Md. Istiyaque Ahmad @ Istiyaque Ahmad v. Union of India, through Directorate of Enforcement, Government of India, having office

Judgment

1. The instant application has been filed under Sections 482 and 484 of the B.N.S.S., 2023 for grant of regular pre-arrest bail to the petitioner, in connection with ECIR Case No.01 of 2024 in ECIR- RNZO/34/2023, dated 12.12.2023 registered for the alleged offence under Section 3 read with Section 70 of Prevention of Money Laundering Act, 2002 and punishable under Section 4 of Prevention of Money Laundering Act, 2002, now pending in the Court of A.J.C-cum- Special Judge, CBI-cum-Special Judge, P.M.L.A., Ranchi. Factual Matrix

2. The prosecution story in brief, as per the allegation made in the instant ECIR/complaint, reads as under:

3. This Prosecution Complaint is being filed under Section 45 read with Section 44 read with Section 70 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA, 2002") for the commission of offence defined under Section 3 of PMLA, 2002 and 1 punishable under Section 4 of PMLA, 2002, against the aforesaid Accused person as mentioned in the cause title.

4. FIR bearing No. 10 of 2019 dated 20.01.2019 was registered at Mandu Police Station, District-Ramgarh, Jharkhand against the truck driver namely Sayyaid Salmani of Truck No. JH02AR-6640 and the truck owner Md. Ezhar Ansari, among others for the commission of the offence as defined u/s 420, 468, 469, 471 and 120B of IPC, 1860.

5. It is alleged that on 20.01.2019 at around 2:30 a.m. the truck bearing registration no. JH02AR-6640 was on its way from Ramgarh to Hazaribagh. The truck was intercepted by the Police during night patrolling and when the police tried to stop the truck, the driver of the truck tried to run away.

6. But the police were able to catch the truck and upon enquiry with the driver and scrutiny of the documents available with him, it was revealed that the truck was loaded with 19.56 MT of steam coal which was purchased from M/s Central Coalfields Limited and lifted from the Topa Colliery and was supposed to be delivered at the premises of M/s Om Coke Industries, Bharechnagar, Sandi, Ramgarh (Jharkhand).

7. However, the truck was on its way from Ramgarh to Hazaribagh and the driver had no document to justify the same. The driver of the truck, Sayyaid Salmani, informed the police that the coal loaded on the truck was being transported to Varanasi Mandi for sale.

8. The said truck bearing no. JH02AR-6640 was registered in the name of Md. Ezhar Ansari. Further, M/s Om Coke Industries (having their GSTIN:20AABFO0499G1ZK), Bharechnagar, Hazaribagh, Jharkhand is a partnership concern wherein Istiyaque Ahmed (applicant herein), is a partner with 10% of share and M/s Jalasree Mercantiles Pvt. Ltd. is another partner with 90% share. Md. Ezhar Ansari and Manjoor Hasan were the directors of M/s Jalasree Mercantiles Pvt. Ltd. at the time of the commission of the offence.

9. The documents available with the driver of the truck bearing registration no. JH02AR-6640 and on analysis of the said documents, it was ascertained that 19.560 MT of coal was loaded from Topa 2 Colliery of Jharkhand and it was consigned to M/s OM Coke Industries, Bharechnagar, Hazaribagh, Jharkhand but instead, the coal was being transported to Varanasi Mandi (Uttar Pradesh) for sale.

10. The coal so purchased by M/s Om Coke Industries from M/s Central Coalfields Limited (CCL) was under an agreement (Fuel Supply Agreement) wherein among the terms there are clauses which restrict the purchaser from diverting the coal and that the said coal will be utilised by the purchaser for captive consumption as raw material for a specific purpose as mentioned in the agreement.

11. Charge sheet dated 28.03.2019 was filed under Sections 420, 468, 469, 471 & 120B of IPC, 1860 and under Section 30(ii) of Coal Mines Act, against Saiyyad Salmani and supplementary Charge sheet bearing No. 43/20 dated 30.07.2020 was filed under Sections 420, 468, 469, 471 & 120B of IPC, 1860 and under Section 30(ii) of Coal Mines Act, against Md. Ezhar Ansari, Sanju Saw, Deepak Saw, Md. Aslam, Rajiv Alam and Istiyaque Ahmad (applicant herein).

12. Accordingly, ECIR Case No.01 of 2024 in ECIR- RNZO/34/2023 has been filed by the complainant-the Directorate of Enforcement against the accused persons including the present petitioner, in which, it is alleged that the accused persons including present applicant are actually involved in the process related to the proceeds of crime.

