Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment pronounced on: May 29, 2015
+ BAIL APPLICATION NO. 484/2015
GAURAV GUPTA ..... Petitioner
Through Mr. Sandeep Sethi, Sr. Adv. with
Mr. Bharat Sharma, Mr. Akshey
Bhatia, Adv.
versus
DIRECTOR OF ENFORCEMENT ..... Respondent
Through Mr. Sanjay Jain, ASG with Mr.Ajay
Digpal, Mr. Akshay Makhija, GHS,
Ms. Prabhsahey Kaur, GP, Ms.
Shreya Sinha, Mr. Akash Nagar,
Ms. Pallavi Shali, Adv.
+ BAIL APPLICATION NO.571/2015
GAGANDEEP SINGH & ANR ..... Petitioners
(IN JUDICIAL CUSTODY)
Through Mr. Saurabh Kirpal, Adv. with
Ms. Deeksha Rao, Adv.
versus
DIRECTOR OF ENFORCEMENT ..... Respondent
(THROUGH ASSTT. DIRECTOR)
Through Mr. Sanjay Jain, ASG with Mr.Ajay
Digpal, Mr. Akshay Makhija, GHS,
Ms. Prabhsahey Kaur, GP, Ms.
Shreya Sinha, Mr. Akash Nagar,
Ms. Pallavi Shali, Adv.
CORAM:
Bail Application Nos.484/2015 & 571/2015 Page 1 of 25
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1. By way of this order, I propose to decide the two applications;
one filed by Gaurav Gupta and another one by Gagandeep Singh
and Paramdeep Singh (both brothers). All the three petitioners are in
th
custody since 25 September, 2014, who have filed the
abovementioned applications under Section 439 read with Section
482 Cr.P.C. for grant of bail under Section 3 of Prevention of Money-
Laundering Act, 2002 (hereinafter referred to as the “Act”)
punishable under Section 4 of the Act.
2. Brief facts as per the case of the respondent are that :
i) The Australian Federal Police (hereinafter referred to as AFP)
had conducted an investigation code named 'Operation Zanella'
relating to the activities of global money laundering networks who
found that certain persons namely Gulshan Kumar, Mandeep Singh,
Sanjeev Kumar Sahni and Ravender Pal Singh based in Australia,
were providing their services to Australian Organized Crime Groups
and were having extensive contacts with their Indian based
counterparts who were identified as Gangandeep Singh, Paramdeep
Singh and Gaurav Gupta. The AFP identified an extensive Alternate
Remittance services network operating from India with significant
influence of money laundering activities in Australia and further stated
that the transactions were structured in a way that each deposit of
money in Australian bank accounts was for a sum less than
Australian $10,000/- to avoid any reporting requirement, who had
Bail Application Nos.484/2015 & 571/2015 Page 2 of 25
also identified the money laundering networks and their operational
structure.
ii) On the basis of Mutual Assistant Request (MAR) Note Verbal
th
No.458/2014 dated 27 August, 2014 (Letter of request) was issued
by the Austrian Competent Authority regarding involvement of the
petitioners in criminal activity.
iii) The Enforcement Directorate on the basis of MAR received
from Australian Authorities in the form of Letter of Request found that
Gagandeep Singh and Paramdeep Singh from Amritsar and Gaurav
Gupta from Delhi were the members of money Laundering Syndicate
who were involved in transferring the proceeds of crime generated
from drug trafficking of the Organised Crime Groups (OCGs) in
Australia. The preliminary inquiry was conducted and it was
transpired that Gagandeep Singh and Paramdeep Singh were
already charge sheeted in a drug case under Narcotics Drugs and
Psychotropic Substances Act, 1985 (hereinafter referred to as the
“NDPS Act”) by Special State Operation Cell, Amritsar. The
Enforcement Directorate registered an ECIR on the basis of the LR
and the case under NDPS Act against the petitioners and searches
th
were conducted on 25 September, 2014.
iv) During the course of searches from the residence as well as
from the business premises certain incriminating documents in the
form of hard copies, electronic devices were recovered and seized.
