Chattisgarh High Court
Sandeep Kumar Nayak vs Directorate Of Enforcement on 8 April, 2025
Author: Narendra Kumar Vyas
Bench: Narendra Kumar Vyas
Page 1 of 23
2025:CGHC:16439
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
MCRC No. 642 of 2025
Reserved on : 28.02.2025
Delivered on : 08.04.2025
Sandeep Kumar Nayak S/o Shri Kirti Chand Nayak Aged About 42
Years R/o Village Dantu Tahsil And P.S. Kasmaar District - Bokaro
Jharkhand
--- Applicant
Versus
Directorate Of Enforcement Through Investigation Officer Enforcement
Directorate (FEMA/ PMLA) Raipur (C.G.)
--- Respondent
For Applicant : Mr. Manish Nigam, Advocate.
For Respondent : Dr. Saurabh Kumar Pande, Special Public
Prosecutor.
Hon'ble Shri Justice Narendra Kumar Vyas
CAV ORDER
1. This is first bail application filed under Section 483 of the
Bhartiya Nayay Suraksha Sanhita, 2023 for grant of regular bail
to the applicant, who has been arrested on 25.01.2023 in
connection with Crime No. ECIR/RPZO/09/2022 dated
29.09.2022 registered at Police Station- Directorate of
Enforcement, Zonal Office, Raipur (C.G.) for the offence
punishable under Sections 3 & 4 of the Prevention of Money
Laundering Act, 2002 (for short “the PMLA, 2002”).
2. The case of the prosecution, in brief, is that on 12.07.2022, FIR
No. 129/2022 was registered by Kadugodi Police Station,
Digitally
signed by
ARUN
ARUN KUMAR
KUMAR DEWANGAN
DEWANGAN Date:
2025.04.08
16:58:52
+0530
Page 2 of 23Whitefield, Bengaluru under Sections 186, 204, 353 & 120B of
IPC against one Suryakant Tiwari & other persons on the basis
of complaint filed by Deputy Director of Income Tax, Foreign
Assets Investigation Unit-I Bengaluru alleging that as part of
conspiracy, during course of search by Income Tax department
on 30.06.2022, Suryakant Tiwari had obstructed the officials
from carrying their official duties and destroyed crucial
incriminating documents and digital evidence about the alleged
illegal extortion on Coal Transportation, payments collected by
Suryakant Tiwari and his associates.
3. It is also case of the prosecution that on 13.09.2022, OM in F.
No. 22-IT was forwarded by Central Board of Direct Taxes (for
short “CBDT”) to the Directorate of Enforcement containing the
FIR No. 129/2022 Police Station- Kadugodi along with a report
on the investigation conducted by the Income Tax Department
on M/s Jay Ambey Group of Raipur (Suryakant Tiwari Group). In
the report, it has been mentioned that during search operations
on 30.06.2023 by Income Tax Department on the premises of
Suryakant Tiwari and his associates, evidence was gathered
related to a syndicated being operated and coordinated by
Suryakant Tiwari whereby additional unauthorized cash to the
tune of Rs. 25 per ton of coal was being collected over and
above the legal amount against Coal Delivery Orders. It has also
been alleged that pursuant to the Order F.No.4138-
47/Sankhikiya/Coal bhandaran/N.Kra 2020 dated 15.07.2020
issued by the State Government the dispatch rules of coal mines
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by authorities have been changed from online process to
introduction of manual verification. The said notification was
issued under the signatures of Sameer Vishnoi, IAS who was the
Director, Geology & Mining as well as MD of CMDC. It is also
case of the prosecution that it is only after the said notification
Suryakant Tiwari in conspiracy with certain other persons started
obtaining an illegal levy of Rs. 25 per ton of coal for issuance of
delivery order for coal transportation. The handwritten diaries
maintained by one Rajnikant Tiwari who is brother of Suryakant
Tiwari contained entries of incoming and outgoing amounts of
unaccounted cash generated, inter alia from illegal levy on coal
transport revealed profits of more than Rs. 500 crores in 16
months from different kinds of levies. On 29.09.2022,
ECIR/RPZ0/09/2022 was registered by Directorate of
Enforcement, Raipur Zonal Office for commission of offence
under Sections 120 (B) & 384 of IPC being a part of FIR No.
129/2022.