13. Further it has been alleged in the prosecution complaint that the activities of acquisition, possession, use, concealment, projecting, and claiming the proceeds of crime as untainted, to the tune of Rs 71,32,28,759.17/- was carried out by Md. Ezhar Ansari and the present applicant Istiyaque Ahmad knowingly assisted him in acquiring and projecting the crime proceeds as untainted of the same amount with the help of his entity namely M/s Rajhans Ispat Pvt Ltd.

14. In

the aforesaid background the present applicant Apprehending his arrest had preferred anticipatory bail being Anticipatory Bail Petition No. 1380/2024 before Spl. Judge PML Act, Ranchi but the same has been rejected vide order dated 13.06.2024. 3

15. Hence, the present petition has been preferred for the grant of pre-arrest bail. Submission of the learned counsel for the applicant:

16. Mr. L.C.N. Shahdeo, learned counsel appearing for the petitioner has taken the following grounds in assailing the impugned order that: - (i) The present applicant is innocent and has committed no offence whatsoever as alleged and has falsely been implicated in this case. Even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the P.M.L. Act, 2002. (ii) It has further been submitted that applicant/petitioner did not have much experience field of manufacturing and procurement of coal. The entire business was being looked after by his brother-in-law, Md. Ezhar Ansari (co-accused). (iii) It has further been submitted that the applicant/petitioner was hardly having any role in the functioning of Ola Coke Industries and Om Coke Industries and as submitted by Md. Ezhar Ansari with respect to M/s Ola Coke Industries on page 50 of complaint that it was controlled and managed by him. (iv) The learned counsel for the applicant has submitted that said Md. Ezhar Ansari has been directed to enlarge on bail by the learned single Judge of this Court vide order dated 13.09.2024 passed in B.A. No. 4766 of 2024 and while granting bail to the co- accused Md. Ezhar Ansari it has been observed by the learned single Judge that “in para 8.2 of the prosecution complaint, it is clearly stated the petitioner after investing Rs. 29,50,36,622.79/-, wherein the words ‘Paid and Purchase’ have been used, thus, prima facie it appears that that amount cannot be said to be the subject matter of amount used for the proceeds of crime”. (v) The learned counsel for the applicant further submitted that since the learned single Judge has already observed that that 4 amount cannot be said to be the subject matter of amount used for the proceeds of crime, therefore the present applicant in view of the aforesaid observation, is eligible for the privilege of pre- arrest bail. Argument on behalf of learned counsel Respondent/Directorate of Enforcement

17. Per contra, Mr. Prashant Vidyarathi, learned counsel appearing the Respondent-Directorate of Enforcement has vehemently opposed the prayer for bail by taking the following grounds:- (i) Learned counsel appearing for the Opp. Party-E.D. has taken the ground that the petitioner is having direct nexus with the other co-accused person, namely, Md. Ezhar Anssari. (ii) The ingredients of offence under Sec 3 of PMLA is made out against him and the present applicant is involved in process or activity connected with the proceeds of crime and knowingly involved in acquisition of the tainted property as an associate of prime accused Md Ezhar Ansari. Further, huge ill-gotten money was recovered and seized from the premises of his associate in crime. (iii) By referring para 7.7 of the prosecution complaint, it has been submitted by the learned counsel that the petitioner had not co- operated to the agency during investigation and as such he is not eligible for privilege of pre-arrest bail. (iv) On the above grounds, he has submitted that the petitioner does not deserve the privilege of anticipatory bail, but the learned counsel has not disputed the fact that the other co-accused namely Md. Ezhar Ansari upon whom there is greater degree of allegation has been directed to enlarge on bail by this Court, vide order dated 13.09.2024 passed in B.A. No. 4766 of 2024. Analysis

18. In view of the above submissions of learned counsel appearing for the petitioner as well as the Enforcement Directorate, the court has gone through the materials available on record. 5

19. This Court before appreciating the argument advanced on behalf of the parties, deems it fit and proper to discuss herein some of the provision of law as contained under the PML Act, 2002 (Act 2002) with its object and intent as also the legal proposition as settled by the Hon'ble Apex Court in various judgments.

20. The Act 2002 was enacted in order to answer the urgent requirement to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime.

21. It needs to refer herein the definition of “proceeds of crime” as provided under Section 2(1)(u) of the Act, 2002 wherein it has been stipulated that the “proceeds of crime” 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 or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.

22. The “property” has been defined under Section 2(1)(v) which 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.

23. Further, the schedule has been defined under Section 2(1)(x) which means schedule to the Prevention of Money Laundering Act,

2002. The “scheduled offence” has been defined under Section 2(1)(y) and “scheduled offence” means the offences specified under Part A of the Schedule; or the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule. 6

24. The offence of money laundering has been defined under Section 3 of the Act, 2002 and the punishment for money laundering has been provided under Section 4 of the Act, 2002. It is evident from the said provision “offence of money-laundering” means 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 with the proceeds of crime including concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.

