[2023] 14 S.C.R. 813 : 2023 INSC 1006

CASE DETAILS

TARUN KUMAR

ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT

(Criminal Appeal No. 3593 of 2023)

NOVEMBER 20, 2023

[ANIRUDDHA BOSE AND BELA M. TRIVEDI, JJ.]

HEADNOTES

Issue for consideration: Appellant was arrested on the fourth supplementary complaint fi led u/ss.44, 45, Prevention of Money Laundering Act, 2002, in continuation of three complaints in the Complaint Case, for the commission of the oﬀ ence of money laundering. High Court whether justifi ed in dismissing the bail application of the appellant seeking bail in connection with the said Complaint Case bearing ECIR No. arising out of the FIR registered for oﬀ ence u/s.13(2) r/w 13(1)(d), Prevention of Corruption Act, 1988 and u/s.120B r/w ss.420, 465, 467, 468, 471, IPC.

Prevention of Money Laundering Act, 2002 - ss.50, 45 - Plea of the appellant that he was not named in the FIR nor in fi rst three prosecution/ supplementary complaints and was implicated only on the basis of the statements of witnesses recorded pursuant to the summons issued u/s.50, without there being any material in support thereof:

Held: There is no merit in the said submission - The statements of witnesses/accused are admissible in evidence in view of s.50 and such statements may make out a formidable case about the involvement of the accused in the commission of a serious oﬀ ence of money laundering - As transpiring from the supplementary complaint fi led against the appellant, apart from the statements of witnesses recorded u/s.50, PMLA, there was suffi cient material collected in the form of documents prima facie showing as to how the appellant was knowingly a party and actually involved in the process and in the activities connected with the proceeds of crime, how he was projecting/claiming such proceeds of crime as untainted and how he

SUPREME COURT REPORTS


was the benefi ciary of the proceeds of crime acquired through the criminal activities relating to the scheduled oﬀ ences - Appellant has not been able to overcome the threshold stipulations contemplated in s.45 as he has failed to prima facie prove that he is not guilty of the alleged oﬀ ence and is not likely to commit any oﬀ ence while on bail - Burden of proof lies on the accused for the purpose of the condition set out in the s.45 that he is not guilty of such oﬀ ence - Of course, such discharge of burden could be on the probabilities, nonetheless in the instant case there being suffi cient material on record adduced by the respondent showing the thick involvement of the appellant in the alleged oﬀ ence of money laundering u/s.3, PMLA, thus, bail cannot be granted to the appellant - The submission to grant bail to the appellant on the ground that the other co-accused similarly situated as the appellant were granted bail, not accepted - Bail - Prevention of Corruption Act, 1988 - Penal Code, 1860 - ss.420, 465, 467, 468, 471. [Paras 15, 16, 20]

Prevention of Money Laundering Act, 2002 - s.3:

Held: The oﬀ ence of money laundering u/s.3 is an independent oﬀ ence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled oﬀ ence - It is not dependent or linked to the date on which the scheduled oﬀ ence or predicate oﬀ ence has been committed - The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime - Thus, the involvement of the person in any of the criminal activities like concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the oﬀ ence of money laundering u/s. 3. [Para 15]

Bail - Principle of Parity:

Held: Parity is not the law - While applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration - In the instant case, the main accused, Managing Director of SBFL, and KMP of group companies and the other accused, owner/ operator/ controller of various shell companies were granted bail on the ground of infi rmity and medical grounds - The coaccused who was the internal auditor of SBFL was granted bail by the

High Court, however the said order of High Court was challenged by the respondent before this Court by fi ling being SLP and the same is pending under consideration - High Court in the impugned order while repelling the said submission made on behalf of the appellant, had distinguished the said co-accused and observed that unlike him who was an internal auditor of SBFL (for a brief period statutory auditor of SBFL), the applicant was the Vice President of Purchases and as a Vice President, he was responsible for the day-to-day operations of the company and his role was made out from the fi nancials, where direct loan funds have been siphoned oﬀ to the sister concerns of SBFL, where the appellant was either a shareholder or director - In any case, the order granting bail to the said co-accused being under consideration before this Court, it would not be appropriate to make any observation with regard to the said order passed by the High Court - Furthermore, the principle of parity is based on the guarantee of positive equality before law enshrined in Article 14 - However, if any illegality or irregularity has been committed in favour of any individual or a group of individuals, or a wrong order has been passed by a judicial forum, others cannot invoke the jurisdiction of the higher or superior court for repeating or multiplying the same irregularity or illegality or for passing similar wrong order - Article 14 is not meant to perpetuate the illegality or irregularity - Constitution of India - Article 14. [Para 18]

