Constitution allows

for curtailing the right of citizen as per provision of law. A person is

eligible to be released on bail under the PMLA only if such person

satisfies the twin conditions prescribed under Section 45 of the PMLA.

It is submitted that the applicant herein has not at all gone through any

prolonged incarceration and neither is the trial delayed. Since there are

only two accused in prosecution complaint filed before the Court and

45

both the accused are in judicial custody, the trial is likely to commence

very soon and reach finality within a reasonable time. He contended

that the conduct of the applicant towards the investigation and legal

procedures must be taken into account for consideration of the bail

application. The applicant has not only remained absconding for a long

time and evaded multiple summons issued to him under Section 50 of

the PMLA vut also influenced Ms. Pritika Pooja Kerketta, the then DMO

to not join the investigation as he knew that her statement would

implicate the applicant in the offence of money laundering. The Apex

Court in the ase of Gautam Kundu Vs. Directorate of Enforcement

(2015) 16 SC 1, while dealing with the provisions of bail under Section

45 of the PMLA held as under:

8. Before dealing with the application for bail on

merit, it is to be considered whether the

provisions of Section 45 of the PMLA are binding

on the High Court while considering the

application for bail under Section 439 of the Code

of Criminal Procedure. There is no doubt that

PMLA deals with the offence of money laundering

and the Parliament has enacted this law as per

commitment of the country to the United Nations

General Assembly. PMLA is a special statute

enacted by the Parliament for dealing with money

laundering. Section 5 of the Code of Criminal

Procedure, 1973 clearly lays down that the

provisions of the Code of Criminal Procedure will

not affect any special statute or any local law. In

other words, the provisions of any special statute

will prevail over the general provisions of the

Code of Criminal Procedure in case of any

conflict.

46

29. Section 45 of the PMLA starts with a non

obstante clause which indicates that the

provisions laid down in Section 45 of the PMLA

will have overriding effect on the general

provisions of the Code of Criminal Procedure in

case of conflict between them. Section 45 of the

PMLA imposes following two conditions for grant

of bail to any person accused of an offence

punishable for a term of imprisonment of more

than three years under Part-A of the Schedule of

the PMLA: (i) That the prosecutor must be given

an opportunity to oppose the application for bail;

and (ii) That the Court must be satisfied that there

are reasonable grounds for believing that the

accused person is not guilty of such offence and

that he is not likely to commit any offence while

on bail.

30. The conditions specified under Section 45 of

the PMLA are mandatory and needs to be

complied with which is further strengthened by

the provisions of Section 65 and also Section 71

of the PMLA. Section 65 requires that the

provisions of Cr.P.C. shall apply in so far as they

are not inconsistent with the provisions of this Act

and Section 71 provides that the provisions of the

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 Cr.P.C.

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 of

Cr.P.C. 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.”

47

40.From perusal of the Section 45 of PMLA, 2002, it is inferred that

the legislature imposed two twin conditions for grant of bail.

a) that there should be reasonable grounds for believing that he is

not guilty of such offence and

(b) that he is not likely to commit any offence while on bail.

41.In the light of the above, it is noteworthy that the charges have

been framed in the PMLA case which primarily dissatisfies the condition

that there are reasonable grounds of believing that the accused is not

guilty of the offence of money laundering. It is further submitted that the

applicant has to be looked into from the prism of the twin conditions laid

down in the statute itself under Section 45 of the PMLA, 2002. It even

stands substantiated by the ruling of the Apex Court in Vijay Madanlal

Choudhary Vs. Union of India SLP (Crl.) No. 4634 of 2014, which is

reproduced as under:

133. This Court has been restating this position in

several decisions, including Gautam Kundu639 and

Amit Kumar640. Thus, while considering the

application for bail under Section 45 of the 2002 Act,

the Court should keep in mind the abovementioned

principles governing the grant of bail. The limitations

on granting bail as 638 Supra at Footnote No.255

639 Supra at Footnote No.207 640 Supra at

Footnote No.258 prescribed under Section 45 of the

2002 Act are in addition to the limitations under the

1973 Code.”

42.Further in the matter of Sajjan Kumar Vs. Directorate of

Enforcement, MANU/DE/2155/2022, it has been held that “in matter of

48

regular bail, the Court must consider aspects, including but not limited

to, the larger interest of the State or public-another factor relevant would

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

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

different approach, given their severity and magnitude.”