25. It is further evident that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.

26. The various provisions of the Act, 2002 along with interpretation of the definition of “proceeds of crime” has been dealt with by the Hon’ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors., reported in (2022) SCC OnLine SC 929 wherein the Bench comprising of three Hon’ble Judges of the Hon’ble Supreme Court have decided the issue by taking into consideration the object and intent of the Act, 2002.

27. Further, the implication of Section 50 has also been taken into consideration by the Hon’ble Apex Court in the aforesaid case and has observed that, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he or she considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act and “proceeding” applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. It has further been observed that Nevertheless, sub- 7 section (2) empowers the authorised officials to issue summon to any person, and it is only for the purpose of collecting information or evidence in respect of proceeding under this Act and the person so summoned, is bound to attend in person or through authorised agent and to state truth upon any subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act.

28. The predicate offence has been considered in the aforesaid judgment wherein by taking into consideration the explanation as inserted by way of Act 23 of 2019 under the definition of the “proceeds of crime” as contained under Section 2(1)(u), whereby and whereunder, it has been clarified for the purpose of removal of doubts that, the "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, meaning thereby, the words “any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence” will come under the fold of the proceeds of crime.

29. At this juncture it needs to refer herein the purport of Section 45(1)(i)(ii) is concerned, the aforesaid provision starts from the non- obstante clause that notwithstanding anything contained in the Code of Criminal Procedure, 1973, 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. 8

30. Sub-section (2) thereof puts limitation on granting bail specific in sub-section (1) in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail.

31. The explanation is also there as under sub-section (2) thereof which is for the purpose of removal of doubts, a clarification has been inserted 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, and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section.

32. The fact about the implication of Section 45 has been interpreted by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.(supra) at paragraphs-371 to 374. For ready reference, the said paragraphs are being referred as under: “371. The relevant provisions regarding bail in the 2002 Act can be traced to Sections 44(2), 45 and 46 in Chapter VII concerning the offence under this Act. The principal grievance is about the twin conditions specified in Section 45 of the 2002 Act. Before we elaborate further, it would be apposite to reproduce Section 45, as amended. The same reads thus:------

372. Section 45 has been amended vide Act 20 of 2005, Act 13 of 2018 and Finance (No. 2) Act, 2019. The provision as it obtained prior to 23.11.2017 read somewhat differently. The constitutional validity of Sub-section (1) of Section 45, as it stood then, was considered in Nikesh Tarachand Shah. This Court declared Section 45(1) of the 2002 Act, as it stood then, insofar as it imposed two further conditions for release on bail, to be unconstitutional being violative of Articles 14 and 21 of the Constitution. The two conditions which have been mentioned as twin conditions are: (i) that there are reasonable grounds for believing that he is not guilty of such offence; and (ii) that he is not likely to commit any offence while on bail. 9

373. According to the petitioners, since the twin conditions have been declared to be void and unconstitutional by this Court, the same stood obliterated. To buttress this argument, reliance has been placed on the dictum in State of Manipur.

374. The first issue to be answered by us is: whether the twin conditions, in law, continued to remain on the statute book post decision of this Court in Nikesh Tarachand Shah and if yes, in view of the amendment effected to Section 45(1) of the 2002 Act vide Act 13 of 2018, the declaration by this Court will be of no consequence. This argument need not detain us for long. We say so because the observation in State of Manipur in paragraph 29 of the judgment that owing to the declaration by a Court that the statute is unconstitutional obliterates the statute entirely as though it had never been passed, is contextual. In this case, the Court was dealing with the efficacy of the repealing Act. While doing so, the Court had adverted to the repealing Act and made the stated observation in the context of lack of legislative power. In the process of reasoning, it did advert Khurshid Pesikaka and Deep Chand7 including American jurisprudence expounded Constitutional Limitations and Norton v. Shelby County.” in Behram exposition in Cooley

33. Subsequently, the Hon’ble Apex Court in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement, (2023) SCC OnLine SC 1486 by taking into consideration the law laid down by the Larger Bench of the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra), it has been laid down that since 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.

34. It has further been observed 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 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 10 Act. For ready reference, paragraph-17 of the said judgment reads as under: “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.”

35. The Hon’ble Apex Court in the said judgment has further laid down that the twin conditions as to fulfil the requirement of Section 45 of the Act, 2002 before granting the benefit of bail is to be adhered to which has been dealt with by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) wherein it has been observed that the accused is not guilty of the offence and is not likely to commit any offence while on bail.

36. In the judgment rendered by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) as under paragraph-284, it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of “proceeds of crime”. Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process. 11

37. The Hon’ble Apex Court in the case of Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India through Manoj Kumar, Assistant Director, Eastern Region, reported in (2015) 16 SCC 1 has been pleased to hold at paragraph -30 that the conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which further strengthened by the provisions of Section 65 and also Section 71 of PMLA. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money-laundering and the burden to prove that the proceeds of crime are not involved, lies on the petitioner.

