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AFR

HIGH COURT OF CHHATTISGARH, BILASPUR

MCRC No. 402 of 2024

Reserved on : 14.03.2024

Delivered on : 08.04.2024

Sunil Kumar Agrawal, S/o Late Mohan Lal Agrawal, Aged About 52

Years, R/o R-3, Aishwarya Residency, Telibanda, District Raipur,

Chhattisgarh…...(Presently In Judicial Custody)

--- Applicant

Versus

Directorate of Enforcement Government of India, Government of India,

Through - Assistant Director, Zonal Office, 2

nd

Floor, A-1 Block, Pujari

Chambers, Pachpedi Naka, Raipur, District Raipur (C.G.)

--- Respondent

For Applicant :Mr. Puneet Bali, Sr. Advocate with Mr. Nikhil

Varshney, Mr. Sourabh Dangi, Mr. Aditya Soni,

Mr. Anmol Chandan, Mr. Vibhav Jain, Mr. Sajal

Kumar Gupta, Mr. Sriharsh Raj, Mr. Tushar Giri

& Mr. Kartik Sharma, Advocates.

For Respondent :Dr. Sourbh Kumar Pande, Advocate.

Hon'ble Shri Justice Narendra Kumar Vyas

CAV ORDER

1.This is second bail application filed under Section 439 of the

Code of Criminal Procedure, 1973 for grant of regular bail to the

applicant, who has been arrested on 13.10.2022 in connection

with Crime No. ECIR/RPZO/09/2022 dated 29.09.2022

registered at Police Station- Directorate of Enforcement, Zonal 2024:CGHC:12494

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Office, Raipur (C.G.) for the offence punishable under Sections 3

& 4 of the Prevention of Money Laundering Act, 2002 (for short

“the PMLA, 2002”).

2.The case of the prosecution, in brief, is that on 12.07.2022, FIR

No. 129/2022 was registered by Kadugodi Police Station,

Whitefield, Bengaluru under Sections 186, 204, 353 & 120B of

IPC against one Suryakant Tiwari & other persons on the basis

of complaint filed by Deputy Director of Income Tax, Foreign

Assets Investigation Unit-I Bengaluru alleging that as part of

conspiracy, during course of search by Income Tax department

on 30.06.2022, Suryakant Tiwari had obstructed the officials

from carrying their official duties and destroyed crucial

incriminating documents and digital evidence about the alleged

illegal extortion on Coal Transportation, payments collected by

Suryakant Tiwari and his associates.

3.It is also case of the prosecution that on 13.09.2022, OM in F.

No. 22-IT was forwarded by Central Board of Direct Taxes (for

short “CBDT”) to the Directorate of Enforcement containing the

FIR No. 1292022 Police Station- Kadugodi along with a report

on the investigation conducted by the Income Tax Department

on M/s Jay Ambey Group of Raipur (Suryakant Tiwari Group). In

the report, it has been mentioned that during search operations

on 30.06.2023 by Income Tax Department on the premises of

Suryakant Tiwari and his associates, evidence was gathered

related to a syndicated being operated and coordinated by

Suryakant Tiwari whereby additional unauthorized cash to the 2024:CGHC:12494

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tune of Rs. 25 per ton of coal was being collected over and

above the legal amount against Coal Delivery Orders. It has also

been alleged that pursuant to the Order F.No.4138-

47/Sankhikiya/Coal bhandaran/N.Kra 2020 dated 15.07.2020

issued by the State Government the dispatch rules of coal mines

by authorities have been changed from an online process to

introduction of manual verification. The said notification was

issued under the signatures of one Sameer Vishnoi, IAS who

was the Director, Geology & Mining as well as MD of CMDC. It is

also case of the prosecution that it is only after the said

notification Suryakant Tiwari in conspiracy with certain other

persons started obtaining an illegal levy of Rs. 25 per ton of coal

for issuance of delivery order for coal transportation. The

handwritten diaries maintained by one Rajnikant Tiwari who is

brother of Suryakant Tiwari contained entries of incoming and

outgoing amounts of unaccounted cash generated, inter alia

from illegal levy on coal transport revealed profits of more than

Rs. 500 crores in 16 months from different kinds of levies. On

29.09.2022, ECIR/RPZ0/09/2022 was registered by Directorate

of Enforcement, Raipur Zonal Office for commission of offence

under Sections 120 (B) & 384 of IPC being a part of FIR No.

129/2022.

4.The role of the present applicant is that the present applicant

who is promoter of M/s Indermani Group having a close

relationship with Suryakant Tiwari. Investigation revealed that

the applicant had helped Suryakant Tiwari in acquiring coal 2024:CGHC:12494

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washeries from M/s Indus Udyog & Infrastructure Pvt Ltd. and

Ms. Satya Power and Ispat Ltd. These coal washeries were

acquired for an amount of Rs. 96 crore, out of which Rs. 34 crore

was registered value and was paid through banking channel and

rest of the amount was to be paid in cash. Thus, large amount of

illegally acquired cash was layered in these transactions. After

the IT raids, the applicant made stamp paper transactions to

show that he was the owner of these 2 washeries which were

nothing but a futile attempt to alienate the ill-gotten proceeds of

crime and take them far away from arms of Income Tax

Department & Enforcement Directorate and to prevent their

attachment and to claim them as untainted assets. The applicant

knowingly and willingly participated in these transactions to layer

and obfuscate the real ownership of these tainted properties.

Despite being a man of means and business standing, he

knowingly acted as a benami for Suryakant Tiwari and has

assisted in the money laundering process. Apart from the above

two washeries, after the income tax raids on Surykant Tiwari and

his associates, Indermani Group purchased all the benami

properties of Suryakant Tiwari to safeguard the ill-gotten

proceeds of crime and to frustrate the efforts of Enforcement

Directorate to attach the proceeds of crime in future. All these

transactions are sham transactions and in effect applicant's

Indermani Group is holding these assets for Suryakant Tiwari

and his benamis. It is clear that although the applicant is a

wealthy businessman, Enforcement Directorate investigation has 2024:CGHC:12494

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established that for getting personal benefits in terms of share in

washery business and for his larger business ambitions in

getting close to the Government of the day, he has acted as a

benami and is holding these assets for the benefit of Suryakant

Tiwari. He has only blocked his capital in these assets and the

remaining entire cash transactions were still done by Suryakant

Tiwari only. He has also been evasive in his statements

regarding his complete financial dealings. In fact, on the day of

the search, he was not found at his premises and he joined the

search proceedings later on with a brand-new phone, but came

only after hiding his regular mobile devices. He claimed that his

phone was 'stolen' from his crown farm house. several properties

in the names of companies of the applicant herein viz., M/s

Indermani Minerals Pvt. Ltd. & M/s KJSL Coal & Power Pvt. Ltd.

which were acquired using proceeds of crime have been

attached under Section 5(1) of PMLA, 2002, vide PAO Nos.

02/2022 dated 09.12.2022 & 01/2023 dated 29.01.2023 and the

same were subsequently confirmed by the learned Adjudicating

Authority (PMLA), vide orders dated 01.06.2023 & 17.07.2023 in

OC No. 1874/2023 & 1906/2023 respectively. The prosecution

complaint under Section 45 of the PMLA, 2002 has been filed

before the learned Special PMLA Court, Raipur on 09.12.2022

against the applicant herein, inter alia, for committing the offence

of money laundering and the learned PMLA Court has taken

cognizance of the complaint vide order dated 01.06.2023. In

order to money trail the remaining unidentified proceeds of crime 2024:CGHC:12494

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and to question the applicant further, an application was filed

before the learned Special PMLA Court, Raipur seeking

permission to examine and record the statement of the applicant

herein, inter alia, in prison. The learned Court vide order dated

08.01.2024 allowed the application and granted 6 days i.e. from

10.01.2024 to 15.01.2024. The statement of the applicant was

recorded in the Central Jail, Raipur on 10.01.2024 & 14.01.2024

under Section 50 of the PMLA, 2002.

5.The record of the case would show that the applicant filed an

application for grant of regular bail before the learned PMLA

Court, Raipur (C.G.) seeking enlargement on regular bail.

Learned Special Judge vide order dated 23.11.2022, dismissed

the bail application filed by the applicant. This order was assailed

by the applicant before this Court by filing bail application

bearing MCRC No. 11046/2022. The said bail application was

dismissed by the Coordinate Bench of this Court on 21.03.2023

by observing that the manner of transaction made between the

applicant and the firms belonging to Suryakant Tiwari, the timing

of the transaction, the sale consideration made by the applicant

in the process of purchase of the coal washeries from the firms

belonging to Suryakant Tiwari, all establishes the nexus between

the applicant and Suryakant Tiwari and their involvement in the

predict offence. Further, going into the entire materials available

in the case records, there seems to be a serious nature of racket

involving huge generation of hard cash illegally being collected.