43.Similarly, in the matter of Abdul Gafoor @ Kunhumon Vs.

Assistant Director, Directorate of Enforcement in bail

application No. 2840 of 2022 decided by the High Court of

Kerala on 27.05.2022, has ordered as follows:

“ I have no hesitation to hold that the twin

conditions as amended in Section 45(1) in 2018

have now become referable and reliable to the

offences punishable under PMLA and an accused

charged with an offence under the Act still has to

satisfy the rigours of those conditions

notwithstanding the judgment of the Apex Court in

Nikesh Shah (supra).

The bail application accordingly, stands

dismissed.”

44. The submission of the learned counsel for the applicant that till date

POC worth Rs. 19 crores out of total 147 crores has been attached till

date to which it is submitted by Shri Pandey that the investigation for

tracing as well as role of other persons involved in the said offence is

going on. It is submitted that the applicant is the key conspirator and

beneficiary of this scam and his examination may be required during

further investigation. Further it is submitted that the applicant has cited

the case of Sanjay Chandra Vs. CBI (supra) which is not applicable in

49

the case of the applicant because in the instant case, the applicant has

history of destroying the evidence and influencing the witnesses. The

High Court of Chhattisgarh in the matter of Alok Agrawal Vs.

Directorate of Enforcement bearing M.Cr.C. No. 6533 of 2019

decided on 03.01.2021 has discussed about the seriousness of the

offence of money laundering and the impact on the economy of the

country. It has been stated categorically in the judgment that the

allegations in the Enforcement Case Information Report/Prosecution

Complaint is a matter of final outcome of the trial but the burden of proof

under Section 24 of the PMLA, 2002 is the burden of proving that

proceeds of crime are untainted property shall be on the accused.' 45.

The relevant para from the above mentioned judgment is produced as

under :

It is true that at present there may or may not be

direct or indirect attempts to indulge the applicant in

any process of activity connected with the proceeds

of crime, there is no attempt on the part of the

applicant to disclose the source of the large sums of

money handled by him. There is no denying the fact

that allegations have been made that the said money

was the proceeds of crime and by depositing or

investing the same in his wife's account and in the

business of his wife and brother, the applicant has

attempted to project the same as untainted money.

The said allegations may be the subject matter of

final outcome of the trial, but having been made, the

burden of proof that the said money is not the

proceeds of crime and, therefore, shifted to the

applicant under Section 24 of the PML Act, 2002. For

the sake of reference, Sections 3 and 24 of the PML

Act are extracted herein below :-

50

“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 4[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.”

“24. Burden of Proof. - In any proceeding relating to

proceeds of crime under this Act, (a) in the case of a

person charged with the offence of money-

laundering under Section 3, the Authority or Court

shall, unless the contrary is proved, presume that

such proceeds of crim e are involved in money-

laundering; and (b) in the case of any other person

the Authority or Court, may presume that such

proceeds of crime are involved in money-

laundering.”

46. Shri Pandey, learned counsel for the respondent submits that the

legality of sharing of information by ED to the predicate agencies under

Section 66 of the PMLA and taking up investigation by predicate

agencies by registering FIR on the basis of information received from

ED. The applicant is one of the key conspirator and main beneficiary of

the POC extorted from the rice millers.

47. It is further contended that the applicant has been closely associated

with the State Government machinery and is familiar with the basic

working procedure of law enforcement agencies. It is submitted that

plethora of evidences in the form of seized material from search as well

as the submissions made under Section 50 of the PMLA has been

51

collected which squarely proves the guilt of the applicant in the offence

of money laundering.

48. It is contended that the Jailor of Central Jail, Raipur has stated

that the jail administration had filed an application before the Ld. Special

Court (PMLA) and 4

th

Addl. Sessions Court, Raipur for transferring him

from Central Jail, Raipur to Central jail Bilaspur on the ground that the

applicant was influencing and instigating the local prisoners, creating

factions inside the jail and causing security issues for the jail. There is a

larger risk of the witnesses being influenced and prejudicially tutored to

oppose the prosecution case. It has been further contended that the

applicant by his influence is getting illegal facilities like access to mobile

phone, food etc. inside the jail with the help of jail staff.

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

records as well as the documents annexed with utmost circumspection.