38. The Hon’ble Apex Court in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement (supra) has again reiterated the implication of Sections 45 and the principle of parity at paragraphs-17 and 18. The issue of parity has been considered by the Hon’ble Apex Court at paragraph-18 by making observation therein 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.

39. In order to appreciate the submission of the learned counsel for the parties this Court is re-adverting to the facts of the instant case. It is evident from the material available on record that the investigation under the Prevention of Money Laundering Act, 2002 was initiated by recording an ECIR No. ECIR/RNZO/34/2023 dated 12.12.2023 against the accused persons including the applicant on the basis of information received from FIR bearing Mandu PSCase No. 10/2019 dated 20.01.2019 registered by police of Dist. Ramgarh (Jharkhand) against the truck driver Sayyaid Salmani of truck number JH02AR-6640 and the truck owner Md Ezhar Ansari and others for the commission of the offence as defined u/s 420, 468, 469, 471 and 120-B IPC. 12

40. Subsequently the charge-sheet was filed by the investigating agency on dated- 28.03.2019 u/s 420, 467, 468, 471 & 120B IPC and u/s 30 (ii) of Coal Mines Act against Sayyaid Salmani and supplementary charge-sheet bearing no. 43/20 dated 30.07.2020 was filed u/s 420, 467, 468, 471 & 120B IPC and u/s 30 (ii) of Coal Mines Act against Md Ezhar Ansari and other co-accused persons including the present applicant.

41. Accordingly, ECIR Case No.01 of 2024 in ECIR-RNZO/34/2023 has been filed by the complainant-the Directorate of Enforcement against the accused persons including the present petitioner, in which, it is alleged that the accused persons including present applicant are actually involved in the process related to the proceeds of crime.

42. Further it has been alleged in the prosecution complaint that the activities of acquisition, possession, use, concealment, projecting, and claiming the proceeds of crime as untainted, to the tune of Rs 71,32,28,759.17/- was carried out by Md. Ezhar Ansari and the present applicant Istiyaque Ahmad knowingly assisted him in acquiring and projecting the crime proceeds as untainted of the same amount with the help of his entity namely M/s Rajhans Ispat Pvt Ltd.

43. The present applicant Apprehending his arrest had preferred anticipatory bail being Anticipatory Bail Petition No. 1380/2024 before the Spl. Judge PML Act, Ranchi but the same has been rejected vide order dated 13.06.2024. Hence, the present petition has been preferred for the grant of pre-arrest bail.

44. Now coming to the grounds as has been raised on behalf of the learned counsel for the petitioner that even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the P.M.L. Act, 2002.

45. Per contra, learned counsel for ED has submitted that the ingredients of offence under Sec 3 of PMLA is made out against the 13 present applicant and the present applicant is activity connected with the proceeds of crime and knowingly involved in acquisition of the tainted property as an associate of prime accused Md Ezhar Ansari.

46. It is evident from the record that cognizance in the matter against the present applicant/petitioner as well as others for commission of offence u/s 3 r/w 4 of PML Act has been taken by the court concerned on

18.03.2024.

47. At this juncture, in order to proper appreciation of the argument of the learned counsel for the parties, it would be profitable to refer some relevant part of the prosecution complaint, which has been referred as under: “7.5.3 COAL PURCHASED BY ENTITIES OF MD. EZHAR ANSARI WERE BEING SOLD IN OPEN MARKET B ------- ------- -------- --------- --------- ----------- From the above details, it is evident that the truck bearing registration no. JH-02V-5907 which was in the name of Ishtiyaque Ahmad (Truck Owner) was being used frequently both for the purpose of purchase of coal as well as supply/sale of coal. Shri Pappu Kumar was driving the truck JH-02V-5907 for the last three years. From the statement dated 03.03.2023 of Shri Pappu Kumar recorded under Section 17 of the PMLA, 2002, it further established that he was frequently transporting the coal illegally in the coal mandi/open market procured by Md. Ezhar Ansari on account of non-operational/non-functional MSME firms. Therefore, Md. Ezhar Ansari was diverting coal received for his small and medium enterprises to open coal markets in Dhanbad and Varanasi, whereas the said coal was allocated to companies of Md. Ezhar Ansari for captive consumption to use as a raw material in his units of small and medium enterprises. It was further observed that most of the companies for which Md. Ezhar Ansari was receiving coal were non-functional on the ground, and in fact, these were non-operational for more than 3-5 years. It is further seen that records of truck movement in the coal companies were manipulated by making fake entries. C. During the search conducted on 16.01.2024 at the factory premises of M/s Om Coke Industries, Ramgarh, Jharkhand Loose sheets from page no. 1 to 82 were recovered & seized by the officers of Enforcement Directorate vide ANNEXURE C-2 under Panchnama dated 16.01.2024. purchase register is maintained for the period 01.04.2022 to 30.09.2022 in a computerized sheet (placed on page no. 64 & 65 of the documents recovered vide ANNEXURE- C-2) was also the said document, In 14 recovered in respect of M/s Ola Coke Industries, proprietorship firm of Ishtiyaq Ahmad, however, the same was controlled and managed by Md. Ezhar Ansari.— ------- Industries From the above table, it is clearly revealed that the coal from JSMDC was purchased by M/s Ola Coke sold/supplied on the very same day of purchase, in the same quantity and transported by the same truck which means the said coal was not used either as a raw material to processed further into some goods or as a fuel to manufacture something, as same cannot be done on the same day. It further revealed that M/s Ola Coke Industries after procuring the subsidized coal from JSMDC to use the same as fuel/ raw material, diverted/supplied the coal in the open market and violated the agreement executed between M/s Ola Coke Industries and M/sJSMDC. In this manner, Md. Ezhar Ansari indulged in diverting the coal procured from JSMDC at subsidized rates in the open market on higher prices and collecting amounts in cash from customers. In this manner, Md. Ezhar Ansari was generating a huge amount of Proceeds of Crime.

