Allowed

Jogendra Tiwari v. Union of India through Directorate of Enforcement

Jharkhand HC3 Sept 2024B.A./11977/2023

Case brief

AI extract

What is this about?

Bail application under PMLA arising from an ECIR based on nineteen FIRs concerning sand, liquor and land business. Most predicate offences ended in acquittal or quashing; remaining land cases were final-reported as civil disputes. Court held no proceeds of crime could be attributed from sand cases, found twin conditions under Section 45 satisfied considering custody since October 2023 and unlikely

What did the court decide?

Petitioner released on bail on furnishing bail bond of Rs. 1,00,000 with two sureties of like amount before Special Judge, CBI-cum-PMLA, Ranchi.

Jogendra Tiwari Vs Union of India through Directorate of… — Money Laundering | Jharkhand HC (2024)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI B.A. No. 11977 of 2023

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Jogendra Tiwari, S/o Shri Rameshwar Tiwari, R/o Station Road, P.O. & P.S. Mihijam, District Jamtara, PIN-815354

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... … Petitioner

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Versus

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Union of India through Directorate of Enforcement, Government of India, having its office at Plot No. 1502/B, Airport Road, P.O. Hinoo, P.S. Doranda, Ranchi, PIN834002, Jharkhand. ... … Opposite Party

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CORAM : HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY

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For the Petitioner : Mr. Anshuman Sinha, Adv., Mr. Indrajit Sinha, Adv. Mr. Aditya Tiwari, Adv. For the Opp. Party : Mr. Amit Kr. Das, Spl. P.P. Mr. Saurav Kumar, Adv. Mr. Sankalp Goswami, Adv.

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C.A.V. on 13/05/2024 Pronounced on 03/09/2024

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Heard Mr. Anshuman Sinha and Mr. Indrajit Sinha, learned counsels for the petitioner and Mr. Amit Kr. Das, learned Spl. P.P. for the Enforcement Directorate.

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2. The petitioner, in this application prays for grant of bail in connection with ECIR/RNZO/09/2022 in ECIR Case No. 08/2023, for the offence u/s 3 of the Prevention of Money Laundering Act, 2002 (for short PMLA, 2002) punishable u/s 4 of PMLA, 2002.

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3. It has been submitted by the learned counsels for the petitioner that on a perusal of the prosecution complaint it would transpire that initially the ECIR was lodged on the basis of four First Information Reports and subsequently by an addendum further fifteen First Information Reports were added. A bare perusal of the conclusions arrived at by the Investigating Agency would reveal that the Directorate of Enforcement has wrongly mentioned that the petitioner has committed the scheduled offences and generated

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the proceeds of crime as out of the nineteen First Information Reports the petitioner was an accused in only three First Information Reports and in all the three cases the Police after investigation had not sent up the petitioner for trial and has filed final forms. Out of the total of nineteen First Information Reports the Directorate of Enforcement in their prosecution complaint have admitted that nine First Information Reports which all relate to the liquor business have been quashed by the Jharkhand High Court in separate quashing applications and, therefore, those have not been considered and the proceeds generated therefrom have not been accounted in the prosecution complaint as proceeds of crime. It has been submitted that out of the remaining fifteen First Information Reports the case of the Directorate of Prosecution relating to proceeds of crime hinges upon a total of six First Information Reports, of which, four relate to alleged generation of proceeds of crime from the business of sand and two relate to the alleged money generated by commission of offences relating to land. Referring to the provisions of PMLA, 2002, learned counsels have submitted that until and unless the proceeds of crime are generated by committing a schedule offence and a person deals with the proceeds of crime in any manner a person cannot be tried or held guilty for the offences under the provisions of PMLA, 2002. Even in case of acquittal, quashing or discharge of an accused in the schedule predicate offence the natural consequence would be that the prosecution under the provisions of PMLA, 2002 shall also stand terminated. In the contours of the said submissions reference has been made to the case of “ Vijay Madanlal Choudhary and Ors. Versus Union of India and Ors. ” reported in 2022 SCC OnLine 929 . The other judgments referred to in this connection are “ Parvathi Kollur and Another versus State by Directorate of Enforcement ” reported in 2022 SCC OnLine SC 1975 , “ Pavana Dibbur versus

