DIRECTORATE OF ENFORCEMENT versus ADITYA TRIPATHI

[2023] 5 S.C.R.

ADIRECTORATE OF ENFORCEMENT

ADITYA TRIPATHI

(Criminal Appeal No. 1401 of 2023)

BMAY 12, 2023

[M. R. SHAH AND C. T. RAVIKUMAR, JJ.]

Prevention of Money Laundering Act, 2002: s. 45 –Enlargement on bail – Sustainability of – Allegations of temperingof bids – Accused chargesheeted u/ss. 120-B, 420, 468, 471 IPCCand s. 7 rw s. 13(2) of the PC Act, the scheduled offences – Offencesunder the PML Act, 2002 added later – Enforcement Directorateinitiated money laundering investigation – Respondent no. 1 arrested– Thereafter, the High Court enlarged the respondent No.1 on bail– Sustainability of – Held: Not sustainable – High Court did notDconsider the rigour of s. 45 nor considered the seriousness of theoffences alleged against accused for the schedule offences underthe PMLA Act, 2002 and that the investigation by the EnforcementDirectorate for the scheduled offences under the PML Act, 2002 isstill going on – Merely because other accused are acquitted/discharged, it cannot be ground not to continue the investigationEagainst respondent No. 1 – Merely because, for the predicatedoffences the chargesheet might have been filed it cannot be groundto release the accused on bail in connection with the scheduledoffences under the PML Act, 2002 – Investigation for the predicatedoffences and the investigation by the Enforcement Directorate forFthe scheduled offences under the PML Act are different and distinct– Matters remitted back to the High Court for afresh decision onthe bail applications – Penal Code, 1860 – ss. 120-B, 420, 468 and471 – Prevention of Corruption Act, 1988 – s. 7 rw s. 13(2).

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.G1401 of 2023.

From the Judgment and Order dated 02.03.2021 of the High Courtfor the State of Telangana at Hyderabad in CRLP No. 1146 of 2021.

With

HCriminal Appeal no.1402 of 2023.

K. M. Nataraj, A.S.G., Mukesh Kumar Maroria, Mukul Singh,S.A. Haseeb, Mrs. Deepavali Dutta, Rajan Kumar Chourasia, ZohebHussain, Kannu Agarwal, Sarath Nambiar, Advs. for the Appellant.

Rakesh Khanna, Aman Lekhi, Sr. Advs., Santosh Kumar Tripathi,Siddharth Krishna Dwivedi, Varun K Chopra, Yugant Sharma, AyushJindal, Tushar Gupta, Rohin Oza, M/s. Vkc Law Offices, Advs. for theRespondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugnedjudgment(s) and order(s) passed by the High Court for the State ofTelangana at Hyderabad in Criminal Petition Nos. 1146/2021 and 1147/2021, by which, the High Court has allowed the said bail applicationsand has directed to enlarge respective respondent No. 1 on bail inconnection with the offences under the Prevention of Money LaunderingAct, 2002 (hereinafter referred to as the PML Act, 2002) investigatedby the Enforcement Directorate, Hyderabad in F. No. ECIR/HYZO/36/2020 on the file of Metropolitan Sessions Judge, Hyderabad, theDirectorate of Enforcement has preferred the present appeals.2. That an FIR No. 12/2019 dated 10.04.2019 was registered bythe Economic Offences Wing, Bhopal, naming about 20 persons/companies as accused for the offences punishable under Sections 120-B, 420, 468 and 471 of IPC, Section 66 of the Information TechnologyAct, 2000 and Section 7(c) read with Section 13(2) of the Prevention ofCorruption Act, 1988. It was found in the preliminary enquiry that e-Tender Nos. 91,93, and 94 for total works amounting to Rs. 1769.00crores of Madhya Pradesh Water Corporation were tempered to changethe price bid of M/s GVPR Engineers Limited, M/s The Indian HumePipe Company Limited and M/s IMC (sic) Project India Limited to makethem the lowest bidders. Subsequent to the registration of the FIR,Economic Offences Wing, Bhopal conducted investigation and filed thechargesheet before the competent court on 04.07.2019. That on studyof chargesheet, it was found that the accused have also committed theoffences under the PML Act, 2002 as the offences for which they werechargesheeted, namely, Sections 120-B, 420, 468 and 471 of IPC andSection 7 read with Section 13(2) of the PC Act, are also scheduledoffences and therefore, the Enforcement Directorate, Hyderabad had