Role of the present applicant:
4. The role of the present applicant is that the present applicant
was working as an Assistant Mining Officer and posted at
Surajpur from 2019 to 2022 i.e. during the period when coal levy
scam was undertaken by Suryakant Tiwari and associates. The
applicant in his statement recorded under Section 50 of the
PMLA, 2002 has stated that one Rahul Singh who was
employee of Suryakant Tiwari used to send him various
messages containing name of company, DO No., date, Grade,
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Quantity, Mines etc. and on the basis of which Rahul Singh
extorted money in Surajpur for coal transportation on behalf of
Suryakant Tiwari. He also admitted that he was told by Rahul
Singh in July, 2020 that he will give him information of DOs
which are to be cleared and accordingly, Rahul Singh used to
send him the details on Whatsapp messages mentioned “Clear”
after that he used to send NOC to SECL. He has also stated that
“Clear” in the messages means that Rahul Singh had received
money @ Rs. 25/tonne from the companies whose DOs were to
be cleared. Rahul Singh messaged him when he had received
money for the clearance of DO from the DO holder and only then
he used to issue the NOC. Rahul Singh confirmed the modus
operandi told by the applicant regarding collection of cash @ Rs.
25/ tonne. Rahul Singh in his statement inter-alia disclosed that
when any coal transporter used to visit Mining Office, Surajpur
regarding clearance of DO, he was informed by the applicant to
contact with Rahul Singh and the DO will be cleared only after
making payment @ Rs. 25/per ton to Rahul Singh and contact
number of Rahul Singh was also provided by the applicant to the
coal transporter/businessmen. When the payment @ Rs. 25/ton
against the coal transportation was received, message was
passed to the applicant by Roshan Singh for clearance of DOs.
From the above, it is clear that the DOs were cleared by the
applicant only after receipt of message from Rahul Singh, who
used to send message for clearance of DO only after receipt of
illegal levy on coal transportation. Thus, the applicant has
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knowingly and willingly assisted the extortion syndicate in
committing the predicate crime of extortion and also in
generation of proceeds of crime.
5. The record of the case would show that the applicant filed an
application for grant of regular bail before the learned PMLA
Court, Raipur (C.G.) seeking enlargement on regular bail.
Learned Special Judge vide order dated 14.07.2023, dismissed
the bail application filed by the applicant by observing that there
is involvement of the applicant in crime in question. This order
has been assailed by the applicant before this Court by filing the
instant bail application under Section 483 of the Bhartiya Nayay
Suraksha Sanhita, 2023.
6. Learned counsel for the applicant would submit that the ECIR is
an abuse of process of law as the same has been registered
against the applicant on false, frivolous, vague and vexation
allegations which do not make out any offence against the
applicant. He would further submit that the ECIR is based on the
subject FIR in Crime No.129/2022 dated 12/07/2022 and
CBDT’s Office Memorandum in F No. 289/ED/36/2022-IT (Inv.II)
dated 13.09.2022 and there is no nexus between the allegation
in the subject FIR and the proceedings pending before this Court
in ECIR/RPZO/09/2022 dated 29.09.2022. Even there is no
whisper of applicant’s name in the subject FIR. He would further
submit that no ground of arrest in view of Section 19 of the
PMLA, 2002 was supplied to the applicant at the time of arrest.
Thus, non-compliance of statutory provision will render whole
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arrest proceedings null and void. He would further submit that
neither the complaint nor the subject FIR reveals commission of
any offence by the applicant as the applicant is not related to any
of the events or irregularities as narrated in the subject FIR. He
would further submit that the FIR and complaint which does not
name the applicant at all cannot be used as a predicate offence
by the respondent to seek remand of the applicant and register
an ECIR against him. He would further submit that the complaint
does not disclose the commission of any cognizable offence as
against the applicant much less the offences punishable under
Sections 186, 204, 120-B and 353 of IPC.
7. He would further submit that the respondent authority under the
PMLA, 2002 to prosecute any person for offence of money
laundering gets triggered only if there exist proceeds of crime
within the meaning of Section 2(1)(u) of the PMLA, 2002 and
further it is involved in any process or activity, not even in case of
existence of undisclosed income and irrespective of its volume,
the definition of “proceeds of crime” under Section 2(1)(u) of the
PMLA, 2002 will get attracted, unless the property has been
derived or obtained as a result of criminal activity relating to a
scheduled offence.