7.6 CONCLUSION 7.6.1 From the facts discussed above, it is clear that Md. Ezhar Ansari indulged in diverting the coal being purchased through JSMDC under category D and selling the same in the open market illegally for financial gain, thus violating the conditions of the agreement under which the coal was purchased at a subsidized rate. 7.6.2 Statements recorded from the truck drivers indicate that they were instructed by Md. Ezhar Ansari to load coal from various collieries and deliver it to different destinations, including brick factories, coal Mandis, and other industrial establishments. The drivers mentioned specific locations where the coal was unloaded, indicating a pattern of distribution orchestrated by Md. Ezhar Ansari.

7.6.3 The involvement of Md. Ezhar Ansari in diverting and illegally selling coal purchased financial gain constitutes a violation of the terms of the agreement the Prevention of Money Laundering Act (PMLA). from government-owned entities is criminal activity under

8.2 In view of above facts, the total amount paid by the 13 small and medium enterprises of Ezhar Ansari for purchase of the said coal from JSMDC from October 2018 to March 2023 is calculated to be Ra 29,50,36,622.79/- and the same is the property used in the commission of the offence under the PMLA, 2002 in terms of Section 2(1)(v) of PMLA, 2002 and are thus proceeds of crime in terms of Sections 2(1)(u) of PMLA. Further, the said coal is sold in the open market and by the commission of this offence Md. Ezhar Ansari obtained further proceeds of Rs. 41,81,92,136.38/- and the same are also proceeds of crime in terms of Section 2(1)(u) of PMLA. Therefore, the total proceeds of crime is calculated to be Rs. 71,32,28,759.17.” 15

48. From the aforementioned relevant paragraphs of complaint it is apparent that main allegation is diversion of coal which being purchased through JSMDC selling the same in the open market illegally for financial gain, thus violating the conditions of the agreement under which the coal was purchased at a subsidized rate. which is criminal activity under the Prevention of Money Laundering Act (PMLA).

49. It has come in investigation that Statements recorded from the truck drivers indicate that they were instructed by co-accused Md. Ezhar Ansari to load coal from various collieries and deliver it to different destinations, including brick factories, coal Mandis, and other industrial establishments. The drivers mentioned specific locations where the coal was unloaded, indicating a pattern of distribution orchestrated by Md. Ezhar Ansari.

50. So far as present applicant is concerned it has come in the para-

7.7, of the prosecution complaint that the present applicant has assisted to the co-accused Md. Ezhar Ansari in managing the business activities of 13 entities which were procuring coal from JSMDC. It has further been alleged that he and his associate used to transport and sale subsidized coal in open market at market price on higher rate and through this generated huge amount of cash as proceeds of crime to the tune of Rs. 71,32,28,759.17.

51. In the aforesaid context the learned counsel for the applicant has by referring the paragraph 5 of the supplementary affidavit has submitted that in the said para-8.2, it is clearly stated that the petitioner has paid and purchased the coal and after investing Rs. 29,50,36,622.79/- and thus the words Paid and Purchase for that coal is there and therefore, Rs. 29,50,36,622.79/- cannot be termed as proceeds of crime under Section 2(1)(u) of the PML Act and the amount of Rs. 29,50,36,622.79/-is misusing from Rs. 41,81,92,136.38/-, then it comes to Rs. 11 crores and odd, where in the said paragraph, the investment is also said to be the 16 proceeds of crime and that is how the figure has come to Rs. 71,32,28,759.17 which clearly signifies that the total calculation is wrong and which cannot be termed as proceeds of crime.

