Tarun Kumar v. Assistant Director Directorate of Enforcement

(ix) The bail application being No. 152 of 2023 preferred by the appellant before the High Court of Delhi also came to be rejected vide the impugned order dated 18.07.2023.

4. The allegations against the appellant have been detailed in paragraph nos. 7, 7.1,7.2, & 7.11 and the summary thereof is stated in para 10 of the fourth Supplementary Complaint filed by the respondent. The role of the appellant in the commission of the alleged offence of money laundering in terms of Section 3 of PML Act reads as under: “Tarun Kumar was Vice President (Purchases) in Shakti Bhog Limited and was also a director in various Shakti Bhog Group companies. He was actively involved in the bank fraud committed by Shakti Bhog Foods Ltd. Tarun Kumar was directly involved in procuring fake invoices from shell companies operated by Devki Nandan Garg and Ashok Kumar Goel, Entry Operators. Investigation revealed that emails from and related to the shell entities supplying fake invoices to Shakti Bhog Foods Ltd. were also marked to Tarun Kumar. Further, Tarun Kumar used to transfer proceeds of crime to the shell companies for procuring fake invoices without any genuine business transactions and collected part thereof in cash from Vivek Prasad, Entry Operator. Besides, he used to verify the fake bills for LC settlement with the lending banks. He also was involved in the criminal conspiracy of stock manipulation and inflation of the financial results of Shakti Bhog Foods Ltd. Tarun Kumar also used the platform of group companies under his directorship and control for diversion, rotation and siphoning of the proceeds of crime. Further, he played active role in the export activities of Shakti Bhog Foods Ltd. and then in siphoning and stashing the proceeds of crime abroad. Tarun Kumar along with his directed company Goal Securities Pvt. Ltd. acquired proceeds of crime to the tune of Rs.3.69 Crore. Tarun Kumar was knowingly a party and actually involved in process and activity connected with proceeds of crime including its acquisition, use, possession, concealment and/or projecting as well claiming the same as untainted. He was beneficiary of proceed of crime acquired through the criminal activities related to scheduled offences. Therefore, Tarun Kumar has committed offence of money laundering u/s r.w.s. 4 of PMLA, 2002.”

5. The learned Senior Counsel Mr. Sidharth Luthra for the appellant taking the Court through the documents on record made the following submissions:

(i) The offending transactions in the ECIR/Prosecution Complaints and FIR were common, yet the appellant was not named in the FIR or in the first three prosecution/supplementary complaints.

(ii) The co-accused Raman Bhuraria, who is similarly placed as the appellant has been granted bail by the High Court of Delhi vide the judgment and order dated 08.02.2023, and therefore the appellant is entitled to the bail on the ground of parity.

(iii) The investigation qua the appellant is complete and the further investigation is kept open with regard to the other accused persons, if any, and the trial of the case is likely to take long time. Hence, the appellant ought not to be incarcerated indefinitely. The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Cr.P.C. and Section 45 of PML Act. In this regard, Mr. Luthra has relied upon the observations made by this Court in case of Manish Sisodia vs. Central Bureau of Investigation[1] in Criminal Appeal arising out of SLP (Crl) No. 8167 of 2023 and in case of Sanjay Raghunath Agarwal Vs. Directorate of Enforcement[2].

(iv) Bail cannot be denied merely on account of the crime being an economic offence. In this regard, Mr. Luthra has relied upon the decision in case of Satender Kumar Antil vs. Central Bureau of Investigation and Another[3].

(v) ED failed to establish the rationale behind discriminating between the appellant and the individuals with similar roles who have not been taken as accused. In this regard, learned Senior Counsel has relied upon the observations made in State of Madhya Pradesh vs. Sheetla Sahai and Others[4].

(vi) Taking the Court to the allegations made against the appellant, the learned Senior Counsel submitted that the allegations and 1 (2023) SCC Online SC 1393 2 (2023) SCC Online SC 455 the roles attributed to the appellant in the commission of the alleged offences are baseless.

