This Single Judge judgment rejected the petitioner's prayer for anticipatory bail. The Court held that the petitioner ran shell companies to launder proceeds of crime, making the allegation serious and denying bail.
The prayer for anticipatory bail is rejected.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JHARKHAND AT RANCHI A.B. A. No. 7507 of 2017
Prashant Kumar Singh @ Prashant Singh …… Petitioner Versus
The State of Jharkhand through Enforcement Directorate…… Opposite Party
CORAM: HON'BLE MR. JUSTICE ANANT BIJAY SINGH
For the Petitioner: M/s Ranjan Kumar, Vishal Kr. Singh, Rahul Kumar, Advocates
For the Enforcement Directorate: Mr. A.K. Das, Spl. P.P
C.A.V on: 08/03/2018 Pronounced on: 12/03/2018
1. The petitioner is apprehending his arrest in connection with ECIR No. 02/Pat/09/AD(D) for the offence registered under sections 3, punishable under section 4 of the Prevention of Money Laundering Act, 2002 on the basis of complaint filed by B. Hazra, Deputy Director, Patna Zonal Office, Patna, alleging therein as follows:
(i.) That, an F.I.R beaing No. 09/09 dated 02.02.2009 was registered at Police Station Nigrani, District Ranchi against Shri Madhu Koda and others for the commission of offences punishable under sections 409, 420, 423, 424, 465, 120B of the Indian Penal Code and under section 7, 10, 11, 13 of the Preventiion of Corruption Act on the basis of a complaint filed by one Shri Rajiv Sharma vide complaint no. 1/09 dated 01.07.2009.
Thus case was taken upon for investigation by the Vigilance Department of Ranchi as per order dated 01.07.2009 of the learned Special Judge, Vigilance, Ranchi passed under section 156(3) of the Code of Criminal Procedure, 1973.
(ii) It is further alleged that a Public Interest Litigation (PIL) NO. 4700 of 2008 was also filed in the Hon'ble High Court of Jharkhand at Ranchi by one Shri Durga Oraon alleging corrupt practices by Shri Madhu Koda and others. Another PIL bearing no. 2252 of 2009, was filed by one Shri Aman Munda making similar allegations against Shri Madhu Koda, Sanjay Kumar Choudhary, Binod Sinha, and others, seeking directions of the Hon'ble High Court for
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investigation by the Central Bureau of Investigation and the Income Tax Department. Subsequently, Directorate of Enforcement was also made one of the respondents in the W.P. (PIL) No. 4700 of 2008.
(iii) It is further alleged subsequently, the Hon'ble High Court of Jharkhand vide order dated 04/08/2010 in W.P. (PIL) NO. 4700 of 2008, transferred the investigations in Jharkhand Vigilance Case No. 09/09 to the C.B.I for further investigation, in compliance of this order, the Jharkhand Vigilance Case No. 09/09 was re-registered by the C.B.I as Case No. RC 5(A)2016/AHD Ranchi dated 11.08.2010.
(iv) It is further alleged that on the basis of F.I.R NO. 09/09 dated 02.07.2009 registered at Police Station, Nigrani, District-Ranchi against Shri Madhu Koda and others for the commission of offences punishable under sections 409, 420, 423, 424, 465, 120B of the Indian Penal Code and section 7/10/11/13 of the Prevention of Corruption Act, the Directorate of Enforcement, Patna collected the copy of F.IR NO. 09/09 dated 02.07.2009 for investigation under the Prevention of Money Laundering Act, 2002 and registered an ECIR bearing NO. ECIR/02/Pat/2009/AD against Bhanu Pratap Sahi accused no. 1.
(v). That, C.B.I, AHD, Ranchi in RC 5(A)/2010/AHD, Ranchi filed the Charge-sheet NO. 07/2011 dated 22.12.2011 under section 173 of the Cr.P.C before the Special Judge, C.B.I, Ranchi against accused no. 1 and others for commission of offence under section 13(2) read with section 13(1) (c) of the Prevention of Corruption Act & Section 109 of the I.P.C.
(vi) The investigation reveals that accused no. 1 Bhanu Pratap Shahi after being elected as a Member of Jharkhand Legislative Assembly on 13.03.2005 and while working as a public servant being a Minister of Health and Labour, Government of Jharkhand during the period 07.02.2007 to 12.01.2009 in the
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cabinet headed by Shri Madhu Koda, during the period 13.03.2005 to 24.07.2009 had acquired disproportionate assets to the tune of Rs. 6,99,95,964/- by abusing his official position. The disproportionate assets has been invested in the form of immovable/movable assets in the name of his relatives, Trust and front companies.