Thereafter, the applicant has filed second bail application before 2024:CGHC:12494

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this Court on 12.01.2024 contending that there are changed

circumstances as certain germane facts have been transpired

after rejection of first bail application approximately ten months

ago.

6.Learned Senior counsel for the applicant would submit that the

present applicant is a victim of extortion syndicate who has been

projected as an accused in fact the applicant was not a part of

the extortion syndicate. He would further submit that the

applicant tried to erase the evidences related to proceeds of

crime and the properties connected by removing all computers

and other digital devices from his office and by hiding his mobile

phone in an attempt to escape the clutches of law and to

frustrate further investigation under the PMLA, 2002 whereas

the applicant has always cooperated with Enforcement

Directorate and also recorded his statement as provided under

Section 50 of the PMLA, 2002. He would further submit that due

to thunder lightening in the applicant's office, many electronic

devices like air conditioners, camera, DVR, desktop computers,

etc. were burnt/damaged, and therefore, the same were in the

process of being repaired and would submit that the applicant

has already provided cash ledger, sources of funds as

demanded by the ED. As such, it cannot be said that the

applicant has made any attempt to suppress anything regarding

purchase transaction with ED. He would further submit that there

is violation of Section 19 of the PMLA, 2002 as this Section

provides that arrest should be made on the basis of the "material 2024:CGHC:12494

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in possession", which has to be of sterling quality and

unimpeachable character, which is not available in the present

case. However, in the instant case, the applicant has been

arrested on the basis of the statements of Directors of Indus and

Satya Power, but these Directors have not been named as

prosecution witness, therefore, the relevancy of statements of

these directors is in question. He would further submit that the

Enforcement Directorate ought to explain the rationale behind

not including these directors in the list of witnesses.

7.He would further submit that Rupesh Garg in his statement

recorded under Section 50 of the PMLA, 2002 has stated before

the Enforcement Directorate that against the sale of two coal

washeries Rs. 21.5 crore was received in cash and the Director

of Indus (Ashish Agrawal) in his statement has stated that Rs. 20

crores was to be receivable, but it has not been received. He

would further submit that as per the statement made by Rupesh

Garg, Rs. 21.5 crores was paid in cash by Suryakant Tiwari then

question arises that where is this money. He would further

submit that the recovery made by the Enforcement Directorate

from Rupesh Garg and Pawan Agrawal is only for Rs.

78,49,000/- and there is no recovery regarding remaining

amount. It is imperative to mention that none of the directors of

Satya or Indus has stated that the applicant had pressurized

them to sell the coal washeries to M/s Maa Madwarani Coal

Benefaction Pvt. Ltd. He would further submit that Rupesh Garg

and Ashish Agarwal have stated in their statements to 2024:CGHC:12494

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Enforcement Directorate that the coal washeries were sold to

Maa Madwarani for Rs. 96 Crores whereas the ground of arrest

provides that the coal washeries were sold by them to Maa

Madwarani for Rs. 50 crores. He would further submit that from

the documents relied upon by the prosecution complaint is that

two coal washeries were sold for Rs. 31,50,00,000. Hence, any

value attributed to the two coal washeries over an amount of Rs.

31.59 crores approx, is a pure figment of imagination. He would

further submit that these two coal washeries were sold by them

as per the independent valuation report dated 14.05.2022 and

16.05.2022 which is based upto the value declared by the

directors and certified the independent Chartered Accountants.

As such, he would submit that the allegation is without any

foundation.

8.He would further submit that out of 70 properties attached by the

Enforcement Directorate only 9 properties were directly

purchased from Suryakant Tiwari. He would further submit that it

is not a case of the Enforcement Directorate that the applicant

purchased the property using the proceeds of crime or under

valued amount prize below the circle rate. He would further

submit that the applicant has not purchased these properties in

cash but were purchased through banking system, as such the

allegation that the applicant has paid huge amount of cash to

acquire properties from Suryakant Tiwari is not correct. He

would further submit that the applicant has only purchased 4.616

hectare (which comes to 11.40 acres) out of a total of 22 acres 2024:CGHC:12494

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as per agreement of sale dated 20.06.2022 which was executed

between by KJSL and Maa Madwarani. He would further submit

that the allegation made by the Enforcement Directorate that the

sale of coal washeries was only a sham transaction, is not

correct as after execution of the agreement of sale, the registry

of property was executed and payments were made. He would

further submit that before purchasing valuation report was

obtained by independent valuer and not by Maa Madwarani and

thereafter, the said coal washeries were purchased from Indus at

Rs. 31.6 crore. However, the applicant has paid Rs. 35.28 crores

approx for acquiring the said washeries which is more than the

amount paid by Maa Madwarani to acquire this coal washery.

9.He would further submit that in the first prosecution complaint the

Enforcement Directorate has stated that the applicant indulged

in sham transactions and that the applicant is holding these

assets for Suryakant Tiwari and his benamis. Further,

Enforcement Directorate has also stated that no board resolution

was passed to purchase these properties, is incorrect

submission as there was board Resolution for purchasing these

properties passed by the board of M/s Maa Madwarani and M/s

KJSL on 01.05.2022 and 15.06 2022 respectively. Further, these

properties are not held for Suryakant Tiwari and his benamies

and the purpose for which they were purchased in mentioned in

the board resolutions. He would further submit that the bank

account details of Maa Madwarani would show that there was

transfer of amounts in furtherance of payment for consideration 2024:CGHC:12494

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as contemplated under the agreement of sale dated 20.06.2022.

Hence, there is no material evidence on record which would

even slightly indicate that these transactions are sham

transactions. It is the case of Enforcement Directorate that

properties belonging to Suryakant Tiwari was purchased by the

applicant as benami, as he was a close associate of Suryakant

Tiwari. In this regard, it is submitted that the purchase of the said

properties can never be a benami transaction since the agreed

price was paid by the applicant using its own funds. No loan or

external aid was sought to purchase these properties. Hence, all

these properties were acquired by legal means. The applicant

had paid the purchase consideration for all these properties by

cheques and all these properties are registered with the

appropriate authorities. The applicant had acquired these

properties for its own use as such it cannot be said that it

benami property.

10.He would further submit that the allegation made by the

Enforcement Directorate that Suryakant Tiwari and other

persons liquidated all properties in their names and in the names

of their family members to willing associates like the applicant to

project the same as untainted assets, though these assets

continue to remain in the syndicate's control for all practical

purposes, is incorrect fact as there is nothing on record to

substantiate this. He would further submit that these properties

were purchased by the applicant to fulfill the purpose of

acquiring these properties, as mentioned in the board 2024:CGHC:12494

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resolutions passed in this regard. He would further submit that

the applicant owned seven coal washeries and is in the business

of coal for twenty years. Hence, no question of enriching arises

when somebody already has seven coal washeries. He would

further submit that the ED has wrongly alleged that the applicant

played an active part in layering of the extorted amounts in the

purchase of two coal washeries through his company KJSL.

Further, ED has also alleged that the applicant, in order to

alienate the tainted assets through M/s Indermani which is sham

purchase transaction and acquired properties from Suryakant

Tiwari, therefore, the allegation of layering qua Sunil Kumar

Agrawal cannot survive. Moreover, in terms of Section 3 of

PMLA, 2002, the applicant submits that he has neither played

role knowingly nor indirectly in layering of the proceeds of crime,

and hence, cannot be held liable for money laundering.

11.He would further submit that new set of arguments taken with

respect to arrest, grounds of arrest and remand order could not

have been taken by the applicant in its first hail application

before this Court or before the learned PMLA Court because the

Hon'ble Supreme Court has clarified the law in favour of the

accused through later judgments in the case Pankaj Bansal Vs.

Union of India decided on 03.10.2023 and V. Senthil Balaji Vs.