Bail - Economic oﬀ ences - Duty of Court:

Held: Economic oﬀ ences constitute a class apart and need to be visited with a diﬀ erent approach in the matter of bail - Such oﬀ ences having deeprooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave oﬀ ences aﬀ ecting the economy of the country as a whole and thereby posing serious threat to the fi nancial health of the country - Court while considering an application seeking bail, is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, it 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 oﬀ ences, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT


the public/State etc. - Though, the fi ndings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic oﬀ ences. [Paras 13, 22]

Prevention of Corruption Act, 1988 - s.45 - Conditions specifi ed under:

Held: Are mandatory - They need to be complied with - The Court is required to be satisfi ed that there are reasonable grounds for believing that the accused is not guilty of such oﬀ ence and he is not likely to commit any oﬀ ence while on bail - As per the statutory presumption permitted u/s. 24, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the oﬀ ence of money laundering u/s.3, such proceeds of crime are involved in money laundering - Such conditions enumerated in s.45 will have to be complied with even in respect of an application for bail made u/s.439, CrPC in view of the overriding eﬀ ect given to the PML Act over the other law for the time being in force, u/s.71 of the PML Act - Code of Criminal Procedure, 1973 - s.439. [Para 17]

Criminal Law - Economic oﬀ ences - Continued detention of accused, courts to conclude trials within reasonable time ensuring the right of speedy trial guaranteed by Article 21:

Held: With the advancement of technology and Artifi cial Intelligence, the economic oﬀ ences like money laundering have become a real threat to the functioning of the fi nancial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein - Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law - When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time ensuring the right of speedy trial guaranteed by Article 21 - Constitution of India - Article 21. [Para 23]

LISTS OF CITATIONS AND OTHER REFERENCES

Vijay Madanlal Choudhary and Others vs. Union of India and Others (2022) SCC Online SC 929; Gautam Kundu vs. Directorate of Enforcement (2015) 16 SCC 1: [2015] 15 SCR 499; Rohit Tandon vs.

Directorate of Enforcement (2018) 11 SCC 46: [2017] 13 SCR 156 - relied on.

Manish Sisodia vs. Central Bureau of Investigation (2023) SCC Online SC 1393; Sanjay Raghunath Agarwal Vs. Directorate of Enforcement (2023) SCC Online SC 455; Satender Kumar Antil vs.

Central Bureau of Investigation and Another (2022) 10 SCC 51; State of Madhya Pradesh vs. Sheetla Sahai and Others (2009) 8 SCC 617: [2009] 12 SCR 1048; Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation (2013) 7 SCC 439; Nimmagadda Prasad vs. Central Bureau of Investigation (2013) 7 SCC 466; Gautam Kundu vs. Directorate of Enforcement (supra) State of Bihar and Another vs. Amit Kumar alias Bachcha Rai (2017) 13 SCC 751: [2017] 4 SCR 503; State of Gujarat vs. Mohanlal Jitamalji Porwal and Another (1987) 2 SCC 364: [1987] 2 SCR 677 - referred to.

OTHER CASE DETAILS INCLUDING IMPUGNED

ORDER AND APPEARANCES

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.3593 of 2023.

From the Judgment and Order dated 18.07.2023 of the High Court of Delhi at New Delhi in BA No.152 of 2023.

Appearances:

Sidharth Luthra, Sr. Adv., Malak Manish Bhatt, Ms. Neeha Nagpal, Ms. Samridhi, Karitikeye Dang, Rudraditya Khare, Sahir Seth, Naveen Sharma, Karan Kumar Panesar, Advs. for the Appellant.

S.V. Raju, A.S.G., Mukesh Kumar Maroria, Annam Venkatesh, Arkaj Kumar, Zoheb Hussain, Advs. for the Respondent.

