Beruflich Dokumente
Kultur Dokumente
For example:
a. Advantage Strategic Consulting Private Limited,
India received Rs. 29,49,25,885/- on 25.3.2013
and later on transferred part of it to Advantage
Strategic Consulting Singapore Pte Limited,
16
Singapore in various tranches like Rs.
97,82,699/- was transferred to Advantage
Strategic Consulting Singapore Pte Limited,
Singapore on 03.04.2013 and Rs. 89,07,629 on
08.05.2013.
b. As per emails recovered by the investigating
agency, fund flow are evident where in Rs.
22,43,35,570.80/- was received in the financial
year 2010-11 and Rs. 99,97,352/- was received in
financial Year 2011-12. Out of this Rs.
8,71,96,059/- was transferred to Advantage
Strategic Consulting Singapore Pte. Limited,
Singapore in financial year 2011-12 and property
at Surridge Farm, UK was purchased for Rs.
9,36,88,056/-. Similarly, Rs. 47,49,41,133/- was
received during financial year 2012-13 and out of
these proceeds Rs. 3,63,90,783/- was transferred
to Advantage Strategic Consulting Singapore Pte.
Limited, Singapore and property at Pampellonne,
France was acquired.
(xi) It is submitted that the proceeds of crime are thereafter
routed through the web of shell companies so
incorporated for the purpose of laundering of proceeds
of crime and the movement of such proceeds of crime
from one company to another company [all of which are
not doing any business and exist only on paper] just to
17
make tracing of money trail difficult. The said
companies are incorporated and located in different
countries so that it becomes difficult for the law
enforcing agency / investigating agencies to follow the
trail of laundered money.
(xii) It is submitted that the present petitioner and his
co-conspirators / co-accused have created these layers
of money laundering web in a manner which is
sufficient to make it difficult for law enforcing agencies
to track the money trail of proceeds of crime.
(xiii) It is submitted that the next step was to park / invest/
hide the laundered money in movable and immovable
properties in India and most of them outside the
country that is to say in various other countries of the
world.
(xiv) It is submitted that it has come on record of the
investigation conducted so far that the proceeds of
crime, as deposited in the web of shell companies
referred hereinabove, were used for making deposits in
various benami bank accounts and making benami
investments in movable and immovable properties both
in India and mainly outside India either in the name of
such shell companies or in the name of close
confidants of the present petitioner and his
18
co-conspirators whose relationship can be pointed out
to this Hon’ble Court from the investigation papers.
(xv) As a next step the petitioner and his co-conspirators
concealed the processes used for Money Laundering. In
order to conceal detection of the process and activities
used in money laundering, petitioner took several steps
namely change in shareholding pattern of the shell
companies, closure of foreign bank accounts (thus
making exchange of information difficult), transfer of
properties from one shell company to another,
destruction/fabrication of evidence, creation of false
evidence and influencing the witness.
(xvi) In the process the petitioner changed the share holding
pattern of the shell companies as well as directors in
order to distance himself from investment: After the
irregularity in FIPB approval in several cases including
INX Media came to public domain, several changes
were made to share holding pattern of shell companies
in which proceeds of crime were deposited in order to
conceal real ownership.
(xvii) Furthermore to conceal the proceeds of crime the
earlier bank accounts were closed and new bank
accounts were opened. Investigations have revealed
that two bank accounts of the son of the petitioner
(Karti P. Chidambaram) in Metro Bank, UK were
19
closed. Later on some new accounts were opened in
different banks by Karti P. Chidambaram and other
conspirators.
(xviii) The petitioner and his co-conspirator also
transferred the ownership of the properties so
purchased from the proceeds of crime from one shell
company to another.
Thus from the aforesaid it is clear that cogent and
irrefutable evidence is available with the investigating
agency demonstrating that the petitioner has not only
generated but has also laundered the proceeds of crime
so as to project the same as un-tainted money, for
which no bail ought to be granted to the petitioner.
It is submitted that in cases of conspiracy it is
well settled that there cannot be a direct evidence and
conspiracy has to be seen from the surrounding
circumstances. Reliance in this regard is placed on the
following judgments of the Hon’ble Supreme Court:-
I. Manohar Joshi v. State of Maharashtra, (2012) 3
SCC 619,:
178.There will never be any direct evidence of the officers
being pressurised, nor will they say that they were so
pressurised. Ultimately one has to draw the inference
from the course of events, the manner in which the
officers have acted and changed their stand to suit the
20
developer and the fact that the son-in-law of the then
Chief Minister was the developer of the project. As we
have noted earlier the affidavit of the Commissioner
clearly indicated that he tried to place the correct legal
position initially but ultimately had to give in to the
pressure from the superiors. Unless one is naïve one will
have to agree with the conclusion which the Division
Bench had drawn in para 136 of its judgment to the
following effect:
“We are left with only one conclusion which we have to draw
from the facts on record and, to quote the words of the
petitioners, ‘the conduct of Respondent 5 itself indicates
that he had “pressurised” the officials into taking an
illegal action’ and this, in our view, is certainly misuse of
executive powers.”
183. The facts of the present case are stronger than those in
Shivajirao Nilangekar case2 8. Here also a relationship is
established. The basic order dated 21-8-1996 in this
matter granting no objection to an illegal action is signed
by the then Chief Minister himself. That was after
personally calling for the file containing the report dated
17-4-1996 sent by the Municipal Commissioner much
earlier. The entire narration shows that the then Chief
Minister had clear knowledge about this particular file
all throughout, and the orders were issued only because
the developer was his son-in-law, and he wanted to
favour him. U ltimately, one has to draw the inference on
the basis of probabilities. The test is not one of being
proved guilty beyond reasonable doubt, but one of
preponderance of probabilities.
II. Rajiv Kumar v. State of U.P., (2017) 8 SCC 791:-
45. The essential ingredients of the offence of criminal
conspiracy are: (i) an agreement between two or more
21
persons; (ii) the agreement must relate to doing or
causing to be done either (a) an illegal act; or (b) an act
which is not illegal in itself but is done by illegal means.
It is, therefore, plain that meeting of minds of two or
more persons for doing or causing to be done an illegal
act or an act by illegal means is sine qua non of criminal
conspiracy. It is extremely difficult to adduce direct
evidence to prove conspiracy. Existence of
conspiracy and its objective can be inferred from
the surrounding circumstances and the conduct of
the accused. In some cases, indulgence in the illegal
act or legal act by illegal means may be inferred from the
knowledge itself.
46. After referring to Yash Pal Mittal v. State of Punjab [
(1977) 4 SCC 540 and Ajay Aggarwal v. Union of India [
(1993) 3 SCC 609] in State of Maharashtra v. Som Nath
Thapa [ (1996) 4 SCC 659] in para 24, it was held as
under: (Som Nath Thapa case
“24. The aforesaid decisions, weighty as they are, lead us to
conclude that to establish a charge of conspiracy,
knowledge about indulgence in either an illegal act or a
legal act by illegal means is necessary. In some cases,
intent of unlawful use being made of the goods or
services in question may be inferred from the knowledge
itself. This apart, the prosecution has not to establish
that a particular unlawful use was intended, so long as
the goods or service in question could not be put to any
lawful use. Finally, when the ultimate offence consists of
a chain of actions, it would not be necessary for the
prosecution to establish, to bring home the charge of
conspiracy, that each of the conspirators had the
knowledge of what the collaborator would do, so long as
it is known that the collaborator would put the goods or
service to an unlawful use.”