52. It has further been submitted that Md. Ezhar Ansari upon whom there is greater degree of allegation has been directed to enlarge on bail by this Court vide order dated 13.09.2024 passed in B.A. No. 4766 of

53. In the aforesaid context, it is considered view of this Court that whether amount of Rs. 71,32,28,759.17 is proceed of crime or calculation wrong is the matter of trial and that can only be determined by adducing the evidence on behalf of parties.

54. So far, the prayer for anticipatory bail is concerned, this Court is conscious with the fact that in the case of Money Laundering offences, the preconditions of Section 45 of PMLA Act have to be satisfied for anticipatory bail also. Reference in this regard may be made to the judgment rendered by the Hon’ble Apex Court in the case of Directorate of Enforcement v. M. Gopal Reddy, 2023 Live Law (SC) 138.

55. In the aforesaid settled opposition of law this Court is now adverting to the various paragraphs of the complaint as referred herein above, in order to verify that whether the twin condition as stipulated in Section 45 of the PML Act 2002 is fulfilled herein.

56. From the material available upon record, it is evident that admittedly the present applicant has not been arrested during the investigation and complaint has also been filed in this case. Further as paragraph 7.7 of the complaint it has revealed that the present applicant has assisted to the co-accused Md. Ezhar Ansari in managing the business activities of 13 entities which were procuring coal from JSMDC.

57. Further, in paragraph 7.6 of the complaint under caption head “conclusion”, it is mentioned that Statements recorded from the truck 17 drivers indicate that they were instructed by co-accused Md. Ezhar Ansari to load coal from various collieries and deliver it to different destinations, including brick factories, coal Mandis, and other industrial establishments and the drivers mentioned specific locations where the coal was unloaded, indicating a pattern of distribution orchestrated by Md. Ezhar Ansari.

58. Thus, on the basis of aforesaid it is evident that the co-accused Md. Ezhar Ansari was instrumental in the alleged offence and as per para

7.7 of the complaint, the role of present applicant is described as assistance in the work of Md. Ezhar Ansari who has been granted bail by learned single Judge of this Court vide order dated 13.09.2024 passed in B.A. No. 4766 of 2024.

59. This Court has gone through the order dated 13.09.2024 by which bail has been granted to co-accused Md. Ezhar Ansari and found that the learned court while granting bail has opined at paragraph 34 of the order that “in para 8.2 of the prosecution complaint, it is clearly stated that the petitioner after investing Rs. 29,50,36,622.79/-, wherein the words ‘Paid and Purchase’ have been used, thus, prima facie it appears that that amount cannot be said to be the subject matter of amount used for the proceeds of crime”.

60. Thus, on the basis of the discussion made hereinabove it is evident that so far, the present applicant is concerned, the twin condition as stipulated in Section 45 of the Act 2002 is hereby fulfilled.

61. The learned counsel for the ED while referring para 7.7 of the complaint has submitted that despite the summons issued by the agency, the present applicant/accused has not replied or appeared before the I.O., and this depicts the reluctance shown by the petitioner during the investigation and his non-cooperation to the agency as such he is not eligible for privilege of pre-arrest bail. 18

62. Per contra, the learned counsel for the petitioner has submitted that petitioner/present applicant has not been arrested during the investigation and had fully co-operated by providing all the relevant documents.

63. In the context of aforesaid contention, it needs to refer herein that a person cannot be arrested by the Directorate of Enforcement for mere non-cooperation in response to a summons issued under Section 50 of the Prevention of Money Laundering Act 2002. Reference in this regard may made to the Judgment rendered by the Hon’ble Apex Court in the case of Pankaj Bansal v. Union of India, (2024) 7 SCC 576, wherein while declaring the arrests of Pankaj Bansal and Basant Bansal in the money laundering case against the real estate group M3M as illegal has observed that Mere non-cooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19. For ready reference the relevant paragraph of the aforesaid Judgment is being quoted as under: “33. We may also note that the failure of the appellants to respond to the questions put to them by ED would not be sufficient in itself for the investigating officer to opine that they were liable to be arrested under Section 19, as that provision specifically requires him to find reason to believe that they were guilty of an offence under the 2002 Act. Mere non-cooperation of a witness in response to the summons issued under Section 50 PMLA would not be enough to render him/her liable to be arrested under Section 19. As per its replies, it is the claim of ED that Pankaj Bansal was evasive in providing relevant information. It was however not brought out as to why Pankaj Bansal's replies were categorised as “evasive” and that record is not placed before us for verification. In any event, it is not open to ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an “evasive reply”. In Santosh v. State of Maharashtra [Santosh v. State of Maharashtra, (2017) 9 SCC 714 : (2018) 1 SCC (Cri) 87] , this Court noted that custodial interrogation is not for the purpose of “confession” as the right against self-incrimination is provided by Article 20(3) of the Constitution. It was held that merely because an accused did not confess, it cannot be said that he was not cooperating with the investigation. Similarly, the absence of either or both of the appellants during the search operations, when their presence was not insisted upon, cannot be held against them.” 19