Indian currency worth Rs. 77 lakh and foreign currency worth Rs. 3
lakh was also recovered and seized. Paramdeep Singh, Gagandeep
Bail Application Nos.484/2015 & 571/2015 Page 3 of 25
th
Singh and Gaurav Gupta were arrested on 25 September, 2014
under Section 19 of the Act.
v) As per the respondent, during the course of investigation it was
found that they were involved in the money laundering and
transferred huge amount of proceeds of crime suspected to be
proceeds of drug money, through their accounts from one country to
another country for the OCG and thus acquired huge money. It was
also revealed that they had purchased movable and immovable
properties worth crores of rupees. The Directorate identified one such
property i.e. House No. 414, Basant Avenue, Amritsar, worth 1.65
Crore of Gagandeep and Paramdeep Singh which had been
purchased out of the funds generated through criminal activity and
being proceeds of crime the same was been provisionally attached
th
vide Provisional Attachment Order No.1/2014 dated 18 November,
2014 under Section 5(1) of the Act. The Adjudicating Authority by
th
order dated 25 March, 2015 had confirmed the above said
Provisional Attachment Order under Section 5(3) of the Act. The
identification of other such properties generated through proceeds of
crime is in process.
In the meantime Enforcement Directorate had received few
documents from Australia in the form of Bank statements and other
documents which established the involvement of above accused
persons. Based on the investigation conducted and the documents
received by Enforcement Directorate, a Criminal Complaint had been
filed in the Special Court for money laundering and the court had
Bail Application Nos.484/2015 & 571/2015 Page 4 of 25
already taken the cognizance of the offence of money laundering and
th
the case had been listed for framing of charges on 14 March, 2015.
vi) During the course of investigations it was found that Ms
Amandeep Kaur, sister of the petitioners i.e. Gagandeep Singh and
Paramdeep Singh has NRI/NRO accounts which are being operated
by the Paramdeep Singh. In these NRO/NRI accounts an amount of
more than Rs. 3 crore had been deposited which has been frozen
under Section 17(1 A) of the Act and thereafter, the Adjudicating
Authority has found after hearing the representatives of the
petitioners under Section 8(3) as frozen properties were involved in
money laundering and liable for confiscation. The Enforcement
Directorate summoned Ms Amandeep Singh Kaur through diplomatic
channel but she failed to appear or depute someone on her behalf to
appear before the IO for the investigation. She has been issued the
third summon to appear before the IO.
vii) The Letters of request to Australia, Hong Kong, UK, USA and
Canada have been sent under Section 57 of the Act through Special
Court on being satisfied, requesting for the details of the accounts
and transactions done on behalf of the petitioners and the reply is
awaited. As and when the reply is received, the investigation will be
completed on top priority and the Supplementary/further complaints
in the case shall be filed before Special Court.
3. Case of the petitioners in Bail Application No.571/2015
i) At the time of arrest no property was attached nor any scheduled
offence as mentioned under Section 2(x) and (y) of the Act have
been registered against accused. The Enforcement Directorate
Bail Application Nos.484/2015 & 571/2015 Page 5 of 25
recorded the statement of the petitioners while they were in the
custody under Section 50 of the Act on number of occasions i.e.
th th th
27 September, 2014, 28 September, 2014, 29 September,
th th
2014, 30 September, 2014, 7 November, 2014 in the instant
case.
rd
ii) Thereafter on 23 November, 2014, respondent filed a complaint
under Section 45 of the Act before the concerned court against
the petitioners.
iii) There is no evidence against the petitioners which suggests any
complicity of the petitioners directly or indirectly in the act of
money laundering which is an offence under Section 3 of the
Act. The evidence did not substantiate with the allegations
against the petitioners, that the petitioners are directly or
indirectly attempted to indulge or knowingly assist or is a part or
actually involved in process of activities connected with the
proceeds of crime.
iv) As per the allegations schedule offence has been committed by
the petitioners in Amritsar and as per Section 44 of the Act the
court at New Delhi has no jurisdiction to try the offence and only
the court at Amritsar have jurisdiction to try the offence under the
Act where the schedule offence has been committed.
The authorities have failed to comply with the rules and
documents have not been attested under the Diplomatic and
Consular Officers (Oath &Fees) Act 1948 (41 of 1948) for the
purpose of sub Section 2 of Section 22 of the Act.
Bail Application Nos.484/2015 & 571/2015 Page 6 of 25
v) There is no evidence which suggests that the petitioners are
generating money from drug trafficking dealing with the proceeds
of crime or any nexus that the petitioners are involved in any
laundering of money or facilitating the other accused persons in
laundering of money.