State decided on 07.08.2023, respectively, which is after

dismissal of bail application bearing MCRC No. 11046 of 2022

vide order dated 21.03.2023. He would further submit that the

last prosecution complaint i.e. second supplementary 2024:CGHC:12494

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prosecution complaint was filed on 18.08.2023, therefore, seven

months have passed by and neither the Enforcement Directorate

has filed any further complaints nor has called the applicant for

any further interrogation, it was only in the first week of January

2024 that Enforcement Directorate sought permission from the

learned PMLA Court to interrogate the applicant. Subsequently,

interrogation was conducted on 10.01.2014 and 14.01.2014 and

only a couple of questions were asked the applicant for

namesake. Further, it is important to note that the first

prosecution complaint states that the investigation with regard to

the accused is complete and it is not the case of Enforcement

Directorate that the applicant tampered with the evidence or

influenced the witnesses during the period when the applicant

was out of jail for medical treatment. He would further submit

that Anupp Bansal has submitted in his statement that he sold

his entire share (13%) of M/s Maa Madwarani to M/s Indermani

in the month of July 2022 at Rs. 14 crore, is entirely false and

baseless as no such records exist with the Registrar of

Companies, Chhattisgarh. Lastly he would submit that Rajnikant

Tiwari's anticipatory bail bearing MCRCA No. 816 of 2023 was

dismissed by this Court vide order dated 02.11.2023, but till date

he is not arrested by the Enforcement Directorate. He would

further submit that the applicant is remained in jail for more than

one year and five months whereas maximum sentence which

can be imposed upon him is seven years.

12.The applicant has also filed additional documents on record i.e. 2024:CGHC:12494

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the remand order dated 13.10.2022 passed by the learned

Special Court, Raipur, copy of remand order dated 05.06.2023

passed by the learned Special Judge (PMLA) Panchkula in case

of Pankaj Bansal, copy of extract of financial statements of KJSL

Coal and Power Private Ltd. as well as Indermani Mineral India

Private Ltd. and statement made by Nikhil Chandrakar before

Police Station- Telibandha, Raipur to substantiate that applicant

was illegally kept under custody as summon was issued only for

12.10.2022 and he was kept under custody on 13.10.2022 upto

5.30 a.m. whereas the applicant ought to have been released by

11.59 p.m. on 12.10.2022 as summon was issued to the

applicant for 12.10.2022 only. Thus, he was kept under wrongful

custody and illegally restrained during the period between 12

p.m. to 5.30 a.m. of 13.10.2022, as such, the arrest is nonest

and illegal and the alleged ground of arrest was provided to the

applicant only at 5.30 a.m. To substantiate this submission, he

would refer to the judgment of Punjab and Haryana High Court

in case of Pranav Gupta Vs. Union of India reported in (2023)

SCC Online P&H 3598 . He would further submit that the

respondent has failed to communicate the ground of arrest to the

applicant on actual date of arrest on 13.10.2022, as such, it is an

arbitrary action and violated the mandate of arrest as provided in

Section 19(1) of the PMLA, 2002. To substantiate his

submission, he relied upon the judgment of Hon’ble the

Supreme Court in case of Pankaj Bansal Vs. Union of India

reported in (2023) SCC OnLine 1244. He would further submit 2024:CGHC:12494

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that the statement of Shikhar Agrawal and Shailesh Agrawal as

well as statement of the applicant recorded by the respondent

cannot be termed as “material” in terms of Section 19(1) of the

PMLA, 2002 thus, he would pray for releasing the applicant on

bail.

13.To substantiate his submission, learned senior counsel for the

applicant would refer to the judgment rendered in case of Vijay

Madanlal Chaudhary & others Vs. Union of India & others,

reported in 2022 SCC OnLine SC 929 , Assistant Director,

Directorate of Enforcement Vs. Pankaj Trivedi [SLP (Crl.) No.

6128/2019], Sanjay Agarwal Vs. Directorate of Enforcement,

reported in (2022) SCC OnLine SC 1748, Sujay U. Desai Vs.

Serious Fraud Investigation Office, reported in (2022) SCC

OnLine SC 1507, Jainam Rathod Vs. State of Haryana ,

reported in (2022) SCC OnLine SC 1506, Raman Bhuraria Vs.

Directorate of Enforcement, reported in (2023) SCC OnLine

Del 657, Benoy Babu Vs. Directorate of Enforcement [SLP

(Crl.) Nos. 11644-11645 of 2023], Gurbaksh Singh Sibbia Vs.

State of Punjab, reported in (1980) 2 SCC 565, Sanjay Kumar

Tiwari Vs. Union of India [SLP (Crl.) No. 003794/2022], P.

Chidambaram Vs. Directorate of Enforcement, reported in

(2020) 13 SCC 337, Sanjay Chandra Vs. Central Bureau of

Investigation, reported in (2012) 1 SCC 40, Manish Sisodia

Vs. Central Bureau of Investigation, reported in (2023) SCC

OnLine SC 1393, State of Rajasthan Vs. Balchand, reported

in (1977) 4 SCC 308, Dataram Singh Vs. State of Uttar 2024:CGHC:12494

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Pradesh, reported in (2018) 3 SCC 133, Arnab Manoranjan

Goswami Vs. State of Maharashtra & others , reported in

(2021) 2 SCC 427, Y.S. Jagan Mohan Reddy Vs. CBI, reported

in (2013) 7 SCC 439, DK Shivkumar Vs. Directorate of

Enforcement, reported in (2019) SCC Online Del 10691, Union

of India Vs. K.A. Najeeb, reported in (2021) 3 SCC 713, Preeti

Chandra Vs. Enforcement Directorate (Bail Application No.

3494/2022) (decided on 14.06.2023) reported in 2023 SCC

OnLine Del 3622, Anil Kumar Aggarwal Vs. Enforcement

Directorate through its Assistant Director, Jammu [WP(Crl.)

No. 09/2024, decided on 15.03.2024], Vijay Narendra Kumar

Kothari Vs. Directorate of Enforcement & another reported in

(2021) SCC OnLine SC 561, Raj Kumar Goel Vs. Directorate

of Enforcement, reported in (2018) SCC OnLine Del 8873,

Ramchand Karunakaran Vs. Directorate of Enforcement &

another [Criminal Appeal No. 1650 of 2022, decided on

23.09.2022], Sujit Tiwari Vs. State of Gujarat, reported in

(2020) 13 SCC 447, Mohammad Salman Hanif Shaikh Vs.

State of Gujarat [SLP (Crl.) 5530/2022], Gopal Krishna Patra

@ Gopalrusma Vs. Union of India [Criminal Appeal No. 1169

of 2022], Shariful Islam @ Sarif V/s State of West Bengal

[SLP (Crl.) No. 4173 of 2022], Nitish Adhikary @ Bapan Vs.

State of West Bengal [SLP (Crl.) No. 5769 of 2022], Mohd.

Muslim @ Hussain Vs. State (NCT of Delhi), Ajit Bhagwan

Tiwde Vs. State of Maharashtra, reported in 2022 SCC Online

Bom 4079, Ajay Thakre Vs. State of Maharashtra [Crl. Bail 2024:CGHC:12494

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Application No. 515/2022], Roop Bansal Vs. Union of India

[CWP-23005-2023, decided on 31.10.2023], Parvathi Kollur &

another Vs. State of Directorate of Enforcement [Crl. Appeal

No. 1254/2022, decided on 16.08.2022], Indrani Patnaik Vs.

Directorate of Enforcement [WP (C) No. 368 of 2021, decided

on 03.11.2022], Adjudicating Authority (PMLA) & others Vs.

Shri Ajay Kumar Gupta & others [Crl. Appeal No. 391-

392/2018], Directorate of Enforcement Vs. M/s Obulapuram

Mining Company Pvt. Ltd. [Crl. Appeal No. 1269/2017,

decided on 02.12.2022], M. Nagarajan & another Vs.

Directorate of Enforcement & others [SLP (Crl.) 10917/2022,

decided on 23.01.2023], Southern Agrifurance Industries

Pvt. Ltd. Vs. Asst. Director Directorate of Enforcement [SLP

(Crl.) N. 154-155/2023, decided on 10.04.2023], Harish

Fabiani Vs. Enforcement Directorate & others, reported in

2022 SCC OnLine Del 3121, Naresh Goyal Vs. Directorate of

Enforcement & others [W.P. (Crl.) No. 4037/2022, decided on

23.02.2023], Pusham Appala Naidu & others Vs. Directorate

of Enforcement [Crl. OP 2279/2019, decided on 12.09.2022]

& Vijay Sai Reddy Vs. Enforcement Directorate [Crl. Petition

No. 1216/2021, decided on 08.09.2022].

14.Learned counsel for the applicant would submit that since no

schedule offence is levelled against the applicant, therefore, the

proceeding under the PMLA, 2002 is not tenable as such also he

is entitled to be released on bail. He would further submit that

the orders passed by this Court arising out of same ECIR are 2024:CGHC:12494

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also not applicable to the facts of this case and would pray for

releasing the applicant on bail.

15.On the other hand, learned counsel for the Enforcement

Directorate would refer to the ECIR and would submit that a

notification dated 15.07.2020 was issued by Shri Sameer

Vishnoi, IAS at the instance of extortion cartel led by Mr.

Suryakant Tiwari, modified the pre-existing transparent online

process of getting e-permits for transporting coal from mines to

users, into a system which made it prone to massive corruption.