64. Further, at this juncture this Court would like to refer the recent Judgment rendered by the Hon’ble Apex Court in the case of Tarsen lal v. Directorate of Enforcement Jalandhar, Zonal Office, (2024) 7 SCC 61. The relevant paragraph of the aforesaid judgment is being quoted as under:

33. Now, we summarize our conclusions as under:

33.2. If the accused was not arrested by ED till filing of the complaint, while taking cognizance on a complaint under Section 44 (1) (b), as a normal rule, the Court should issue a summons to the accused and not a warrant. Even in a case where the accused is on bail, a summons must be issued;

33.3. After a summons is issued under Section 204 CrPC on taking cognizance of the offence punishable under Section 4 PMLA on a complaint, if the accused appears before the Special Court pursuant to the summons, he shall not be treated as if he is in custody. Therefore, it is not necessary for him to apply for bail. However, the Special Court can direct the accused to furnish bond in terms of Section 88 CrPC;

33.4. In a case where the accused appears pursuant to a summons before the Special Court, on a sufficient cause being shown, the Special Court can grant exemption from personal appearance the accused by exercising power under Section 205 CrPC;

33.5. If the accused does not appear after a summons is served or does not appear on a subsequent date, the Special Court will be well within its powers to issue a warrant in terms of Section 70 CPC. Initially, the Special Court should issue a bailable warrant. If it is not possible to effect service of the bailable warrant, then the recourse can be taken to issue a non- bailable warrant;

33.6. A bond furnished according to Section 88 is only an undertaking by an accused who is not in custody to appear before the court on the date fixed. Thus, an order accepting bonds under Section 88 from the accused does not amount to a grant of bail;

33.7. In a case where the accused has furnished bonds under Section 88 CrPC, if he fails to appear on subsequent dates, the Special Court has the powers under Section 89 read with Section 70 CPC to issue a warrant directing that the accused shall be arrested and produced before the Special Court; if such a warrant is issued, it will always be open for the accused to apply for cancellation of the warrant by giving an undertaking to the Special Court to appear before the said court on all the dates fixed by it. While cancelling the warrant, the court can always take an undertaking from the accused to appear before the court on every date unless appearance is specifically exempted. when ED has not taken the custody of the accused during the investigation, usually, the Special Court will exercise 20 the power of cancellation of the warrant without insisting on taking the accused in custody provided an undertaking is furnished by the accused to appear regularly before the Court. When cancellation of a warrant, the Special Court is not dealing with an application for bail. Hence, Section 45 (1) will have no application to such an application: the Special Court deals with an application is empowered

33.8. When an accused appears pursuant to a summons, the Special Court take bonds under Section 88 CrPC in a given case. However, it is not mandatory in every case is direct furnishing of bonds. However, if a warrant of arrest has been i sued on account of non-appearance or proceedings under Section 82 and/or Section 83 none have been issued against an accused, he cannot be let off by taking a bond under Section 88 CrPC, and the accused will have to apply for cancellation of the warrant;

33.9. After cognizance is taken of the offence punishable under Section 4 PMLA based on a complaint under Section 44(1)(b), ED and its officers are powerless to exercise power under Section 19 to arrest a person shown as an accused in the complaint; and

33.10. If ED wants custody of the accused who appears after service of summons for conducting further investigation in the same offence, ED will have to seek custody of the accused by applying to the Special Court. After hearing the accused, the Special Court must pass an order on the application by recording brief reasons. While hearing such an application, the court may permit custody only if it is satisfied that custodial interrogation at that stage is required, even though the accused was never arrested under Section 19. However, when ED wants to conduct a further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed fulfilled.

34. We are making it clear that we are dealing with a fact situation where the accused shown in the complaint under Section 44(1)(b) PMLA was not arrested by ED by the exercise of power under Section 19 PMLA till the complaint was filed.

35. Hence, the appeals succeed, and we pass the following order: 35 : 1 We set aside the impugned orders declining to grant anticipatory bail;

35.2. We direct that warrants issued by the Special Courts against the appellants shall stands cancelled subject to the following conditions: (i) The appellants shall appear before the Special Court concerned within one month from today and shall file an undertaking before the Special Court that they shall regularly and punctually appear before the Special Court on the dates fixed unless their appearance is specifically exempted by the exercise of powers under Section 205 CrPC; and 21 (ii) The appellants shall furnish bonds in accordance with Section 88 CrPC to the satisfaction of the Special Court within one month from today.