(emphasis in original)
22
The above judgment was quoted with approval in Ram
Narayan Popli v. ED [Ram Narayan Popli v. ED , (2003)
3 SCC 641 : 2003 SCC (Cri) 869] .
III. State of M.P. v. Sheetla Sahai, (2009) 8 SCC 617
38. A criminal conspiracy must be put to action inasmuch as
so long a crime is generated in the mind of an accused, it
does not become punishable. What is necessary is not
thoughts, which may even be criminal in character, often
involuntary, but offence would be said to have been
committed thereunder only when that take concrete
shape of an agreement to do or cause to be done an
illegal act or an act which although not illegal by illegal
means and then if nothing further is done the agreement
would give rise to a criminal conspiracy. Its ingredients
are:
(i) an agreement between two or more persons;
(ii) an agreement must relate to doing or causing to be done
either (a) an illegal act; or (b) an act which is not illegal in
itself but is done by illegal means.
39. What is, therefore, necessary is to show meeting of minds
of two or more persons for doing or causing to be done
an illegal act or an act by illegal means. W hile saying
so, we are not oblivious of the fact that often
conspiracy is hatched in secrecy and for proving
the said offence substantial direct evidence may
not be possible to be obtained. An offence of
criminal conspiracy can also be proved by
circumstantial evidence.
23
In the present case there is overwhelming surrounding
circumstances [which is available in the sealed cover]
evidencing that the proceeds of crime have been laundered
by the petitioner and other co-conspirators, as such, for this
reason alone his present bail application is liable to be
rejected.
GRAVITY OF THE OFFENCE
8. I further state and submit that the gravity of the
offence of the present case, the brazenness and impunity
with which it was planned and carried out further disentitles
the petitioner from seeking any relief from this Hon'ble
court. It is further well settled that the economic offences
constitute a class apart and a class by itself, as it cuts the
very root of probity and purity of public administration and
results in eroding the public confidence which it reposes on
the government elected by it.
9. I state and submit that the gravity of the offence is also
to be seen in view of the impunity with which a High Public
Office has been abused for personal gains. In the present
case the Petitioner who held a very high and influential office
of the Finance Minister of the Country, used the same for
personal gains, personally, as well as in connivance with his
co-conspirators and has laundered the proceeds of crime to
conceal the tainted money. The said fact itself makes the
present case grave enough to deny bail to the Petitioner.
24
It is submitted that in the present case constitutes as
one of the gravest case of economic offences committed at
the point in time. The said fact is manifested from the facts
and evidences placed before this Hon'ble Court in the sealed
cover and therefore in view of the gravity of the offence also
the petitioner is not entitled for bail in the present case.
In this context, it is respectfully submitted that it is
well settled by catena of judgments that economic offences
in itself are considered to be gravest offence against the
society at large and hence are required to be treated
differently in the matter of bail. It is submitted that the
Hon'ble courts have successively held that “the entire
Community is aggrieved if the economic offenders who ruin
the economy of the State are not brought to book as such
offences affects the very fabric of democratic governance and
probity in public life. 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. A disregard for the interest of the Community can
be manifested only at the cost of forfeiting the trust and faith
of the Community in the system to administer justice in an
even handed manner without fear of criticism from the
quarters which view white collar crimes with a permissive eye
unmindful of the damage done to the national economy and
25
national interest..” [See State of Gujarat v. Mohanlal Jitamalji
Porwal, (1987) 2 SCC 364]
Reliance in this regard is also placed on the following
judgments rendered by the Hon'ble Supreme Court:-
CASE NAME REL PARA
1. Judgement dated 5.09.2019 passed in 76 - 81
Criminal Appeal No 1340 of 2019 in the
case of P. Chidambaram Vs. Enforcement
of Directorate
2. (2013) 7 SCC 439 34, 35,
Y. S. Jagan Mohan Reddy Vs. Central 36, 37
Bureau of Investigation
3. (1987) 2 SCC 364 5
State of Gujarat Vs. Mohanlal Jitamalji
Porwal
4. (2017) 13 SCC 751 3, 8, 9,
State of Bihar & Anr. Vs. Amit Kumar 10, 11,
alias Bachcha Rai 13, 14,
15
5. (2015) 16 SCC 1 2, 3, 4,
Gautam Kundu Vs. Directorate of 32, 33,
Enforcement 37, 39
10. In view of the fact and circumstances stated above,
more particularly considering the evidence available on
record with the investigating agency on the apprehension
relating to influencing of witnesses / co-accused which is
manifested by records during the investigation of the case, it
is humbly prayed that this Hon’ble court may be pleased to
dismiss the bail petition of the petitioner, in the interest of
justice.
26
EVIDENCE OF TAMPERING OF EVIDENCE, DESTRUCTION OF MATERIAL
EVIDENCE, INFLUENCING OF WITNESS BY THE PETITIONER AND HIS
CO-CONSPIRATORS:
11. Apart from the above, the petitioner is also not entitled
for bail for the reason that sufficient evidence has come on
record that the petitioner has been indulging in destruction
of evidence and influencing the witnesses. It is pertinent to
note here that the said material is completely distinct,
different and independent from the material which was
collected by the CBI in the predicate offence. It is submitted
that even the witness which have been approached and
influenced in the PMLA investigation are different from the
investigations conducted by CBI. The material particulars of
the above is as under:-
(i) Destruction of material evidence: During the course
of search, and the scrutiny of the digital data it is
revealed that directors and share holders of Advantage
Strategic Consulting Private Limited [a benami
company of the petitioner and his son], India (which is
holding company of Advantage Strategic Consulting
Singapore Pte. Ltd., Singapore) later on in the year
2013 transferred their entire share holding of M/s
Advantage Strategic Consulting Pvt. Ltd. to the
grand-daughter of petitioner by way of a will. During
the course of investigation when one of the
co-conspirator was asked to produce original copy of
the will, he stated in his statement 23.02.2018 that
27
original copy of the will was destroyed at the instance
of the son of petitioner (Karti P. Chidambaram, another
conspirator). This fact clearly manifest that the
petitioner who is the beneficial owner of the entire
proceeds of crime has been indulging in destruction of
evidence directly or indirectly and for this reason also
he does not deserves bail from this Hon'ble court.
(ii) Fabrication of evidence: The investigations have
revealed that Advantage Strategic Consulting Singapore
Pte. Limited, Singapore which is a subsidiary of
Advantage Strategic Consulting Pvt. Ltd., India [a
company beneficially owned by the petitioner’s son
Karti P Chidambaram, another co-accused, on behalf of
the petitioner] received several payments without
rendering any services. During the search several
invoices were recovered from the seized digital data
which were claimed to have been raised by Director of
Advantage Strategic Consulting Singapore Pte. Ltd.