(vii) Lastly, Mr. Luthra submitted that the parameters of bail under

Section 45 of the PML Act having been made out, and the custodial detention of the appellant being not necessary, the appellant should be released on bail.

6. The learned Additional Solicitor General, Mr. S.V. Raju for the respondent however, made the following submissions:

(i) The appellant was the Vice President (Purchases) in Shakti

Bhog Limited and was also a Director in various Shakti Bhog Group Companies and was actively involved in the bank fraud committed by the SBFL.

(ii) The appellant along with other accused who were the Directors, promoters and shareholders were directly involved in diversion, rotation and siphoning of proceeds of crime. During the period 2007-08 to 2016-17, under the Directorship of the appellant crores of proceeds of crime were transferred to the shell companies without any genuine business transactions. The appellant had played active role in diverting the loan funds availed by the SBFL to shell entities on the basis of fake bills generated without any genuine business transactions.

(iii) The appellant was also involved in the export activities of SBFL.

(iv) The twin conditions contained in Section 45(1) of the PML Act would apply to the appellant having regard to the seriousness of the offence and the investigation qua other accused being still in process, the appellant could not be granted bail on the ground that the other persons allegedly involved have not been arrested. Mr. Raju has relied upon the number of decisions of this Court which shall be dealt with as found necessary.

7. At the outset, before adverting to the submissions made by the learned counsels for the parties, it would be apt to note that the PML 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. The said Act was enacted in view of the political declaration adopted by the special session of United Nations General Assembly in June, 1998 calling upon the member states to adopt national money laundering legislation and programme.

8. Section 3 of the PML Act which pertains to the offence of money laundering, reads as under: -

9. Section 45 of the said Act being relevant for the purpose of the instant appeal is reproduced hereunder for ready reference: - “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 undersection 4 except upon a complaint in writing made by—

(i) the Director; or

(ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. (1A) Notwithstanding anything contained in the 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. Explanation. —For the removal of doubts, it is clarified that the expression "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfillment of conditions under section 19 and subject to the conditions enshrined under this section.

10. The constitutional validity of certain provisions of the PML Act and the procedure followed by the Enforcement Directorate while inquiring into/ investigating offences under the said Act having been challenged before this Court in case of Vijay Madanlal Choudhary and Others vs. Union of India and Others[5], a three Judge Bench had considered the said provisions of the Act in detail. After considering the submissions of the learned counsels for the parties with regard to the interpretation of Section 3 of the said Act, it was held therein as under: -

11. As regards the twin conditions for the grant of bail contained in Section 45(1) of the said Act, it has been held in the said decision of Vijay Madanlal (supra) as under: -

12. In Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India Through Manoj Kumar, Assistant Director, Eastern Region[6], it was observed as under: -

13. Keeping in view of the aforestated legal position let us consider the submissions made by the learned counsels for the parties. It is trite 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, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of the public/State etc. Though, the findings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic offences.

14. The first and foremost contention raised by learned Senior Counsel Mr. Luthra would be that the appellant was not named in the FIR nor in first three prosecution/ supplementary complaints and has been implicated only on the basis of the statements of witnesses recorded pursuant to the summons issued under Section 50 of the PML Act, without there being any material in support thereof.

15. In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement[7], a three Judge Bench has categorically observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering. Further, as held in Vijay Madanlal (supra), the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like concealment, possession, 7(2018) 11 SCC 46 acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the offence of money laundering under Section 3 of the Act.

16. So far as facts of the present case are concerned, as transpiring from the supplementary complaint filed against the appellant, apart from the statements of witnesses recorded under Section 50 of the said Act, there has been sufficient material collected in the form of documents which prima facie show as to how the appellant was knowingly a party and actually involved in the process and in the activities connected with the proceeds of crime, and how he was projecting/ claiming such proceeds of crime as untainted and how he was the beneficiary of the proceeds of crime acquired through the criminal activities relating to the scheduled offences.

17. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr.P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act.