4. The allegations against Gaurav Gupta in Bail Application
No.484/2015 are :
a) That he was involved in an international syndicate of laundering
the money generated out of drug trafficking in Australia and
other countries. It is also alleged that the proceed of crimes were
laundered by the Associates in Australia and were sent to them
through an account in Australia to their Bank Account in Hong
Kong and made available to the organized crime group in
different countries.
b) That he was in contact with one Bunty Sharma of Germany for
money laundering activities. One Ravinder Pal Singh and
Gaurav Gupta were in constant contact since April, 2013 with
regard to giving money to people in Australia in their Bank
Account and collection from OCG members. Mr. Gaurav Gupta
was having regular cash/foreign exchange transaction with
Gagandeep Singh and Paramdeep Singh for approx. Rs.50 to
Rs.60 lacs per month and had arranged substantial amount of
foreign currency being proceeds of crime from Bunty Sharma
through Billion Trend Forex Pvt. Ltd., Australia and he is running
a Jai Durga Forex Pvt. Ltd. in Delhi and was acting as a money
changer having bank account with HDFC bank and Axis Bank.
Bail Application Nos.484/2015 & 571/2015 Page 7 of 25
Reply by Gaurav Gupta in Bail Appl. No.484/2015
5. In addition to plea raised by Gagandeep Singh and Paramdeep
Singh, it is alleged by him that he has no contact with Bunty Sharma.
There is no material on record to suggest that the petitioner is
connected to Bunty Sharma or Ravinder Pal Singh regarding drug
trafficking or dealing with the proceeds of crime. He has no bank
account in Australia nor ever visited Australia and he has never dealt
with any tainted money. He is the license holder of money exchange
from RBI and do not have any company outside India. He is dealing
in accordance with the norms laid down by the RBI and never
involved in any illegal activity. He has already shown each and every
transaction to the Enforcement Directorate. There is no violation as
alleged by the petitioner, the same will come under the purview of
FEMA 1999 which is not a scheduled offence. There is no cogent or
positive evidence which may involve him in the present crime. The
material collected by the respondent does not create any link or show
any nexus that he is involved in any laundering of money or
facilitating the other accused persons in laundering of money. He has
arraigned as accused in the present case on the basis of suspicion.
6. Mr. Sandeep Sethi, learned Senior counsel who is appearing
for Gaurav Gupta has argued that there is no material on record
against his client whose case is different from Gagandeep Singh and
Paramdeep Singh. As far as his client is concerned, his client is not
involved in the scheduled offence under Part A of the Schedule, thus
he is entitled for bail.
Bail Application Nos.484/2015 & 571/2015 Page 8 of 25
7. Mr. Saurabh Kirpal who is appearing on behalf of petitioners in
bail application No.571/2015 submits that every action of putting
money in a bank or otherwise introducing it into the white economy is
not laundering. It is only when 'dirty money' is laundered that an
offence comes into play. The onus, therefore is to establish that the
laundered money comes from an illegal source. The scheme of the
Act which also requires that the scheduled offence (i.e. the underlying
criminal activity) and the offence of money laundering have to be tried
together. The impugned order where the trial court has rejected the
bail application records that "the connections between transactions
being done by the accused persons and it being 'proceeds of crime'
may be nebulous, but this in itself cannot be a ground for ignoring the
huge amounts of transactions that have been taking place through
the accounts of the accused persons."
8. Mr. Kirpal argues that in the present complaint, there is no
reference or details given about any underlying scheduled offence. A
mere reference has been made to certain alleged offences in
Australia, but no details are provided about the same. There is no
averment, let alone evidence, linking the petitioners to the scheduled
offence or the petitioner alleged generating money from drug
trafficking or dealing with the proceeds of crime. Earlier, the
petitioners were granted bail for the charge under Section 21/25/29 of
NDPS Act and Section 420/467/471 read with Section 120B IPC. He
submits that even there is no prima facie direct evidence that the
petitioners have any nexus with any person or party in Australia who
Bail Application Nos.484/2015 & 571/2015 Page 9 of 25
is involved in drug trafficking or they are facilitating money for that
purpose in laundering of money.