Ainitiated money laundering investigation in the F. No. ECIR/HYZO/36/2020. That respective respondent No. 1 herein in respective appealswere arrested on 19.01.2021, therefore, they filed the present bailapplications before the High Court to enlarge them on bail in connectionwith the aforesaid investigation/case being investigated by theEnforcement Directorate. By the impugned orders, the High Court hasBdirected to enlarge respondent No. 1 in respective appeals on bail. Theimpugned orders passed by the High Court enlarging respondent No. 1in respective appeals on bail in the case being investigated by theEnforcement Directorate, Hyderabad, are the subject matters of presentappeals.C3. Shri K.M. Nataraj, learned ASG, has appeared on behalf of theappellant – Enforcement Directorate and Shri Rakesh Khanna and ShriAman Lekhi, learned Senior Advocates have appeared on behalf ofrespective respondent No. 1.

3.1 Shri Nataraj, learned ASG appearing on behalf of theDEnforcement Directorate has submitted that in the facts andcircumstances of the case the High Court has seriously erred in enlargingrespective respondent No. 1 – accused on bail. It is submitted that whileenlarging respective respondent No. 1 – accused on bail the High Courthas not properly appreciated Section 45 of the PML Act, 2002.

E3.2 It is further submitted that the High Court has not properlyappreciated and/or considered the seriousness of the offences whichare scheduled offences under the PML Act, 2002.

3.3 It is submitted that the High Court has enlarged respectiverespondent No. 1 on bail solely on the ground that the investigation hasFbeen completed and the chargesheet has been filed. It is submitted thathowever, the High Court has not properly appreciated the fact that theinvestigation by the Enforcement Directorate is still going on andtherefore, it is wrong to say that the investigation has been completed.

4. While opposing the present appeals, learned Senior Advocate(s)Gappearing on behalf of respective respondent No. 1 have vehementlysubmitted that in the facts and circumstances of the case, the High Courthas not committed any error in directing to enlarge the accused on bail.4.1 It is submitted that in the present case so far as the impugnedFIR is concerned i.e., for the predicated offences others accused haveHbeen acquitted/discharged.

4.2 It is further submitted that as the investigation is over and thechargesheet has been filed, the High Court has rightly enlarged theaccused – respective respondent No. 1 on bail. It is submitted that asthe accused are on bail since March, 2021, the impugned orders passedby the High Court may not be interfered by this Court at this stage.

5. We have heard learned counsel appearing on behalf of therespective parties at length.

6. At the outset, it is required to be noted that respective respondentNo. 1 – accused are facing the investigation by the EnforcementDirectorate for the scheduled offences and for the offences of moneylaundering under Section 3 of the PML Act punishable under Section 4of the said Act. An enquiry/investigation is still going on by theEnforcement Directorate for the scheduled offences in connection withFIR No. 12/2019. Once, the enquiry/investigation against respectiverespondent No. 1 is going on for the offences under the PML Act, 2002,the rigour of Section 45 of the PML Act, 2002 is required to be considered.Section 45 of the PML Act, 2002 reads as under: -

“45. Offences to be cognizable and non-bailable.—

(1) [Notwithstanding anything contained in the Code of CriminalProcedure, 1973 (2 of 1974), no person accused of anoffence [under this Act] shall be released on bail or on his ownbond unless—]

(i) the Public Prosecutor has been given an opportunity tooppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, thecourt is satisfied that there are reasonable grounds for believingthat he is not guilty of such offence and that he is not likely tocommit any offence while on bail:

Provided that person, who, is under the age of sixteen years,or is woman or is sick or infirm [or is accused either on his ownor along with other co-accused of money-laundering sum ofless than one crore rupees], may be released on bail, if the SpecialCourt so directs:

Provided further that the Special Court shall not take cognizanceof any offence punishable under Section 4 except upon complaintin writing made by—

A(i) the Director; or

(ii) any officer of the Central Government or StateGovernment authorised in writing in this behalf by the CentralGovernment by general or special order made in this behalfby that Government.