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT


JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT

BELA M. TRIVEDI, J.

1. Leave granted.

2. The Appellant-accused being aggrieved by the Judgment and Order dated 18.07.2023 passed by the High Court of Delhi at New Delhi in Bail Application No. 152 of 2023 has preferred the present appeal. The High Court vide the impugned order has dismissed the said bail application of the appellant seeking bail in connection with the Complaint Case No. 20/2021 bearing ECIR /DLZO-1/12/2021 arising out of FIR No. RC0742020E0014, registered for the oﬀ ence under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 120B read with sections 420, 465, 467, 468 and 471 of IPC. The appellant was arrested on 22.06.2022 on the fourth supplementary complaint having been fi led by the respondent under Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the 'PML Act'), in continuation of the complaint dated 01.09.2021, 11.10.2021 and 18.11.2021 in Case No. 20/2021, for the commission of the oﬀ ence of money laundering as defi ned under Section 3 punishable under Section 4 of PML Act.

3. The broad facts and events as discernible from the record may be stated as under:

(i) M/s. Shakti Bhog Foods Ltd. (SBFL) was engaged in manufacturing and selling food items under the brand name of "Shakti Bhog". The company was managed through its Directors/ Guarantors - Sh. Kewal Krishan Kumar, Sh. Siddharth Kumar and Smt. Sunanda Kumar. The appellant is the nephew of Sh.

Kewal Krishan Kumar, and was shown as one of the employees in SBFL.

(ii) The consortium of banks led by the State Bank of India vide the Letter of Engagement dated 18.05.2018 engaged the services of a Forensic Auditor - BDO India LLP for conducting the Forensic Audit of SBFL.

(iii) The Forensic Auditor conducted audit review for the period 01.04.2013 to 31.03.2017 and submitted the report on 25.06.2019, disclosing several fi nancial irregularities and discrepancies in the functioning of SBFL, and alleged that SBFL had failed to discharge its loan liability and caused loss to the consortium member banks to the tune of Rs.3269.42 crores.

(iv) An FIR being NO. RC0742020E0014 came to be registered on 31.12.2020 by the CBI, Bank Securities and Fraud Cell, New Delhi for the oﬀ ences under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 120B read with Sections 420, 465, 467, 468 and 471 of IPC, on the basis of a written complaint given by the Bank Offi cials against the Directors/Guarantors of SBFL and against the Employees/ servants and other unknown persons.

(v) Since the oﬀ ences under Section 120B read with Sections 420, 467 and 471 of IPC and Section 13(2) read with Section 13(1)

(d) of the Prevention of Corruption Act were specifi ed as the scheduled oﬀ ences under the Schedule to the PML Act, an ECIR bearing No. ECIR/DLZO-1/12/2021 came to be recorded on 31st January, 2021 against SBFL and others with regard to the said FIR registered by the CBI against the accused for investigation of the commission of oﬀ ence under Section 3 punishable under Section 4 of the PML Act.

(vi) The appellant was summoned by the respondent-authorities for the purposes of investigation and interrogation for about seven times till the fi rst complaint was fi led by the respondent on 01.09.2021. Second and third supplementary complaints were fi led by the respondent on 11.10.2021 and 18.11.2021 respectively. However, the appellant was not named in the said three complaints.

(vii) When the appellant was in attendance before the respondent pursuant to the call by the investigating authorities on 22.06.2022, he was arrested and on 18.08.2022 the fourth supplementary complaint came to be fi led by the respondent arraigning the appellant as the Accused No. 10.

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


(viii) The appellant filed a bail application in complaint case no.20/2021 before the Special Judge (PC-ACT), Rouse Avenue Court Complex, New Delhi on 18.10.2022, which came to be dismissed by the Special Judge vide the order dated 23.12.2022.

(ix) The bail application being No. 152 of 2023 preferred by the appellant before the High Court of Delhi also came to be rejected vide the impugned order dated 18.07.2023.