9. Mr. Kirpal argues that otherwise even if the prosecution case at
this stage is taken as gospel truth the petitioner is in any event
entitled to bail as the restrictions contained in Section 45 of the Act
do not apply to the petitioners as they are not accused of any
scheduled offence under Part A of the Schedule. The normal
provisions of the Cr.P.C. would apply to the petitioners.
10. It is argued by him that all the alleged incriminatory statements
have been recorded after his arrest and are hence inadmissible in
law. It is wrong to allege that officers under the Act and/or NDPS Act
are not police officers. This very issue is still pending before a three
judge bench of Supreme Court in the case of Tofan Singh v. State
of Tamil Nadu (2013) 16 SCC 31.
11. Mr. Sanjay Jain, learned ASG has made his submissions which
are outlined as under :
a) Mr. Jain, ASG submits that the petitioners are not entitled for bail
in view of the nature and gravity of offence, nature of evidence.
The conduct of the accused are peculiar. It may be possible that
they may influence the witnesses or evidence being tampered
with, therefore, they are not entitled to bail. Their offence is
covered under Section 45 of the Act. The object of the Act is to
prevent money laundering and to provide for confiscated
property derived from or involved in money laundering and the
matter connected there with in incidental thereto. He argues that
the expression “Part A of the schedule”, the other provisions
Bail Application Nos.484/2015 & 571/2015 Page 10 of 25
referred by him and the object of the Act has to be read as
together. Reliance is placed by Mr. Jain, learned ASG in the
case of Y.S. Jaganmohan Reddy vs. CBI , (2013) 7 SCC 439.
Furthermore, Section 45 of the Act introduces an additional
limitation upon this Court while exercising its discretion to grant
or deny bail. Section 45(1) of the Act provides that no person
accused of an offence punishable for a term of more than three
years under Part A of the schedule shall be released on bail
unless the two following conditions are necessarily satisfied :
i) where the Public Prosecutor has been given an
opportunity to oppose the bail application; and
ii) bail shall not be granted unless the court is satisfied that
there are reasonable grounds for believing that he is not guilty
of such offence and that he is not likely to commit any offence
while on bail.
b) The next submissions of Mr. Jain, learned ASG is that there are
sufficient material on record, which can prove the allegations
against the petitioners as the offence of Money Laundering
generally comprises of 3 stages i.e. Placement, Layering and
Integration, in consonance with the definition of money
laundering. The main object of the Act is to punish the person
who deals with proceeds of crime as defined under Section
2(1)(u) of the Act.
Mr. Jain, learned ASG submits that the offence of money
laundering is of a continuous nature. It is not a single time
offence and cannot be said that the offence would stop.
Bail Application Nos.484/2015 & 571/2015 Page 11 of 25
Therefore, the nature of money laundering is of a continuous
one. The onus on the accused is therefore not as same as under
the Cr.P.C, it is to show that he is not guilty of the offence at all.
The rigorous provisions of Section 45 of the Act do not allow bail
in cases where the offence is continuous one even otherwise if
the court is satisfied while granting bail of such offence which
comes under Section 45(1)(b) of the Act, the Court has to keep
in mind that the accused is not likely to commit any offence while
on bail. Mr. Jain submits that in the present case incriminating
documents have been recovered and admissions have been
made on the part of the accused.
12. It is also the case of prosecution that during the course of
searches from the residence as well as from business premises
certain incriminating documents in the form of hard copies, electronic
devices were recovered and seized. Indian currency worth Rs.77
lakh and foreign currency worth Rs.2 lakh was also recovered and
seized. Paramdeep Singh, Gagandeep Singh and the petitioner were
th
arrested on 25 September, 2014 under Section 19 of the Act.