However, when statement of Director of Advantage
Strategic Consulting Singapore Pte. Ltd. was recorded
he had clarified that he had not signed any invoice as
authorized signatory of Advantage Strategic Consulting
Singapore Pte. Ltd. and the said invoice bore his
fabricated signature. Thus from his statement it is
evident that not only the company had not rendered
any services but had created fake invoices to
camouflage proceeds of crime as receipt of payment in
28
lieu of services. This fact further disentitles the
petitioner to seek any bail from this Hon'ble court.
(iii) Creation of false evidence: In order to justify that
Advantage Strategic Consulting Pvt. Ltd. is not a shell
company but a professional organization run by
management professional certain mails were generated
and exchanged by the co-conspirators. From the
investigation it has been revealed that the purpose, as
per content of the email was to create evidence behind
transfer of equity of Vasan to Advantage. The said
mails and the statement of the generator of the mail
forms part of the investigation papers of the present
case and will be placed before this Hon'ble Court
during the course of the hearing of the present petition
to demonstrate and satisfy the conscience of this
Hon'ble Court that petitioner and his co-conspirators
have been creating false evidence to layer and
camouflage the proceeds of crime so as to project it as
untainted money. The said fact further disentitles the
petitioner to seek any bail from this Hon'ble court.
(iv) Influencing of witness: It is respectfully submitted
that inasmuch as three (3) witnesses have stated in
their statements under section 50, recorded by the
investigating agency, that the petitioner and his family
members have pressurised them and have asked them
not to appear before the Enforcement Directorate. It is
29
stated that as advised the respondent / Enforcement
Directorate is not disclosing the names of the said
witnesses in the present affidavit, however their
statements are available in the case file of the present
case which will be placed before this Hon'ble court at
the time of hearing of the present bail application.
From a bare perusal of the said statements, the
conscience of this Hon'ble court would be satisfied that
the petitioner and his co-conspirators have tried to
influence and pressurise the witness, firstly not to
co-operate with the investigations and secondly not to
disclose/divulge any incriminating fact [which is in
their personal knowledge] to the investigating agency.
Furthermore, as stated above the said witness are
completely different from the witnesses, which were
sought to be influenced in the CBI Case. Hence in view
of such cogent and ocular evidence clearly
demonstrating as to how, systematically, the petitioner
and his co-conspirators have been trying to influence
the witnesses, in the respectful submission of the
respondent investigating agency no case of bail is made
out by the petitioner. It is submitted that the evidence
related to influencing of witnesses itself disentitles the
petitioner to seek any bail from this Hon'ble court and
his bail application deserves to be dismiss on this
ground alone.
30
PMLA Is A Standalone Offence And Is Not Part Of the
Same Case And Or Offence Committed In Course Of
Same Transaction
12. It is further respectfully submitted that the offence
under Section 3 of the PMLA is a standalone offence and
therefore the contention of the petitioner that he could not
have been detained in respect of another offence committed
by him [PMLA offence] in the same case and /or offence
committed in course of same transaction is completely
untenable in law. It is respectfully submitted that the offence
of PMLA is independent of offence under PC Act and IPC Act
as investigated by CBI. As such the PMLA offence do not
form part of the same transaction of IPC and PC offence.
Also PMLA offence is not addition of another offence in the
investigation conducted under IPC and PC Act by CBI. As
such selective reliance by the petitioner on the judgment
rendered by the Hon'ble supreme court in CBI vs Anup J
Kulkarni [1993] 3 SCC 141 is completely misconceived.
13. It is submitted that after the amendment, it is amply
clear that the offences under the PMLA, are standalone and
once the investigation is initiated under the PML Act, it
would not amount to further investigation of the
transactions investigated under PC and IPC Acts or addition
of separate offence in the said investigations. The offence of
money laundering constitutes a separate offence which
warrants a separate custody remand. The said contention is
fortified from the judgment of the Hon'ble High Court of
31
Gujarat, rendered in the case of Rakesh Manekchand Kothari
v. Union of India, 2015 SCC Online Guj 3507,wherein it is
held as under:
"17.10That the "proceeds of crime" is defined in Section
2fu], which means any property derived or
obtained,directly or indirectly, by any person as a result
of criminal activity relating to a scheduled offence or the
value of any such property as defined under Section 2M
of the PML Act and activity relating to schedule offence
or value of any property and scheduled offence is
defined under Section 2fy] which after amendment Act 2
of 2013 remained all those offences specified under part
A of the schedule since part B is omitted and part A is
substituted accordingly by shifting offences in Part B
enblock to Part A.
17.11 T hat reference to criminal activity relating
to a schedule offence is again a wider connotation
and even may extend to a person, who is connected
with criminal activity relating to schedule offence
but may not be offender of scheduled offence.
Thus, money laundering itself is an offence
standalone under Section 3 of PML Act having a
distinct character, with many facets with wider
implications and, therefore, twofold dragnet is
laid down by the Legislature by providing a
mechanism of punishment as defined under
Section 4 for such offender under Section 3 rea.d
with Sections 44 and 45 of PML Act and to take
care of attachment, confiscation of such tainted
property under sections 5, 8, etc. subject to
outcome at the end of trial before the special
court. In the above context, section 24 of PML Act
cast burden of proof upon an accused person to
prove that proceeds of crime are untainted
property."
32
14. The same conclusion have been arrived by the Division
Bench of the Hon'ble High Court of Karnataka at Bangalore
in Smt. K. Sowbaghya v. Union of India, 2016 SCC OnLine
Kar 282, wherein the Hon'ble high court of Karnataka was
pleased to hold as under:
"102. It is the case of the petitioners that Section 8 (5) as
it stood under the Amended Act of 2009, contemplated
that if a person was acquitted of the scheduled offence,
the attachment of the property ceased to have effect. The
same was in consonance with the logic that if no crime
under the scheduled offence could be established there
could be no 'proceeds of crime'. But under the
Amendment Act of 2013, it is now contemplated that
even if the case instituted in respect of a scheduled
offence results in acquittal of the accused, a person
could still be prosecuted under Sections 3 & 4 of the PML
Act. It is contended that if the genesis of the proceedings
is relatable only to the scheduled offence as no action
and has suffered the loss despite having taken all
reasonable precautions and is not involved in the offence
of money-laundering, could be initiated under the PML
Act unless there was a report under Section 173 Cr.P.C.
in relation to a Scheduled offence, Therefore, on acquittal
in respect of such offence, should ipso facto, result in the
proceedings under the PML Act coming to a close. In
other words, without the guilt of the accused in the
scheduled offence being proved there could be no
proceedings under Sections 3 and 4 of the PML Act.
103. There is substance in the above contention of the
petitioners for the definition of the phrase "proceeds of
crime" read with Section 3 if construed strictly. It can be
said that having regard to the meaning attributed to
'proceeds of crime' under the PML Act, whereby the
'crime' contemplated is the alleged scheduled offence,
33
the 'proceeds of crime', contemplated under Sections 3
and 4 are clearly and inextricably linked to the
scheduled offence and it is not possible to envision an
offence under PML Act as a 'stand alone' offence without
the guilt of the offender in the Scheduled offence being
established.