4. The allegations against the appellant have been detailed in paragraph nos. 7, 7.1,7.2, & 7.11 and the summary thereof is stated in para 10 of the fourth Supplementary Complaint fi led by the respondent. The role of the appellant in the commission of the alleged oﬀ ence of money laundering in terms of Section 3 of PML Act reads as under:

"Tarun Kumar was Vice President (Purchases) in Shakti Bhog Limited and was also a director in various Shakti Bhog Group companies. He was actively involved in the bank fraud committed by Shakti Bhog Foods Ltd. Tarun Kumar was directly involved in procuring fake invoices from shell companies operated by Devki Nandan Garg and Ashok Kumar Goel, Entry Operators. Investigation revealed that emails from and related to the shell entities supplying fake invoices to Shakti Bhog Foods Ltd. were also marked to Tarun Kumar. Further, Tarun Kumar used to transfer proceeds of crime to the shell companies for procuring fake invoices without any genuine business transactions and collected part thereof in cash from Vivek Prasad, Entry Operator.

Besides, he used to verify the fake bills for LC settlement with the lending banks. He also was involved in the criminal conspiracy of stock manipulation and infl ation of the fi nancial results of Shakti Bhog Foods Ltd. Tarun Kumar also used the platform of group companies under his directorship and control for diversion, rotation and siphoning of the proceeds of crime. Further, he played active role in the export activities of Shakti Bhog Foods Ltd. and then in siphoning and stashing the proceeds of crime abroad.

Tarun Kumar along with his directed company Goal Securities Pvt.

Ltd. acquired proceeds of crime to the tune of Rs.3.69 Crore.

Tarun Kumar was knowingly a party and actually involved in process

and activity connected with proceeds of crime including its acquisition, use, possession, concealment and/or projecting as well claiming the same as untainted. He was benefi ciary of proceed of crime acquired through the criminal activities related to scheduled oﬀ ences. Therefore, Tarun Kumar has committed oﬀ ence of money laundering u/s r.w.s. 4 of PMLA, 2002."

5. The learned Senior Counsel Mr. Sidharth Luthra for the appellant taking the Court through the documents on record made the following submissions:

(i) The oﬀ ending transactions in the ECIR/Prosecution Complaints and FIR were common, yet the appellant was not named in the FIR or in the fi rst three prosecution/supplementary complaints.

(ii) The co-accused Raman Bhuraria, who is similarly placed as the appellant has been granted bail by the High Court of Delhi vide the judgment and order dated 08.02.2023, and therefore the appellant is entitled to the bail on the ground of parity.

(iii) The investigation qua the appellant is complete and the further investigation is kept open with regard to the other accused persons, if any, and the trial of the case is likely to take long time.

Hence, the appellant ought not to be incarcerated indefi nitely. The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Cr.P.C. and Section 45 of PML Act.

In this regard, Mr. Luthra has relied upon the observations made by this Court in case of Manish Sisodia vs. Central Bureau of Investigation1 in Criminal Appeal arising out of SLP (Crl) No. 8167 of 2023 and in case of Sanjay Raghunath Agarwal Vs.

Directorate of Enforcement2.

(iv) Bail cannot be denied merely on account of the crime being an economic oﬀ ence. In this regard, Mr. Luthra has relied upon the

(2023) SCC Online SC 1393 2

(2023) SCC Online SC 455

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


decision in case of Satender Kumar Antil vs. Central Bureau of Investigation and Another3.

(v) ED failed to establish the rationale behind discriminating between the appellant and the individuals with similar roles who have not been taken as accused. In this regard, learned Senior Counsel has relied upon the observations made in State of Madhya Pradesh vs. Sheetla Sahai and Others4.

(vi) Taking the Court to the allegations made against the appellant, the learned Senior Counsel submitted that the allegations and the roles attributed to the appellant in the commission of the alleged oﬀ ences are baseless.

(vii) Lastly, Mr. Luthra submitted that the parameters of bail under Section 45 of the PML Act having been made out, and the custodial detention of the appellant being not necessary, the appellant should be released on bail.

6. The learned Additional Solicitor General, Mr. S.V. Raju for the respondent however, made the following submissions:

(i) The appellant was the Vice President (Purchases) in Shakti Bhog Limited and was also a Director in various Shakti Bhog Group Companies and was actively involved in the bank fraud committed by the SBFL.