35.3. It is necessary to clarify that the warrants issued against the appellants shall be cancelled only if they make compliance as aforesaid within one month from today. To enable them to do so, the warrants shall not be executed against them for a period of one month from today;

35.4. On the failure of the appellants to appear before the Special Court and to file undertakings and bonds within one month from today, it will be open for the Special Courts to issue warrants against the appellants; and

35.5. After the warrants issued against the appellants are cancelled, the apprehension that they may be arrested will not survive. Hence, in view of what we have held in this judgment, it is unnecessary to consider the prayer for the grant of anticipatory bail.

36. The appeals are allowed on the above terms.”

65. Thus, it is evident from the aforesaid judgment that Hon'ble Supreme Court in the matter of Tarsem lal (supra) while dealing with Sections 46(1), 44(1)(b), 3, 4 & 19 of the Prevention of Money Laundering Act, 2002 (for short, PMLA Act, 2002), has cancelled the warrant while imposing certain conditions and has observed that After cognizance is taken of the offence punishable under Section 4 PMLA based on a complaint under Section 44(1)(b), ED and its officers are powerless to exercise power under Section 19 to arrest a person shown as an accused in the complaint.

66. Further, it needs to refer herein that the law on grant of anticipatory bail has been summed up by the Hon’ble Apex Court in Siddharam Satlingappa Mhetre v. State of Maharashtra (2011) 1 SCC 694 after due deliberation on the parameters evolved by the Constitution Bench of the Hon’ble Apex Court in Gurbaksh Singh Sibbia v. State of Punjab (1980) 2 SCC 565.The Hon’ble Apex Court held thus:

112. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail: (i) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made; (ii) The antecedents of the applicant including the fact as to 22 whether the accused has previously undergone imprisonment on conviction by a court in respect of any cognizable offence; (iii) The possibility of the applicant to flee from justice; (iv) The possibility of the accused's likelihood to repeat similar or other offences; (v) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her; (vi) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people; (vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because over- implication in the cases is a matter of common knowledge and concern; (viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused; to consider reasonable apprehension of (ix) The court tampering of the witness or apprehension of threat to the complainant; (x) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as prosecution, in the normal course of events, the accused is entitled to an order of bail. to the genuineness of

67. In Sushila Aggarwal v. State (NCT of Delhi), (2020) 5 SCC 1, the Constitution Bench of the Hon’ble Apex Court reiterated that while deciding applications for anticipatory bail, courts should be guided by factors like the nature and gravity of the offences, the role attributed to the applicant, and the facts of the case.

68. The time-tested principles are that no straitjacket formula can be applied for grant or refusal of anticipatory bail. The judicial discretion of the Court shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case. The Court must draw a delicate balance between liberty of an individual as guaranteed under Article 23 21 of the Constitution and the need for a fair and free investigation, which must be taken to its logical conclusion. Arrest has devastating and irreversible social stigma, humiliation, insult, mental pain and other fearful consequences.

69. On the basis of discussion made herein above and Keeping the aforesaid settled connotation of law particularly the judgment passed by the Hon'ble Supreme Court in the matter of Tarsem Lal (supra), and further taking in to consideration the para 34 the order dated 13.09.2024 passed in B.A. No. 4766 of 2024 by which co-accused persons namely Ezhar Ansari, have already been granted bail by this Court, it is considered view of this Court that it is a fit case to extend the benefit under Section 482 of the Bhartiya Nagarik Suraksha Sanhita, 2023 to the present applicant.

70. Accordingly, instant anticipatory bail application stands allowed.

71. In consequence thereof, the petitioner, above named, is directed to surrender before the learned court below within a period of four weeks’ and on his surrender, he shall be released on bail on furnishing bail bond of Rs.50,000/- (Rupees Fifty Thousand) with two sureties of the like amount each to the satisfaction of the learned A.J.C-cum-Special Judge, CBI-cum- Special Judge, P.M.L.A., Ranchi, in connection with ECIR Case No.01 of 2024, subject to the following conditions: (i) The applicant/petitioner shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such fact to the Court; (ii) The applicant/petitioner shall not act in any manner which will be prejudicial to fair and expeditious trial; (iii) The applicant/petitioner shall appear before the trial Court on each and every date given to him by the said Court till 24 disposal of the trial; and (iv) The applicant/petitioner shall not involve himself in any offence of a similar nature in future.

72. The observations made in the course of this order, are only for considering the case of the applicant/petitioner on the application for the grant of anticipatory bail. The concerned trial Court shall not be influenced or bound by any observations made hereinabove. (Sujit Narayan Prasad, J.) Rohit/- A.F.R. 25