104. However, it is to be seen that proceeds of crime is
"property" of all kinds as defined under clause (v) of
Section 2(1). The "Explanation" inserted to the said
clause rea.d.s thus:
"Explanation.-For the removal of doubts, it is hereby
clarified that the term "property" includes property of
any kind used in the commission of an offence under
this Act or any of the scheduled offences;" Hence, it is
possible to extend the definition of 'proceeds of crime' to
property used in the commission of an offence under the
Act or any of the Scheduled offences. It is therefore
possible to reconcile the amendments made elsewhere in
the Act proceeding on the basis that money laundering is
also treated as a 'stand alone' offence, de hors, a
scheduled offence, if circumstances warrant.
105. The endeavour under the Amendment Act, 2013,
visa-vis Sections 5 & 8 is to enable attachment
proceedings against the following:
a) persons who are accused of a scheduled offence.
b) persons who have been accused of money
laundering alone
c) persons who have come in possession of the
proceeds of crime.
106. It is evident that in view of the 2013 Amendment to
the PML Act, a person can be tried for an offence of
money laundering alone without restricting the meaning
attributable to it as being with reference to a scheduled
34
offence alone.
107. Hence Section 8, as amended by the Amendment
Act of 2013, cannot be said to be arbitrary and violative
of the fundamental right of a person if the proceedings
are continued under the PML Act, even if the trial of a
scheduled offence results in an acquittal and the alleged
proceeds of crime pertained to that scheduled crime.
108. The challenge to Section 9 of the Act on the ground
that if the Adjudicating Authority confirms a provisional
attachment order and the guilt is recorded under
Sections 3 and 4, there is a provision for confiscation
and hence the statutory remedy of appeal is foreclosed.
This proposition may not be accurate. Even after an
order of confiscation is made, an appeal is provided for
to challenge the basis of such order when the finding of
guilt is naturally challenged in appeal. It is merely an
enabling provision providing for the consequence of a
finding of guilt in respect of the offences alleged under
the PML Act.
109. The petitioners have challenged the validity of
Sections 17, 18 and 19 of the Act, which provide for
Search and seizure, Search of persons and Arrest,
respectively, on two grounds-namely, that by virtue of
the Amendment Act of 2013, officers who have been
empowered to arrest are not police officers under the
Act; And secondly, that the said officers are enabled to
carry out the above measures merely on a report being
made under Section 157 of the Cr.P.C. to the Magistrate,
whereas for attachment of property, a final report under
Section 173 Cr.P.C. is required. It is highlighted that the
urgency for such action would not be a valid
justification, as such action always follows action
apparently initiated in respect of the scheduled offence
and the concerned investigating agency therein would
have recovered, seized all such incriminating material,
35
which would form part of the charge sheet, a copy of
which is forwarded to the Enforcement Directorate for
action under the PML Act. It is only thereafter that the
Enforcement Directorate could initiate action under
Section 17 and 18.
110. The power of search, seizure and arrest are
considered an important tool in any investigation. Such
power being available in matters relating to economic
offences is not unusual. Identical provisions are found in
the Customs Act, 1962, the Prevention of Food
Adulteration Act, 1954, the Railway Property (Unlawful
Possession Act, 1966, etc.
111. Further, as investigation precedes the filing of a
charge sheet under Section 173 Cr.P.C., the exercise of
power of search, seizure and arrest as part of
investigation would not prejudice any person as such
measures are controlled by other provisions of the
Cr.P.C. Section 65 of the PML Act does provide that the
provisions of the Cr.P.C. would be applicable including
the provisions for investigation under the Act. Section 19
is assailed also on the ground that there is no judicial
body provided to scrutinize the initial action as in the
case of scheduled offences. However, Section 19 (3)
itself provides that every person arrested under the Act
would be produced before a Magistrate within 24 hours
of such arrest. Further, The contention that such arrest
may not be warranted by an officer under the Act, may
not be tenable. If the authorized officer, on the basis of
material in his possession has reason to believe that the
person is guilty of an offence punishable under the Act,
he being empowered to arrest is akin to powers
conferred on authorized officers under other legislation
which power of arrest has been upheld by the Apex
court in the case of Directorate of Enforcement v. Deepak
Mahajan, (1994) 3 SCC 440. 115. It is evident that as it
existed post the Amendment Act, 2009, in so far as the
36
presumption arising in interconnected transactions,
where money laundering was alleged to be involved in
two or more transactions, and if one or more such
transactions was proved to be involved in money
laundering then for purposes of adjudication or
confiscation under Section 8, unless otherwise proved, it
could be presumed that the remaining transactions
formed such inter-connected transactions. Hence if the
scheduled offence resulted in acquittal, in terms of
Section 8 the presumption with regard to inter connected
transaction ceased to exist. However, with the
Amendment Act of 2013, by the inclusion of the phrase
"or for the trial of the money laundering offence" after the
words "for the purpose of adjudication or confiscation
under Section 8"- the offence of money laundering is
sought to be treated as not being dependent on the
result of the trial of the scheduled offence. Such a
presumption is now possible by virtue of the 2013
Amendment. As already noticed, the offence of money
laundering is no more inextricably linked to the proceeds
of crime of a scheduled offence."
15. Similarly this Hon'ble Court in the case of Rohit Tandon
v. Enforcement Directorate, B ail Appl. No. 119 of 2017, i t has
39
16. It is stated that in the Special Leave Petition filed from
the aforesaid decision, while affirming the decision, this
Hon'ble Court in Rohit Tandon vs. Enforcement Directorate,
2017 SCC Online SC 1304, the Hon'ble supreme court held
as under:
"7. Having formed that opinion and noticing that the
investigation was at the initial and crucial stage and
that the source of funds of proceeds of crime was yet to
be ascertained till then and that the recovery of balance
proceeds of crime was in the process, the question of
enlarging the appellant on bail does not arise, more so,
when there was every possibility that he may tamper
with the evidence and influence the material prosecution
witnesses. Accordingly, the bail application was rejected
by the Sessions Court vide judgment and order dated 7th
January, 2017.
8. Aggrieved, the appellant approached the High Court
of Delhi by way of bail application under Section 439 of
the Cr.P.C. rea.d with Section 45 of the Act of 2002. The
High Court independently analysed all the contentions
raised by the appellant and after adverting to the
relevant materials, rejected the application for grant of
bail preferred by the appellant. The High Court found
that the Act of 2002 does not prescribe that the
Enforcement Directorate is debarred from conducting
investigation in relation to the offences under Sections 3
& 4 of the Act of 2002 unless the Crime Branch
concludes its investigation in relation to FIR No.