[(1-A) Notwithstanding anything contained in the Code ofCriminal Procedure, 1973 (2 of 1974), or any other provision ofthis Act, no police officer shall investigate into an offence underthis Act unless specifically authorised, by the Central Governmentby general or special order, and, subject to such conditions asCmay be prescribed.]

(2) The limitation on granting of bail specified in [* * *] sub-section (1) is in addition to the limitations under the Code of CriminalProcedure, 1973 (2 of 1974) or any other law for the time being inforce on granting of bail.”

DBy the impugned judgment(s) and order(s) and while grantingbail, the High Court has not considered the rigour of Section 45 of thePML Act, 2002.

6.1 Even otherwise, the High Court has not at all considered thenature of allegations and seriousness of the offences alleged of moneyElaundering and the offences under the PML Act, 2002. Looking to thenature of allegations, it can be said that the same can be said to be veryserious allegations of money laundering which are required to beinvestigated thoroughly.

6.2 Now so far as the submissions on behalf of the respectiveFrespondent No. 1 that respective respondent No. 1 were not named inthe FIR with respect to the scheduled offence(s) and/or that all theother accused are discharged/acquitted in so far as the predicatedoffences are concerned, merely because other accused are acquitted/discharged, it cannot be ground not to continue the investigation inrespect of respective respondent No. 1. An enquiry/investigation is goingGon against respective respondent No. 1 with respect to the scheduledoffences. Therefore, the enquiry/investigation for the scheduled offencesitself is sufficient at this stage.

6.3 From the impugned judgment(s) and order(s) passed by theHigh Court, it appears that what is weighed with the High Court is thatH

chargesheet has been filed against respective respondent No. 1 – accusedand therefore, the investigation is completed. However, the High Courthas failed to notice and appreciate that the investigation with respect tothe scheduled offences under the PML Act, 2002 by the EnforcementDirectorate is still going on. Merely because, for the predicated offencesthe chargesheet might have been filed it cannot be ground to releasethe accused on bail in connection with the scheduled offences under thePML Act, 2002. Investigation for the predicated offences and theinvestigation by the Enforcement Directorate for the scheduled offencesunder the PML Act are different and distinct. Therefore, the High Courthas taken into consideration the irrelevant consideration. The investigationby the Enforcement Directorate for the scheduled offences under thePML Act, 2002 is till going on.

7. As observed hereinabove, the High Court has neither consideredthe rigour of Section 45 of the PML Act, 2002 nor has considered theseriousness of the offences alleged against accused for the scheduledoffences under the PML Act, 2002 and the High Court has not at allconsidered the fact that the investigation by the Enforcement Directoratefor the scheduled offences under the PML Act, 2002 is still going on andtherefore, the impugned orders passed by the High Court enlargingrespective respondent No. 1 on bail are unsustainable and the mattersare required to be remitted back to the High Court for afresh decision onthe bail applications after taking into consideration the observations madehereinabove.

8. In view of the above and for the reasons stated above, boththese appeals succeed. The impugned judgment(s) and order(s) passedby the High Court in Criminal Petition Nos. 1146/2021 and 1147/2021enlarging respective respondent No. 1 – accused in respective appealson bail are hereby quashed and set aside. That respective respondentNo. 1 now to surrender before the competent court having jurisdictionor before the concerned jail authority within period of one week fromtoday. The matters are remitted back to the High Court to consider thebail applications afresh in light of the observations made hereinaboveand after respective respondent No. 1 surrenders within period of oneweek as ordered above. Present appeals are accordingly allowed to theaforesaid extent.

Appeals allowed.