The Allahabad High Court, while noting that twin conditions laid down by the Supreme Court in the case of Vijay Madanlal Choudhary and others Vs Union of India and others are fulfilled, granted bail to an accused arrested under the Prevention of Money Laundering Act, 2002.
The Single-Judge Lucknow Bench of Justice Dinesh Kumar Singh passed this order while hearing an application under Section 482 filed by Pankaj Grover.
The application under Section 482 CrPC has been filed for quashing of entire proceedings of Complaint Case under Section 3/4 of the Prevention of Money Laundering Act, 2002 (PMLA), pending against the accused applicant before the Special Judge, PMLA, Lucknow.
The facts of the case are that the Government of India launched a scheme, named and styled as ‘National Rural Health Mission’ (NRHM) on 12.04.2003 with a view to provide accessible, adequate and affordable health service to all persons, particularly to vulnerable section of the society residing in remote areas.
The separate Memorandum of Understandings were entered into between the Central Government and the State Governments for decentralising the implementation of the scheme and mobilising the resources for implementing the said scheme. Such a Memorandum of Understanding with the Government of Uttar Pradesh was entered into on 12.11.2006.
As per the said Memorandum, 85% funds were to be provided by the Central Government whereas the State Government was to contribute 15% of the total funds for the Mission.
The State Health Society (SHS) was established under the Chairmanship of Chief Secretary, Government of Uttar Pradesh and the existing State Agencies involved in implementation of tuberculous, blindness and leprosy eradication as well as other State Empowered Committee for RCH etc were merged with he SHS.
In compliance of the directions issued by the Court, the CBI, after making preliminary inquiries, registered FIR bearing RC dated 02.01.2012 in the matter of irregularities in utilization of funds allocated to the UP Small Scale Industries Corporation for supply/procurement of various items under the NRHM during the year 2009-2010.
M/s Surgicoin Medequip Private Limited, Ghaziabad and its Director/ Representative, Naresh Grover were also accused in the FIR.
The CBI, after completing the investigation, filed a charge-sheet dated 25.02.2013 in respect of Crime.
The charge-sheet was filed for commission of offence punishable under Section 120-B read with Sections 409 and 420 IPC read with Sections 13(2)(1)(c) and 13(2)(1)(d) of the PC Act and substantive offence thereof against the accused, Abhai Kumar Bajpai, Raja Ram Bharti, Sunil Kumar Chauhan, Naresh Grover and M/s Surgicoin Medequip Private Limited, Ghaziabad.
The CBI, in its charge-sheet, has alleged that the accused had entered into criminal conspiracy to cheat the Government by misusing the funds allocated under the NRHM so as to illegal gains and corresponding loss to the Government.
The allegations against the accused-applicant is that he disposed of half of the Factory situated at 1701-1702, HSIDC, Industrial Area, Rai, Sonepat, Haryana to one Sachin Gupta of M/s Sain Packing Private Limited for a sum of Rs 5,48,59,200/- on 04.08.2014.
However, no satisfactory explanation was given either by Naresh Grover or by his son, Pankaj Grover for the end use of the said procedure. The ED, therefore, concluded that the accused-applicant and his father, Naresh Grover have siphoned off and laundered the proceeds of crime, with a view to avoid its disclosure or attachment under the PMLA.
The accused-applicant is not an accused in the predicate offence for which the CBI had filed the charge-sheet. However, the accused applicant is one of the two Directors of M/s Surgicoin Medequip Private Limited. Allegation against M/s Surgicoin Medequip Private Limited is that it had received payment of Rs 31,39,23,140/- for supplies made by it at exorbitant rates against NRHM in the State of Uttar Pradesh and generated proceeds of crime to the tune of Rs 21,20,87,617/-.
It was also said that the tender process was manipulated in favour of M/s Surgicoin Medequip Private Limited for commission/bribery to be paid to the Minister, officials and their associates and cohorts, showing fictitious translocation to conceal the deployment of the same. In lieu of this proceeds of crime, properties in the hands of M/s Surgicoin Medequip Private Limited and its Promoters/Directors, Naresh Grover and Pankaj Grover have been identified and attached which are the two properties mentioned above.