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Directorate of Enforcement ” reported in 2023 SCC OnLine1586 , “ Naresh Kumar Kejriwal versus Directorate of Enforcement (Prevention of Money Laundering Act) ” in Cr. Appeal No. 1262/2023. Since Section 45 of the PMLA, 2002 holds centre stage as consideration of grant of bail would be guided by the principles enumerated therein, learned counsels have once again put reliance in the case of “ Vijay Madanlal Choudhary and Ors. Versus Union of India and Ors ” (supra). Mr. Sinha has drawn the attention of the Court to Section 24 of the PMLA, 2002 while submitting that the stage for raising presumption has not been reached as the Special Court has yet to frame charges. The domain of Section 24 of the PMLA, 2002 has been aptly dealt with in the case of “ Anil Tuteja versus Director, Directorate of Enforcement and Others ” reported in 2020 SCC OnLine Chh 2527 . Mr. Sinha, learned counsel for the petitioner has once again reiterated that the generation of proceeds of crime is confined to the purported illegal sale of sand and land. In the context of the sand cases, submission has been advanced that out of four First Information Reports, in three First Information Reports being Jamtara Nagar P.S. Case No. 101/2020, Jamtara Nagar P.S. Case No. 103/2020 and Nala (Jamtara) P.S. Case No. 71/2020 either the cognizance order has been quashed or the petitioner acquitted from the charges levelled against him. So far as the fourth FIR is concerned relating to “Margo Munda P.S. Case No. 27/2020” the order of cognizance has itself been quashed in Cr.M.P. No. 2505/2023 on the ground that the company is not an accused in the charge-sheet. Therefore, in the light of the various pronouncements of the Hon’ble Supreme Court the prosecution of the petitioner under the provisions of PMLA, 2002 is impermissible so far as the predicate offence relating to sand is concerned. Learned counsel has thereafter drawn the attention of the Court to the land cases which have been

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instituted by the Director of Enforcement as predicate offences. These are based on Deoghar Town P.S. Case No. 342/2020 and Jasidih P.S. Case No. 50/2020 and in both the cases the dispute pertains to the same piece of land which has been referred to as “Roy Bungalow”. Final forms have been submitted by the Police in both the cases claiming the dispute to be civil in nature. The contention of the Directorate of Enforcement that in both the cases protest petitions have been filed has been sought to be negated by submitting that only in one case protest petition has been filed as in Jasidih P.S. Case No. 50/2020 the protest petition is said to have been filed on 14.02.2020 while the final form has been submitted much later on 27.06.2023. Even assuming that the protest petitions have been filed, the same would have a significant bearing on the case of the petitioner as it cannot be said that any case is registered with the jurisdictional Police unless the protest petition is to be treated as a complaint in terms of Section 2 (d) of the Code of Criminal Procedure. The protest petition filed in Deoghar P.S. Case No. 342/2020 suffers from several infirmities and does not fulfil the requirement of a complaint as in Section 2 (d) of the Cr.P.C. Reference has been made to the case of “ Mukhtar Zaidi versus the State of Uttar Pradesh and Another ” reported in 2024 SCC OnLine SC 553 . It has, therefore, been submitted that there is no schedule offence relating to the land in question to prosecute the petitioner under PMLA, 2002. So far as the allegation of proceeds of crime of Rs. 4,13,95,000/- generated for sale and purchase of land is concerned, it has been elaborately stated about the dispute between the siblings relating to “Roy Bungalow” culminating in a suit and the documents which have been submitted would clearly indicate that there was no criminal activity in the said case. The land dispute was amicably settled vide Registered Partition Deed No. 1352/2019 and after

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possession of their respective shares the same were sold by the petitioner and such sale deeds have not been challenged in any Court of Law. The aforesaid facts would signify that the amount of Rs. 4,13,95,000/- are not the proceeds of crime as alleged. Mr. Sinha after having dealt with fifteen First Information Reports has now turned his attention to the rest four First Information Reports and while doing so he has submitted that in Narayanpur P.S. Case No. 111/2020 the sole accused had died and the case was, therefore, disposed of and Dhurwa P.S. Case No. 212/2022 was quashed by this Court in Cr.M.P. No. 3641/2023. The remaining two First Information Reports according to Mr. Sinha have not resulted in generation of the proceeds of crime. It has, therefore, been concluded in the aforesaid precincts that the requirement of Section 45 of PMLA, 2002 having been satisfied the petitioner deserves to be released on bail.

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4. Mr. Amit Kr. Das, learned Spl. P.P. for the Enforcement Directorate has submitted that ECIR/RNZO/09/ 2022 was registered by the Directorate of Enforcement based upon four First Information Reports; (i) FIR No. 342/2020 registered at Deoghar Town P.S., (ii) FIR No. 50/2020 registered at Jasidih P.S., (iii) FIR No. 27/2020 registered at Margo Munda P.S. and, (iv) FIR No. 01/2022 registered at Rikhya P.S. Deoghar. Since Sections 419, 420, 467, 471 and 120B IPC are schedule offences as mentioned in Schedule “A” of PMLA, 2002 investigation was taken up for commission of the offences of Money Laundering after recording an ECIR. Further another fifteen FIRs have merged with the present investigation of ECIR by addendum dated 16.10.2023. It has been submitted that a total of nineteen First Information Reports consisting of schedule offence under PMLA, 2002 were considered during investigation as the petitioner was found directly or indirectly involved in various illegal business related