(ii) The appellant along with other accused who were the Directors, promoters and shareholders were directly involved in diversion, rotation and siphoning of proceeds of crime. During the period 2007-08 to 2016-17, under the Directorship of the appellant crores of proceeds of crime were transferred to the shell companies without any genuine business transactions. The appellant had played active role in diverting the loan funds availed by the SBFL to shell entities on the basis of fake bills generated without any genuine business transactions.

(2022) 10 SCC 51 4

(2009) 8 SCC 617

(iii) The appellant was also involved in the export activities of SBFL.

(iv) The twin conditions contained in Section 45(1) of the PML Act would apply to the appellant having regard to the seriousness of the oﬀ ence and the investigation qua other accused being still in process, the appellant could not be granted bail on the ground that the other persons allegedly involved have not been arrested.

Mr. Raju has relied upon the number of decisions of this Court which shall be dealt with as found necessary.

7. At the outset, before adverting to the submissions made by the learned counsels for the parties, it would be apt to note that the PML Act has been enacted to prevent money laundering and to provide for confi scation of property derived from, or involved in money laundering, and for the matters connected therewith and incidental thereto. The said Act was enacted in view of the political declaration adopted by the special session of United Nations General Assembly in June, 1998 calling upon the member states to adopt national money laundering legislation and programme.

8. Section 3 of the PML Act which pertains to the oﬀ ence of money laundering, reads as under: -

"3. Oﬀ ence of money-laundering. - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of oﬀ ence of money-laundering.

Explanation. -For the removal of doubts, it is hereby clarifi ed that, -

(i) a person shall be guilty of oﬀ ence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely: -

(a) concealment; or

(b) possession; or

(c) acquisition; or

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


(d) use; or

(e) projecting as untainted property; or

(f) claiming as untainted property,

in any manner whatsoever;

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

9. Section 45 of the said Act being relevant for the purpose of the instant appeal is reproduced hereunder for ready reference: -

"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 oﬀ ence [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 satisfi ed that there are reasonable grounds for believing that he is not guilty of such oﬀ ence and that he is not likely to commit any oﬀ ence while on bail:

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infi rm, 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 oﬀ ence punishable undersection 4 except upon a complaint in writing made by-

(i) the Director; or

(ii) any offi cer 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.

(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police offi cer shall investigate into an oﬀ ence under this Act unless specifi cally 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 specifi ed 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.

Explanation. -For the removal of doubts, it is clarifi ed that the expression "Oﬀ ences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all oﬀ ences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the offi cers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfi llment of conditions under section 19 and subject to the conditions enshrined under this section.

10. The constitutional validity of certain provisions of the PML Act and the procedure followed by the Enforcement Directorate while inquiring into/ investigating oﬀ ences under the said Act having been challenged before this Court in case of Vijay Madanlal Choudhary and Others vs. Union of India and Others5, a three Judge Bench had considered the said provisions of the Act in detail. After considering the submissions of the learned counsels for the parties with regard to the interpretation of Section 3 of the said Act, it was held therein as under: -

"269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the oﬀ ence of money-laundering is an independent oﬀ ence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled oﬀ ence. The process or activity can be in any form - be it one of concealment, possession, acquisition,

5 2022 SCC Online SC 929

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute oﬀ ence of money-laundering. This oﬀ ence otherwise has nothing to do with the criminal activity relating to a scheduled oﬀ ence - except the proceeds of crime derived or obtained as a result of that crime.

270. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled oﬀ ence). It would be an oﬀ ence of moneylaundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing oﬀ ence, irrespective of the date and time of commission of the scheduled oﬀ ence. In other words, the criminal activity may have been committed before the same had been notifi ed as scheduled oﬀ ence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notifi ed as scheduled oﬀ ence, may be liable to be prosecuted for oﬀ ence of money-laundering under the 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The oﬀ ence of money-laundering is not dependent on or linked to the date on which the scheduled oﬀ ence or if we may say so the predicate oﬀ ence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarifi ed by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause

(ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all.

271 to 282 …………

283. Even though, the 2002 Act is a complete Code in itself, it is only in respect of matters connected with oﬀ ence of money-laundering, and

for that, existence of proceeds of crime within the meaning of Section 2(1)(u) of the Act is quintessential. Absent existence of proceeds of crime, as aforesaid, the authorities under the 2002 Act cannot step in or initiate any prosecution.