8. He would further submit that applicant is a public servant working
as Assistant Mining Officer and Section 65 of the PMLA, 2002
clearly mandates that all the provisions of the Cr.P.C. shall be
applicable under this Act unless it is inconsistent with the
provisions of the PMLA, 2002. Thus, the provisions contained
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under Section 197 of the Cr.P.C. are salutary in nature whereas
the Directorate of Enforcement has never obtained any sanction
order for prosecuting the applicant by obtaining sanction for
prosecution under Section 197 of the Cr.P.C. He would further
submit that Hon’ble the Supreme Court in case of Directorate of
Enforcement Vs. Bibhu Prasad Acharya [Criminal Appeal
Nos. 4314-4316 of 2024 (order dated 06.11.2024] has
categorically held that sanction to prosecute petitioner as public
servant was mandatory and prerequisite to take cognizance and
thus allowed the petition. In the instant case, the Directorate of
Enforcement has never obtained any sanction for prosecuting
the applicant under Section 197 of the Cr.P.C., hence the bail
may be granted to the applicant on this count alone.
9. He would further submit that the “Proceeds of Crime” being the
core of the ingredients constituting the offence of money-
laundering, that expression needs to be construed strictly, as
such, all properties recovered or attached by the respondent in
connection with the criminal activity relating to a scheduled
offence under the general law, cannot be regarded as proceeds
of crime, therefore, the property must be derived or obtained,
directly or indirectly, as a result of criminal activity relating to a
scheduled offence. For being regarded as proceeds of crime, the
property associated with the scheduled offence must have been
derived or obtained by a person as a result of criminal activity
relating to the concerned scheduled offence. He would further
submit that the respondent/Enforcement Directorate has failed to
Page 8 of 23
even make any allegation or show how the applicant has
claimed or projected the alleged proceeds of crime as untainted,
which is an essential ingredient of Section 3 of the PMLA, 2002,
therefore, no offence under Section 3 of the PMLA, 2002 is
prima facie made out against the applicant. He would further
submit that the right to fair trial being a facet of the Right to Life
and Liberty under Article 21 of the Constitution of India can only
be violated by procedure established by law, which procedure
must be just, fair, and reasonable. He would further submit that
Hon’ble the Supreme Court has already enlarged similarly
placed accused person namely Shiv Shankar Nag on bail. He
would further submit that continued incarceration of the
applicant, based on absolutely no admissible material, has
severely damaged his reputation and risks the livelihood and
well-being of his family as held by Hon’ble the Supreme Court in
case of Manish Sisodia Vs. Directorate of Enforcement
[(2024) INSC 595], Prem Prakash Vs. Union of India [(2024)
INSC 637], as such, the applicant deserves to be enlarged on
bail. He would further submit that the applicant is in jail since
25.01.2023 and the trial of the case is likely to take more time for
its conclusion and applicant is ready and willing to abide by any
condition that may be imposed upon him and would pray for
grant of bail to the applicant.
10. On the other hand, learned counsel for the Enforcement
Directorate referring to the ECIR would submit that the role of
the present applicant is that applicant who was posted as
Page 9 of 23
Assistant Mining Officer at Surajpur from 2019 to 2022 through
Rahul Singh extorted money in Surajpur for coal transportation
on behalf of Suryakant Tiwari who had received money @ Rs.
25/tonne from the companies whose DOs were to be cleared.
Rahul Singh in his statement inter-alia disclosed that when any
coal transporter used to visit Mining Office, Surajpur regarding
clearance of DOs, he was informed by the applicant to contact
with Rahul Singh and the DOs will be cleared only after making
payment @ Rs. 25 per ton to Rahul Singh and contact number
of Rahul Singh was also provided by the applicant to the coal
transporter/businessmen. He has further stated that DOs were
cleared by the applicant only after receipt of message from
Rahul Singh, who used to send message for clearance of DO
only after receipt of illegal levy on coal transportation. Thus, the
applicant has knowingly and willingly assisted the extortion
syndicate in committing the predicate crime of extortion and also
in generation of proceeds of crime.
11. He would further submit that the learned Special Judge (PMLA),
Raipur vide order dated 14.07.2023 while dismissing the bail
application filed by the applicant has observed that there is
involvement of the applicant in the crime in question which has
not been rebutted by the applicant while making this submission
before this Court and would pray for rejection of bail petition. He
would further submit that the applicant is unable to fulfill the twin
conditions of Section 45 of the PMLA, 2002 as from the above
factual matrix, it is quite vivid that the possibility of the accused
Page 10 of 23
being not guilty of the offence of money laundering is highly
impossible. To substantiate the submission, he would refer to
paragraph 135 of the judgment rendered by Hon’ble the
Supreme Court in case of Vijay Madanlal Chaudhary & others
Vs. Union of India & others [2022 SCC OnLine SC 929]. He
would further submit that the applicant with proceed of crime and
having deep roots in the society, is in a position to influence
witnesses. He has referred to the judgment of Hon’ble Allahabad
High Court in case of Pankaj Grover v. ED [Criminal Misc.
