The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK BLAPL No.6225 of 2024 Anand Kumar Agarwal …. Petitioners Mr. M. Kanungo, Senior Advocate Along with Mr. D. Acharya, Advocate -Versus- The Director of Enforcement, Bhubaneswar …. Opposite Party Mr. G. Agarwal, Advocate for Enforcement Directorate (ED) CORAM: MR. JUSTICE R.K. PATTANAIK Order No. ORDER 15.01.2025 11. 1. Heard Mr. Kanungo, learned Senior Advocate for the petitioner and Mr. Agarwal, learned counsel for the ED. 2. Instant petition is filed for release of the petitioner on bail in connection with Crl. Misc. (PMLA) Case No.08 of 2024 arising out of ECIR No. BBZO/15 of 2021 dated 23rd March, 2021 registered under Section(s) 3 and 4 of PMLA Act, 2002 (hereinafter referred to ‘the PMLA’) pending in the file of learned Special Court (Prevention of Money Laundering Act)-cum-Sessions Judge, Khurda, Bhubaneswar on the grounds stated therein.
Legal Reasoning
3. Mr. Kanungo, learned Senior Advocate for the petitioner submits that the petitioner is in judicial custody from 18th May, 2024 and in the meantime, with the closure of investigation, the chargesheet is filed. It is further submitted that the petitioner never avoided summons of the ED but had been to Dubai to meet his younger son staying there. It is claimed that the petitioner travelled to Dubai in the month of December, 2022 and returned in January, 2023 and Page 1 of 10 once again, had gone to Dubai on 19th March, 2023 and was back on 28th March, 2023. With other travel itinerary, Mr. Kanungo, learned Senior Advocate submits that the petitioner had been to Dubai on and of and lastly, returned on 16th May, 2024 and never had any intention to avoid summons to him and in fact, appeared before the ED and at last, was arrested on 18th May, 2024 and was taken on remand. Under the above circumstances, Mr. Kanungo, learned Senior Advocate submits that since the petitioner had no such intention to evade investigation by the ED, he returned back to India and ultimately, made himself available for the purpose of investigation but was arrested finally and is in custody from the date of arrest in the month of May, 2024 and considering the same and the fact that the investigation is concluded, the Court should allow him to go on bail on any terms and conditions as would be fixed. 4. Mr. Agarwal, learned counsel for the ED submits that a flight risk is involved, since repeated summons were issued to the petitioner to appear before the ED, which was deliberately avoided and at last, Look Out Circular (LOOC) had to be issued, consequent upon which, on his return to India and he was arrested on 18th May, 2024. In so far as, the involvement of the petitioner is concerned, a prima facie case is made out and in that regard, Mr. Agarwal, learned counsel refers to the complaint filed under Section 45 of the PMLA. It is further submitted that in course of enquiry and investigation, the petitioner admitted to have availed loan for more than Rs.300 crore with the accounts declared as Non-Performing Asset (NPA)by the concerned banks and since, such disclosure has been made and a supplementary complaint could be filed against him, the petitioner should not be released on bail as he is involved in a banking fraud as well, which has been revealed by himself and surfaced during and in course of investigation. In course of hearing, Page 2 of 10 Mr. Agarwal, learned counsel refers to Section 50 of the PMLA to contend that such disclosure is subject to action since the actions thereunder is deemed to deemed be judicial proceedings within the meaning of Sections 193 and 228 IPC in view of sub-section (4) thereof. It is again submitted that since the petitioner is also involved in banking fraud and the same is unearthed during investigation and the ED could file a supplementary complaint permissible under law in view of the decision of Apex Court in Rohit Tandon Vrs. Directorate of Enforcement AIR (2017) SC 5309, he should not be released on bail at the present, notwithstanding closure of investigation with the chargesheet being filed. 5. In reply and response to the above, Mr. Kanungo, learned Senior Advocate admits the fact that such disclosure regarding loan and default has been made by the petitioner in course of investigation so revealed from the chargesheet as at para 12.2.4 about the fact that the accounts, after having availed loan to have declared as NPA in the year 2014 but it does not relate to the predicate offence. It is submitted that the petitioner has no qualm to face the action in case of any such default of the loan but he cannot be detained in the ED case for that matter. It is also admitted by Mr. Kanungo, learned Senior Advocate that a case against the petitioner to be pending before the Court of learned ACJM, Bidhannagar, Kolkata but he is on bail therein. With the above submission, release of the petitioner is pleaded for with any conditions including a direction to surrender the passport, if so required. 