13. Learned ASG has referred the charge sheet which indicates
that during the course of investigation it was found that they were
involved in money laundering and transferred huge amount of
proceeds of crime suspected to be proceeds of drug money, through
their accounts from one country to another country for the OCG and
thus acquired huge money. During the course of investigation it was
also revealed that they had purchased movable and immovable
properties worth crores of rupees. The Directorate identified one
Bail Application Nos.484/2015 & 571/2015 Page 12 of 25
such property bearing House No.414, Basant Avenue, Amritsar,
worth Rs.1.65 crores of Gagandeep and Paramdeep Singh which has
been purchased out of the funds generated through criminal activity
and being proceeds of crime the same has been provisionally
th
attached vide Provisional Attachment Order No.1/2014 dated 18
November, 2014 under Section 5(1) of the Act. The Adjudicating
th
Authority vide order dated 25 March, 2015 has confirmed the above
said Provisional Attachment Order under Section 5(3) of the Act. The
identification of other such properties generated through proceeds of
crime is in the process. A chart showing involvement of the petitioner
and the others in the money laundering crime is filed as Annexure
A1. In the meantime Enforcement Directorate received few
documents from Australia in the form of bank statements and other
documents which established the involvement of above accused
persons in the crime. Based on the investigation conducted by
Enforcement Directorate and the documents received by
Enforcement Directorate, a criminal complaint was filed in the Special
Court for money laundering and the court has already taken
cognizance of the offence of money laundering and the case has
th
been listed for framing of charges on 18 May, 2015.
Charge sheet also disclosed that on investigation, it has been
noticed by the investigating agency that Ms. Amandeep Kaur, sister
of Gagandeep Singh and Paramdeep Singh, has NRI/NRO accounts,
operated by Paramdeep Singh. In these NRO/NRI accounts an
amount of more than Rs. 3 crore had been deposited which has been
frozen under Section 17(1A) of the Act and thereafter, the
Bail Application Nos.484/2015 & 571/2015 Page 13 of 25
Adjudicating Authority after hearing the representatives of the
petitioner, Gagandeep Singh and Paramdeep Singh, under Section
8(3) has found that the frozen properties are bought with proceeds of
crime and are liable for confiscation. The Enforcement Directorate
summoned Ms. Amandeep Singh Kaur through diplomatic channel
but she has failed to appear or depute someone on her behalf to
appear before the IO for the investigation. She has been issued a
third summon to appear before the IO.
14. In reply, it is submitted by Mr. Kirpal that even if the allegation
against the petitioner may be taken as gospel truth, the case of the
prosecution falls under the ambit of Section 3 of the Act which is
punishable maximum upto 7 years and not less than three years. He
has referred the following decisions in support of his submission :
i) In the case titled as H.B. Chaturvedi Vs. CBI decided by this
Court reported as 2011 I AD (Delhi) 447 has held that "Bail, it
has been held in a catena of decisions, is not to be withheld as a
punishment. Even assuming that the accused is prima facie
guilty of a grave offence, bail cannot be refused in an indirect
process of punishing the accused person before he is convicted.
ii) In the case titled as Sanjay Chandra and Ors. vs. C.B.I. , (2012)
1 SCC 40 the Supreme Court held that the object of bail is
neither punitive nor preventative. It was further held that the
accused are charged with economic offences of high magnitude.
At the same time we cannot lose sight of the fact that the
investigating agency has already completed investigation and
the charge sheet is already filed. Appellants are entitled to bail.
Bail Application Nos.484/2015 & 571/2015 Page 14 of 25
iii) In the case of Suresh Kalmadi vs. C.B.I., 187 (2012) DLT 575
this Court held that no doubt the offence punishable under
Section 467 is made out on the facts alleged. This is an "issue
which will have to be decided by the trial court during trial on
appreciation of evidence. It was further held if seriousness of the
offence on the basis of punishment provided is the only criteria;
the courts would not be balancing the constitutional rights but
rather recalibrating the scales of justice. Bail granted.
iv) It has been held by this Court in the case of Sushil Ansal vs.
CBI, 1999 III (AD) CrI. Del 195 that "the apprehension of
likelihood of tampering with the prosecution evidence can be
taken care of by imposing necessary conditions and the breach
whereof may expose the Applicant to the consequence/risk of
calculation of bail".
15. It is argued by him that as investigation of the case is complete
and the trial is going to take considerable period of time before the
entire evidence is concluded, therefore continuing incarceration of the
petitioner is not going to serve any purpose except to deny the
benefit of bail to petitioner by way of punishment.
16. During the hearing, an affidavit of Maan Singh Yadav, Assitant
Director, Enforcement Directorate has been filed in the Court in which
th
it was deposed that 6 May, 2015, the officers of the Enforcement
Directorate visited the premises of the accused being House No.414,
Basant Avenue, Race Course Road, Amritsar under the provision of
Section 8(4) of the Act to take possession of the same and during the
proceedings, the officers noticed suspicious activity of the wives and
Bail Application Nos.484/2015 & 571/2015 Page 15 of 25
mother of the accused and they insisted to be given one more day
for vacating the premises. A search warrant was prepared under
Section 17 of the Act for search of the premises and the Enforcement
Directorate officers carried out a search of the premises and had
recovered 10 kgs of gold from the premises i.e. 10 bars of “1 kilo gold
were dug up from the garden of the premises.”