205/2016 or was to file charge-sheet for commission of
scheduled offence. Further, the proceedings under the
Act of 2002 are distinct from the proceedings relating to
scheduled offence and both the investigations can
continue independently. The High Court then noted that
40
Section 44 of the Act of 2002 is an enabling provision, to
have a joint trial in such a situation to avoid conflicting
and multiple opinions of the Courts. But proceeded to
hold that the said possibility would arise only when the
charge-sheet is filed after completion of investigation in
relation to FIR No. 205/2016 and the case is committed
to the concerned Court. The High Court held that Section
44 of the Act of 2002 does not envisage a joint
investigation but is a provision stipulating that the trial
of offence under Section 3/4 of the Act of 2002 and any
scheduled offence connected to the offence under that
section may be tried only by the Special Court
constituted for the area in which the offence has been
committed. While considering the merits of the
allegations against the appellant, in particular, the
materials on record, the High Court analysed the same
in the following words:
"14. In FIR No. 205/2016 allegations are that Raj Kumar
Goel; Ashish Kumar, Bank Manager, Kotak Mahindra
Bank, K.G. Marg Branch and others conspired for illegal
conversion of demonetized currency notes into monetized
currency by way of depositing cash in various accounts
of the firms and subsequently getting Demand Drafts
issued in fictitious names. It is further alleged in the said
FIR that a.ccused therein opened bank accounts in the
name of 'Group of Companies' in Kotak Mahindra Bank.
In ECIR No. 18, transactions statements of accounts
were collected pertaining to these 'Group of Companies'
from Kotak Mahindra Bank and it emerged that from
15.11.2016 to 19.11.2016, there was huge cash deposit
to the tune of Rs. 31.75 crores by Raj Kumar Goel and
his associates. It was also found that the Demand
Drafts amounting to Rs. 38 crores were issued in
fictitious names during that period. It cannot be said at
this stage that offences referred in FIR No. 205/2016
41
and the ECIR No. 18 have no nexus.
15. Prosecution under Section 45 of PMLA for
commission of offence under Section 3 punishable under
Section 4 of PMLA has alrea,dy been initiated by ED in
the Special Court. By an order dated 25.02.2017,
learned Addl. Sessions Judge/Special Court (PMLA) has
taken cognizance against Rohit Tandon (present
petitioner), Ashish Kumar and Raj Kumar Goel. Dinesh
Bhola and Kamal Jain have also been summoned to face
trial under Section 4 of PMLA. Raj Kumar Goel and
Ashish Kumar continue to be in custody in the said
proceedings.
16. On perusal of the complaint lodged under Section
45 PMLA, it reveals that serious and grave allegations
have been leveled against the petitioner and others. The
allegations are categorical and specific; definite role has
been assigned to each a.ccused. It is alleged that during
the period from 15.11.2016 to 19.11.2016, huge cash to
the tune of Rs. 31.75 crores was deposited in eight bank
accounts in Kotak Mahindra Bank in the accounts of the
'Group of Companies'. It gives details of Demand Drafts
issued during 15.11.2016 to 19.11.2016 from eight
bank accounts in the name of Sunil Kumar, Dinesh
Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini,
Satya Narain Dagdi and Seema Bai on various dates.
Most of the Demand Drafts issued have since been
recovered. Its detail finds mention in Table No. 2 given in
the complaint.
17. During arguments, specific query was raised
and the learned Senior Counsel for the petitioner
was asked as to, to whom the money deposited in
the various accounts belonged. Learned Senior
Counsel for the petitioner was fair enough to
admit that the whole money belonged to the
petitioner. When enquired as to from which
42
'source', huge cash was procured, there was no
clear response to it. Again, learned Senior Counsel
for the petitioner was asked as to how the cash
belonging to the petitioner happened to be
deposited in various accounts of the 'Group of
Companies' which were not owned by the petitioner
and what was its purpose. It was further enquired
as to why the Demand Drafts were got issued in
the names of the persons referred above and what
was its specific purpose. Learned Senior Counsel
for the petitioner avoided to answer these queries
stating that the defence of the petitioner could not
be disclosed at this juncture to impact his case
during trial. Apparently, no plausible explanation
has been offered as to what forced the petitioner
to deposit the old currency to the tune of Rs. 31.75
crores in eight accounts of the different 'Group of
Companies' in Kotak Mahindra Bank during the
short period from 15.11.2016 to 19.11.2016.
There was no explanation as to why the Demand
Drafts for the said amount were got issued in the
name of sham people whose identity was not
known. The purpose of all this exercise seemingly
was to deposit the cash (old currency) first, get the
Demand Drafts issued in fictitious names and
obtain monetized currency by cancelling them
subsequently. The petitioner also did not place on
record any document whatsoever to show as to
from which legal source, the cash was procured to
deposit in the bank accounts of strangers. I find
no substance in the petitioner's plea that
petitioner's only liability was to pay income tax on
the unaccounted money/income. In my considered
view, mere payment of tax on the unaccounted
money from any 'source' whatever would not
convert it into 'legal' money. Needless to say, huge
deposit was a sinister attempt/strategy by the
43
petitioner and others to convert the 'old currency'
into new one to frustrate the Demonetization
Policy primarily meant to unearth bla.ck money.
18. Allegations against the petitioner are not without
substance. The prosecution has recorded statements of
the petitioner on va,rious dates and that of Dinesh
Bhola., Ashish Kumar (Branch Mana.ger, Kotak
Mahindra Bank), Raj Kumar Goel, Kamal Jain
(petitioner's Chartered Accountant), Vimal Negi, Jivan
Singh and Varun Tandon under Section 50 PMLA on
various dates. There statements have evidentiary
value under Section 50 PMLA. Prima facie, the
version given by them is in consonance with the
prosecution case. The prosecution has further
relied upon Call Data Records, CCTV footage,
Account Trend Analysis."
(emphasis supplied)
The High Court opined that keeping in mind the rigors of
Section 45 of the Act of 2002 for the release of the
accused charged under Part A of the Schedule, on bail,
coupled with the antecedents of the appellant of being
involved in other similar crime registered as FIR No.
197/2016, for offence under Section 420, 409, 188,
120B of IPC dated 14th December, 2016 by Crime
Branch and ECIR No. 14/DZ/II/2016 registered on 16th
December, 2016 by Enforcement Directorate for offences
under Sections 3/4 of the Act of 2002. Further, during a
raid conducted jointly by the Crime Branch and Income
Tax Department on 10th December, 2016 at a.round
10.00 P.M. at the office premises of the appellant,
currency ofRs. 13.62 Crore was recovered including new
currency in the denomination of Rs. 2000/- amounting to
44
Rs. 2.62 Crore. In addition, the appellant had
surrendered Rs. 128 Crore during the raid conducted by
the Income Tax Department on 6/8 October, 2016 in his
office and residential premises. No reliable and credible
documents were forthcoming from the appellant about
the source from where he had obtained such a huge
quantity of cash. The possibility of the same being
proceeds of crime cannot be ruled out. Hence, it noted
that the question of granting bail did not arise, taking
into consideration the serious allegations against the
appellant and other facts including severity of the
punishment prescribed by law. Accordingly, the bail
application of the appellant came to be rejected. As a
consequence, the pending application which was
considered along with the bail application was also
disposed of by the impugned judgment and order dated
5th May, 2017 passed by the High Court.