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sand mining, land grabbing, extortion and liquor business etc. Thus the said First Information Reports which have been merged are either in the name of family members, relations, employees of the petitioner or associates involved in similar illegal business. It has been submitted that the modus operandi of the petitioner is to be involved in illegal business which is running in the name of his employer or relations or family members. Hence, the petitioner is never directly involved in most of the business but the ultimate beneficiary of such activities is the petitioner. Mr. Amit Kr. Das, learned Spl. P.P. in relation to the land grabbing cases are concerned has submitted that in FIR No. 342/2020 and FIR No. 50/2020 final form has been submitted by the Police showing the dispute to be civil in nature and in FIR No. 342/2020 a protest petition has been filed by the informant stating therein that the house was demolished and the belongings were looted by the accused persons and the said protest petition is pending adjudication before CJM, Deoghar. In FIR No. 50/2020 also the informant has filed a protest petition on 14.02.2020. With respect to the sand mining cases in FIR No. 71/2020, the learned trial court has passed an order of acquittal on 17.10.2023 and so far as Margo Munda P.S. Case No. 27/2020 is concerned, the cognizance order was quashed by the High Court and the matter was remanded back to the learned trial court for passing a reasoned and speaking order afresh as per law after considering the materials available on record. Therefore, the said predicate offence is pending. Mr. Amit Kr. Das, learned Spl. P.P. has drawn the attention of the Court to the liquor business while submitting that nine First Information Reports were quashed by the High Court although the matters were related to the search conducted by the State Police and liquor was found to be in excess as per the stock register of the petitioner and the proceeds of liquor business were not

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considered in the investigation. The other case is Dhurwa P.S. Case No. 212/2022 wherein cognizance has been taken by the accused persons for the offence u/s 504 IPC. It has further been submitted that after filing of the prosecution complaint two of the First Information Reports have either been quashed by the High Court or an order of acquittal has been passed and in FIR No. 101/2020 although the same was quashed but the matter was remanded back for framing of charge under other Sections if any offence is made out. The submission of the learned counsel for the petitioner that no predicate offence remain is misconceived as protest petitions have been filed in two of the land grabbing cases and in two cases charge-sheets have been filed. The generation of proceeds of crime to the tune of Rs. 5.6 Crores by sale of land will survive prosecution as a protest petition has been filed and the protest petition is treated as a complaint petition pending inquiry and taking recourse to “ Vijay Madanlal Choudhary and Ors. Versus Union of India and Ors ” (supra), it has been submitted that for institution of prosecution case under PMLA, 2002 the registration of an FIR or the pendency of a complaint for inquiry is required which is fulfilled in view of the pendency of the protest petition. It has been submitted that the proceeds of crime in cash amounting to Rs. 2,43,79,070/- has been deposited directly in the bank account of the concerns of the petitioner which had applied for license of wholesale sale of liquor in the State of Jharkhand in the year 2021 and apart from this the proceeds of crime in cash amounting to Rs.3,82,41,860/- have been firstly deposited in the bank account of the associates of the petitioner and was thereafter transferred to the bank accounts of the concerns of the petitioner. By adopting such modes the total proceeds of crime to the tune of Rs. 6,26,20,930/- had reached the concerns belonging to the petitioner either directly or after routing it

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through the accounts of their associates. It has been submitted that the bank accounts/statements of the companies/firms of the petitioner reveals that cash deposit has been utilized by the petitioner for meeting the application for the license of wholesale sale of liquor and for operational expenses in the said business in the State of Jharkhand. It has been submitted that the accused need not be named in the predicate offence and the predicate offence is considered to be concluded only in case of quashing of the various proceedings, acquittal or discharge of the accused. In support thereof reliance has been placed in the case of “ Vijay Madanlal Choudhary and Ors. Versus Union of India and Ors ” (supra). He has also referred to the case of “ P. Rajendran versus The Assistant Director, Directorate of Enforcement ” in Criminal Original Petition No. 19880 of 2022 of the Madras High Court and “ Pavana Dibbur versus Directorate of Enforcement ” (supra). Drawing the attention of the Court to the rigors of Section 45 PMLA, 2002 reference has been made by Mr. Amit Kr. Das, learned Spl. P.P. to the case of “ Tarun Kumar versus Assistant Director, Directorate of Enforcement ” reported in 2023 SCC OnLine SC 1486. It has been submitted that the petitioner has failed to discharge the burden of proof u/s 24 PMLA, 2002 and in this connection he has referred to the case of “ Rohit Tandon versus Directorate of Enforcement ” reported in 2018 11 SCC 46 and “ Union of India versus Hassan Ali Khan and Another ” reported in 2011 10 SCC 235 . The conduct of the petitioner has also been highlighted to the effect that a search was conducted in the residential premises of the petitioner and Amrendra Tiwari on 23.08.2023 and from the said premises the mobile phone of the petitioner was recovered and seized and it was found that the data from the said phone has been deleted. Moreover, the petitioner was found to be tampering with the evidence as the e-mail which were used for correspondence with regard to the

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business activities of the petitioner have been deleted and the petitioner has also failed to provide access to the e-mail Id. In course of investigation statements were recorded which revealed that the E-mail Id belongs to the petitioner. The petitioner being in judicial custody had threatened the Chief Editor of the Newspaper Prabhat Khabar after filing of the prosecution complaint for which an FIR was also got registered.