17. In reply an affidavit of Parminder Pal Singh S/o Shri Mehar
Singh R/o WZ - 87 A, Ram Nagar Choukandi, Tilak Nagar, Delhi was
filed in which it was mentioned that the petitioners in bail application
No.571/2015 purchased gold bar from M.S. Jewellers, Beadon Pura,
th th
Karol Bagh, Delhi on 16 September, 2014 and 18 September,
2014 vide Invoice bearing No. R-010 & R-012 before their arrest as
th
they were arrested on 25 September, 2014 since then they are in
custody and after the arrest of the petitioners there was no male
member in the family of the petitioners in Amritsar who could take
care of the aforementioned gold and the female members were left
alone in the family who got panicked and dug up and put the gold in
order to protect it from burglars. But this is no ground to deny the bail
to the petitioners because all the activities by Enforcement
Directorate search and seizure of the aforementioned gold took place
when the petitioners were in custody. The act of the family members
of the petitioners is bonafide and not intentional.
18. The court is aware about the fact that the court must not
undertake meticulous examination of the evidence collected by the
police and comment on the same. Such assessment of evidence and
premature comments are likely to deprive the accused of a fair trial.
Bail Application Nos.484/2015 & 571/2015 Page 16 of 25
While cancelling bail under Section 439(2) Cr.P.C., the primary
considerations which weigh with the court are whether the accused is
likely to tamper with the evidence or interfere or attempt to interfere
with due course of justice or evade the due course of justice. While
considering the bail application, it is also to be kept in mind that
individual liberty cannot be accentuated to such an extent or elevated
to such a high pedestal which would bring in anarchy or disorder in
the society. There can be no arithmetical formula for fixing the
parameters in precise exactitude but the adjudication should express
not only application of mind but also exercise of jurisdiction on
accepted and established norms.
19. Let me now deal with the objection raised by the respondent to
grant of relief prayed by the petitioner. In order to arrive at prima
facie opinion, it is necessary to refer certain provisions of the Act and
discussion thereon.
a) The “offence of money laundering” is defined under Section 3
of the Act, which reads as under: -
“ 3. Offence 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 proceeds of crime including its
concealment, possession, acquisition or use and projecting
or claiming it as untainted property shall be guilty of offence
of money-laundering.”
b) The meaning of “proceeds of crime” is under clause (u) of
Section 2 of the Act, which reads as under : -
“(u) “proceeds of crime” means any property derived or
obtained, directly or indirectly, by any person as a result of
Bail Application Nos.484/2015 & 571/2015 Page 17 of 25
criminal activity relating to a scheduled offence or the value
of any such property.”
c) Section 24 of the Act stipulates about the ‘burden of proof’
relating to proceeds of crime of the Act, the same reads as under: -
“ 24. In any proceeding relating to proceeds of crime under
this Act, -
(a) In the case of a person charged with the offence of
money-laundering under Section 3, the Authority or
Court shall, unless the contrary is proved, presume
that such proceeds of crime are involved in money-
laundering; and
(b) In the case of any other person the Authority or
Court, may presume that such proceeds of crime are
involved in money-laundering.”
d) Section 45 of the Act deals with offences to be cognizable and
non-bailable, which reads as under: -
“ 45. Offences to be cognizable and non-bailable. – (1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an
offence punishable for a term of imprisonment of more than
three years under Part A of the Schedule shall be released
on bail or on his own bond unless –
(i) The Public Prosecutor has been given an opportunity
to oppose the application for such release; and
(ii) Where the Public Prosecutor opposes the application,
the court is satisfied that there are reasonable grounds
for believing that he is not guilty of such offence and
that he is not likely to commit any offence while on
bail:
Bail Application Nos.484/2015 & 571/2015 Page 18 of 25
Provided that a person who is under the age of sixteen
years or is a woman or is sick or infirm, may be released
on bail, if the special court so directs: Provided further that
the Special Court shall not take cognizance of any offence
punishable under section 4 except upon a complaint in
writing made by –
(i) The Director; or
(ii) Any officer of the Central Government or State
Government authorized in writing in this behalf by the
Central Government by a general or a 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 officer shall investigate into
an offence under this Act unless specifically authorized, by
the Central Government by a general or special order, and,
subject to such conditions as may be prescribed.