24. K
eeping in mind the dictum in the aforesaid
decisions, we find no difficulty in upholding the
opinion recorded by the Sessions Court as well as
the High Court in this regard. In our opinion, both
the Courts have carefully analysed the allegations
and the materials on record indicating the
complicity of the appellant in the commission of
crime punishable under Section 3/4 of the Act
of2002. The Courts have maintained the delicate
balance between the judgment of acquittal and
conviction and order granting bail before
commencement of trial. The material on record
does not commend us to take a contrary view.
25. Realizing this position, the learned counsel
appearing for the appellant would contend that even if
the allegations against the appellant are taken at its
face value, the incriminating material recovered from the
appellant or referred to in the complaint, by no stretch of
45
imagination, would take the colour of proceeds of crime.
In fact, there is no allegation in the charge-sheet filed in
the scheduled offence case or in the prosecution
complaint that the unaccounted cash deposited by the
appellant is as a result of criminal activity. Absent this
basic ingredient, the property derived or obtained by the
appellant would not become proceeds of crime. To
examine this contention, it would be useful to advert to
Sections 3 and 4 of the Act of 2002. The same read thus:
27. It will be useful to advert to the meaning of
expression "property" as predicated in Section 2(1)(v).
The same reads thus:
"2(1)(v) "property" means any property or assets of every
description, whether corporeal or incorporeal, movable or
immovable, tangible or intangible and includes deeds
and instruments evidencing title to, or interest in, such
property or assets, wherever located;
28. The expression 'scheduled offence' has been
defined in Section 2(1)(y) of the Act of2002. The same
rea.d.s thus:
"2(1)(y) 'scheduled offence' means-
(i) the offences specified under Part A of the Schedule;
or
(ii) the offences specified under Part B of the Schedule
if the total value involved in such offences is one
crore rupees or more; or
(iii) the offences specified under Part C of the
46
Schedule;"
29. Indisputably, the predicate offence is
included in Part A in paragraph 1 of the Schedule
in the Act of 2002, in particular Sections 420,
467, 471 and 120B of IPC. Indeed, the expression
"criminal activity" has not been defined. By its very
nature the alleged activities of the accused
referred to in the predicate offence are criminal
activities. The possession of demonetized currency in
one sense, ostensibly, may appear to be only a facet of
unaccounted money in reference to the provisions of the
Income Tax Act or other taxation laws. However, the
stated activity allegedly indulged into by the a.ccused
named in the commission of predicate offence is replete
with mens rea. In that, the concealment, possession,
acquisition or use of the property by projecting or
claiming it as untainted property and converting the
same by bank dra,fts, would certainly come within the
sweep of criminal activity relating to a scheduled
offence. That would come within the meaning of Section
3 and punishable under Section 4 of the Act, being a
case of money-laundering. The expression
'money-laundering' is defined thus:
"2(1)(p) "money-laundering" has the meaning assigned to
it in section 3;
30. The appellant then relies upon the decision in the
case of Gorav Kathuria v. Union of India, of the Punjab
and Haryana High Court which has taken the view that
Section 45(1) of the Act of 2002 requires to be rea,d
down to apply only to those scheduled offences which
were included prior to the amendment in 2013 in the
Schedule. It is contended that the offence, in particular,
under Sections 420, 467 and 471 of IPC, may not be
treated as having been included in the scheduled
offences for the purpose of the Act of 2002. Further, if
any other view was to be taken, the provision would be
47
rendered ultra vires. We are in agreement with the stand
taken by the respondents that the appellant cannot be
permitted to raise the grounds urged in the writ petition,
hearing whereof has been deferred on the request of the
appellant. In other words, the appellant should be in a
position to persuade the Court that the allegations in the
complaint and the materials on record taken at its face
value do not constitute the offence under Section 3 read
with the schedule of the Act of2002 as in force.
36. It was urged on behalf of the appellant that
Demonetization Notification dated 8th November, 2016
imposes no limit in KYC compliant accounts on the
quantum of deposit and no restrictions on non-cash
transactions. The relevant portion of the said notification
reads thus:
"(iii) there shall not be any limit on the quantity or value
of specified bank notes to be credited to the account
maintained with the bank by a person, where the
specified bank notes are tendered; however, where
compliance with extant Know Your Customer (KYC)
norms is not complete in an account, the maximum value
of specified bank notes as may be deposited shall be Rs.
50,000/-;
(vii) there shall be no restriction on the use of any
noncash method of operating the account of a person
including cheques, demand drafts, credit or debit cards,
mobile wallets and electronic fund transfer mechanisms
or the like;"
37.W e fail to understand as to how this argument can
be countenanced. The fa.ct that no limit for deposit was
specified, would not extricate the appellant from
explaining the source from where such huge amount has
been a,cquired, possessed or used by him. The volume
of demonetized currency recovered from the office and
residential premises of the appellant, including the bank
48
drafts in favour of fictitious persons and also the new
currency notes for huge amount, leave no manner of
doubt that it was the outcome of some process or activity
connected with the proceeds of crime projecting the
property as untainted property. No explanation has
been offered by the appellant to dispel the legal
presumption of the property being proceeds of
crime. Similarly, the fa.ct that the appellant has made
declaration in the Income Tax Returns and paid tax as
per law does not extricate the appellant from disclosing
the source of its receipt. No provision in the taxation
laws has been brought to our notice which grants
immunity to the appellant from prosecution for an
offence of money-laundering. In other words, the
property derived or obtained by the appellant was
the result of criminal activity relating to a
scheduled offence. The argument of the appellant that
there is no allegation in the charge-sheet filed in the
scheduled offence case or in the prosecution complaint
that the unaccounted cash deposited by the appellant is
the result of criminal activity, will not come to the aid of
the appellant. That will have to be negatived in light of
the materials alrea,dy on record. The possession of such
huge quantum of demonetized currency and new
currency in the form of Rs. 2000/- notes, without
disclosing the source from where it is received and the
purpose for which it is received, the appellant has failed
to dispel the legal presumption that he was involved in
money-laundering and the property was proceeds of
crime.
38. Taking overall view of the matter, therefore, we are
not inclined to interfere with the well considered opinion
of the Sessions Court and the High Court rejecting the
prayer for grant of regular bail to the appellant.
However, considering the fact that the appellant is in
custody since 28th December, 2016 and the offence is
punishable with imprisonment for a term extending to
49
seven years only, but not less than three years, the Trial
Court will be well advised to proceed with the trial on
day-to-day basis expeditiously. We clarify that the Trial
Court must examine the evidence/material brought on
record during the trial on its own merit and not be
influenced by the observations in this decision which are
limited for considering the prayer for grant of regular
bail."
17. This Hon'ble court further in the case of A nand
Chauhan v. Directorate of Enforcement, 2017 SCC OnLine Del
7790,held as under:
"12 . The petitioner further submits that the arrest
of the petitioner is premature, as the commissions
of the scheduled offence u/s 13(1)(e) r/w 13(2) of PC
Act:, 1988 is yet to be, prima facie, established
and charge sheet in the regular case is yet to be
filed by the CBI, and the principal accused in
a.foresaid regular case has also not been arrested
till date.