50. The crux of the allegation against the applicant is that he was

involved in running an extortion racket by way of Rs. 20+20=Rs. 40/- per

quintal of custom milled rice out of the special incentive price of Rs.

120/- payable by the State of Chhattisgarh to the custom rice millers.

Hence the offence under Section 383/384 of the IPC has been levelled

against the applicant. Similarly, the allegation of cheating under Section

420 IPC has been made against the applicant. Though it has been

submitted by the counsel for the applicant that there is no direct or

specific evidence against the applicant to suggest that he was involved

52

in any of the offence as alleged in the subject ECIR or the prosecution

complaint.

51. From the investigation of the ED, it has been revealed that the

applicant was one of the key conspirator and main beneficiary of the

POC extorted from the rice millers. It has also been revealed that the

rice milers were forced for payment of the same under threat that their

incentive bills would not be cleared from the MARKFED. As per Section

50(4) of the PML Act, the statements recorded under Section 50 of the

PMLA has evidentiary value as the proceedings under Section 50(2)

and (3) are deemed to be a judicial proceeding within the meaning of

Section 193 and 228 of the IPC, 1860.

52.The applicant is closely connected with POC as he had deputed

some persons at certain place and the cash was not physically taken by

him but it was initially demanded by the applicant and payment, he

conveyed it to the rice millers over phone. It has come in the statements

of some of the rice millers who have personally handed over the

extortion amount as demanded by the applicant. In Y.S.Jagan Mohan

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

been observed that the economic offences having deep rooted

conspiracies and involving huge loss of public funds need to be viewed

seriously and considered as grave offences affecting the economy of the

country as a whole and thereby posing serious threat to the financial

health of country. In Union of India Vs.Hassan Ali Khan (2011) 10

53

SCC 235, this Court has laid down that what will be the burden of proof

when attempt is made to project the proceeds of crime as untainted

money. It is held in the said paragraph that allegations may not

ultimately be established, but having been made, the burden of proof

that the monies were not the proceeds of crime and were not, therefore,

tainted shifted on the accused persons Under Section 24 of the PML

Act, 2002. The same proposition of law is reiterated and followed by the

Orissa High Court in the unreported decision of Smt. Janata Jha v.

Assistant Director, Directorate of Enforcement (CRLMC No. 114 of 2011

decided on December 16, 2013). Therefore, taking into account all these

propositions of law, we feel that the application for bail of the Appellant

should be seen at this stage while the Appellant is involved in the

economic offence, in general, and for the offence punishable Under

Section 4 of the PMLA, in particular.

53.It has been held by the Apex Court that the term “money

laundering” under the PMLA must be read expansively. Under the

broadened definition, even if an accused has not attempted to

misrepresent the “proceeds of crime” as “untainted”, they can still be

implicated for “money laundering.” “Proceeds of crime” refers to the

property obtained through the original criminal activity through which the

act of money laundering is enabled. The original crime from which black

money is generated is called a ‘scheduled offence’ or ‘predicate

offence’. The Court upheld wide powers of the ED, such as search and

seizure and powers of arrest by reasoning that the ED was not the

54

police and hence not bound by the Criminal Procedure Code, 1973. It

also upheld stringent bail conditions under PMLA, where the accused

has the burden of proof to prove that they are not guilty.”

54.The present case related to grant of bail in connection with the

offence registered against the applicant by the ED under various

provisions of Sections 3 and 4 of the PMLA (ECIR registered by the ED)

respectively. In the context of interpretation of Section 45 of the PMLA,

held that the twin conditions obligate the Court to arrive at a positive

finding that applicant has not committed an offence under the PMLA. A

tentative finding should be recorded on the basis of broad probabilities

and detailed reasons are not necessary to be assigned, nor evidence be

weighed meticulously. It was further observed that the assertion of Rs

19.39 crores out of Rs. Total POC of Rs. 147 crores having been paid as

bribe to the applicant as alleged by ED however only properties worth

Rs. 19.39 crores has been recovered from the applicant in the form of

proceeds of crime as well as under clause ‘value thereof’ as per Section

2(1)(u) of the PMLA.

55.Under PMLA, there is a presumption of guilt on the accused which

they have to disprove to get bail. In an older version of the PMLA, the

first condition stated that it would be presumed that the accused was

guilty of the ‘scheduled offence’, and the reversed burden of proof on

the accused was to disprove their involvement in the scheduled offence.