It is submitted by Amarjeet Singh Rakhra, counsel for the accused-applicant, that only allegation against the accused applicant in the complaint is that he disposed of half of the Factory situated at 1701-1702, HSIDC, Industrial Area, Rai, Sonepat, Haryana, which was alleged to have been acquired by proceeds of crime and no explanation could be offered by him or his father regarding end use of proceed of sale of the factory.
It is submitted that the attachment order was set-aside by the Appellate Authority vide detailed judgment and order dated 22.11.2018. The appellate Authority has recorded a finding of fact that the said two properties, which were attached by the ED, treating them to have been acquired by proceeds of crime, were purchased in the year 2003-2005, whereas the alleged offence was committed in the 2009-2010 and, therefore, the two properties, which were attached by the ED, could not be said to be the proceeds of crime.
Further submission made by the counsel for the accused applicant is that the accused-applicant was not arrested during the course of investigation by the ED in exercise of its power under Section 19 of the PMLA; the accused-applicant had fully cooperated in the investigation.
The counsel has further submitted that after the judgment reported in 2022 SCC OnLine SC 929 (Vijay Madanlal Choudhary and others Vs Union of India and others, in which it has been held that to prosecute a person under the PMLA, there should be predicate offence registered, and there should be allegation against the person that he has dealt with the proceeds of crime in same manner.
The counsel has, therefore, submitted that since he has confined his prayer to the extent of enlarging the accused-applicant on bail on his surrender before the trial Court on furnishing a personal bond and two sureties to the satisfaction of the trial Court, the Court, looking at the facts of the case, may grant the said prayer.
On the other hand, Kuldeep Srivastava, counsel for the ED, submitted that the accused-applicant had approached the Court earlier by filing an application for anticipatory bail being Criminal Miscellaneous Anticipatory Bail Application, however, the said bail application was rejected by the Court by a detailed judgment and order dated 26.08.2021. The accused-applicant assailed the said judgment and order of the Court dated 26 August 2021 before the Supreme Court in Special Leave Petition, and the Supreme Court dismissed the said special leave petition on 09.09.2021.
So far as contention of Rakhra, counsel for the accused-applicant, regarding attachment of the two properties by the ED and the orders passed by the appellate Authority and the Delhi High Court are concerned, Srivastava has submitted that merely because the attachment order has been set aside by the appellate Authority, which has been affirmed by the Delhi High Court in appeal, offence under the PMLA, against the accused-applicant, does not get wiped out.
The Court held that,
It is not in dispute that the accused-applicant is not an accused in the predicate offence and no charge sheet has been filed against him for any predicate offence. In the complaint filed under Section 45 of the PMLA, allegation against the accused applicant is that he, in connivance and active conspiracy with his father and other co accused, had dealt with the proceeds of crime. There is also allegation that he disposed of half of the factory premises situated at 1701-1702 HSIDC Industrial Area, Rai Sonipat, Haryana, which is in the name of M/s Surgicoin Medequip Private limited, co-accused in which the accused-applicant has been a Director (Marketing) from October 2007 to January 2012.
Against the attachment order, there has been a specific finding recorded by the appellate authority as well as Delhi High Court that the factory in question was acquired before commission of predicate offence. Neither the appellate authority nor the Delhi High Court has treated the said property to have been acquired from proceeds of crime.
“Considering the aforesaid facts and the judgements of Appellate authority as well as Delhi High Court I am prima facie of the view that the twin conditions prescribed under section 45 of the PMLA are satisfied in the case and, therefore, looking at the facts and circumstances of the case, particularly, the two orders, one by the appellate authority and the other by the Delhi High Court, the interest of Justice would meet, if the applicant is directed to surrender before the trial court within one week”, the Court observed.
In case he surrenders as aforesaid, he may be enlarged on bail on furnishing personal Bond and two sureties to the satisfaction of the trial Court, preferably on the same day, the Court said while disposing the application.