Ramesh Chandra v. The Directorate of Enforcement

I. All companies mentioned by the ED were lawfully established, with the necessary permissions and disclosures made to the relevant statutory authorities. Therefore, no valid allegation of creating and managing shell companies can be directed against the group or the petitioner.

2012. There is a complete lack of interconnectivity between the money received from homebuyers and the funds invested in Carnoustie Management Private Ltd. (“CMPL”). No statements from any homebuyer have been recorded, nor have any bank account statements or builder-buyer agreements been submitted. Additionally, there is no specified date of investment and no trailing of funds has been conducted. The investigation has not produced any evidence showing which of the 326 bank accounts of the company received deposits from the homebuyers for purchasing their homes, nor has it clarified how these amounts were diverted, on what dates and to what extent.

Thornton lacks evidentiary value. The report is based on mere conjectures and surmises and cannot serve as the foundation for the case of ED. The author of the report has included a list of disclaimers, acknowledging that they cannot guarantee the report's reliability or verify the accuracy of the information it is based on. Additionally, the report frequently uses the phrase “potential diversion”, further undermining its credibility.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

7. Per contra, Mr. Zoheb Hossain, learned Special Counsel appearing on behalf of the respondent has stated that:

PMLA cases has to be strictly decided in terms of the mandatory twin conditions under Section 45 of PMLA which prescribes that an accused may be released on bail only if he fulfils the mandatory twin conditions, which read as under:i. There are reasonable grounds for believing that he is not guilty of the offence of money laundering; and ii. That he is not likely to commit any offence while on bail. Reliance is placed on the decision of the Hon‟ble Supreme Court in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors., (2023) 12 SCC 1, which has held that a person accused of the offence of money laundering has to satisfy the twin test laid down under Section 45 of PMLA.

PMLA, Sunil Kher testified that on 05.03.2021, following the searches by ED on the Trikar Group companies on 04.03.2021, the petitioner called him and instructed him to meet at the Taj Vivanta hotel. Upon arrival, he found Ajay Chandra present as well. They inquired about the search by ED of the Trikar Group companies. When Kher raised the issue of fake bills related to the Trikar Group, the Chandras, particularly Ajay Chandra, threatened him with serious consequences if he disclosed the truth to the ED.

I. The petitioner and his family members incorporated, controlled and managed over 100 shell or benami entities both in India and abroad. POC amounting to Rs. 16.69 crores were laundered and deposited into the accounts of Actra Construction and Infrastructure Services Pvt. Ltd. (“ACISPL”), which were operated for the benefit of the petitioner. Five properties of ACISPL were sold under the instructions of the petitioner. Additionally, the petitioner managed and controlled a shell company named SEMPL and in February 2021, he appointed Rajeev Kumar as a director of SEMPL through his confidants.

Waraich acquired 85% of the Class A shares of CMPL, while parties who invested Rs. 350 crores were only allotted 15% of the Class B shares, which carried no voting rights. To obscure the true purpose of this transaction, the petitioner and Rajesh Malik created a facade of share applications. An examination of the tally data revealed a complex web of interconnected transactions between Unitech, CMPL, homebuyers and loan funds, amounting to Rs. 380.80 crores, which were illegally diverted to CMPL.

ANALYSIS AND FINDINGS

8. I have heard learned counsel for the parties and perused the material on record.

9. The relevant portion of Section 45 of PMLA reads as under:- “Section 45. Offences to be cognizable and non-bailable. (1) Notwithstanding anything contained in the Criminal Procedure Code, 1973 (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond unless-

(i) the Public Prosecutor has been given a 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 moneylaundering a sum of less than one crore rupees may be released on bail, if the Special Court so directs: … ”

10. The first question that arises for my consideration is whether the proviso to section 45(1) of PMLA will be applicable to the petitioner being „sick or infirm‟. Applicability of Section 45 of PMLA

11. To understand the term „sick‟ as contemplated in the PMLA, it is essential to consider the legislative intent behind the inclusion of the proviso to section 45(1) of PMLA.

12. In the case of Devki Nandan Garg (supra), it has been observed as under:-

“In addition to above recommendations of the standing committee the Central Government proposes to (a) relax the conditions prescribed for grant of bail so that the Court may grant bail to a person who is below sixteen years of age, or woman, or sick or infirm...”

33. A bare perusal of the Statement of Objects and Reasons of PMLA goes to show that inclusion of the above conditions for grant of bail as a proviso to section 45(1) of PMLA elucidates the legislature's intent to incorporate relaxations for persons below sixteen years of age; a woman; or one who is sick or infirm.”

13. In Kewal Krishan Kumar v. Enforcement Directorate, 2023 SCC OnLine Del 1547, it has been held that the legislature has carved out the proviso to section 45(1) of PMLA as a lenient provision for persons below sixteen years of age, women or persons who are sick or infirm. The relevant paragraphs read as under:-

amend sub-section (1) of section 45 to substitute the words “punishable for a term of imprisonment of more than three years under Part A of the Schedule” by the words “under this Act” so as to take a step further towards delinking the Scheduled offence and money laundering offence. Further, it seeks to amend the proviso in subsection (1) by inserting the words “or is accused either on his own or along with other co-accused of money laundering a sum of less than Rupees one crore”, after the words “sick or infirm” to allow the Court to apply lenient bail provisions in case of money laundering offence is not grave in nature.”