13. The petitioner further submits that custody of
applicant is in violation of Article 21 of the Constitution
of India, since no trial under section 3 and 4 of PMLA Act
can be proceeded without the charge sheet being filed in
the case under Section 13(2) r/w Section 13(1)(e) of the
PC Act- which is the scheduled offence in question. He
further submits that amendment to section 44 PMLA,
2002 contemplates a joint trial by the Special Court of
scheduled offence case, and the case relating to the
offence under PMLA, to avoid conflicting and multiple
opinion of courts,which is not possible as the
charge-sheet in scheduled offence case is yet to be filed.
15. The petitioner further relies upon a Division Bench
50
judgment of this Court in Gurucharan Singh v. Union of
India, 2016 SCC OnLine Del 2493, wherein the accused
was released on bail by the Court in view of the
amendment of section 45 PMLA - making it a non-
cognizable offence. The Division Bench in Gurucharan
Singh (supra) observed that it is mandatory to follow the
provisions of Section 155, 177(1) and 172 of the Code of
Criminal Procedure in case the offence is non-cognizable.
It was further observed that without reaching the
conclusion that the offence under PMLA is cognizable,
the respondent was bound to follow and comply with the
said provision of the Code of Criminal Procedure. It was
further observed that in the absence of the procedure
having been followed, the rights of the petitioner under
Article 21 of the Constitution stand violated.
25. Section 3 of the PMLA defines the offence of money
laundering as, "Whosoever directly or indirectly attempts
to indulge or knowingly assists or knowingly is a party
or is actually involved in any process or activity
connected proceeds of crime including its concealment,
possession, acquisition or use and projecting or claiming
it as untainted property shall be guilty of offence of
money-laundering".
26. The expression "proceeds of crime" is defined in
Section 2(u) of the PMLA to mean "any property derived
or obtained, directly or indirectly, by any person as
result ofcriminal activity relating to a scheduled offence
".
As noticed hereinabove, the offence alleged against Sh.
Vir Bha.dra Singh in the FIR/RC registered by the CBI
under Section 13(2) rea.d with Section 13(1)(e) of the PC
Act is a scheduled offence and thus, the allegation
against the petitioner is that the proceeds of crime of Sh.
Vir Bhadra Singh have been laundered by him.
51
27. A reading of Section 3 shows that the person
who commits the offence of money laundering need
not necessarily be a one who may have been
involved in the acquisition of the proceeds of
crime. Thus, even if the petitioner herein is
assumed to be not guilty of the offence under
Section 13(2) read with Section 13(1)(e) of the PC
Act:, nevertheless, he is a person charged with
abetting the said offence and with the laundering
of the proceeds of the crime of Sh. Vir Bhadra
Singh.
28. I cannot agree with the submission of the
petitioner that for the purpose of Sections 3 and 4
of the PMLA, the person accused of the commission
of the offence under the PMLA should have
committed the scheduled offence and acquired the
proceeds of crime. The proceeds of crime may be
acquired by another person who commits one of
the scheduled offences, and the person charged
with money laundering may have only, directly or
indirectly, assisted or knowingly become a party,
or may be actually involved in the process or
activity of, inter alia., concealing, possessing,
acquiring or using and projecting or claiming the
said proceeds of crime as untainted property. The
purpose of scheduling the offences under the PMLA
appears to be to enlist the various crimes through
which the proceeds of crime may be generated.
Thus, the submission of the petitioner that he
cannot be charged under the PMLA, does not
appear to have any merit.
29. The learned Special Judge has opined that it
cannot be said that there are reasonable grounds for
believing that the petitioner is not guilty of the scheduled
offence. This prima-facie finding of the learned Special
52
Judge on a reading of the allegations made against the
petitioner herein in the FIR/RC registered by the CBI, as
well as on a perusal of the complaint preferred under the
PMLA, appears to be justified and there is no reason to
take a different view of the matter at this stage.
30. In Gautam Kundu (supra), t he Supreme Court has
categorically held that the conditions specified in Section
45 of the PMLA are mandatory and needs to be complied
with In this regard, the Supreme Court places reliance
on Sections 65 and 71 of PMLA. Section 65 provides that
the provisions of the Code shall apply insofar as they
are not inconsistent with the provisions of the PMLA and
Section 71 provides that the provisions of PMLA shall
have overriding effect, notwithstanding anything
inconsistent therewith contained in other law for the
time being in force. Thus, PMLA has an over-riding effect
and the provisions of the Code would apply only if they
are not inconsistent with the provisions of the PMLA. The
Supreme Court has held that the compliance of the
provisions of Section 45 of the PMLA should be insisted
upon by the High Court as well, while considering an
application under Section 439 Cr.P.C. In the present
case, the prima facie finding returned by the trial court
with regard to the petitioner's involvement in the
scheduled offence is unexceptionable."
18. Therefore, from the analysis of the above stated
judgments, it is clear that after the amendments to the
PMLA, the reference to 'criminal activity relating to a
scheduled offence' has a wide connotation and extends to a
person, who is connected with any 'criminal activity relating
53
to scheduled offence and may not necessarily be an offender
of scheduled offence. Thus, money laundering itself is an
offence standalone under Section 3 of PMLA having a
distinct character, with many facets with wide implications
and, therefore, the contention of the petitioner that the
investigation under PMLA is investigation pertaining to the
same transaction as investigated by CBI is patently
erroneous.
CONTENTIONS PERTAINING TO REJECTION OF SURRENDER PRAYER AND
NO OFFENCE BEING MADE OUT AGAINST THE PETITIONER
19. I respectfully state and submit that the contention of
the petitioner that the Ld. Trial Court erroneously refused to
accept the prayer of the petitioner to surrender before ED on
05.09.2019 are misconceived and extraneous to scope of the
present bail application. It is stated that the Ld. Trial Court
by a detailed reasoned order rejected the application for
surrender preferred by the petitioner. Thereafter, for the
reasons recorded in the orders passed from time to time, the
Ld. Trial Court remanded the petitioner to the custody of the
respondent for his custodial interrogations. It is stated that
54
the said orders have now outlived their life and, therefore,
cannot be gone into in the present bail application; which is
to be considered on the basis of the parameters laid under
Section 439 of the CrPC. As such the said contentions of the
petitioner are untenable and are liable to be rejected by this
Hon'ble Court. It is respectfully submitted that the present
bail application has to be considered purely and solely on
the ground/parameters as provided under section 439 of
CrPC which as detailed hereinabove are not made out in the
present case.