Anticipatory Bail Application U/S 438 Cr.P.C. No. 7661 of
2021] wherein Hon’ble the High Court has held that the accused
in economic offences/ PMLA cases are in possession of huge
proceeds of crime and may use those to influence witnesses.
Further the Court also held that since such offences are
committed mostly by influential persons, there is a high
likelihood of their using influence to tamper with evidence and
influence witnesses. He would further submit that economic
offence constitutes a separate class of offence and in the
present case, the amount involved in the offence of money
laundering is Rs. 540 crores approximately and in view of well
settled position of law that economic offence constitutes a
separate class of offence and bail should not normally be
granted in such cases and would pray for rejection of bail
petition.
12. To substantiate his submission, he would refer to the judgment
rendered by Hon’ble the Supreme Court in case of
Page 11 of 23
Nimmagadda Prasad Vs. CBI, reported in (2013) 7 SCC 466,
State of Bihar Vs. Amit Kumar reported in (2017) 13 SCC 751,
Gautam Kundu Vs. Manoj Kumar reported in (2015) 16 SCC 1,
Mohd. Arif Vs. Directorate of Enforcement, Govt. of India,
BLAPL No. 8882/2021 (decided on 31.05.2022), Soumya
Chaurasia Vs. Directorate of Enforcement Special Leave
Petition (Crl.) No. 8847/2023, Y.S. Jaganmohan Reddy Vs.
CBI [Criminal Appeal No. 730/2013 arising out of SLP (Crl.)
No. 3404/2013], State of Gujarat Vs. Mohanlal Jitamalji
Porwal & others [(1987) 2 SCC 364] & Neeru Yadav Vs. State
of U.P. & another [AIR (SC) (CRI) 2015 (0) 412].
13. I have heard learned counsel for the parties and perused the
documents placed on record including ECIR with utmost
satisfaction.
14. From the above discussion, the point to be emerged for
determination by this Court is :-
“Whether the applicant fulfills twin conditions of Section 45
of the PMLA, 2002 for grant of bail”?
15. From bare perusal of the second prosecution complaint dated
30.01.2023, it is quite vivid that prima facie the Enforcement
Directorate has collected evidence of offence of money
laundering against the present applicant though its correctness
is required to be adjudicated during trial.
16. Further submission of learned counsel for the applicant is that
the applicant remained in jail since 25.01.2023 i.e. for about two
years, therefore, he should be released on bail on account of
Page 12 of 23
long incarceration period. This cannot be considered and
deserves to be rejected as the applicant being Assistant Mining
Officer was very much responsible for affairs of the Government
regarding transportation of mines and minerals and he has
knowingly and willingly assisted the extortion syndicate in
committing the predicate crime of extortion and also in
generation of proceeds of crime, which prima facie establishes
his involvement in the crime in question. As such, there is some
evidence which is against him. Hon’ble the Supreme Court in
case of Y. Vs. State of Rajasthan & another [(2022) 9 SCC
269] has held in paragraph 8 to 14 as under:-
“8. This Court has, in a catena of judgments, outlined the
considerations on the basis of which discretion under
Section 439, CrPC has to be exercised while granting bail. In
Gurcharan Singh v. State (Delhi Administration), (1978) 1
SCC 118 this Court hasheld as to the various parameters
which must be considered while granting bail. This
Court held as follows:
“24. …Even so, the High Court or the Court of Session will
have to exercise its judicial discretion in considering the
question of granting of bail under Section 439(1) CrPC of the
new Code. The overriding considerations in granting bail to
which we adverted to earlier and which are common
both in the case of Section 437(1) and Section 439(1) CrPC
of the new Code are the nature and gravity of the
circumstances in which the offence is committed; the position
and the status of the accused with reference to the victim
and the witnesses; the likelihood, of the accused fleeing from
justice; of repeating the offence; of jeopardising his own life
being faced with a grim prospect of possible conviction in the
case; of tampering with witnesses; the history of the case as
well as of its investigation and other relevant grounds which,
in view of so many valuable factors, cannot be exhaustively
set out.”