19. The 2018 Finance Bill gives an insight into the bail provisions stating that the inclusion of “sixteen years; woman; sick or infirm” along with the addition of “or is accused either on his own or along with other co-accused of money laundering a sum of less than Rupees one crore” is a lenient bail provision encapsulated in PMLA.”

14. Considering the above, a purposive interpretation of the proviso to section 45(1) of PMLA indicates that it was included as a lenient measure to provide „relaxation‟ for a sick or infirm individual, as mentioned in the Statement of Objects and Reasons for the PMLA.

15. The next question for consideration is what is the level of sickness that qualifies an accused as „sick‟ under the proviso to section 45(1) of PMLA.

16. It was further observed in Kewal Krishan Kumar (supra) that the proviso to section 45(1) of PMLA is similar to the proviso to Section 437 of CrPC. The relevant paragraphs read as under:-

17. In addition, the Hon‟ble Supreme Court in Pawan alias Tamatar v. Ramprakash Pandey, (2002) 9 SCC 166 has noted that every sickness does not ipso facto entitle an accused to medical bail. The said judgment was further relied upon by the Bombay High Court in the case of Mahendra Manilal Shah v. Rashmikant Mansukhlal Shah, 2009 SCC OnLine Bom 2095 and more particularly in paragraphs 47 and 50 which read as under:-

Accused, considering the nature of his ailment cannot be adequately or efficiently be administrated in the hospital in which he is at present and that he needs a better equipped or a speciality hospital. … ”

18. While there is no strict formula to determine the level of illness required for bail under this proviso, the general guideline is that when the sickness is serious enough to pose a threat to life and requires medical assistance and treatment which is specialized and unavailable in jail facilities, the accused should be granted bail under the proviso to section 45(1) of PMLA. However, this is not an exhaustive criterion and each case should be evaluated based on its unique facts and circumstances.

19. In the present case, the medical board of AIIMS, Delhi constituted vide Order dated 18.09.2023 submitted its report on 04.12.2023. The medical assessment of the petitioner by the board was conducted on 18.10.2023 and 22.10.2023. Their conclusion is quoted as under:- “The Board opines that the present assessment is suggestive of subjective cognitive decline with risk of fall and he can be treated in jail but he should be monitored for fall and its related complications.”

20. A division bench of this Court in Sandeep Aggarwal v. Priyanka Aggarwal, 2021 SCC OnLine Del 5521 has observed that the courts cannot sit in appeal of the opinion of the medical board as the judges are not experts in medical fields. Thus, an opinion of doctors who are experts cannot be supplanted by a court overstepping its jurisdiction. The relevant paragraph of the said judgment reads as under:-

21. Hence, I am of the view that the petitioner is not „sick‟ to fall within the ambit of proviso to section 45(1) of PMLA since the petitioner can be treated in jail for the ailment as categorically opined by the medical board.

22. Having said that, the legislature has also carved out another category i.e. „infirm‟ in the proviso to Section 45(1) of PMLA. PMLA does not define the word „infirm‟ and this Court referred to the definitions of „infirm‟ mentioned in several dictionaries in the decision of the case of Radhika Kapoor v. State & Ors., 2016 SCC OnLine Del 6652. The definitions of „infirm‟ are:-

23. In the present case, a perusal of the medical records of the petitioner show that on 07.01.2024, the petitioner was rushed to the emergency wing of the AIIMS Medicine Department. The doctor observed that he fell unconscious for a period of 5-6 minutes. The report stated that the ECG was abnormal, there was left anterior fascicular block (LAFB), which is considered a failure or delay of conduction in the left anterior fascicle and anterior infarction.

24. On 21.01.2024, the petitioner had further visited the Lifestyle Clinic for treatment of major cognitive impairment and dementia. The doctor observed that he was suffering from forgetfulness and lack of intent that were due to cognitive impairment and dementia.

25. On 10.02.2024, the petitioner had also visited the MAX Super Specialty Hospital Saket with a complaint of short-term memory loss. He was treated and advised on several medicines.

26. On 19.08.2024, the petitioner was rushed to the emergency department of MAX Healthcare Saket on a complaint of chest pain coupled with giddiness. The family physician observed that such episodes had happened in the past and there was a high likelihood of these incidents recurring in the near future as well. He concluded that there was severe cognitive decline due to age, coupled with disorientation, incoherence and loss of consciousness. He advised heavy medication and complete bed rest.

27. Admittedly, the petitioner, aged 86, suffers from cognitive impairment, pseudodementia and recurrent dizziness, along with a history of falls. A medical board from AIIMS has recommended that he requires constant monitoring due to the risk of falls. Given his diagnosed subjective cognitive decline, it is clear that he needs supervision throughout the day, which cannot be adequately provided by jail authorities. Furthermore, considering his age, the likelihood of improvement in his age-related infirmities is minimal and it is expected that his condition will continue to decline.