He would further submit that FIR No. 129/2022 dated

12.07.2022 was registered by Kadugodi Police Station,

Whitefield, Bengaluru under Sections 186, 204, 353 & 120 (B) of

IPC against Suryakant Tiwari and others on the basis of

complaint filed by the Deputy Director of Income Tax, Foreign

Assets Investigation Unit-1, Bengaluru, stating that as part of a

conspiracy, during the course of search by Income Tax

Department on 30.06.2022 at Room No. 664, Hotel Sheraton

Grand, Whitefield, Bengaluru, Suryakant Tiwari had obstructed

the officials from carrying their official duties and had destroyed

crucial incriminating documents and digital evidences which

supposedly contained important information about the illegal

extortion, payments collected and persons involved. The said

FIR is under investigation. Thereafter, vide O.M in F.No.

289/ED/36/2022-IT (Inv.II) dated 13.09.2022, CBDT has

forwarded the copy of the above FIR No. 129/2022 dated

12.07.2022 under Sections 186, 204, 353, 384 & 120 (B) of IPC 2024:CGHC:12494

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against Suryakant Tiwari along with a report on the investigation

conducted by Income Tax Department on M/s Jay Ambey Group

of Raipur (Suryakant Tiwari Group) to the Directorate of

Enforcement for initiating money laundering investigation. From

perusal of aforementioned O.M, it was learnt that a search and

seizure action was carried out by the Income Tax Department at

multiple premises of Suryakant Tiwari and his associates. During

the course of search and seizure, large number of incriminating

evidences were seized which are in the forms of hand written

diaries, loose papers and digital devices like mobile phones,

laptops etc. These evidences discloses numerous cash

transactions relating to an organized syndicate being operated

and coordinated by Suryakant Tiwari along with six associates

and other persons wherein additional unauthorized cash was

being extorted, over and above the legal amount fixed against

the Coal Delivery Order issued by SECL (South Eastern

Coalfields Limited), from various entities who were lifting and

transporting the coal throughout the State of Chhattisgarh.

Suryakant Tiwari deployed his following associates in the Coal

producing districts and these associates had liaisons with

Collectorate Office, Mining officers and other users to collect the

illegal coal levy from their employees. He would further submit

that once the employees of Suryakant Tiwari, received the illegal

amount of Rs. 25/- tonne on coal to be transported, the message

was then communicated to the Mining Officer and thereafter the

delivery orders (DOs) were cleared for transport by Mining 2024:CGHC:12494

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Officers by issue of manual NOC against the delivery orders.

During the search operations of Income Tax Department, certain

evidences were seized from possession of members of this

syndicate and statements of various persons have been

recorded by the authorities which will reveal that illegal collection

of levy on transport of coal was being done on the direction of

Suryakant Tiwari.

16.He would further submit that the present applicant has played

specific role and he is kingpin of the offence and would submit

that the applicant is promoter of M/s Indermani Group having a

close relationship with Suryakant Tiwari. Investigation revealed

that the applicant had helped Surykant Tiwari in acquiring coal

washeries from M/s Indus Udyog & Infrastructure Pvt. Ltd. and

M/s Satya Power and Ispat Ltd. These coal washeries were

acquired for an amount of Rs. 96 Crore, out of which Rs. 34

Crore was the registered value and was paid through banking

channel and rest of the amount was to be paid in cash. Thus,

large amount of illegally acquired cash was layered in these

transactions. After the Income Tax raids, he made sham paper

transactions to show that he was the owner of these two

washeries. These transactions were nothing but a futile attempt

to alienate the ill-gotten proceeds of crime and take them far

away from the arms of Income Tax & Enforcement Department

and to prevent their attachment and to claim them as untainted

assets. The applicant knowingly and willingly participated in

these transactions to layer and obfuscate the real ownership of 2024:CGHC:12494

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these tainted properties despite being a man of means and

business standing, be knowingly acted as a benami for

Suryakant Tiwari and has assisted in the money laundering

process. He would further submit that apart from the above two

washeries, after the income tax raids on Surykant Tiwari and his

associates, Indermani Group purchased all the benami

properties of Suryakant Tiwari to safeguard the ill-gotten

proceeds of crime and to frustrate the efforts of Enforcement

Directorate to attach the proceeds of crime in future. He would

further submit that all these transactions are sham transactions

and in fact applicant’s Indermani Group is holding these assets

for Suryakant Tiwari and his benamis. He would further submit

that it is clear that although the applicant is a wealthy

businessman, the Enforcement Directorate has established that

for getting personal benefits in terms of share in washery

business and for his larger business ambitions in getting close to

the Government of the day, he has acted as a benami and is

holding these assets for the benefit of Suryakant Tiwari. He has

only blocked his capital in these assets and the remaining entire

cash transactions were still done by Suryakant Tiwari only. He

has also been evasive in his statements regarding his complete

financial dealings. In fact, on the day of the search, he was not

found at his premises and he joined the search proceedings later

on with a brand-new phone, but came only after hiding his

regular mobile devices. He would further submit that the

prosecution complaint under Section 45 of the PMLA, 2002 has 2024:CGHC:12494

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been filed before the learned Special PMLA Court, Raipur on

09.12.2022 against the applicant herein, inter alia, for committing

the offence of money laundering and the learned PMLA Court

has taken cognizance of the complaint vide order dated

01.06.2023. He would further submit that in order to money trail

the remaining unidentified proceeds of crime and to question the

applicant further, an application was filed before the learned

Special PMLA Court, Raipur seeking permission to examine and

record the statement of the applicant, inter alia, in prison. The

Court vide order dated 08.01.2024 allowed the application and

granted six days i.e. from 10.01.2024 to 15.01.2024. The

statement of the applicant under Section 50 of the PMLA, 2002

has been recorded in Central Jail, Raipur on 10.01.2024 &

14.01.2024.

17.He would further submit that the applicant is unable to fulfill the

twin conditions of Section 45 of the PMLA, 2002 as from the

above factual matrix, it is quite vivid that the possibility of the

accused being not guilty of the offence of money laundering is

highly impossible. To substantiate the submission, he would refer

to paragraph 135 of the the judgment rendered by Hon’ble the

Supreme Court in case of Vijay Madanlal Choudhary (supra).

He would further submit that the applicant with proceed of crime

and having deep roots in the society, is in a position to influence

witnesses. To substantiate this submission, he has mentioned

certain privilege granted to him by the medical hospitals which

normally provided to the prisoners. To substantiate this 2024:CGHC:12494

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submission, he has referred to the judgment of Hon'ble

Allahabad High Court in case of Pankaj Grover v. ED [Criminal

Misc. Anticipatory Bail Application U/S 438 Cr.P.C. No. 7661

of 2021] wherein Hon’ble the High Court has held that the

accused in economic offences/ PMLA cases are in possession of

huge proceeds of crime and may use those to influence

witnesses. Further the Court also held that since such offences

are committed mostly by influential persons, there is a high

likelihood of their using influence to tamper with evidence and

influence witnesses.

18.He would further submit that economic offence constitute a

separate class of offence and in the present case, the amount

involved in the offence of money laundering is Rs. 540 crores

approximately and in view of well settled position of law that

economic offence constitutes a separate class of offence and

bail should not normally be granted in such cases and would

pray for rejection of bail petition.

19.To substantiate his submission, he would refer to the judgment

rendered by Hon’ble the Supreme Court in case of

Nimmagadda Prasad Vs. CBI, reported in (2013) 7 SCC 466,

State of Bihar Vs. Amit Kumar reported in (2017) 13 SCC 751,

Gautam Kundu Vs. Manoj Kumar reported in (2015) 16 SCC 1,

Mohd. Arif Vs. Directorate of Enforcement, Govt. of India,

BLAPL No. 8882/2021 (decided on 31.05.2022) , Soumya

Chaurasia Vs. Directorate of Enforcement Special Leave

Petition (Crl.) No. 8847/2023, Radha Mohan Lakhotia Vs. The 2024:CGHC:12494

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Deputy Director, PMLA, Department of Revenue reported in

MANU/MH/1011/2010, Anirudh Kamal Shukla Vs. Union of

India [Criminal Misc. Anticipatory Bail Application under

Section 438 Cr.P.C. No. 307/2022, decided on 21.03.2022],

Naib Singh Vs. State of Haryana [CRM-M-29466-2022,

decided on 15.11.2022].

20.I have heard learned counsel for the parties and perused the

documents placed on record including ECIR with utmost

satisfaction.

21.From the above discussion, the points to be emerged for

determination by this Court are :-

Point No. 1:Whether disclosure of insufficient reason in

remand order, alleged illegal custody entitled the

applicant to be released on bail under the PMLA,

2002.