18. The submission of learned Counsel Mr. Luthra to grant bail to the appellant on the ground that the other co-accused who were similarly situated as the appellant, have been granted bail, also cannot be accepted. It may be noted that parity is not the law. While applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration. It is not disputed in that the main accused Sh. Kewal Krishan Kumar, Managing Director of SBFL, and KMP of group companies and the other accused Devki Nandan Garg, owner/ operator/ controller of various shell companies were granted bail on the ground of infirmity and medical grounds. The co-accused Raman Bhuraria, who was the internal auditor of SBFL has been granted bail by the High Court, however the said order of High Court has been challenged by the respondent before this Court by filing being SLP (Crl.) No. 9047 of 2023 and the same is pending under consideration. In the instant case, the High Court in the impugned order while repelling the said submission made on behalf of the appellant, had distinguished the case of Raman Bhuraria and had observed that unlike Raman Bhuraria who was an internal auditor of SBFL (for a brief period statutory auditor of SBFL), the applicant was the Vice President of Purchases and as a Vice President, he was responsible for the day-to-day operations of the company. It was also observed that the appellant’s role was made out from the financials, where direct loan funds have been siphoned off to the sister concerns of SBFL, where the appellant was either a shareholder or director. In any case, the order granting bail to Raman Bhuraria being under consideration before the coordinate bench of this Court, it would not be appropriate for us to make any observation with regard to the said order passed by the High Court.

19. It is axiomatic that the principle of parity is based on the guarantee of positive equality before law enshrined in Article 14 of the Constitution. However, if any illegality or irregularity has been committed in favour of any individual or a group of individuals, or a wrong order has been passed by a judicial forum, others cannot invoke the jurisdiction of the higher or superior court for repeating or multiplying the same irregularity or illegality or for passing similar wrong order. Article 14 is not meant to perpetuate the illegality or irregularity. If there has been a benefit or advantage conferred on one or a set of people by any authority or by the court, without legal basis or justification, other persons could not claim as a matter of right the benefit on the basis of such wrong decision.

20. It is also difficult to countenance the submission of learned Counsel Mr. Luthra that the investigation qua the appellant is complete and the trial of the cases likely to take long time. According to him the appellant ought not to be incarcerated indefinitely merely because the investigation is kept open with regard to the other accused. In this regard, it may be noted that the appellant has not been able to overcome the threshold stipulations contemplated in Section 45 namely he has failed to prima facie prove that he is not guilty of the alleged offence and is not likely to commit any offence while on bail. It cannot be gainsaid that the burden of proof lies on the accused for the purpose of the condition set out in the Section 45 that he is not guilty of such offence. Of course, such discharge of burden could be on the probabilities, nonetheless in the instant case there being sufficient material on record adduced by the respondent showing the thick involvement of the appellant in the alleged offence of money laundering under Section 3 of the said Act, the Court is not inclined to grant bail to the appellant.

21. The apprehension of the learned counsel for the appellant that the trial is likely to take long time and the appellant would be incarcerated for indefinite period, is also not well founded in view of the observations made by this Court in case of Vijay Madanlal (supra). On the application of Section 436A of the Code of Criminal Procedure, 1973, it has been categorically held therein that: -

22. Lastly, it may be noted that as held in catena of decisions, the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Undoubtedly, economic offences have serious repercussions on the development of the country as a whole. To cite a few judgments in this regard are Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation[8], Nimmagadda Prasad vs. Central Bureau of Investigation[9], Gautam Kundu vs. Directorate of Enforcement (supra), State of Bihar and Another vs. Amit Kumar alias Bachcha Rai10. This court taking a serious note with regard to the economic offences had observed as back as in 1987 in case of State of Gujarat vs. Mohanlal Jitamalji Porwal and Another11 as under:- “5… The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. 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 National Interest…”

23. With the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution.

24. With the afore-stated observations, the appeal is dismissed. …………………………. J. [ANIRUDDHA BOSE] …………………………. J. [BELA M. TRIVEDI] NEW DELHI;