28. I am of the view that beneficial legislation in favour of a class of persons, which is reflective of constitutional spirit, should not be considered narrowly and must be given a liberal interpretation. Thus, the aforementioned infirmities in a senile stage combined with the need for constant „monitoring‟ coupled with frequent falls and forgetfulness makes the petitioner „infirm‟ under the proviso to section 45(1) of PMLA.

29. The Hon‟ble Supreme Court in the case of Gautam Kundu v. Enforcement Directorate, (2015) 16 SCC 1 has held as under:-

30. Therefore, I am of the view that the petitioner falls within the ambit of „infirm‟ under the proviso to section 45(1) of PMLA and thus, he is not required to meet the twin test of section 45(1) of PMLA.

31. As regards the merits or demerits of the allegations against the petitioner are concerned, the same are pending adjudication before the learned trial court and any further appreciation of the evidence/material can be done at the trial stage. Triple Test

32. Having said that, the petitioner, being the accused in the present case, will have to satisfy the triple test for grant of bail namely:-

33. Learned counsel for the respondent has argued that the petitioner fails to meet the triple test. It is stated that the petitioner has influenced witnesses in the past. It is also stated that the petitioner has tampered with the evidence. Thus, if granted bail, the petitioner will influence prosecution witnesses and tamper with evidence again.

34. To support the submissions, it is stated that the petitioner, along with Sanjay Chandra and Ajay Chandra, was running a covert office related to their illegal activities from Tihar Jail. Their associates namely, Lakhbir Sharma and Ravinder, were carrying out these illegal actions and bribing Tihar Jail staff to secure illegal favours.

35. Additionally, the statement of one Sunil Kher made on 10.09.2021 under section 50 of PMLA is relied upon, wherein it has been stated that Sunil Kher was threatened with severe consequences by the petitioner and Ajay Chandra, if he disclosed anything to the ED officials regarding fake bills related to Trikar Group.

36. In the present case, the Order dated 26.08.2021 passed by the Hon‟ble Supreme Court is only regarding Sanjay Chandra and Ajay Chandra, wherein they were shifted from Tihar Jail to Arthur Road Jail, Mumbai and Taloja Central Jail, Mumbai, respectively.

37. The said Order mentions no allegations against the petitioner with regard to the illegal activities in Tihar Jail and this matter is still under investigation in a separate case. In addition, there is no evidence, such as CDR records or location records, that has been placed on record to corroborate the statement of Sunil Kher under Section 50 of PMLA.

38. I am of the view that the statement of Sunil Kher under Section 50 of PMLA can only be analysed at the trial stage and not at the stage of grant of bail. In Chandra Prakash Khandelwal v. Directorate of Enforcement, 2023 SCC Online Del 1094, this Court held as under:-

39. The petitioner has been released on interim bail since 08.08.2022 on medical grounds and there are no allegations of misuse of liberty by him while on bail.

40. As regards the flight risk, adequate restrictions can be imposed upon the petitioner.

41. For the said reasons, I am of the view that the petitioner meets the triple test for grant of bail. Delay in Trial

42. Furthermore, the present case was registered in 2018 and investigation qua the petitioner is complete but the trial is yet to begin.

43. There are 17 accused persons, 66 companies, 121 witnesses and 77,812 pages of documents plus enormous digital data which needs to be analysed in the present case. Thus, there is no likelihood of the trial to be concluded in the near future.

44. In the case of Pankaj Kumar Tiwari v. Directorate of Enforcement, 2024 SCC OnLine Del 7387, a co-ordinate bench of this Court observed that the right of the accused to speedy trial is an important aspect which the courts must keep in contemplation while deciding a bail application as the same is higher sacrosanct constitutional right, which ought to take precedence. The relevant paragraph reads as under:-

45. The Hon‟ble Supreme Court in the case of Manish Sisodia (supra) upheld the right of an accused for expeditious trial even in PMLA cases and held as under:-

50. As observed by this Court, the right to speedy trial and the right to liberty are sacrosanct rights. On denial of these rights, the trial court as well as the High Court ought to have given due weightage to this factor.”

46. Recently, in V. Senthil Balaji (supra), again the Hon‟ble Supreme Court whilst noting that the accused therein has undergone 15 months and considering the aforesaid judgment, observed as under:-

NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45(1)(ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K.A. Najeeb, can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45(1)(ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the accused, there is every possibility of the accused becoming a real threat to society if enlarged on bail. The jurisdiction to issue prerogative writs is always discretionary.” CONCLUSION

47. In view of the above observations, the petitioner is entitled to grant of bail in the present case.

48. For the aforesaid reasons, the petition is allowed and the petitioner is granted bail on the following terms and conditions:

Investigating Officer (IO) concerned at the time of release, which shall be kept in working condition at all times. The petitioner shall not switch off or change the same without prior intimation to the IO concerned, during the period of bail;

49. The observations hereinabove are only for the purposes of deciding the present bail petition and shall not affect the merits of the case.

50. The petition is disposed of along with pending applications, if any.