Point No. 2:Whether the applicant fulfills twin conditions of

Section 45 of the PMLA, 2002 for grant of bail.

Point No. 1

22.To determine this issue, it is necessary for this Court to examine

the relevant provisions of the PMLA, 2002. Chapter-V of the

PMLA, 2002 deals with the power of an authority to conduct

survey, search and seizure of both a place and a person

followed by arrest, if so required. These provisions of step-in-aid

in the conduct of the enquiry of investigation. Section 19 of the

PMLA, 2002 is reproduced below:-

“Section 19- Power to arrest- (1) If the Director, Deputy

Director, Assistant Director or any other officer authorised in

this behalf by the Central Government by general or special

order, has on the basis of material in his possession, 2024:CGHC:12494

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reason to believe (that reason for such belief to be

recorded in writing) that any person has been guilty of an

offence punishable under this Act, he may arrest such

person and shall, as soon as may be, inform him of the

grounds for such arrest.

(2) The Director, Deputy Director, Assistant Director or any

other officer shall, immediately after arrest of such person

under sub-section (1), forward a copy of the order along

with the material in his possession, referred to in that sub-

section, to the Adjudicating Authority, in a sealed envelope,

in the manner, as may be prescribed and such Adjudicating

Authority shall keep such order and material for such

period, as may be prescribed.

(3) Every person arrested under sub-section (1) shall,

within twenty-four hours, be taken to a [Special Court or]

[Inserted by Finance Act, 2018 (Act No. 13 of 2018) dated

29.3.2018.] Judicial Magistrate or a Metropolitan

Magistrate, as the case may be, having jurisdiction:

Provided that the period of twenty-four hours shall exclude

the time necessary for the journey from the place of arrest

to the [Special Court or] Magistrate’s Court.”

23.From bare perusal of the Section 19 of the PMLA, 2002, it is

quite vivid that for arresting any person, any officer authorized

has on the basis of material on his possession and through such

materials, he is expected to form a reason to believe that a

person has been guilty of an offence punishable under the

PMLA, 2002, then only, he is at liberty to arrest. This Section

further provides that the said exercise has to be followed by way

of an information being served on the arrestee of the grounds of

arrest. Any non-compliance of the mandate of Section 19(1) of

the PMLA, 2002 would vitiate the very arrest itself. Under sub-

section (2), the Authorised Officer shall immediately, after the

arrest, forward a copy of the order as mandated under sub-

section (1) together with the materials in his custody, forming the

basis of his belief, to the Adjudicating Authority, in a sealed

envelope. Needless to state, compliance of sub-section (2) is 2024:CGHC:12494

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also a solemn function of the arresting authority which brooks no

exception.

24.Now this Court has to examine the case of the applicant vice

versa case of the Enforcement Directorate whether there is

compliance of Section 19 of the PMLA is done by the

Enforcement Directorate or not. For considering this issue, it is

expedient for this Court to extract the reason to believe dated

13.10.2022 recorded by the Enforcement Directorate. The

Enforcement Directorate in his reason to believe has considered

at paragraph 17 to 20 as under:-

“17. Searches conducted at the residence and office of the

Sunil Kumar Agarwal, associate of Shri Suryakant Tiwari

revealed that two washeries located at Korba and Bilaspur

were acquired by his company, M/s KJSL Coal & Power

Ltd., from M/s Maa Madwarani Coal Beneficiation Pvt. Ltd.

(MCBPL) in the month of July/August, 2022 for a total of

Rs.35 Crore and that M/s MCBPL belongs to Shri

Suryakant Tiwari. It was also found that these two

washeries were purchased by M/s MCBPL from M/s Satya

Power Ltd (M/s SPIL) and M/s Indus Udyog & Infrastructure

P. Ltd. (M/s IUIPL) just two months prior to the sale to the

company of Shri Sunil Kumar Agarwal. Large amount of

legally acquired cash was layers in these transactions. Also

the washery owners were forced and coerced into selling

their companies under duress. Their value was forcibly

depressed and large amount of the sale consideration was

given in cash. Sunil Agarwal actively assisted Suryakant

Tiwari in layering of this cash and in the process of claiming

the ill gotten wealth as untainted and helping in making

investments to conceal the ill gotten cash.

18. Shri Sunil Kumar Agarwal, in his statement dated

12.10.2022 given under Section 50 of PMLA, 2007, has,

inter alia, stated that he has known Shri Suryakant Tiwari

for the last 15 to 20 years and that he had no business

transactions with him. However, in the same statement, he

has admitted to the acquisition of two coal washeries from

the company of Shri Suryakant Twari, M/s MCBPL, When

asked he stated that he did not know that M/s. MCBPL

belonged to Shri Suryakant Tiwari, a person he has known

for the last 20 years Furthermore, the Directors of M/s SPIL

and M/s IUIPL, Shri Shikhar Agarwal and Shri Shailesh 2024:CGHC:12494

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Agarwal respectively, in their statements given under

Section 17(1)(f) of PMLA, 2002 have stated that they were

forced to sell the washeries to M/s MCBPL and that M/s

MCBPL was represented by Shri Suryakant Tiwari and Shri

Sunil Kumar Agarwal at the time of sale. When pointed and

asked about it, Shri Sunil Kumar Agarwal has denied it and

gave evasive replies

19. It was also found that M/s MCBPL was incorporated in

February 2022 and within one month of its incorporation, it

had acquired two washeries, one each from M/s SPIL and

M/s IUIPL, and sold them again to M/s KJSL Coal & Power

Ltd. within two months. The very act of acquisition of two

washeries for a whopping amount of Rs. 50 Crores approax

and its immediate sale to company owned by Shri Sunil

Kumar Agarwal clearly shows that Shri Suryakant Tiwari

had layers the ill gotten proceeds of crime obtained from

illegal levey collected from coal transportation in the

manner discussed above in order to project them as

untainted properties and that Shri Sunil Kumar Agarwal has

knowingly assisted him laundering the proceeds of crime.

20. Also, as could be seen from his statements, Shri Sunil

Kumar Agarwal has tried to erase the evidences related to

the proceeds of crime and the properties connected by

removing all computers and other digital devices from his

office and by hiding his mobile phone in an attempt to

escape from the clutches of law and to frustrate further

investigation under PMLA, 2002. The fact that he did not

lodge complaint for his purportedly lost mobile phone

indicates his criminal intent in destruction of evidences. He

escaped when he became aware about the impending ED

searches and has actively hidden computers in his offence

and is indulging in destruction of evidence.”

25.Thus, there was reason to believe regarding involvement of the

applicant in commission of offence under the PMLA, 2002.

Thereafter the arrestee was taken to the Special Court on

13.10.2022 and the learned Special Judge while granting

custody to the applicant has recorded its finding as under:-

“vfHkys[k ds voyksdu ls nf’kZr gS fd vfHk;qDrx.k dks 24 ?kaVs ds

vanj U;k;ky; ds le{k izLrqr fd;k tkuk nf’kZr gSA vfHk;qDr ds

dLVksfM;y fjekaM ckcr izLrqr vkosnu i= esa izorZu funs’kky;

ds }kjk vfHk;qDr lehj fo’uksbZ ls 47 yk[k :i,] 04 fdyk lksuk ,oa

ghjk vkfn] vfHk;qDr y{ehdakr frokjh ds }kjk Ms<+ djksM+ :i, vU;

vfHk;qDrksa ds ek/;e ls Nqikus esa lgk;rk djuk rFkk vfHk;qDr lquhy

dqekj vxzoky ds }kjk dksjck ,oa fcykliqj esa esllZ dsts,l,y dksy

,.M ikoj fyfe- ls eak ek/kok jkuh dksy csfufQds’ku izk-fy- esa 35 2024:CGHC:12494

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djksM+ :i, esa Ø; djuk ,oa nks vU; dksy okW’kjh dks Ø; fd;k

tkuk crk;k x;k gSA

vfHk;qDr lehj fo’uksbZ] y{ehdakr frokjh] lehj dqekj vxzoky ds

/kkjk 50 /ku’kks/ku fuokj.k vf/kfu;e ds rgr dFku ys[kc) fd;k

x;k gS] vkxs dh foospuk ds fy;s vfHk;qDrx.k dh dLVksfM;y fjeakM

dh ekax dh x;h gSA

izorZu funs’kky; dh vksj ls izLrqr dh x;h dsl QkbZy@dsl

Mk;jh ls nf’kZr gS fd vfHk;qDr ds fo:) “kSM;wy vQsal iathc) gksus

ds vk/kkj ij ECIR/RPZO/09/2022 fnukad 29-09-2022 /kkjk 3]