(2) The limitation on granting of bail specified in sub-
section (1) is in addition to the limitations under the Code of
Criminal Procedure, 1973 (2 of 1974) or any other law for
the time being in force on granting of bail.”
e) Schedule and Scheduled offence is defined under Section 2
(x) and (y) which is reproduced herein below:
''2(x) "Schedule'' means the Schedule to this Act;
(y) "Scheduled offence" means-
(i) the offences specified under Part-A of the Scheduled
or
(ii) the offences specified under Part-B of the Schedule if
the total value involved in such offences is thirty lakh rupees
or more; or ;
Bail Application Nos.484/2015 & 571/2015 Page 19 of 25
(iii) the offences specified under Part-C of the scheduled".
f) Offence of cross border implications has been defined under
Section 2 (ra) of the Act which reads as under :
"2 (ra) offence of cross border implications, means-
(i) any conduct by a persons at a place outside India
which constitutes an offence at the place and which would
have constituted an offence specified in Part A, Part B or Part
C of the schedule, had it been committed in India and if such
person transfers in any manner the proceeds of such conduct
or part thereof to, India; or
(ii) any offence specified in Part A, Part B or Part C of the
schedule which has been committed in India and the
proceeds of crime or part thereof have been transferred to a
place outside India or any attempt has been made to transfer
the proceeds of crime, or part thereof, from India to a place
outside India.
g) Section 4 defines punishment for money laundering which
reads as under :
"Whoever commits the offence of money-laundering shall
be punishable with rigorous imprisonment for a term which
shall not be less than three years but which may extend to
seven years and shall also be liable to fine.
Provided that where the proceeds of crime involved in
money-laundering relates to any offence specified under
paragraph 2 of Part A of the Schedule, the provisions of
this section shall have effect as if for the words “which may
Bail Application Nos.484/2015 & 571/2015 Page 20 of 25
extend to seven years”, the words “which may extend to
ten years” had been substituted.
20. In case, Section 4 of the Act is read in a meaningful manner, it
is evident that the punishment of such offence for money laundering
is with rigorous imprisonment for a term which shall not be less than
three years which may extend to seven years and a fine extend to
five years. Under the proviso where the involvement of the accused
in money laundering relates to any offence specified under
paragraph 2 of Part A of the Schedule then it may extend to ten
years.
21. Paragraph 2 of Part A of the Schedule reads as under :
PARAGRAPH 2
Offences under the Narcotic Drugs and Psychotropic Substances Act, 1985
(61 of 1985)
Section Description of offence
15 Contravention in relation to poppy straw.
16 Contravention in relation to coca plant and coca leaves.
17 Contravention in relation to prepared opium.
18 Contravention in relation to opium poppy and opium.
19 Embezzlement of opium by cultivator.
20 Contravention in relation to cannabis plant and cannabis.
21 Contravention in relation to manufactured drugs and preparations.
22 Contravention in relation to psychotropic substances.
23 Illegal import into India, export from India to transhipment of narcotic
drugs and psychotropic substances.
24 External dealings in narcotic drugs and psychotropic substances in
contravention of Section 12 of the Narcotic Drugs and Psychotropic
Substances Act, 1985.
Bail Application Nos.484/2015 & 571/2015 Page 21 of 25
25-A Contravention of orders made under Section 9-A of the Narcotic
Drugs and Psychotropic Substances Act, 1985.
27-A Financing illicit traffic and harbouring offenders.
29 Abetment and criminal conspiracy.
22. The petitioners in application No. 571/2015 are already on bail
in the FIR No. 29/2011 lodged at Amritsar under Section 21/25/29 of
NDPS Act and 420/467/471 read with 120B of IPC and petitioner No.
2 is also already on bail in FIR No.526/2005 lodged at I.P. Estate
Police Station, New Delhi.
23. The statements of the petitioner under Section 50 of the Act
was recorded after the arrest of the petitioner and the same are
inadmissible in evidence being hit by Article 20(3) of the Constitution
of India. The petitioners have retracted from the statements recorded
during the remand at the first available opportunity.
