Amit Chandole v. Directorate of Enforcement

1. The reliefs sought in Criminal Writ Petition No.4523 of 2022 are as follows:- “b. That this Hon’ble Court be pleased to quash and set aside letters dated 7th September, 2022 (Exh. 43), 15th September, 2022 (Exh. 48) in Special Case No. 1124 of 2020, pending on the file of Ld. Special PMLA Judge. Mumbai; c. That this Hon’ble Court be pleased to quash and set aside letter bearing OW No. 17951/2022 dated 4th August, 2022 from the Registrar of Sessions Court, Mumbai, directing the Ld. Additional Chief Metropolitan Magistrates 47th Court at Esplanade, Mumbai, to pass appropriate orders with regards to the ‘C’-Summary Report, and thereafter commit the same to the Ld. Special PMLA Court, Mumbai; d. That this Hon’ble Court be pleased to quash and set aside the judgement and order dated 14/09/2022 passed by the Ld. Additional Chief Metropolitan Magistrates 47th Court at Esplanade, Mumbai thereby sending the records of CC No. 2448/MISC/2021 in MECR No. 5/2020 back to the Ld. Special PMLA Court, Mumbai; e. That this Hon’ble Court be pleased to quash and set aside the impugned judgement and order dated 14/09/2022, accepting ‘C’-Summary Report, passed by the Ld. Additional Chief Metropolitan Magistrates 47th Court at Esplanade, Mumbai in CC No. 2448/MISC/2021 in MECR No. 5/2020;”

2. The following relief is sought in Writ Petition No.6332 of 2024:-

3. The impugned Order dated 18th July 2022 has been passed by the learned Additional Chief Metropolitan Magistrate, 47th Court, Esplanade, Mumbai in C.C. No.2448/MISC/2021 below application filed by Prosecution For Directorate Of Enforcement for committal of the said proceedings before the PMLA Special Court at Mumbai. The prayer sought in the said Application reads as under:- “a) this Hon’ble Court be pleased to commit the abovesaid case of scheduled offences under IPC at C-Summary MISC/4702448/2021 filed in FIR No. 05/2020 filed by EOW for a simultaneous trial with PMLA Case No: 1124/2020 to the Designated PMLA Court Mumbai (court no.16) in view of the provisions of Section 43(2) read with Section 44(1)(c) of the PMLA, 2002.”

4. The learned Additional Chief Metropolitan Magistrate by said impugned Order dated 18th July 2022 committed the said case to the PMLA Special Court. The said Order is challenged in Criminal Writ Petition No.6332 of 2024.

5. Before considering the challenge raised in both the Writ Petitions, it is necessary to set out brief facts of the case as set out in Writ Petition No.4523 of 2022:i. That the Complainant, Shri Ramesh lyer, Ex-Vice Chairman of Topsgrup Services Ltd., alleged that he learnt that there are various off the record transactions being carried out from the Company. ii. That amongst other allegations, it was alleged that in the year 2014, a contract was signed by M/s Topsgrup Services & Solutions Ltd, with Mumbai Metropolitan Regional Development Authority (MMRDA) as per which about 350 to 500 guards were to be deployed at MMRDA sites on a monthly basis. It is submitted that out of the same, only 70% of guards were actually deployed; however, the billing was done for all the guards (100% deployment) as per contract, and the wages-paid details were submitted to MMRDA for 100% of the contract value based on the number of guards to be deployed as per the contract and not on the basis of actual deployment of the guards. It is further submitted that accordingly, compliance documents like PF/ ESIC were submitted for 100% of the contract value and not on the basis of actual deployment of the guards. iii. That the Complainant during investigation submitted that huge cash amounts were withdrawn from bank accounts of M/s Topsgrup Services & Solutions Ltd. and were given to Mr. Niraj Bijlani, who is Ex-CEO of Topsgrup. That in the year FY 2017-18, an amount of Rs. 92 lakhs approx. was handed over to Mr. Niraj Bijlani and there was an arrangement with a person namely Mr. Amit S. Chandole (Respondent No. 8) as per which 50% of the profits (i.e., Revenue billed to MMRDA less wages, PF, ESIC) were being regularly shared on monthly basis, and in addition, a fixed commission of Rs. 50,000/- per month and Rs. 500/- per guard (as per contracted agreement) deployed is being paid to Amit Chandole (Respondent No. 8) and these amounts were paid by Topsgrup to the said accused. As per the details provided by the Complainant, for last 3 years i.e., from May 2017 till June 2020, amount aggregating to Rs. 2.36 crore has been shared as commission. Out of the said amount, Rs.