(vii) That an ECIR bearing NO. ECIR/02/Pat/2009/AD dated 08.10.2009 was registered against the accused no. 1 & others for the investigating of the offence of money laundering under the provisions of the Prevention of Money Laundering Act, 2002.
(viii) The investigation further reveals that the disproportionate assets acquired by accused no. 1 was invested in movable and immovable properties, at Garhwa, Ranchi and Delhi in his own name, in the name of relatives, trust and front companies, during the period from 13.03.2005 to 24.07.2009 and thereafter, from the earning which was generated by way of illegal means.
(ix) Investigation further reveals that 5 immovable properties at Gurgaon, Haryana valued at Rs. 2,84,65,500/- in the name of M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd, both at Delhi, the directors of being Shri Prashant Kuamr Singh (petitioner) and Shri Abhishek Kumar Singh (son of another sister of Shri Bhanu Pratap Shahi).
(x) That during investigation conducted by the Directorate of Enforcement, it was revealed that the amount of Rs. 6,06,35,000/- stood invested in from companies of Shri Bhanu Pratap Shahi, namely, M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd in form of share application money.
(xi) It is further alleged that cash along with 0.1% along with commission in cash was paid by Shri Ajay Singh on behalf of M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd to Shri Atul Jalan with the request to adjust
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the same amount of money by cheque against consideration of 0.1% commission to the accounts of M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd in the garb of share application money.
(xii) It is further alleged that M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd are indirectly controlled by Shri Bhanu Pratap Shahi which had no funds of their own. After scrutinizing the bank accounts of M/s Sonanchal Buildcon (P) Ltd and M/s Angesh Trading Co. (P) Ltd . It was revealed that the companies had no capital of their own. The capital was created by way of accommodation entry in exchange of cash. The capital so created was utilized for the purpose of creation of assets in the name of the companies.
(xiii) It is further alleged that both the directors of the companies are relatives of Shri Bhanu Pratap Shahi who were no capable of making the arrangements of cash to the tune of Rs. 6.06 crores as it is evident from the statement of Shri Abhishek Kumr Singh being a student was merely a dummy director, utilized by Shri Prashant Kumar Singh to sign on the papers in lieu of remuneration of Rs. 10,000/- per month.
(xiv) It is further alleged that the petitioner obtained PAN BPYPS6514K on 04.12.2007 assessed to income tax officer, ward no, 2(3), Ranchi however, no income tax return has been filed against the said Pan. Shri Prashant Kumar Singh obtained another PAN BQAPS 8420B assessable to Income Tax Officer, Ward 20(3), New Delhi and started filing his return since 2010 onwards after initiation of investigation against Shri Bhanu Pratap Sahi. On the basis of these allegations, the instant case has been lodged.
2. Learned counsel for the petitioner has submitted that the C.B.I in its charge-sheet filed initially has also not named the petitioner as co-accused but in the supplementary Final Form/Charge Sheet No. 7 dated 22.12.2011, the petitioner has been dragged in the case as an accused on the ground that he
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had been the director of M/s Sonanchal Buildcon & Angesh Trading which had been the front companies of the then Health Minister.
3 . It is further submitted that the petitioner has been dragged in this case only on the basis of statement of one Atul Jalan and Arun Gopal Bansal under section 164 Cr.P.C .
4. It has been submitted that the petitioner has cooperated with the investigation, he has appeared before the C.B.I and never been arrested by the C.B.I, investigation is complete and his custodial interrogation is not required in this case. So the petitioner deserves privilege of anticipatory bail.
5. On the other hand learned counsel for the Enforcement Directorate has vehemently opposed the prayer for anticipatory bail and filed counteraffidavit has been filed on behalf of the Enforcement Directorate. Referring to counter-affidavit, learned Spl. P.P for the Directorate Enforcement has submitted that during investigation it was found that amount of Rs. 6,06,35,000/- stood invested in front companies of Shri Bhanu Pratap Shahi, namely, M/s Sonanchal Buildcon Pvt Ltd and M/s Angesh Trading Co. Pvt. Ltd in form of share application money.
6. Para 21 & 22 of the counter-affidavit reads as under:
“21. That is stated that Shri Atul Jalan, Director of M/s Atul Jalan Portfolio & Finance Co. Pvt. Ltd, in course of his statement dated 23.11.2012 admitted the following:
(a) M/s Raj Rani Securities Pvt. Ltd and M/s Mridul Securities Pvt. Ltd are the sister concerns of M/s Atul Jalan Portfolio & Finance Co. Pvt. Ltd.