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5. The submission of the learned ASGI has been replied to by the learned counsels for the petitioner to the effect that after the change in Government Policy of Liquor Trade in March, 2024 the business was taken over by the State and the related documents were not retained by the petitioner anymore. So far as the various e-mails are concerned, the Investigating Agency has already recovered the contents of the said e-mails. The e-mail [email protected] has not been used by the petitioner for a long time since the liquor policy itself has changed. As regards, the allegation of deposit of cash is concerned, it has been submitted that the business of sand and liquor involves cash transaction and the cash accrued from these business transactions has been deposited in the bank and the documents showing the routine business activities and transactions of these companies have already been brought on record. It has been submitted that the incident in Birsa Munda Central Jail, Hotwar led to institution of FIR No. 564/1993 converted to CID P.S. Case No. 04/2023 and the same has already been quashed in W.P.(Cr.) No.94/2024.

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6. The prosecution complaint was filed by the Directorate of Enforcement being ECIR Case No. 08/2023, in which, the petitioner has been made an accused. The details of the predicate offences have been enumerated in the prosecution complaints which includes; (a) Deoghar Town P.S.

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Case No. 342/2020 which alleges that all the accused persons had usurped the land belonging to Kiran Singh by forceful means and by producing forged documents. The accused persons had demolished the house of the complainant and had looted their belongings amounting to Rs. 5,00,000/- and had also threatened to kill the complainant and her family. The second FIR is Jasidih P.S. Case No. 50/2020 against the petitioner and others and the accused persons are alleged to be involved in hatching a criminal conspiracy by issuance and production of forged land possession certificate and deed for land measuring 27,413.25 square feet at Mouza-Shyamganj, Thana No.-413, Plot No.- 775 and 776, District- Deoghar. On the basis of the land possession certificate the complainant had executed an agreement to sale in the name of M/s. Saran Alcohol Pvt. Ltd., and Brij Mohan Singh. The third predicate offence is Margo Munda P.S. Case No. 27/2020, in which, it is alleged that a surprise inspection was conducted by the Circle Office and the Officer-Incharge of Margo Munda P.S. on 15.07.2020 at Pandnia Sand Mines which was operated by Saran Alcohol, Distillery Road, Gilanpara Dumka and during such inspection it was found that on 14.07.2020 total sand mining was 91,250 cubic feet but only 80,000 cubic feet of sand was found at the storage place and it was suspected that 11,250 cubic feet of sand was illegally transferred/sold resulting in wrongful loss to the exchequer. The fourth FIR is Rikhya P.S. Case No. 01/2022, in which, it has been alleged that on 01.01.2022 one vehicle was stopped for checking and in course of inspection Rs. 1,51,400/- in cash and two mobile phones were recovered from the driver and liquor was also seized from the vehicle and the driver had confessed that he was smuggling foreign liquor in his personal vehicle on the basis of the invoice issued by M/s. Saran Alcohol Pvt. Ltd., of which, the petitioner is one of the Directors.

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It has been alleged that during the course of investigation searches were conducted in various premises related to the petitioner and during such search it was revealed that the petitioner was doing the business of sand and liquor in the name of other individuals and entities and several FIRs have been registered against such individuals with regard to illegal sale of sand, illegal storage of liquor and extortion. In the interest of investigation fifteen FIRs were merged with the investigation of the ECIR/RNZO/09/2022 by issuance of an addendum dated 16.10.2023. The role of the petitioner has been demarcated in the prosecution complaint in the following manner:

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(a) Accused Jogendra Tiwari has committed the schedule offence as mentioned in the FIRs. Through these illegal activities, Jogendra Tiwari has acquired huge amounts of cash which is nothing but the proceeds of crime to the tune of Rs. 13,29,92,620/-.

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(b) Accused Jogendra Tiwari has generated huge proceeds of crime from the illegal sale of sand without challan and also from the fraudulent sale of lands and deposited the same in the bank account of himself and the entities under his control.

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(c) Further the same proceeds of crime were also utilized for payment of license fees in the application for getting wholesale liquor license. (d) Jogendra Tiwari has indulged knowingly as a party and is actually involved in the process related to proceeds of crime by

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(i) Placement – depositing the proceeds of crime generated in the form of cash by the commission of the

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schedule offence in the bank account of his entities, the individuals associated with him and their entities.