9. The above factors do not constitute an exhaustive list. The
grant of bail requires the consideration of various factors
which ultimately depends upon the specific facts and
Page 13 of 23
circumstances of the case before the Court. There is no strait
jacket formula which can ever be prescribed as to what the
relevant factors could be. However, certain important
factors that are always considered, interalia, relate to prima
facie involvement of the accused, nature and gravity of the
charge, severity of the punishment, and the character,
position and standing of the accused [see State of U.P. v.
Amarmani Tripathi, (2005) 8 SCC 21].
10. At the stage of granting bail the Court is not required to
enter into a detailed analysis of the evidence in the case.
Such an exercise may be undertaken at the stage of trial.
11. Once bail has been granted, the Appellate Court is
usually slow to interfere with the same as it pertains to the
liberty of an individual. A Constitution Bench of this Court in
Bihar Legal Support Society v. Chief Justice of India, (1986)
4 SCC 767 observed as follows:
“3. … It is for this reason that the Apex Court has evolved, as
a matter of self-discipline, certain norms to guide it in the
exercise of its discretion in cases where special leave
petition are filed against orders granting or refusing bail or
anticipatory bail….We reiterate this policy principle
laid down by the bench of this Court and hold that this Court
should not ordinarily, save in exceptional cases, interfere
with orders granting or refusing bail or anticipatory bail,
because these are matters in which the High Court should
normally be the final arbiter.”
(emphasis supplied)
12. The above principle has been consistently followed by
this Court. In Prasanta Kumar Sarkar v. Ashis Chatterjee,
(2010) 14 SCC 496 this Court held as under:
“9. We are of the opinion that the impugned order is clearly
unsustainable. It is trite that this Court does not, normally,
interfere with an order passed by the High Court granting or
rejecting bail to the accused. However, it is equally
incumbent upon the High Court to exercise its
discretion judiciously, cautiously and strictly in compliance
with the basic principles laid down in a plethora of decisions
of this Court on the point. It is well settled that, among other
circumstances, the factors to be borne in mind while
considering an application for bail are:
(i) whether there is any prima facie or reasonable ground to
believe that the accused had committed the offence;
(ii) nature and gravity of the accusation;
(iii) severity of the punishment in the event of conviction;
(iv) danger of the accused absconding or fleeing, if released
Page 14 of 23on bail;
(v) character, behaviour, means, position and standing of the
accused;
(vi) likelihood of the offence being repeated;
(vii) reasonable apprehension of the witnesses being
influenced; and
(viii) danger, of course, of justice being thwarted by grant of
bail.
xxx xxx xxx
10. It is manifest that if the High Court does not advert to
these relevant considerations and mechanically grants bail,
the said order would suffer from the vice of nonapplication of
mind, rendering it to be illegal…..”
13. In Mahipal v. Rajesh Kumar, (2020) 2 SCC 118 this Court
followed the holding in Prasanta Kumar Sarkar (supra) and
held as follows:
“17. Where a court considering an application for bail fails to
consider relevant factors, an appellate court may justifiably
set aside the order granting bail. An appellate court is thus
required to consider whether the order granting bail suffers
from a non-application of mind or is not borne out from a
prima facie view of the evidence on record. It is thus
necessary for this Court to assess whether, on the basis of
the evidentiary record, there existed a prima facie or
reasonable ground to believe that the accused had
committed the crime, also taking into account
the seriousness of the crime and the severity of the
punishment…”
14. Recently, a three Judges’ Bench of this Court in Jagjeet
Singh & Ors. V. Ashish Mishra @ Monu & Anr. in Criminal
Appeal No. 632 of 2022, has reiterated the factors
that the Court must consider at the time of granting bail
under Section 439 CrPC, as well as highlighted the
circumstances where this Court may interfere when bail has
been granted in violation of the requirements under the
abovementioned section. This Court observed as follows:
“27. We may, at the outset, clarify that power to grant bail
under Section 439 of CrPC, is one of wide amplitude. A High
Court or a Sessions Court, as the case may be, are
bestowed with considerable discretion while deciding an
application for bail. But, as has been held by this Court
on multiple occasions, this discretion is not unfettered. On
the contrary, the High Court of the Sessions Court must grant
bail after the application of a judicial mind, following well-
established principles, and not in a cryptic or mechanical
Page 15 of 23manner.”