284. In other words, the Authority under the 2002 Act, is to prosecute a person for oﬀ ence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confi scation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process."

11. As regards the twin conditions for the grant of bail contained in Section 45(1) of the said Act, it has been held in the said decision of Vijay Madanlal (supra) as under: -

"412. As a result, we have no hesitation in observing that in whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money-laundering."

12. In Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India Through Manoj Kumar, Assistant Director, Eastern Region6, it was observed as under: -

"30. The conditions specifi ed under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisions of Section 65 and also Section 71 of PMLA. Section 65 requires that the provisions of CrPC shall apply insofar as they

(2015) 16 SCC 1

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of PMLA shall have overriding eﬀ ect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding eﬀ ect and the provisions of CrPC would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 CrPC. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money-laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant."

13. Keeping in view of the aforestated legal position let us consider the submissions made by the learned counsels for the parties. It is trite 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 oﬀ ences, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of the public/State etc. Though, the fi ndings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic oﬀ ences.

14. The fi rst and foremost contention raised by learned Senior Counsel Mr. Luthra would be that the appellant was not named in the FIR nor in fi rst three prosecution/ supplementary complaints and has been implicated only on the basis of the statements of witnesses recorded pursuant to the summons issued under Section 50 of the PML Act, without there being any material in support thereof.

15. In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement7, a three

(2018) 11 SCC 46

Judge Bench has categorically observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious oﬀ ence of money laundering.

Further, as held in Vijay Madanlal (supra), the oﬀ ence of money laundering under Section 3 of the Act is an independent oﬀ ence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled oﬀ ence. The oﬀ ence of money laundering is not dependent or linked to the date on which the scheduled oﬀ ence or predicate oﬀ ence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the oﬀ ence of money laundering under Section 3 of the Act.

16. So far as facts of the present case are concerned, as transpiring from the supplementary complaint fi led against the appellant, apart from the statements of witnesses recorded under Section 50 of the said Act, there has been suffi cient material collected in the form of documents which prima facie show as to how the appellant was knowingly a party and actually involved in the process and in the activities connected with the proceeds of crime, and how he was projecting/ claiming such proceeds of crime as untainted and how he was the benefi ciary of the proceeds of crime acquired through the criminal activities relating to the scheduled oﬀ ences .

17. As well settled by now, the conditions specifi ed under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfi ed that there are reasonable grounds for believing that the accused is not guilty of such oﬀ ence and he is not likely to commit any oﬀ ence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the oﬀ ence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


made under Section 439 Cr.P.C. in view of the overriding eﬀ ect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act.

18. The submission of learned Counsel Mr. Luthra to grant bail to the appellant on the ground that the other co-accused who were similarly situated as the appellant, have been granted bail, also cannot be accepted.

It may be noted that parity is not the law. While applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration. It is not disputed in that the main accused Sh. Kewal Krishan Kumar, Managing Director of SBFL, and KMP of group companies and the other accused Devki Nandan Garg, owner/ operator/ controller of various shell companies were granted bail on the ground of infi rmity and medical grounds. The co-accused Raman Bhuraria, who was the internal auditor of SBFL has been granted bail by the High Court, however the said order of High Court has been challenged by the respondent before this Court by fi ling being SLP (Crl.) No. 9047 of 2023 and the same is pending under consideration. In the instant case, the High Court in the impugned order while repelling the said submission made on behalf of the appellant, had distinguished the case of Raman Bhuraria and had observed that unlike Raman Bhuraria who was an internal auditor of SBFL (for a brief period statutory auditor of SBFL), the applicant was the Vice President of Purchases and as a Vice President, he was responsible for the day-to-day operations of the company. It was also observed that the appellant's role was made out from the fi nancials, where direct loan funds have been siphoned oﬀ to the sister concerns of SBFL, where the appellant was either a shareholder or director. In any case, the order granting bail to Raman Bhuraria being under consideration before the coordinate bench of this Court, it would not be appropriate for us to make any observation with regard to the said order passed by the High Court.

19. It is axiomatic that the principle of parity is based on the guarantee of positive equality before law enshrined in Article 14 of the Constitution.