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(ii) Layering – In some cases the proceeds of crime are routed through various accounts under his control.

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(iii) Integration – The said proceeds of crime are then integrated in the entities belonging to Jogendra Tiwari and / or his associates and / or their entities and used for payment of license fee of wholesale sale of liquor. Further the accused Jogendra Tiwari has been found to indulge in concealment, possession, acquisition, use and projecting the proceeds of crime as untainted property.

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7. The prosecution complaint would, therefore, reveal that initially the predicate offences related to four FIRs and subsequently by an addendum fifteen more FIRs were added. In this context, we may refer to para 9.3 of the prosecution complaint which reads as follows:

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“9.3 It is submitted that as mentioned in paragraph 2.3 that cognizance order in 9 FIRs has been quashed by Hon‟ble High Court of Jharkhand on 07.11.2023 i.e. after arrest of Jogendra Tiwari. However, it is submitted that in all the 9 FIRs the entities had licenses for retail sale of liquor and the said retail shops were raided and in all these cases it was found that the stock of liquor in the retail shop is over and above the stock mentioned in the books. Since all these businesses were actually being run by Jogendra Tiwari along with numerous

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other retail shops in the name of other individuals, therefore, he was the beneficiary of the proceeds of crime generated by selling of this over stocked liquor. However, the said proceeds of crime are not being considered here. ”

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8. It would, therefore, reveal that the purported proceeds of crime for the trade in liquor has not been considered to be the subject matter of the investigation. The proceeds of crime are therefore confined to the illegal sale of land and illegal sale of sand. It would be pertinent to mention that the status of all nineteen FIRs have been enumerated in a tabular form at para 2.3 of the prosecution complaint and from which it appears that twelve cases as at serial nos. 3, 7, 9 to 18 of the tabular chart have either ended in acquittal or the prosecution itself has been quashed by this Court and one of the cases has been disposed of due to the death of the sole accused. As regards the cases mentioned at serial nos. 5, 6 and 19 the same have also come to an end on account of the quashment of the case(s) and / or acquittal of the accused after the filing of the prosecution complaint. The impact of quashment, discharge or acquittal in the predicate offence on the offence of money laundering has been considered in the case of “ Vijay Madanlal Choudhary and Ors. Versus Union of India and Ors. ” reported in 2022 SCC OnLine 929, wherein it has been held as follows:

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“251. The “proceeds of crime” being the core of the ingredients constituting the offence of moneylaundering, that expression needs to be construed strictly. In that, all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as proceeds of crime. There may be cases where the property involved in the commission of scheduled offence attached by the investigating agency dealing with that offence, cannot be wholly or partly regarded as proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act — so long as the

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whole or some portion of the property has been derived or obtained by any person “as a result of” criminal activity relating to the stated scheduled offence. To be 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. To put it differently, the vehicle used in commission of scheduled offence may be attached as property in the concerned case (crime), it may still not be proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act. Similarly, possession of unaccounted property acquired by legal means may be actionable for tax violation and yet, will not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence and such offence is included in the Schedule of the 2002 Act. 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. This distinction must be borne in mind while reckoning any property referred to in the scheduled offence as proceeds of crime for the purpose of the 2002 Act. Dealing with proceeds of crime by way of any process or activity constitutes offence of money-laundering under Section 3 of the Act.

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252. Be it noted that the definition clause includes any property derived or obtained “indirectly” as well. This would include property derived or obtained from the sale proceeds or in a given case in lieu of or in exchange of the “property” which had been directly derived or obtained as a result of criminal activity relating to a scheduled offence. In the context of Explanation added in 2019 to the definition of expression “proceeds of crime”, it would inevitably include other property which may not have been derived or obtained as a result of any criminal activity relatable to the scheduled offence. As noticed from the definition, it essentially refers to “any property” including abroad derived or obtained directly or indirectly. The Explanation added in 2019 in no way travels beyond that intent of tracking and reaching upto the property derived or obtained directly or indirectlyas a result of criminal

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activity relating to a scheduled offence. Therefore, the Explanation is in the nature of clarification and not to increase the width of the main definition “proceeds of crime”. The definition of “property” also contains Explanation which is for the removal of doubts and to clarify that the term property includes property of any kind used in the commission of an offence under the 2002 Act or any of the scheduled offences. In the earlier part of this judgment, we have already noted that every crime property need not be termed as proceeds of crime but the converse may be true. Additionally, some other property is purchased or derived from the proceeds of crime even such subsequently acquired property must be regarded as tainted property and actionable under the Act. For, it would become property for the purpose of taking action under the 2002 Act which is being used in the commission of offence of moneylaundering. Such purposive interpretation would be necessary to uphold the purposes and objects for enactment of 2002 Act. 253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for moneylaundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression “derived or obtained” is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for moneylaundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular

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Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause “proceeds of crime”, as it obtains as of now. ”

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It has also been held in the said case as

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follows:

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“187. Further, the PMLA does not contain any provision which invest the power of an officer incharge of a police station, including the power to file a chargesheet, in the investigating officer as contained in the NDPS Act. Moreover, in case of the NDPS Act, the investigating authority is required to file a chargesheet. However, in case of the PMLA, cognizance is taken on a complaint. ”

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10. In the case of “ Pavana Dibbur versus Directorate

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of Enforcement ” (supra), it has been held as follows:

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“18. In a given case, if the prosecution for the scheduled offence ends in the acquittal of all the accused or discharge of all the accused or the proceedings of the scheduled offence are quashed in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accused in the PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the chargesheets filed in the scheduled offences deserves to be rejected. ”

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11.

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The petitioner’s involvement in the illegal

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business of sand as a predicate offence is related to four FIRs;

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Jamtara Nagar P.S. Case No. 101/2020, Jamtara Nagar P.S. Case No. 103/2020, Nala (Jamtara) P.S. Case No. 71/2020 and Margo Munda P.S. Case No. 27/2020. All the four cases have ended in either acquittal or quashment of the prosecution case.

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12. Applying the matrix of the pronouncements quoted above there being no predicate offence in existence so far as sand is concerned and as a consequence thereof no proceeds of crime can be said to have been generated on account of the same.

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13. The other aspect of the allegation relates to the dealing in land by the petitioner and his other associates / entities. These are confined to two FIRs; Deoghar Town P.S. Case No. 342/2020 and Jasidih P.S. Case No. 50/2020. In Deoghar Town P.S. Case No. 342/2020 final form no. 349/2023 has been submitted while in Jasidih P.S. Case No. 50/2020 final form no. 204/2023 has been submitted showing both the disputes to be civil in nature. It is the case of the Directorate of Enforcement that in both the cases protest petitions have been filed though the same has been refuted by the learned counsel for the petitioner to the effect that no protest petition has been filed in Jasidih P.S. Case No. 50/2020. It is the case of the petitioner that mere filing of the protest petition without fulfilling the particulars necessary would not categorize the same to be a “complaint” and once the Jurisdictional Police has submitted final form and the status of the case continues to remain in the realm of the protest petition not having been treated as a “complaint” the same cannot be concluded to be the commission of a schedule offence and the property being a proceeds of crime. In such context, reference may be made to the case of “ Mukhtar Zaidi versus the State of Uttar Pradesh and Another ” reported in 2024 SCC OnLine SC 553, wherein it has been held as follows:

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“9. In the case of Vishnu Kumar Tiwari v. State of Uttar Pradesh, through Secretary Home, Civil Secretariat, Lucknow, Justice K.M. Joseph, speaking for the Bench laid down the legal position relying upon previous judgments of this Court. In the said case the facts were quite similar to that of the present case where affidavits were filed along with the Protest Petition. The net result is that the Magistrate in the present case ought to have treated the Protest Petition as a complaint and proceeded according to Chapter XV of the Cr. P.C.. The relevant paragraphs dealing with the above aspect in the case of Vishnu Kumar Tiwari (supra), being paragraphs 42 to 46 are reproduced hereunder:

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“42. In the facts of this case, having regard to the nature of the allegations contained in the Protest Petition and the annexures which essentially consisted of affidavits, if the Magistrate was convinced on the basis of the consideration of the final report, the statements under Section 161 of the Code that no prima facie case is made out, certainly the Magistrate could not be compelled to take cognizance by treating the Protest Petition as a complaint. The fact that he may have jurisdiction in a case to treat the Protest Petition as a complaint, is a different matter. Undoubtedly, if he treats the Protest Petition as a complaint, he would have to follow the procedure prescribed under Sections 200 and 202 of the Code if the latter section also commends itself to the Magistrate. In other words, necessarily, the complainant and his witnesses would have to be examined. No doubt, depending upon the material which is made available to a Magistrate by the complainant in the Protest Petition, it may be capable of being relied on in a particular case having regard to its inherent nature and impact on the conclusions in the final report. That is, if the material is such that it persuades the court to disagree with the conclusions arrived at by the investigating officer, cognizance could be taken under Section 190(1)(b) of the Code for which there is no necessity to examine the witnesses under

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Page 18 of 25 B.A. No. 11977 of 2023

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Section 200 of the Code. But as the Magistrate could not be compelled to treat the Protest Petition as a complaint, the remedy of the complainant would be to file a fresh complaint and invite the Magistrate to follow the procedure under Section 200 of the Code or Section 200 read with Section 202 of the Code. Therefore, we are of the view that in the facts of this case, we cannot support the decision of the High Court.