17. This Court has already rejected the bail application of other co-
accused persons who are also senior Government Officers. This
Court while rejecting their bail application has recorded prima
facie involvement of the Government servants, therefore,
considering the prima facie involvement of the applicant as also
the role played by the applicant, the present bail application
deserves to be rejected. Even otherwise, the law has been well
settled by Hon’ble the Supreme Court that while considering the
bail application, the Court 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, the circumstances which are peculiar
to the accused, reasonable possibility of securing the presence
of the accused at the time of trial, reasonable apprehension of
the witness being tempered with, the large interest of the
public/state etc. Hon’ble the Supreme Court in case of Saumya
Chourasiya Vs. Directorate of Enforcement [Criminal Appeal
No. 3840 of 2023, decided on 14.12.2023] has held at
paragraphs 18 & 19 as under:-
“18. The object of the PMLA hardly needs to be delineated.
The said 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. As per
Section 2(1)(p), “Money Laundering” has the meaning
Page 16 of 23
assigned to it in Section 3. The offence of Money
Laundering has been defined in Section 3, which is
punishable under Section 4 of the said Act. Section 45
makes the offences under the PMLA to be cognizable and
non bailable. As regards the twin conditions for the grant of
bail contained in Section 45(1), it has been held by the
Three-Judge Bench in Vijay Madanlal (supra) that the
underlying principles and rigours of Section 45 of the Act
must come into play and without exception ought to be
reckoned to uphold the objectives of the Act, which is a
special legislation providing for stringent regulatory
measures for combating the menace of money laundering.
19. Though it is true 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, the circumstances which are peculiar to the
accused, reasonable possibility of securing the presence of
the accused at the time of trial, reasonable apprehension of
the witness being tempered with, the large interest of the
public/ state etc. Though the findings recorded by the Court
while granting or refusing to grant bail would be tentative in
nature, nonetheless the Court is expected to express prima
facie opinion while granting or refusing to grant bail which
would demonstrate an application of mind, particularly
dealing with the serious economic offences.”
18. Further contention of learned counsel for the applicant that the
applicant is remained in custody for about two years, therefore,
he should be released on bail, cannot be considered in view of
the gravity of offence and prima facie involvement of the
applicant in the commission of offence. Hon’ble the Supreme
Court in case of Satyendar Kumar Jain Vs. Directorate of
Enforcement [Criminal Appeal No. 1638 of 2024, decided
on 18.03.2024] has held at paragraph 28 to 34 as under:-
“28. From the above stated facts there remains no shadow
of doubt that the appellant- Satyendar Kumar Jain had
conceptualized idea of accommodation entries against cash
and was responsible for the accommodation entries
totalling to Rs. 4.81 crores (approx.) received through the
Page 17 of 23Kolkata based entry operators in the bank accounts of the
four companies i.e. M/s. Akinchan Developers Pvt. Ltd.,
M/s. Paryas Infosolution Pvt. Ltd., M/s. Indo Metalimpex
Pvt. Ltd. and M/s. Mangalayatan Projects Pvt. Ltd., by
paying cash and the said companies were controlled and
owned by him and his family. Though it is true that a
company is a separate legal entity from its shareholders
and directors, the lifting of corporate veil is permissible
when such corporate structures have been used for
committing fraud or economic offences or have been used
as a facade or a sham for carrying out illegal activities.
29. It has also been found that the appellants – Ankush Jain
and Vaibhav Jain had assisted the appellant-Satyendar
Kumar Jain by making false declarations under the IDS
each of them declaring alleged undisclosed income of
Rs.8.26 crores in order to protect Satyendar Kumar Jain.
Though it was sought to be submitted by the learned
counsel for the appellants that the said declarations under
IDS having been held to be “void” in terms of Section 193 of
FA, 2016 by the income tax authorities, the same could not
be looked into in the present proceedings, the said
submission cannot be accepted. The declarations made by
the appellants-Ankush Jain and Vaibhav Jain under IDS
have not been accepted by the Income Tax authorities on
the ground that they had misrepresented the fact that the
investments in the said companies belonged to the said
appellants, which in fact belonged to Mr. Satyendar Kumar
Jain. The appellants could not be permitted to take
advantage of their own wrongdoing of filing the false
declarations to mislead the Income Tax authorities, and
now to submit in the present proceedings under PMLA that
the said declarations under the IDS were void. The
declarations made by them under the IDS though were held
to be void, the observations and proceedings recorded in
the said orders passed by the Authorities and by the High
Court cannot be brushed aside merely because the said
declarations were deemed to be void under Section 193 of
the Finance Act, 2016. The said proceedings clearly
substantiates the case of the respondent ED as alleged in
the Prosecution Complaint under the PMLA.