20. Furthermore, I respectfully state and submit that the
contention of the petitioner that no offence is made out
against him and trial of the petitioner under PMLA would
result in retrospective application of provisions of PMLA is
also misleading and untenable. It is stated that though the
petitioner at ground VV has explicitly stated that he is not
inviting findings on merits, despite the same all the
contentions on merits have been taken by the petitioner. It is
stated that the petitioner cannot be allowed to approbate
and reprobate. It is stated that if the petitioner intends to
55
press the said ground, assuming only to show that he has a
prima facie arguable case on merits, then also the
respondent investigating agency will have to deal the same
on merits and this Hon'ble Court will have to decide the
same on merits. It is stated that it does not lie with the
petitioner to contend that he may be permitted to argue on
merits whereas no findings qua the same ought to be
rendered by this Hon'ble Court. Thus the respondent as of
now is not dealing with the contentions of the petitioner on
merits of the case while reserving its right to file a detailed
affidavit qua the said contentions in case the petitioner
chooses to press the same in support of his bail application.
Without prejudice to the above, I respectfully state and
submit that the said contentions were verbatim taken by the
petitioner before the Hon'ble Supreme Court, which came to
be rejected by Hon'ble Supreme Court vide judgement dated
05.09.2019 passed in Criminal Appeal No 1340 of 2019 in
the case of anticipatory bail of Sh. P. Chidambaram in
Directorate of Enforcement case. The respondent begs to
place reliance on the said judgment in this regard during the
hearing of the present bail application.
56
21. The contention of the petitioner pertaining to
retrospective application of the provisions of PMLA is also
patently misconceived.
22. It is asserted by the Petitioner that the alleged offences
under certain Sections like 420 of IPC were committed in the
year 2005-2006. It is also asserted by the petitioner that the
said offences were included in the schedule only on
01.06.2009 and thus Respondent is not empowered to
investigate by applying it retrospectively. It is submitted that
the argument raised is fallacious for the following reasons:-
(i) the Respondent ED is not investigating the Scheduled
offences but the offence of Money Laundering which is
a distinct/separate offence committed after the
commission of scheduled offence and is continuing to
be committed even now; and
(ii) FIR registered by the CBI (predicate offence), inter-alia,
is also under Section 8 of the PC Act, which had always
been scheduled offence i.e. even prior to 01.06.2009.
Hence, the entire contention of the petitioners in so far,
57
as retrospectivity is concerned, is misconceived and
untenable in law;
(iii) that the actions of money laundering as a matter of fact
have occurred after 2009 and, therefore, also the
question of retrospectively is academic in the present
facts and circumstances.
23. Without prejudice to the above, it is respectfully
submitted that the offence of money laundering is a
continuing offence, inasmuch as, by its very definition, the
offence continues as long as accused is in possession,
acquisition of the ill gotten wealth since the projection is not
a one-time offence and continues till such time person is in
possession of the ill gotten wealth. Thus the time of its
generation is of no consequence but the possession,
acquisition and its projection as untainted is. As long as the
projection as untainted continues, the offence will continue
and cannot be said to have been applied retrospectively. The
investigation under PMLA after the year 2009 would not be
treated as applying the Act retrospectively for the reason of
ill gotten wealth being generated prior to the amendment
58
coming into force because accused at the time of
investigation under PMLA was in possession, acquisition and
projecting such proceeds of crime as untainted. This
interpretation is also supported by the judgement of Hon’ble
Jharkhand High Court in the case of Hari Narayan Rai V/s
The Union of India (UOI) through Directorate of
Enforcement reported in 2010 SCC ONLINE (JHAR) 1066,
wherein the Hon'ble court was held as under:-
“……………However, the subject matter of the Act is not
a scheduled offence but the offence of
money-laundering. Strictly speaking, it cannot be
contended that the Act has a retrospective operation
because it now enacts that laundering of proceeds of
crime committed earlier as an offence. In The Queen v.
The Inhabitants of St. Mary, Whitechapel (1848) 12 QB
120, the Court pointed out that "The Statute which in its
direct operation of prospective cannot be properly be
called a retrospective statute because a part of the
requisites for that action is drawn from the time
antecedent to its passing". Thus, with effect from 1st
June, 2009 laundering proceeds of crime under Section
420 of the IPC is enacted as an offence of
money-laundering punishable under Section 4 of the Act.
It is important to note that the punishment under Section
4 of the Act is not for commission of a scheduled offence
but for laundering proceeds of a scheduled crime. The
fact that the scheduled crime may have been committed
prior to the Act coming into force would not render the
Act a retrospective statute as only the offence of
59
money-laundering committed after the enforcement of
the Act can be proceeded against under the Act.
30. The respondent's contention that the relevant date
would be the date of offence of money-laundering and
not that of the commission of the scheduled offence is
merited and the impugned order cannot be set aside
only on the ground that it has been issued in respect of
proceeds of a scheduled crime which was allegedly
committed prior to 1st July, 2005.
24. In Sajjan Singh v. State of Punjab, (1964) 4 SCR
630 : AIR 1964 SC 464 wherein the petitioner was put to
trial for the charges under Section 5 of the Prevention of
Corruption Act, when the assets acquired by the petitioner
was found to be disproportionate to his know sources of
income, the stand, which had been taken is that the
property, which was taken to be disproportionate to his
know source of income, had been acquired before Section
5(3) of the Prevention of Corruption Act, was incorporated in
Section 5 and, thereby, he is not liable to be prosecuted
under Section 5 of the Prevention of Corruption Act. It was
held that “15. It may also be mentioned that if pecuniary
resources or property acquired before the date of
commencement of the Act were to be left out of account in
60
applying sub-section (3) of S.5 it would be proper and
reasonable to limit the receipt of income against which the
proportion is to be considered also to the period after the Act.
On the face of it this would lead to a curious and anomalous
position by no means satisfactory or helpful to the accused
himself. For the income received during the years previous to
the commencement of the Act may have helped in the
acquisition of property after the commencement of the Act.
From whatever point we look at the matter it seems to us clear
that the pecuniary resources and property in possession of
the accused persons or any other person on his behalf have to
be taken into consideration for the purpose of sub-sec. (3) of
S.5, whether these were acquired before or after the Act came
into force.”
25. Section 3 of PMLA specifically says that whosoever
“directly or indirectly attempts to indulge or knowingly
assists or knowingly is a party or is actually involved in any
process or activity connected proceeds of crime including its
concealment, possession, acquisition or use and projecting
or claiming it as untainted property shall be guilty of offence
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of money-laundering”. Thus the Petitioner cannot claim that
it is only his son (Sh. Karti P. Chidambaram) who can be at
best be alleged to have committed the offence. It has come
on record that the proceeds of crime were generated due to
the act of Petitioner in granting permissions illegally for
gratification collected by Sh Karti P. Chidambaram at
Petitioners behest. Thus for this reason also the contention
of the petitioner that no offence against him is made out is
untenable in law and liable to be rejected and therefore, his
bail application is also liable to be rejected.
26. Thus in view of the aforesaid it is respectfully
submitted that the present bail application filed by the
petitioner is devoid of merits and is liable to be dismissed in
the interest of justice.
DEPONENT
VERIFICATION
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Verified at New Delhi on 2nd
day of November, 2019, that the
contents of my above affidavit are true and correct to my
knowledge based on records.
DEPONENT