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43. It is true that law mandates notice to the informant/complainant where the Magistrate contemplates accepting the final report. On receipt of notice, the informant may address the court ventilating his objections to the final report. This he usually does in the form of the Protest Petition. In Mahabir Prasad Agarwala v. State [Mahabir Prasad Agarwala v. State, 1957 SCC OnLine Ori 5 : AIR 1958 Ori 11], a learned Judge of the High Court of Orissa, took the view that a Protest Petition is in the nature of a complaint and should be examined in accordance with the provisions of Chapter XVI of the Criminal Procedure Code. We, however, also noticed that in Qasim v. State [Qasim v. State, 1984 SCC OnLine All 260 : 1984 Cri LJ 1677], a learned Single Judge of the High Court of Judicature at Allahabad, inter alia, held as follows : (Qasim case [Qasim v. State, 1984 SCC OnLine All 260 : 1984 Cri LJ 1677], SCC OnLine All para 6)

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“6. … In Abhinandan Jha [Abhinandan Jha v. Dinesh Mishra, AIR 1968 SC 117 : 1968 Cri LJ 97 : (1967) 3 SCR 668] also what was observed was “it is not very clear as to whether the Magistrate has chosen to treat the Protest Petition as complaint”. This observation would not mean that every Protest Petition must necessarily be treated as a complaint whether it satisfies the conditions of the complaint or not. A private complaint is to contain a complete list of witnesses to be examined. A further examination of complainant is made under Section 200 CrPC. If the Magistrate did not treat the Protest Petition as a complaint, the

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Protest Petition not satisfying all the conditions of the complaint to his mind, it would not mean that the case has become a complaint case. In fact, in majority of cases when a final report is submitted, the Magistrate has to simply consider whether on the materials in the case diary no case is made out as to accept the final report or whether case diary discloses a prima facie case as to take cognizance. The Protest Petition in such situation simply serves the purpose of drawing Magistrate's attention to the materials in the case diary and invite a careful scrutiny and exercise of the mind by the Magistrate so it cannot be held that simply because there is a Protest Petition the case is to become a complaint case.”

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(emphasis supplied)

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44. We may also notice that in Veerappa v. Bhimareddappa [Veerappa v. B himareddappa, 2001 SCC OnLine Kar 447 : 2002 Cri LJ 2150], the High Court of Karnataka observed as follows : (SCC OnLine Kar para 9)

¶84

“9. From the above, the position that emerges is this : Where initially the complainant has not filed any complaint before the Magistrate under Section 200 CrPC, but, has approached the police only and where the police after investigation have filed the „B‟ report, if the complainant wants to protest, he is thereby inviting the Magistrate to take cognizance under Section 190(1)(a) CrPC on a complaint. If it were to be so, the Protest Petition that he files shall have to satisfy the requirements of a complaint as defined in Section 2(d) CrPC, and that should contain facts that constitute offence, for which, the learned Magistrate is taking cognizance under Section 190(1)(a) CrPC. Instead, if it is to be simply styled as a Protest Petition without containing all those necessary particulars that a normal complaint has to contain, then, it cannot be construed

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Page 20 of 25 B.A. No. 11977 of 2023

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as a complaint for the purpose of proceeding under Section 200 CrPC.” 45. “Complaint” is defined in Section 2(d) of the Code as follows:

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“2. (d) “complaint” means any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report.

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Explanation.—A report made by a police officer in a case which discloses, after investigation, the commission of a noncognizable offence shall be deemed to be a complaint; and the police officer by whom such report is made shall be deemed to be the complainant;”

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46. If a Protest Petition fulfils the requirements of a complaint, the Magistrate may treat the Protest Petition as a complaint and deal with the same as required under Section 200 read with Section 202 of the Code. In this case, in fact, there is no list of witnesses as such in the Protest Petition. The prayer in the Protest Petition is to set aside the final report and to allow the application against the final report. While we are not suggesting that the form must entirely be decisive of the question whether it amounts to a complaint or is liable to be treated as a complaint, we would think that essentially, the Protest Petition in this case, is summing up of the objections of the second respondent against the final report.”

¶90

10. From a perusal of the above opinion of this Court, it is also reflected that the Magistrate also had the liberty to reject the Protest Petition along with all other material which may have been filed in support of the same. In that event the Complainant would be at liberty to file a fresh complaint. The right of the Complainant to file a petition under Section 200 Cr. P.C. is not taken away even if the Magistrate concerned does not direct that such a Protest Petition be treated as a complaint.