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one Shri Arun Gopal Bansal.
(d) Shri Arun Gopal Bansal managed the cheques from various grain merchants of Delhi by way of application for allotment of shares to grain merchants from the sister concerns of Shri Atul Jalan.
(e) Various grain merchants of Delhi remitted money by way of cheque transfers from their bank accoutns to the bank account of the concerns of Shri Atul Jalan, after receipt of cash.
(f) from the bank accounts of the concerns of Shri Atul Jalan, cheques was remitted to the bank accounts of M/s Sonanchal Buildcon Pvt Ltd & M/s Angesh Trading Co. Pvt. Ltd.
22.That it is stated that the investigation has revealed that Shri Ankur Mittal, Director of M/s Magic Buildwell Pvt. Ltd, Delhi which has invested Rs, 38,00,000/- in M/s Angesh Trading Co. Pvt. Ltd and agaisnt two transfers of Rs. 20 lakhs and Rs 18 lakhs received at the instance of Shri Atul Jalan in the account of M/s Magic Buildwell Pvt. Ltd on 30.01.2018, two drafts of equal value were issued on same day I.e 30.01.2018 in favour of M/s Angesh Trading Co. Pvt. Ltd itself again on the direction of Shri Atul Jalan of M/s Jalan Portfolio and Finance Co. Pvt. Ltd against which he has received commission of Rs, 3,800/- in cash without any subscription of any share. This clearly indicates that M/s Magic Buildwell Pvt. Ltd. was a paper firm operating solely for the purpose of providing accommodation entry against receipt of cash.”
7 . I t is further submitted by the counsel for the Enforcement Directorate that the petitioner, being the other Director of M/s Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. Ltd, in course of his statement
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dated 25.03.2013 had admitted that he was the Director of M/s Sonanchal Buildcon P. Ltd Delhi and M/s Angesh Trading Co. P. Ltd, Delhi and in the matter related to the companies, the decisions were always taken by him only.
8 . It is further submitted that the claim made by the petitioner that rental income was one of the source of income of M/s Angesh Trading Co. P. Ltd and M/s Sonanchal Buildcon P. Ltd remained unsubstantiated and was misleading, in as much as the income had not accrued on account of any business activity of the companies. Instead, the rental income had accrued from the properties acquired by the companies from the process of crime and such rental income is indirectly related to profit earned out of proceeds of crime. The above was clearly illustrated on account of the scrutiny of the bank accounts of M/s Angesh Trading Co. P. Ltd and bank accounts of M/s Sonanchal Buildcon as the companies had no funds their own and the capital of the companies was built up by way of accommodation entry in the garb of share application money. From the capital so built up, properties were purchased and rental income started accruing to the companies from the properties so purchased out of proceeds of crime.
9 . Further, it has been submitted that the the circumstances and for the reasons detailed here-in-above, it is evident that the petitioner and other accused persons/entities have directly involved themselves in a process/activity connected with proceeds of crime amounting to Rs. 7,97,96,888/- as they have been found to have knowingly assisted Shri Bhanu Pratap Shahi and or knowingly became a party to transactions connected with process of crime by holding part of the proceeds of crime in their own name and projecting it as untainted property and hence, committed the offence punishable under section 4 of the PMLA, 2002.
10. It is further submitted that the petitioner as director of M/s
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Sonanchal Buildcon P. Ltd and M/s Angesh Trading Co. P. Ltd which have been found to be involved in money laundering, was in-charge of and was responsible for the conduct of the business during the relevant period. So, considering the aforesaid facts, the petitioner does not deserve privilege of anticipatory bail.
11 . After having heard the learned counsel for the petitioner, learned counsel for the Enforcement Directorate, material collected during investigation, it appears that the petitioner was running shell company and has used the company to get the ill-gotten money which has been received by one Bhanu Pratap Shahi to make it white money, the allegation is serious against the petitioner, so, considering the aforesaid facts, I am not inclined to grant anticipatory bail to this petitioner. Accordingly, his prayer for anticipatory bail is hereby rejected.
(Anant Bijay Singh, J.)
Satyarthi/-
2 issues framed by the court
Whether the petitioner deserves the privilege of anticipatory bail while apprehending arrest under the Prevention of Money Laundering Act, 2002.
Whether the petitioner, as a director of front companies used to hide proceeds of crime committed by a public servant, can be granted anticipatory bail.
7 provisions across 5 enactments
Prashant Kumar Singh
The State of Jharkhand through Enforcement Directorate
Anant Bijay Singh
As recorded by the court registry
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