90 Lakh has been paid through bank transfers to Mr. Amit S. Chandole and Mr. Sanket S. More. As per the Complainant, all these amounts were being paid from Topsgrup bank accounts and approx. commission of Rs. 7 Crore has been paid to Mr. Amit S. Chandole since 2014 i.e., from initiation of contract with MMRDA.

6. As noted herein above various orders/communications have been challenged in Criminal Writ Petition No.4523 of 2022. One of the Order challenged is dated 14th September 2022, by which ‘C’ Summary Report was accepted by the learned Additional Chief Metropolitan Magistrate. The said Order reads as under:- “ORDER BELOW ‘C’ SUMMARY REPORT

1. M.E.C.R. No. 05/2020 came to be registered and investigation started. Investigating Officer investigated the entire case. Recorded the evidence of witnesses, collected necessary documents and finally come to the conclusion that no cognizable offence can be attributed. Therefore, the Investigating Officer submitted ‘C’ Summary Report. Therefore, notice has been issued to the informant to appear to file say on record.

2. Accordingly first informant Ramesh Iyer have filed say on record and submits that he has no objection to the report of ‘C’ Summary. The said report has been lodged due to mis-understanding. Hence, no objection to ‘C’ Summary Report. Therefore, ‘C’ Summary report is hereby accepted.” A bare perusal of said Order shows that the Additional Chief Metropolitan Magistrate has not applied his mind to the said ‘C’ Summary Report and only on the ground that the Informant has given no objection, accepted said C-Summary Report.

7. Mr. H. S. Venegavkar, learned SPP relies on the decision of Bhagwant Singh v. Commr. of Police 1 and more particularly on Paragraph No.4, which reads as under:- “4. Now, when the report forwarded by the officer-incharge of a police station to the Magistrate under sub-section (2)(i) of Section 173 comes up for consideration by the Magistrate, one of two different situations may arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and drop the proceeding or (3) he may direct further investigation under sub-section (3) of Section 156 and require the police to make a further report. The report may on the other hand state that, in the opinion of the police, no offence appears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub-section (3) of Section 156. Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceeding or takes the view that though there is sufficient ground for proceeding against some, there is no sufficient ground for proceeding against others mentioned in the first information report, the informant would certainly be prejudiced because the first information report lodged by him would have failed of its purpose, wholly or in part. Moreover, when the interest of the informant in prompt and effective action being taken on the first information report lodged by him is clearly recognised by the provisions contained in subsection (2) of Section 154, sub-section (2) of Section 157 and sub-section (2)(ii) of Section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the first information report lodged by him. There can. therefore, be no doubt that when, on a consideration of the report made by the officer-incharge of a police station under sub-section (2)(i) of Section 173, the Magistrate is not inclined to take cognizance of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take cognizance of the offence and issue process. We are accordingly of the view that in a case where the Magistrate to whom a report is forwarded under sub-section (2)(i) of Section 173 decides not to take cognizance of the offence and to drop the proceeding or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the first information report, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report. It was urged before us on behalf of the respondents that if in such a case notice is required to be given to the informant, it might result in unnecessary delay on account of the difficulty of effecting service of the notice on the informant. But we do not think this can be regarded as a valid objection against the view we are taking, because in any case the action taken by the police on the first information report has to be communicated to the informant and a copy of the report has to be supplied to him under sub-section (2)(i) of Section 173 and if that be so, we do not see any reason why it should be difficult to serve notice of the consideration of the report on the informant. Moreover, in any event, the difficulty of service of notice on the informant cannot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate.” (Emphasis added)

8. Thus, it is clear that if ‘C’ Summary Report is filed, then the learned Magistrate has three options, as follows:

(i) Learned Magistrate may accept the C-Summary report and drop the proceeding.

(ii) Learned Magistrate may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process.

(iii) Learned Magistrate may direct further investigation to be made by the police under sub-section (3) of Section 156.