4 /ku’kks/ku fuokj.k vf/kfu;e dk vijk/k iathc) fd;k x;k gSA

vfHk;qDrx.k dks n`< vk/kkjksa ij fxjQrkj fd;k x;k gS rFkk 24 ?kaVs

ds vanj mldk vUos"k.k iw.kZ fd;k tkuk laHko izrhr ugha gksrk gSA

vfHk;qDr lquhy dqekj vxzoky dh vksj ls dh x;h vkifRr;ksa ij

fopkj fd;k x;kA izdj.k izkjafHkd Lrj ij gSA vfHk;qDrx.k dks

fxjQrkj djus ds I’pkr fof/kor le; esa U;k;ky; ds le{k mifLFkr

fd;k x;k gS vr% mldh vksj ls dh x;h vkifRr fujLr dh tkrh gS

rFkk ifjoknh dh vksj ls izLrqr vkosnu i= Lohdkj dj vfHk;qDr

lehj fo”uksbZ] y{ehdakr frokjh] lquhy dqekj vxzoky dks 08 fnol

dk vFkkZr fnukad 21-10-2022 rd dLVksfM;y fjekaM esa fuEu “krksZa ds

v/khu lkSik tkuk U;k;kfpr nf”kZr gksrk gS%&

¼1½ vfHkj{kk vof/k ds nkSjku vfHk;qDrx.k ds ekuokf/kdkjksa dh j{kk

dk laiw.kZ nkf;Ro izorZru funs’kky; ds lgk;d funs’kd fueZy

>jokj dh gksxhA

¼2½ vfHkj{kk vof/k esa vfHk;qDrx.k ds lkFk nqO;Zogkj] ekjihV ;k

'kkjhfjd izrkM+uk ugha dh tkosxh vkSj vfHkj{kk vof/k lekIr gksus ij

iqu% fpfdRldh; eqykfgtk djkbZ tkdj] U;k;ky; ds le{k izLrqr

fd;k tkosxkA

¼3½ vfHk;qDrx.k dks dksjksuk ok;jl ds ladze.k ls lqjf{kr j[ks

tkus ds laca/k esa dsUnz ljdkj] jkT; ljdkj ds }kjk tkjh fn’kkfunsZ’kkas

dk vko’;d :i ls ikyu djsaxsA”

26.He would further submit that since no reason has been assigned

in the remand order, the subsequent continuation of custody, is

illegal. To substantiate this submission, he has referred to the

judgment of Hon’ble the High Court of Punjab & Haryana in case

of Pranav Gupta (supra). This was vehemently objected by the

learned counsel for the Enforcement Directorate and would

submit that the learned trial Court while ordering for remand has

taken consideration the material and assigned the reason as

such, the applicant is not entitled to grant bail for this reason.

27.From bare perusal of the order dated 13.10.2022 passed by the 2024:CGHC:12494

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learned Special Judge granting remand of the applicant along

with other accused has given reason wherein it has specifically

stated that the present applicant has purchased coal washeries

from M/s KJSL Coas & Power Ltd. to M/s Maa Madwarani Coal

Benefaction Pvt. Ltd. at the cost of Rs. 35 crores and other two

coal washeries have been purchased and the investigation

within 24 hours is not possible, therefore, the custodial remand

was ordered. Thus, the learned Special Judge has given some

reason. Whereas the order cited by learned Senior counsel for

the applicant of the Panchkula Court, it is quite clear that in case

of Pankaj Bansal (supra), learned Special Judge has not

assigned any reason merely sent them on custodial remand. The

judgment of Hon’ble Supreme Court in case of Pankaj Bansal

(supra) at paragraph 19 has categorically held that the learned

Judge has not recorded its satisfaction. Paragraph 19 of the

judgment reads as under:-

“19. Viewed in this context, the remand order dated

15.06.2023 passed by the learned Vacation Judge/

Additional Sessions Judge, Panchkula, reflects total

failure on his part in discharging his duty as per the

expected standard. The learned Judge did not even record

a finding that he perused the grounds of arrest to ascertain

whether the ED had recorded reasons to believe that the

appellants were guilty of an offence under the Act of 2002

and that there was proper compliance with the mandate of

Section 19 of the Act of 2002. He merely stated that,

keeping in view the seriousness of the offences and the

stage of the investigation, he was convinced that custodial

interrogation of the accused persons was required in the

present case and remanded them to the custody of the ED!

The sentence – ‘It is further (sic) that all the necessary

mandates of law have been complied with’ follows – ‘It is

the case of the prosecution….’ and appears to be a

continuation thereof, as indicated by the word ‘further’, and

is not a recording by the learned Judge of his own 2024:CGHC:12494

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satisfaction to that effect.”

28.Whereas in the present case, the learned Special Judge has

categorically recorded its reason and satisfaction while granting

the remand of the applicant to the Enforcement Directorate.

Thus, there is compliance of Section 19 of the PMLA, 2002 and

the order dated 13.10.2022 passed by the learned Special

Judge is inconformity with the law laid down by Hon’ble the

Supreme Court in case of Pankaj Bansal (supra). Therefore,

the contention raised by learned Senior counsel for the applicant

that there is non-compliance of Section 19 of the PMLA, 2002

vitiating the entire proceedings, applicant is entitled to be

released on bail, deserves to be rejected. Accordingly, it is

rejected. Hon’ble the Supreme Court while elaborately

discussing the facts in case of Pankaj Bansal (supra) has

recorded its finding that the way in which Enforcement

Directorate recorded second ECIR immediately after the

applicant secures anticipatory bail in relation to the first ECIR

though the foundational FIR dated 17.04.2023 and then went

about summoning them on one pretext and arresting them an

another within a short span of 24 hours or so manifest

completely utter lack of bonafides. This is not the case in hand.

The applicant along with the other accused were arrested on

12.10.2022 and thereafter they were produced before the

learned Special Judge 13.10.2022 itself. Therefore, the judgment

passed by Hon’ble Division Bench of Punjab & Haryana High

Court referred by learned Senior counsel for the applicant in 2024:CGHC:12494

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case of Roop Bansal (supra) is distinguishable on the facts and

circumstances of the case.

29.Further submission of learned Senior counsel for the applicant

that the summon was issued for appearance of the applicant for

12.10.2022 which was made effective till 11.59 p.m. on

12.10.2022 and he was arrested at 5.30 a.m. on 13.10.2022 as

such, the applicant was remained in wrongful custody and was

illegally restrained during the period from 12 a.m. to 5.30 a.m. of

13.10.2022 as such, arrest is nonest and illegal order. This

submission has already been repelled by the learned Special

Judge by rejecting the same. Even otherwise the submission

made by learned Senior counsel for the applicant that he was

remained in custody of the Enforcement Directorate from 12.00

a.m. to 5.30 a.m. is a matter of evidence which can be examined

when the trial is begun. Even otherwise, law has been well

settled by Hon’ble the Supreme Court that while considering the

bail application, the Court is not required to weigh the evidence

collected by the investigating agency meticulously, nonetheless,

the Court should keep in mind the nature of accusation, the

nature of evidence collected in support thereof, the severity of

the punishment prescribed for the alleged offences, the

character of the accused, the circumstances which are peculiar

to the accused, reasonable possibility of securing the presence

of the accused at the time of trial, reasonable apprehension of

the witness being tempered with, the large interest of the public/

state etc. Hon’ble the Supreme Court in case of Saumya 2024:CGHC:12494

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Chourasiya Vs. Directorate of Enforcement [Criminal Appeal

No. 3840 of 2023, decided on 14.12.2023], wherein Hon’ble the

Supreme Court has held at paragraph 18 & 19 as under:-

“18. The object of the PMLA hardly needs to be delineated.

The said Act has been enacted to prevent money

laundering and to provide for confiscation of property

derived from, or involved in, money laundering and for the

matters connected therewith and incidental thereto. As per

Section 2(1)(p), “Money Laundering” has the meaning

assigned to it in Section 3. The offence of Money

Laundering has been defined in Section 3, which is

punishable under Section 4 of the said Act. Section 45

makes the offences under the PMLA to be cognizable and

non bailable. As regards the twin conditions for the grant of

bail contained in Section 45(1), it has been held by the

Three-Judge Bench in Vijay Madanlal (supra) that the

underlying principles and rigours of Section 45 of the Act

must come into play and without exception ought to be

reckoned to uphold the objectives of the Act, which is a

special legislation providing for stringent regulatory

measures for combating the menace of money laundering.