However, if any illegality or irregularity has been committed in favour of any individual or a group of individuals, or a wrong order has been passed by a judicial forum, others cannot invoke the jurisdiction of the higher or superior court for repeating or multiplying the same irregularity or illegality

or for passing similar wrong order. Article 14 is not meant to perpetuate the illegality or irregularity. If there has been a benefi t or advantage conferred on one or a set of people by any authority or by the court, without legal basis or justifi cation, other persons could not claim as a matter of right the benefi t on the basis of such wrong decision.

20. It is also diffi cult to countenance the submission of learned Counsel Mr. Luthra that the investigation qua the appellant is complete and the trial of the cases likely to take long time. According to him the appellant ought not to be incarcerated indefi nitely merely because the investigation is kept open with regard to the other accused. In this regard, it may be noted that the appellant has not been able to overcome the threshold stipulations contemplated in Section 45 namely he has failed to prima facie prove that he is not guilty of the alleged oﬀ ence and is not likely to commit any oﬀ ence while on bail. It cannot be gainsaid that the burden of proof lies on the accused for the purpose of the condition set out in the Section 45 that he is not guilty of such oﬀ ence. Of course, such discharge of burden could be on the probabilities, nonetheless in the instant case there being suffi cient material on record adduced by the respondent showing the thick involvement of the appellant in the alleged oﬀ ence of money laundering under Section 3 of the said Act, the Court is not inclined to grant bail to the appellant.

21. The apprehension of the learned counsel for the appellant that the trial is likely to take long time and the appellant would be incarcerated for indefi nite period, is also not well founded in view of the observations made by this Court in case of Vijay Madanlal (supra). On the application of Section 436A of the Code of Criminal Procedure, 1973, it has been categorically held therein that: -

"419. Section 436A of the 1973 Code, is a wholesome benefi cial provision, which is for eﬀ ectuating the right of speedy trial guaranteed by Article 21 of the Constitution and which merely specifi es the outer limits within which the trial is expected to be concluded, failing which, the accused ought not to be detained further. Indeed, Section 436A of the 1973 Code also contemplates that the relief under this provision cannot be granted mechanically. It is still within the discretion of the Court, unlike the default bail under Section 167 of the 1973 Code.

Under Section 436A of the 1973 Code, however, the Court is required

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]


to consider the relief on case-to-case basis. As the proviso therein itself recognises that, in a given case, the detention can be continued by the Court even longer than one-half of the period, for which, reasons are to be recorded by it in writing and also by imposing such terms and conditions so as to ensure that after release, the accused makes himself/ herself available for expeditious completion of the trial."

22. Lastly, it may be noted that as held in catena of decisions, the economic oﬀ ences constitute a class apart and need to be visited with a diﬀ erent approach in the matter of bail. The economic oﬀ ences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave oﬀ ences aﬀ ecting the economy of the country as a whole and thereby posing serious threat to the fi nancial health of the country. Undoubtedly, economic oﬀ ences have serious repercussions on the development of the country as a whole. To cite a few judgments in this regard are Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation8, Nimmagadda Prasad vs. Central Bureau of Investigation9, Gautam Kundu vs. Directorate of Enforcement (supra), State of Bihar and Another vs. Amit Kumar alias Bachcha Rai10. This court taking a serious note with regard to the economic oﬀ ences had observed as back as in 1987 in case of State of Gujarat vs. Mohanlal Jitamalji Porwal and Another11 as under:-

"5… The entire community is aggrieved if the economic oﬀ enders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic oﬀ ence is committed with cool calculation and deliberate design with an eye on personal profi t regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest…"

(2013) 7 SCC 439 9

(2013) 7 SCC 466

10 (2017) 13 SCC 751

11 (1987) 2 SCC 364

23. With the advancement of technology and Artifi cial Intelligence, the economic oﬀ ences like money laundering have become a real threat to the functioning of the fi nancial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution.

24. With the afore-stated observations, the appeal is dismissed.

Headnotes prepared by: Appeal dismissed.

Divya Pandey

TARUN KUMAR v. ASSISTANT DIRECTOR DIRECTORATE

OF ENFORCEMENT [BELA M. TRIVEDI, J.]