30. Having regard to the totality of the facts and
circumstances of the case, we are of the opinion that the
appellants have miserably failed to satisfy us that there are
reasonable grounds for believing that they are not guilty of
the alleged offences. On the contrary, there is sufficient
material collected by the respondent-ED to show that they
are prima facie guilty of the alleged offences.
31. Though Ms. Arora had faintly sought to submit that the
so-called inadvertent mistake committed by the ED with
regard to the figures mentioned in the Prosecution
Complaint in respect of the role of the appellants Ankush
Page 18 of 23Jain and Vaibhav Jain should not be permitted to be
corrected, which otherwise show that the allegations
against the appellants were vague in nature, we are not
impressed by the said submission. We are satisfied from
the explanation put forth in the affidavit filed on behalf of the
respondent-ED that it was only an inadvertent mistake in
mentioning the figure Rs.1,53,61,166/- in the bracketed
portion, which figure was shown by the CBI in its charge-
sheet. The said inadvertent mistake has no significance in
the case alleged against the appellants in the proceedings
under the PMLA.
32. From the totality of facts and circumstances of the case,
it is not possible to hold that appellants had complied with
the twin mandatory conditions laid down in Section 45 of
PMLA. The High Court also in the impugned judgment after
discussing the material on record had prima facie found the
appellants guilty of the alleged offences under the PMLA,
which judgment does not suffer from any illegality or
infirmity.
33. The appellants were released on bail for temporary
period after their arrest and the appellant-Satyendar Kumar
Jain was released on bail on medical ground on
30.05.2022, which has continued till this day. He shall now
surrender forthwith before the Special Court. It is needless
to say that right to speedy trial and access to justice is a
valuable right enshrined in the Constitution of India, and
provisions of Section 436A of the Cr.P.C. would apply with
full force to the cases of money laundering falling under
Section 3 of the PMLA, subject to the Provisos and the
Explanation contained therein.
34. In that view of the matter, all the appeals are
dismissed.”
19. Now this Court has to examine the issue whether the applicant
has fulfilled the twin conditions required for grant of bail under
the PMLA, 2002 for that, it is expedient for this Court to extract
Section 45 of the PMLA, 2002, which reads as under:-
“Section 45 of PMLA, 2002- 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
Page 19 of 23not 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 under Section 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.
[(1-A) 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.”
20. From bare perusal of ECIR with regard to the allegations leveled
against the present applicant, it is quite vivid that the present
applicant has played a specific role in commission of offence.
Investigation revealed that the applicant had helped Surykant
Tiwari in the offence. The ECIR would further reflect that the
present applicant has knowingly and willingly assisted the
extortion syndicate in committing the predicate crime of extortion
and also in generation of proceeds of crime. It has also recorded
in the ECIR that it was not possible to run the extortion racket
without the collusion of the mining officers and thus the applicant
was knowingly assisted in the offence of money laundering as
defined in Section 3 of the PMLA, 2002. Thus, the applicant is
unable to fulfill the twin conditions of Section 45 of the PMLA,
Page 20 of 23
2002.
21. Considering the above stated factual legal matrix, it is quite vivid
that the applicant is unable to fulfill twin conditions for grant of
bail as per Section 45 of the PMLA, 2002 and also considering
the submission that the applicant has not prima facie reversed
the burden of proof and dislodged the prosecution case which is
mandatory requirement to get bail. Hon’ble the Supreme Court in
case of Directorate of Enforcement Vs. Aditya Tripathi
(Criminal Appeal No. 1401/2023) decided on 12.05.2023 has
held at paragraphs 6 & 7 as under:-
“6. At the outset, it is required to be noted that respective
respondent No. 1 – accused are facing the investigation by
the Enforcement Directorate for the scheduled offences
and for the offences of money laundering under Section 3
of the PML Act punishable under Section 4 of the said Act.
An enquiry/investigation is still going on by the
Enforcement Directorate for the scheduled offences in
connection with FIR No. 12/2019. Once, the
enquiry/investigation against respective respondent No. 1
is going on for the offences under the PML Act, 2002, the
rigour of Section 45 of the PML Act, 2002 is required to be
considered. Section 45 of the PML Act, 2002 reads as
under:-
“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
Page 21 of 23cognizance of any offence punishable under Section 4
except upon a complaint in writing made by–
(i) the Director; or
(ii) any officer of the Central Government or a State
Government authorized in writing in this behalf by the
Central Government by a general or special order made in
this behalf by that Government.