19. Though it is true that the Court while considering an

application seeking bail is not required to weigh the

evidence collected by the investigating agency

meticulously, nonetheless the Court should keep in mind

the nature of accusation, the nature of evidence collected

in support thereof, the severity of the punishment

prescribed for the alleged offences, the character of the

accused, the circumstances which are peculiar to the

accused, reasonable possibility of securing the presence of

the accused at the time of trial, reasonable apprehension of

the witness being tempered with, the large interest of the

public/ state etc. Though the findings recorded by the Court

while granting or refusing to grant bail would be tentative in

nature, nonetheless the Court is expected to express prima

facie opinion while granting or refusing to grant bail which

would demonstrate an application of mind, particularly

dealing with the serious economic offences.”

30.From bare perusal of the above reason assigned by the learned

trial Court and the material which has been considered by the

trial Court while ordering for remand, clearly demonstrates that

there is sufficient material for passing the impugned order.

31.Further submission of learned counsel for the applicant that the 2024:CGHC:12494

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summon was issued for appearance of the applicant on

12.10.2022 which expired on 12.10.2022 at 12 p.m. thereafter

arrest was made on 13.10.2022 upto 5.30 a.m., it was illegal

custody, as such, the subsequent order of remand on illegal

custody, is void ab initio in the light of judgment passed by

Hon’ble the Supreme Court in case of V. Senthil Balaji (supra),

and deserves to be rejected as in the present facts of the case,

while arresting the applicant, reasons have been assigned by

the Enforcement Directorate and in the remand order also, the

learned trial Court has applied its mind and has also considered

the fact that the present applicant has purchased two coal

washeries at the cost of Rs. 35 crores and the accused have

been arrest on a solid grounds and the investigation is not

possible within 24 hours. The objection raised by the applicant

that he has not been produced before the learned trial court has

also been rejected by it. The submission of the learned counsel

for the applicant that his summon for 12.10.2022 and he

remained in custody upto 5.30 a.m. cannot be considered as it is

a matter of evidence which can be very well taken during the

trial. Even the trial Court while granting remand has recorded its

finding that within 24 hours of arrest, the applicant has been

produced before the Court and there is no material to rebut the

said finding recorded by the learned trial Court, as such the

contention that the accused was remained in illegal custody from

12 a.m. to 5.30 a.m. deserves to be rejected and accordingly, it

is rejected. 2024:CGHC:12494

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32.The submissions made by learned Senior counsel for the

applicant that the coal washeries were purchased after due

process getting approval from the Directors of the companies,

proper valuation has been done and thereafter the property has

been purchased as such, it cannot be said that he was involved

in commission of offence of layering the proceeds of crime, are

all are his defence, which can be considered during the trial only.

33.Further contention of learned counsel for the applicant that the

applicant is remained in custody for one year and five months,

therefore, he should be released on bail, cannot be considered

in view of the gravity of offence and prima facie involvement of

the applicant in the commission of offence. Hon’ble the Supreme

Court in case of Satyendar Kumar Jain Vs. Directorate of

Enforcement [Criminal Appeal No. 1638 of 2024, decided

on 18.03.2024] wherein it has been held at paragraph 28 to 34

as under:-

“28. From the above stated facts there remains no shadow

of doubt that the appellant- Satyendar Kumar Jain had

conceptualized idea of accommodation entries against cash

and was responsible for the accommodation entries

totalling to Rs. 4.81 crores (approx.) received through the

Kolkata based entry operators in the bank accounts of the

four companies i.e. M/s. Akinchan Developers Pvt. Ltd.,

M/s. Paryas Infosolution Pvt. Ltd., M/s. Indo Metalimpex

Pvt. Ltd. and M/s. Mangalayatan Projects Pvt. Ltd., by

paying cash and the said companies were controlled and

owned by him and his family. Though it is true that a

company is a separate legal entity from its shareholders

and directors, the lifting of corporate veil is permissible

when such corporate structures have been used for

committing fraud or economic offences or have been used

as a facade or a sham for carrying out illegal activities.

29. It has also been found that the appellants - Ankush Jain

and Vaibhav Jain had assisted the appellant-Satyendar

Kumar Jain by making false declarations under the IDS 2024:CGHC:12494

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each of them declaring alleged undisclosed income of

Rs.8.26 crores in order to protect Satyendar Kumar Jain.

Though it was sought to be submitted by the learned

counsel for the appellants that the said declarations under

IDS having been held to be “void” in terms of Section 193 of

FA, 2016 by the income tax authorities, the same could not

be looked into in the present proceedings, the said

submission cannot be accepted. The declarations made by

the appellants-Ankush Jain and Vaibhav Jain under IDS

have not been accepted by the Income Tax authorities on

the ground that they had misrepresented the fact that the

investments in the said companies belonged to the said

appellants, which in fact belonged to Mr. Satyendar Kumar

Jain. The appellants could not be permitted to take

advantage of their own wrongdoing of filing the false

declarations to mislead the Income Tax authorities, and

now to submit in the present proceedings under PMLA that

the said declarations under the IDS were void. The

declarations made by them under the IDS though were held

to be void, the observations and proceedings recorded in

the said orders passed by the Authorities and by the High

Court cannot be brushed aside merely because the said

declarations were deemed to be void under Section 193 of

the Finance Act, 2016. The said proceedings clearly

substantiates the case of the respondent ED as alleged in

the Prosecution Complaint under the PMLA.

30. Having regard to the totality of the facts and

circumstances of the case, we are of the opinion that the

appellants have miserably failed to satisfy us that there are

reasonable grounds for believing that they are not guilty of

the alleged offences. On the contrary, there is sufficient

material collected by the respondent-ED to show that they

are prima facie guilty of the alleged offences.

31. Though Ms. Arora had faintly sought to submit that the

so-called inadvertent mistake committed by the ED with

regard to the figures mentioned in the Prosecution

Complaint in respect of the role of the appellants Ankush

Jain and Vaibhav Jain should not be permitted to be

corrected, which otherwise show that the allegations

against the appellants were vague in nature, we are not

impressed by the said submission. We are satisfied from

the explanation put forth in the affidavit filed on behalf of the

respondent-ED that it was only an inadvertent mistake in

mentioning the figure Rs.1,53,61,166/- in the bracketed

portion, which figure was shown by the CBI in its

chargesheet. The said inadvertent mistake has no

significance in the case alleged against the appellants in

the proceedings under the PMLA.

32. From the totality of facts and circumstances of the case,

it is not possible to hold that appellants had complied with

the twin mandatory conditions laid down in Section 45 of 2024:CGHC:12494

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PMLA. The High Court also in the impugned judgment after

discussing the material on record had prima facie found the

appellants guilty of the alleged offences under the PMLA,

which judgment does not suffer from any illegality or

infirmity.

33. The appellants were released on bail for temporary

period after their arrest and the appellant-Satyendar Kumar

Jain was released on bail on medical ground on

30.05.2022, which has continued till this day. He shall now

surrender forthwith before the Special Court. It is needless

to say that right to speedy trial and access to justice is a

valuable right enshrined in the Constitution of India, and

provisions of Section 436A of the Cr.P.C. would apply with

full force to the cases of money laundering falling under

Section 3 of the PMLA, subject to the Provisos and the

Explanation contained therein.

34. In that view of the matter, all the appeals are

dismissed.”

Thus, Point No. 1 answered against the applicant.

Point No. 2

34.Before adverting to the facts of the case, it is expedient for this

Court to extract Section 45 of the PMLA, 2002, which reads as

under:-

“Section 45 of PMLA, 2002- Offences to be

c31.05.2022ognizable and non-bailable .— (1)

[Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), no person accused

of an offence [under this Act] shall be released on bail or

on his own bond unless—]

(i) the Public Prosecutor has been given an opportunity to

oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application,

the court is satisfied that there are reasonable grounds for

believing that he is not guilty of such offence and that he is

not likely to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen

years, or is a woman or is sick or infirm [or is accused

either on his own or along with other co-accused of

money- laundering a sum of less than one crore rupees],

may be released on bail, if the Special Court so directs:

Provided further that the Special Court shall not take

cognizance of any offence punishable under Section 4

except upon a complaint in writing made by—

(i) the Director; or 2024:CGHC:12494

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(ii) any officer of the Central Government or a State

Government authorised in writing in this behalf by the

Central Government by a general or special order made in

this behalf by that Government.

[(1-A) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), or any other

provision of this Act, no police officer shall investigate into

an offence under this Act unless specifically authorised, by

the Central Government by a general or special order, and,

subject to such conditions as may be prescribed.]

(2) The limitation on granting of bail specified in [* * *] sub-

section (1) is in addition to the limitations under the Code

of Criminal Procedure, 1973 (2 of 1974) or any other law

for the time being in force on granting of bail.”