6. Gone through the complaint as at Annexure-1. The petitioner was summoned by the ED as made to reveal from Annexure-3. Upon receiving such summons of court, with a delay, though, the petitioner did respond, he was arrested by the ED. Perused the Page 3 of 10 rejection order as at Annexure-4. In fact, the submission of Mr. Kanungo, learned Senior Advocate for the petitioner is that in a case of the ED as well, bail is the rule and rejection is an exception and while contending so, he refers to a decision of the Apex Court in Prem Prakash Vrs. Union of India through the Directorate of Enforcement (2021) 9 SCC 787. It is submitted that the ratio decided by the Apex Court in Vijay Madanlal Choudhary Vrs. Union of India (2023) 12 SCC 1 has been reiterated with a conclusion that while Section 45 of the PMLA restricts right of bail but it could not be said that the conditions provided thereunder impose any absolute restraint for grant of it. In reply, Mr. Agarwal, learned counsel for the ED submits that if any case, the conditions of Section 45 of the PMLA are to be fulfilled, while considering the release of an accused which has been held by the Apex Court in Prem Prakah (supra). It is further submitted that the facts of the case therein to be different as it was in connection with a transaction and execution of sale deeds that the Apex Court had to reach at such a conclusion referring to the decision Vijay Madanlal Choudhary (supra). Besides the above, Mr. Agarwal, learned counsel refers to one more decision of the Madras High Court in V. Senthil Balaji Vrs. the Deputy Director, Directorate of Enforcement which has been taken judicial notice by the Apex Court. Referring to other decisions and the objection filed, Mr. Agarwal, learned counsel submits that it is not the case for release of the petitioner on bail, more so when, he is likely to abscond and avoid the enquiry and trial before the learned court below. 7. In the case of Prem Prakah, the Apex Court had the occasion to consider release of an accused involved in ED case and held and concluded, the relevant paragraphs of which are reproduced herein below: Page 4 of 10 “11. In Vijay Madanlal Choudhary and Ors. Vs Union of India. this Court categorically held that while Section 45 of PMLA restricts the right of the accused to grant of bail, it could not be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. Para 302 is extracted herein below. “302. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the court, which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the 2002 Act.” These observations are significant and if read in the context of the recent pronouncement of this Court dated 09.08.2024 in Criminal Appeal No. 3295 of 2024 Manish Sisodia (II) Vs. Directorate of Enforcement Directorate, it will be amply clear that even under PMLA, the governing principle is that “Bail is the Rule and Jail is the Exception”. In para 52 of Manish Sisodia, this Court observed as under: “52.XXX From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straight forward open and shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts and the High Page 5 of 10 Courts should recognize the principle that “bail is rule and jail is exception.” 12. All that Section 45 of PMLA mentions is that certain conditions are to be satisfied. The principle that, “bail is the rule and jail is the exception” is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individual is always a Rule and deprivation is the exception. Deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure. Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied.” 8. It is further held therein that in Vijay Madanlal Choudhary case with reference to Section of the PMLA that any such statement recorded after a formal arrest by the ED, the consequences of Article 20(3) of the Constitution of India or Section 25 of the Evidence Act may come into play as the same is the nature of confession and shall not be proved against him. Mr. Kanungo, learned Senior Advocate for the petitioner refers to one more paragraph and the same is also reproduced and as hereunder: “30. Vijay Madanlal Choudhary2 though held that the authorities under the PMLA are not police officers, did anticipate a scenario where in a given case, the protection of Section 25 of the Evidence Act may have to be made Page 6 of 10 available to the accused. The Court observed that such situations will have to be examined on a case-to-case basis. We deem it appropriate to extract Para 356 of Vijay Madanlal Choudhary (supra) “356. In other words, there is stark distinction between the scheme of the NDPS Act dealt with by this court in Tofan Singh10 and that in the provisions of the 2002 Act under consideration. Thus, it must follow that the authorities under the 2002 Act are not police officers. Ex-consequenti, the statements recorded by the authorities under the 2002 Act, of persons involved in the commission of the offence of money-laundering or the witnesses for the purposes of inquiry/investigation, cannot be hit by the vice of article 20(3) of the Constitution or for that matter, article 21 being procedure established by law. In a given case, whether the protection given to the accused who is being prosecuted for the offence of money-laundering, of section 25 of the Evidence Act is available or not, may have to be considered on case-to-case basis being rule of evidence.” 