[(1-A) 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.”
By the impugned judgment(s) and order(s) and while
granting bail, the High Court has not considered the rigour
of Section 45 of the PML Act, 2002.
6.1 Even otherwise, the High Court has not at all
considered the nature of allegations and seriousness of the
offences alleged of money laundering and the offences
under the PML Act, 2002. Looking to the nature of
allegations, it can be said that the same can be said to be
very serious allegations of money laundering which are
required to be investigated thoroughly.
6.2 Now so far as the submissions on behalf of the
respective respondent No. 1 that respective respondent
No. 1 were not named in the FIR with respect to the
scheduled offence(s) and/or that all the other accused are
discharged/acquitted in so far as the predicated offences
are concerned, merely because other accused are
acquitted/discharged, it cannot be a ground not to continue
the investigation in respect of respective respondent No. 1.
An enquiry/investigation is going on against respective
respondent No. 1 with respect to the scheduled offences.
Therefore, the enquiry/investigation for the scheduled
offences itself is sufficient at this stage.
6.3 From the impugned judgment(s) and order(s) passed
by the High Court, it appears that what is weighed with the
High Court is that chargesheet has been filed against
respective respondent No. 1 – accused and therefore, the
investigation is completed. However, the High Court has
failed to notice and appreciate that the investigation with
respect to the scheduled offences under the PML Act, 2002
by the Enforcement Directorate is still going on. Merely
because, for the predicated offences the chargesheet might
Page 22 of 23
have been filed it cannot be a ground to release the
accused on bail in connection with the scheduled offences
under the PML Act, 2002. Investigation for the predicated
offences and the investigation by the Enforcement
Directorate for the scheduled offences under the PML Act
are different and distinct. Therefore, the High Court has
taken into consideration the irrelevant consideration. The
investigation by the Enforcement Directorate for the
scheduled offences under the PML Act, 2002 is till going
on.
7. As observed herein-above, the High Court has neither
considered the rigour of Section 45 of the PML Act, 2002
nor has considered the seriousness of the offences alleged
against accused for the scheduled offences under the PML
Act, 2002 and the High Court has not at all considered the
fact that the investigation by the Enforcement Directorate
for the scheduled offences under the PML Act, 2002 is still
going on and therefore, the impugned orders passed by the
High Court enlarging respective respondent No. 1 on bail
are unsustainable and the matters are required to be
remitted back to the High Court for afresh decision on the
bail applications after taking into consideration the
observations made hereinabove.”
22. Considering the ECIR and other material placed on record,
which prima facie shows involvement of the applicant in crime in
question and also considering the judgment of Hon’ble the
Supreme Court in case of Saumya Chourasiya (supra) &
Satyendar Kumar Jain (supra), it is quite vivid that the
applicant is unable to fulfill the twin conditions for grant of bail as
provided under Section 45 of the PMLA, 2002. Thus, Point
involved in this bail application is answered against the
applicant.
23. Further contention of learned counsel for the applicant is that the
applicant is government servant, therefore, before prosecuting
the applicant under the PMLA, 2002, sanction to prosecute as
per Section 218 of the BNSS is necessary, as such the
prosecution is illegal, therefore, the applicant is entitled to be
Page 23 of 23
released on bail, is being considered by this Court. The
submission is misconceived and deserves to be rejected as it is
well settled position of law that for act done in violation of the
official duty, no sanction is required. In the present case, prima
facie, the applicant is involved in crime in question which is not
relates to public duty, therefore, sanction to prosecute under
Section 218 BNSS is not required. Accordingly, the submission
made by counsel for the applicant that without sanction
prosecution has been initiated, therefore, the prosecution
deserves to be quashed and he may be released on bail, is
rejected.
24. Considering the above stated factual and legal matrix, the role
played by the applicant, prima facie and also considering the
gravity of offence, I am not inclined to enlarge the applicant on
bail.
25. Accordingly, the bail application filed under Section 483 of the
Bhartiya Nayay Suraksha Sanhita, 2023 is also liable to be and
is hereby rejected.
26. The observation made by this Court is not bearing any effect on
the trial of the case. Learned trial Court will decide the criminal
trial in accordance with evidence, material placed on record,
without being influenced by any of the observations made by this
Court while deciding the present bail application.
Sd/-
(Narendra Kumar Vyas)
Judge
Arun
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