35.From bare perusal of ECIR with regard to the allegations leveled

against the present applicant, it is quite vivid that the the present

applicant has played specific role and he is kingpin of the

offence and is promoter of M/s Indermani Group having a close

relationship with Suryakant Tiwari. Investigation revealed that

the applicant had helped Surykant Tiwari in acquiring coal

washeries from M/s Indus Udyog & Infrastructure Pvt. Ltd. and

M/s Satya Power and Ispat Ltd. These coal washeries were

acquired for an amount of Rs. 96 crore, out of which Rs. 34 crore

was the registered value and was paid through banking channel

and rest of the amount was to be paid in cash. Thus, large

amount of illegally acquired cash was layered in these

transactions. After the Income Tax raids, he made sham paper

transactions to show that he was the owner of these two

washeries. These transactions were nothing but a futile attempt

to alienate the ill-gotten proceeds of crime and take them far

away from the arms of Income Tax & Enforcement Department

departments and to prevent their attachment and to claim them 2024:CGHC:12494

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as untainted assets. The applicant knowingly and willingly

participated in these transactions to layer and obfuscate the real

ownership of these tainted properties despite being a man of

means and business standing, be knowingly acted as a benami

for Suryakant Tiwari and has assisted in the money laundering

process. He would further submit that apart from the above two

washeries, after the income tax raids on Surykant Tiwari and his

associates, Indermani Group purchased all the benami

properties of Suryakant Tiwari to safeguard the ill-gotten

proceeds of crime and to frustrate the efforts of Enforcement

Directorate to attach the proceeds of crime in future. The ECIR

would further reflect that all these transactions are sham

transactions. He has only blocked his capital in these assets and

the remaining entire cash transactions were still done by

Suryakant Tiwari only. The record would further reflect that

several properties in the names of companies of the applicant

herein viz., M/s Indermani Minerals Pvt. Ltd. & M/s KJSL Coal &

Power Pvt. Ltd. which were acquired using proceeds of crime

have been attached under Section 5(1) of the PMLA, 2002 on

09.12.2022 and 29.01.2023 and the same were subsequently

confirmed by the learned Adjudicating Authority (PMLA), vide

orders dated 01.06.2023 & 17.07.2023. Thus, the applicant is

unable to fulfill the twin condition of Section 45 of the PMLA,

2002.

36.Considering the above stated factual legal matrix, it is quite vivid

that the applicant is unable to fulfill twin conditions for grant of 2024:CGHC:12494

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bail as per Section 45 of the PMLA, 2002 and also considering

the submission that the applicant has not prima facie reversed

the burden of proof and dislodged the prosecution case which is

mandatory requirement to get bail. Hon'ble the Supreme Court in

case of Directorate of Enforcement Vs. Aditya Tripathi

(Criminal Appeal No. 1401/2023) decided on 12.05.2023 has

held at paragraph 6 & 7 as under:-

“6. At the outset, it is required to be noted that respective

respondent No. 1 – accused are facing the investigation by

the Enforcement Directorate for the scheduled offences

and for the offences of money laundering under Section 3

of the PML Act punishable under Section 4 of the said Act.

An enquiry/investigation is still going on by the

Enforcement Directorate for the scheduled offences in

connection with FIR No. 12/2019. Once, the

enquiry/investigation against respective respondent No. 1

is going on for the offences under the PML Act, 2002, the

rigour of Section 45 of the PML Act, 2002 is required to be

considered. Section 45 of the PML Act, 2002 reads as

under:-

“45. Offences to be cognizable and non-bailable.— (1)

[Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), no person accused

of an offence [under this Act] shall be released on bail or on

his own bond unless—]

(i) the Public Prosecutor has been given an opportunity to

oppose the application for such release; and(ii) where the

Public Prosecutor opposes the application, the court is

satisfied that there are reasonable grounds for believing

that he is not guilty of such offence and that he is not likely

to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen

years, or is a woman or is sick or infirm [or is accused

either on his own or along with other co-accused of money-

laundering a sum of less than one crore rupees], may be

released on bail, if the Special Court so directs:

Provided further that the Special Court shall not take

cognizance of any offence punishable under Section 4

except upon a complaint in writing made by—

(i) the Director; or

(ii) any officer of the Central Government or a State

Government authorised in writing in this behalf by the 2024:CGHC:12494

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Central Government by a general or special order made in

this behalf by that Government.

[(1-A) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), or any other

provision of this Act, no police officer shall investigate into

an offence under this Act unless specifically authorised, by

the Central Government by a general or special order, and,

subject to such conditions as may be prescribed.]

(2) The limitation on granting of bail specified in [* * *] sub-

section (1) is in addition to the limitations under the Code of

Criminal Procedure, 1973 (2 of 1974) or any other law for

the time being in force on granting of bail.”

By the impugned judgment(s) and order(s) and while

granting bail, the High Court has not considered the rigour

of Section 45 of the PML Act, 2002.

6.1 Even otherwise, the High Court has not at all

considered the nature of allegations and seriousness of the

offences alleged of money laundering and the offences

under the PML Act, 2002. Looking to the nature of

allegations, it can be said that the same can be said to be

very serious allegations of money laundering which are

required to be investigated thoroughly.

6.2 Now so far as the submissions on behalf of the

respective respondent No. 1 that respective respondent

No. 1 were not named in the FIR with respect to the

scheduled offence(s) and/or that all the other accused are

discharged/acquitted in so far as the predicated offences

are concerned, merely because other accused are

acquitted/discharged, it cannot be a ground not to continue

the investigation in respect of respective respondent No. 1.

An enquiry/investigation is going on against respective

respondent No. 1 with respect to the scheduled offences.

Therefore, the enquiry/investigation for the scheduled

offences itself is sufficient at this stage.

6.3 From the impugned judgment(s) and order(s) passed

by the High Court, it appears that what is weighed with the

High Court is that chargesheet has been filed against

respective respondent No. 1 – accused and therefore, the

investigation is completed. However, the High Court has

failed to notice and appreciate that the investigation with

respect to the scheduled offences under the PML Act, 2002

by the Enforcement Directorate is still going on. Merely

because, for the predicated offences the chargesheet might

have been filed it cannot be a ground to release the

accused on bail in connection with the scheduled offences

under the PML Act, 2002. Investigation for the predicated

offences and the investigation by the Enforcement

Directorate for the scheduled offences under the PML Act

are different and distinct. Therefore, the High Court has 2024:CGHC:12494

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taken into consideration the irrelevant consideration. The

investigation by the Enforcement Directorate for the

scheduled offences under the PML Act, 2002 is till going

on.

7. As observed hereinabove, the High Court has neither

considered the rigour of Section 45 of the PML Act, 2002

nor has considered the seriousness of the offences alleged

against accused for the scheduled offences under the PML

Act, 2002 and the High Court has not at all considered the

fact that the investigation by the Enforcement Directorate

for the scheduled offences under the PML Act, 2002 is still

going on and therefore, the impugned orders passed by the

High Court enlarging respective respondent No. 1 on bail

are unsustainable and the matters are required to be

remitted back to the High Court for afresh decision on the

bail applications after taking into consideration the

observations made hereinabove.”

37.Learned Senior counsel for the applicant would submit that since

the applicant is remained in jail for more than one year and five

months and maximum sentence which can be awarded is seven

years, therefore, he should be released on bail. This submission

also deserves to be rejected looking to gravity and seriousness

of the offence and the role played by the applicant and also the

offence relates to money laundering which has difference class

of offence, the applicant being influenced person as he was

granted the facilities when he was remained in hospital, this

clearly indicates that he is influential person and may influence

the witness or tamper the evidence. As such, he is not entitled to

be released on bail on the count that he remained in custody for

one year and five months.

38.Considering the ECIR and other material placed on record,

which prima facie shows involvement of the applicant in crime in

question and also considering the judgment of Hon’ble the

Supreme Court in case of Saumya Chourasiya (supra) & 2024:CGHC:12494

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Satyendar Kumar Jain (supra), it is quite vivid that the

applicant is unable to fulfill the twin conditions for grant of bail as

provided under Section 45 of the PMLA, 2002. Thus, Point

No. 2 is answered against the applicant.

39.Considering the above stated factual and legal matrix, the role

played by the applicant, prima facie, the remand and arrest order

are in accordance with the provisions of the PMLA, 2002 and

also considering the gravity of offence, I am not inclined to

enlarge the applicant on bail.

40.Accordingly, the second bail application filed under Section 439

of the Cr.P.C. is also liable to be and is hereby rejected.

41.The observation made by this Court is not bearing any effect on

the trial of the case. The learned trial court will decide the

criminal trial in accordance with evidence, material placed on

record, without being influenced by any of the observations

made by this Court while deciding the present bail application.

Sd/-

(Narendra Kumar Vyas)

Judge

Arun 2024:CGHC:12494

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