9. In the above decision, it is held that in a given case, whether the protection given to the accused who is being prosecuted for the offence of money laundering, Section 25 of the Evidence Act is available or not, may have to be considered on a case-to-case basis being rule of evidence. The submission is that with the above rider is to be kept in mind which is to the effect that any such statement of an accused may be inadmissible in view of Section 25 of the Indian Evidence Act read with Article 20(3) of the Constitution of India. 10. The sum and substance of the decision referred to herein above is that there is no absolute restraint in release of the accused on bail Page 7 of 10 but at the same time, twin conditions occurring in Section 45 of PMLA are to be satisfied. It is to be held that the principle of bail as the rule and jail to be an exception even applies to a criminal prosecution under the PMLA. In fact, the Apex Court in Prem Prakash (supra) made the necessary clarification with regard to the above principle with a reference to the earlier decision in Vijay Madanlal Choudhary case. 11. As far as the case at hand is concerned, the petitioner is facing prosecution for the predicate offence pending in the Court of learned Special Judge Vigilance, Balasore in connection VGR Case No.43 of 2009. In so far as, the ED case is concerned, it is consequent upon such predicate offence and initiation of action under the PC Act and for other allied offences. As to the decision of the Apex Court in Vijay Madanlal Choudhary (supra) is concerned, the Apex Court therein held that in case, the predicate offence and trial results in acquittal, the prosecution under the PMLA is to terminate. In course of hearing, it is brought to the notice of the Court by Mr. Agarwal, learned counsel for the ED that the decision in Vijay Madanlal Choudhary is pending review before the Apex Court. Nevertheless, the legal position as on date is that any such prosecution by the ED and its fate depends on the outcome of the trial in respect of the predicate offence. As to the contention of the Mr. Agarwal, learned counsel that a supplementary complaint could be filed by the ED in view of the disclosure made by the petitioner vis-a-vis the banking fraud with reference to the decision in Rohit Tandon (supra), the Court, with due respect, is of the humble view that any such complaint shall have to be in respect of and corresponding to the predicate offence and for utilization of the crime proceeds. If there is any fraud claimed to have taken place upon such disclosure of the petitioner, the Court is of the further Page 8 of 10 view that law is to take its own course. In fact, the submission with reference to Section 50 of PMLA, which is advanced by Mr. Agarwal, learned counsel, the Court is of the conclusion that in case of any such disclosure made by an accused if found to be false, then the necessary consequence is to follow with a complaint which may be filed for having committed offences punishable under Section(s) 193 and 228 IPC. 12. Having regard to the facts pleaded on record and submissions of learned counsels for both the sides, the Court finds that the petitioner though defaulted in appearance on number of occasions with summons being received followed by reply through e-mail showing the inability to appear for the purpose of investigation but at last, such appearance was ensured though with the claim that the LOC was issued, the Court is of the respectful view that under such circumstances and since with the complaint filed, investigated upon and with closure of investigation, a chargesheet filed in the month of July, 2024 recording the submission that it is a preliminary chargesheet as against him since further investigation is still open, the petitioner who is having a permanent abode in India and happens to be a native of Kolkata having roots in the society as well should be allowed to go on bail with stringent conditions. Such is the conclusion of the Court keeping in view the principles laid down by the Apex Court in the decisions referred to herein before which is to the effect that bail is rule and jail is an exception. 13. Accordingly, it is ordered. 14.
Decision
In the result, the petition stands allowed. Consequently, the petitioner is directed to be released on bail in connection with Crl. Misc. (PMLA) Case No.08 of 2024 corresponding to ECIR Page 9 of 10 No.BBZO/15 of 2021 dated 23rd March, 2021 pending in the file of the learned Special Court (Prevention of Money Laundering Act)- cum- Sessions Judge, Khurda, Bhubaneswar now pending in the Court of Special Judge-cum-CBI(1), Bhubaneswar, who shall be at liberty to impose such other suitable conditions as deemed just and proper in the facts and circumstances of the case besides the following, such as, he shall surrender his passport before the Court concerned and not to leave its jurisdiction without permission being obtained and further to remain present physically on each dates of posting before the court concerned without fail and that apart, to co-operate in the investigation and to appear before the IO, as and when necessary, for the purpose of further investigation. 15. Urgent certified copy of this order be granted as per rules. (R.K. Pattanaik) Judge Rojina Signature Not Verified Digitally Signed Signed by: ROJINA SAHOO Designation: Junior Stenographer Reason: Authentication Location: OHC, CTC Date: 17-Jan-2025 11:45:33 Page 10 of 10