24. It is the case of the petitioners that they have not committed
any offence under Part A of the Schedule nor has been booked in
any case or pending trial against the petitioner in India or anywhere.
25. In view of above referred facts and as per material available as
of today, prima facie , it cannot be established or presumed that the
petitioners are involved for any offences involving in money
laundering relating to the Paragraph 2 of Part A of the Schedule.
Even while rejecting the bail of the petitioners, the trial court has
observed that the connections between transactions being done by
the accused persons and it being 'proceeds of crime' may be
nebulous, but this in itself cannot be a ground for ignoring the huge
Bail Application Nos.484/2015 & 571/2015 Page 22 of 25
amounts of transactions that have been taking place through the
accounts of the accused persons.
26. There is no material at this stage to conclude that the
laundering money if any has been used for the purpose of drug
trafficking or dealing with proceeds of crime of such nature. There is
a suspicion that the same might have been used for said purposes. If
those allegations are proved no doubt the present case would fall
within the meaning of proviso of Section 4 of the Act which is to be
read along with Section 45 of the Act wherein it mandates that while
considering the application for bail, the Court has to satisfy with the
following two conditions:-
(i) the Public Prosecutor has been given an opportunity to
oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the
court is satisfied that there are reasonable grounds for
believing that he is not guilty of such offence and that he is
not likely to commit any offence while on bail:
27. The matter does not end here. On behalf of respondent it has
been informed that the letters of request to Australia, Hong Kong, UK,
USA and Canada have been sent under Section 57 of the Act
through Special Court on being satisfied, requesting for the details of
the accounts and transactions done on behalf of the petitioner,
Gagandeep Singh and Paramdeep Singh and the reply is awaited.
Enforcement Directorate has emphasized the need of urgency to the
above said countries. As and when the reply is received, the
investigation will be completed on top priority and supplementary
Bail Application Nos.484/2015 & 571/2015 Page 23 of 25
charge sheet or fresh complaint would be filed before Special Court.
At this stage, the petitioners are not entitled for bail.
28. In Shiv Kant Tripathi vs. State of U.P. & Ors. 2013 (6) ADJ
672 , the Apex Court held as under: -
“5. It prima facie appears from the proviso to Section 17(1)
and more importantly the proviso to Section 18(1) of the
Prevention of Money-Laundering Act, 2002 that the
Directorate of Enforcement comes into action in respect of
the money laundering allegations only after a charge-sheet is
submitted by the police/ agency investigating the question
whether any of the “scheduled offences” has been
committed. We will assume that even if the police submits a
final report, alleging that no scheduled offence has been
committed, but the Magistrate does not accept the same and
issues process, even then the directorate can initiate
investigation into money-laundering allegations. In that view
the investigation done by the directorate under the interim
orders passed herein, even before a charge-sheet by the
police regarding any scheduled offence having been
committed, was premature.”
29. After further investigation if evidence would reveal that the
petitioners are also involved in the scheduled offence of Part A, then
their bail applications have to be examined within the parameter of
Section 45 of the Act. Therefore, at this stage, I am not inclined to
enlarge them on bail unless the investigation is completed as
suggested by learned ASG. It would be appropriate to wait for final
report, otherwise the applications would be decided on the basis of
existence of material on record without any further delay.
Bail Application Nos.484/2015 & 571/2015 Page 24 of 25
30. Having considered the facts and circumstances of the case in
hand, I am of the view that the further investigation in the matter is
still on and as per respondent, it may take one and half month to
complete. The said statement was made two weeks ago. As the
petitioners are in judicial custody, considering the offence serious in
nature, thirty days are granted to the respondent to complete the
further investigation as last chance. Thereafter, the petitioner would
be entitled to move a fresh application for regular bail before trial
court and same be decided on urgent basis.
31. In the nature of the present case, without expressing any
opinion on the merits of the case and also with regard to the claim of
the respondent, the Court is not inclined to grant the relief of
releasing the petitioner on bail at present as further investigation may
prejudice the case of respondent.
32. Both the applications are accordingly disposed of.
33. Dasti, under the signatures of the Court Master.
(MANMOHAN SINGH)
JUDGE
MAY 29, 2015
Bail Application Nos.484/2015 & 571/2015 Page 25 of 25