In Nikesh Tarachand Shah Vs. Union of India, Criminal Appeal No.

2014 of 2017, (arising out of SLP (CRL) No.7789 of 2017), a division

55

bench of the court ruled that the first condition was unconstitutional.

Right after this in 2018, this condition was amended, and the new

version stated that the reversed burden of proof on the accused was

now to disprove their involvement in the ‘money laundering’ offence, and

not the ‘scheduled offence’.

56. It appears that prima facie the prosecution has adopted has

acted in a pick and choose manner in the investigation and has

specifically chosen not to proceed against several persons ie. the rice

millers, office bearers of the District Rice Millers Associations, the

current regime involved in rice milling and every person who had taken

part in the same. However, learned Counsel for the respondent

contended that the investigation is still going on and 3-4 charge sheets

are yet to be filed. Be that as it may, the applicant cannot take

advantage at this stage because further investigation is going on, the

charge sheet has been filed against the applicant spanning about 4,000

pages with 17 witnesses filed by the investigating agency and the

investigation is still going on. From the statements of the witnesses, it

has been revealed that the applicant and his family members were

involved in purchasing properties from the proceeds of the crime.

However, Rs. 147 crores of cash money is alleged to have been flown to

the applicant and out of which 19.30 crores have been traced out. The

details of the whatsapp chats annexed with the prosecution complaint

prima facie shows the involvement of the applicant in the present case.

57. While considering the prayer for granting bail, a balance has to

56

be struck between two factors, namely, prejudice to the free, fair and full

investigation and prevention of harassment, humiliation and unjustified

detention of the accused in jail. A pick and choose manner of

investigation raises a doubt on the credibility of evidence, specially

where the evidence of similarly placed persons is then relied upon

against the other accused. The Pick and Choose policy of ED adopted

in arresting the accused depicts the discriminatory practice of ED qua

the Applicant. As has been held by the Apex Court, the doctrine of need

and necessity to arrest possibly accepts the principle of parity enshrined

under Article 14 and held that the ED "should act uniformly, consistent in

conduct, confirming one rule for all". Since there is prima facie

involvement of the Applicant in the commission of the offence and as

such, the burden of proof under Section 24 of the PMLA is upon the

applicant to demonstrate before the Ld. Special Judge that the money

involved does not fall within the proceeds of crime involved in the

present ECIR.

58.The Court after examining the entire documents found substantial

material indicating a strong nexus between the applicant and the other

accused persons in the commission of the crime. There were

documents and evidences that reflected the invovlement of the applicant

and he is the key conspirator and beneficiary from the said scam. Thus,

the guilt of the accused in the offence of money laundering has been

gathered and since, the allegations against the applicant were

extremely serious and taking into account, the nature and gravity of the

57

offence and from perusal of the record and in view of the fact that

looking to the special and stringent provision under Section 45(1) of the

PMLA for grant of bail, in the considered opinion of this Court, prima

facie the money trail has been established by the prosecution and

therefore, it is not proper to order release of present applicant on regular

bail for the reasons mentioned hereinabove.

59.It was further held that with regard to the health issue of the

applicant is concerned, as such there is no serious ailment. It is further

held that if the authorities are adopting adequate measures to prevent

deterioration of the health of the accused during the period of custodial

internment, then the Court may not interfere. Referring to the judgment

of Surjeet v. State (NCT of Delhi)2021 SCC OnLine Del 228, it has

been held that if a good treatment can be offered within the jail premises

or at the behest of the jail administration, then grant of bail on medical

grounds becomes unwarranted. Thus, even a sick person need not be

released on bail, if the jail authorities or prosecuting agency could

arrange proper and adequate treatment. The twin conditions under

Section 45 of the Act shall cease to apply to such special category of

persons. However, merely because there is some ailment the accused

is suffering from, does not warrant him to be released on bail, but what

must be seen is whether required treatment can be provided by the jail

authorities. Only in those specialized cases of sustained treatment,

where extreme care is necessary, not otherwise possible in jail, then

only the applicant is entitled to the benefit of proviso to Section 45(1).

58

60.Thus, the prayer for bail made by the applicant under Section 483

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

Section 45 of the PMLA, 2002 for the offences under Section 3 & 4 of

the PMLA, 2002, is hereby rejected.

Sd/-

(Arvind Kumar Verma)

Judge