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14. Notwithstanding the aforesaid scenario the dispute and /or the predicate offence primarily relate to a piece of property commonly known as “Roy Bungalow”. This property appears to have undergone litigation for more than half a century and after partition various sale deed were executed for the said property. Paragraph 8 of the prosecution complaint contains the details of the purported involvement of the petitioner who as a member of the syndicate had taken control of “Roy Bungalow” and had systematically dismantled the structure and sold off portions of it ignoring the claims of the earlier purchasers. The proceeds of crime has been construed to be the difference between the actual consideration of land paid by the purchasers and the consideration amount mentioned in the sale deed. The Investigating Agency has tried to highlight the role played by the petitioner in possessing and selling off the property “Roy Bungalow” to different individuals but the predominant aspect of the case as stated above is with respect to the civil litigation and the consequent execution of sale deeds which gives an imprimatur to the dispute being civil in nature. Moreover, no conclusive role seems to have been specifically assigned to the petitioner. 15. Apart from the land cases, in which, protest petitions are said to have been pending the rest two cases which are pending are Rikhya P.S. Case No. 01/2022 and Jamtara (Mihijam) P.S. Case No. 140/2017 and these cases do not reveal generation of proceeds of crime by the petitioner.

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16. Another aspect of the case is the period of incarceration of the petitioner in custody which is since 20.10.2023 and the trial having not yet started. In this connection, reference is made to the case of “ Ramkripal Meena versus Directorate of Enforcement ” in Special Leave to Appeal (Crl.) No. 3205/2024, wherein it has been held as follows:

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“7. Adverting to the prayer for grant of bail in the instant case, it is pointed out by learned counsel for ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to be examined. The conclusion of proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year. Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and keeping in view the peculiar facts and circumstances of this case, it seems to us that the rigours of Section 45 of the Act can be suitably relaxed to afford conditional liberty to the petitioner. Ordered accordingly. ”

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17. In the case of “ Manish Sisodia versus

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Directorate of Enforcement ” reported in 2024 SCC OnLine SC 1920 , it has been held as follows:

¶98

“53. The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. 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 Courts should recognize the principle that “bail is rule and jail is exception”.

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54. In the present case, in the ED matter as well as the CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the

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Page 23 of 25 B.A. No. 11977 of 2023

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prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. ”

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18. The period of custody and the probability of the trial being concluded in the near future seemingly remote these grounds can also be a defining factor in considering of grant of bail to an accused as observed by the Hon’ble Supreme Court in the above quoted judgments. 19. Based on the discussions made hereinabove, it is concluded that there is “reason to believe” that the petitioner is not guilty of the offence as alleged. So far as the other conditions envisaged in Section 45 of PMLA, 2002 is concerned, reference is made to the case of “ Ranjitsing Brahmajeetsing Sharma versus State of Maharashtra ”, reported in (2005) 5 SCC 294, wherein it has been held as follows:

¶103

“38. We are furthermore of the opinion that the restrictions on the power of the court to grant bail should not be pushed too far. If the court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the court as regards his likelihood of not committing an offence while on bail must be construed to mean an offence under the Act and not any offence whatsoever be it a minor or major offence. If such an expansive meaning is given, even likelihood of commission of an offence under Section 279 of the Penal Code, 1860 may debar the court from releasing the accused on bail. A statute, it is trite, should not be interpreted in such a manner as would lead to absurdity. What would further be necessary on the part of the court is to see the culpability of the accused and his involvement in the commission of an organised crime either directly or indirectly. The court at the time of considering the application for grant of bail shall consider the question from the angle as to whether he was possessed of the requisite mens rea. Every little omission or commission, negligence or dereliction may not lead to a possibility of his having culpability in the matter which is not the

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sine qua non for attracting the provisions of MCOCA. A person in a given situation may not do that which he ought to have done. The court may in a situation of this nature keep in mind the broad principles of law that some acts of omission and commission on the part of a public servant may attract disciplinary proceedings but may not attract a penal provision. ”

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20. This condition can be construed to be also fulfilled by the petitioner primarily for the reason that in a vast majority of the cases which form the schedule offences his complicity has not come to light leading to quashment of the case or the acquittal of the accused and, therefore, there is no likelihood of the petitioner committing a similar nature of offence.

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21. The twin conditions as encapsulated in Section 45 of PMLA, 2002 having been fulfilled coupled with the period of incarceration of the petitioner and there being no probability of the trial being concluded in the near future leads this Court to conclude that the petitioner deserves to be released on bail. Accordingly, the petitioner is directed to be released on bail on furnishing bail bond of Rs. 1,00,000/- (Rupees One lac only) with two sureties of the like amount each, to the satisfaction of learned Special Judge, CBI-cum-PMLA, Ranchi in connection with ECIR/RNZO/09/2022 in ECIR Case No. 08/2023.

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22. It is made clear that the observations made in this order shall not have any bearing in the trial and are restricted only for the purposes of consideration of the plea of bail of the petitioner.

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23. This application is allowed.

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(Rongon Mukhopadhyay, J.)

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A. Sanga /AFR

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Page 25 of 25 B.A. No. 11977 of 2023

Jogendra Tiwari v. Union of India through Directorate of Enforcement

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Jogendra Tiwari v. Union of India through Directorate of Enforcement

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