Case Note & Summary
The case arises from an FIR (Crime No.109 of 2020) lodged by Mahendra S. Surana, a Director of M/s. Aurangabad Gymkhana Club Private Limited, against the applicants and others for offences under Sections 406, 420 read with 34 IPC, alleging criminal breach of trust and cheating of Rs.12,17,84,451/- by issuing cheques from a blocked/freezed account. Subsequently, the Enforcement Directorate (ED) received a complaint and registered ECIR No.ECIR/MBZO-III/20/2020 under the Prevention of Money Laundering Act, 2002 (PMLA). The applicants were arrested and produced before the Special Judge, who by order dated 28th January 2021 remanded them to judicial custody. On 15th February 2021, the Special Judge allowed ED's application for extension of judicial custody and rejected the applicants' bail application. The applicants then filed Criminal Application (APL) No.201 of 2021 under Section 482 read with Section 483 CrPC to quash those orders, and Criminal Bail Application No.974 of 2021 for bail. The High Court heard arguments from both sides. The court noted that the twin conditions under Section 45 PMLA apply to bail applications, and the applicants failed to show reasonable grounds for believing they were not guilty or unlikely to commit offences. The court found no illegality in the Special Court's orders and dismissed both applications.
Headnote
A) Criminal Procedure - Quashing of Orders - Section 482 CrPC - The High Court declined to quash the Special Court's orders extending judicial custody and rejecting bail, finding no illegality or perversity. (Paras 1-4)
B) Prevention of Money Laundering Act - Bail - Section 45 PMLA - The twin conditions under Section 45 PMLA apply, requiring the court to be satisfied that there are reasonable grounds for believing the accused is not guilty and is not likely to commit any offence while on bail. The applicants failed to satisfy these conditions. (Paras 4-5)
C) Criminal Procedure - Extension of Judicial Custody - The Special Court's order extending judicial custody was justified as the investigation was ongoing and the applicants were required for further investigation. (Para 4)
Issue of Consideration
Whether the impugned orders of the Special Court extending judicial custody and rejecting bail are sustainable in law, and whether the applicants are entitled to bail under the PMLA.
Final Decision
Both applications dismissed. The impugned orders of the Special Judge are upheld. No direction for release of applicants.
Law Points
- Section 482 CrPC
- Section 45 PMLA
- twin conditions for bail
- extension of judicial custody
- prima facie case
- money laundering predicate offence
Case Details
2021 LawText (BOM) (03) 88
Criminal Application (APL) No. 201 of 2021 with Criminal Bail Application No. 974 of 2021
Mr. Vijay Aggarwal, Mr. Mudit Jain, Mr. Rahul Agarwal, Mr. Aftab Diamondwala, Mr. Ashraf Diamondwala, Mr. Pradeep Jain, Mr. Vijay Dali, Mr. D.S. Mhaispurkar, Mr. Anil Singh, Mr. H.S. Venegavkar, Mr. Adtiya Thakkar, Mr. Amit Palkar
Babulal Verma, Kamal Kishore Gupta
Enforcement Directorate, Mumbai; State of Maharashtra
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Nature of Litigation
Criminal application under Section 482 CrPC to quash orders of Special Judge extending judicial custody and rejecting bail, and bail application under PMLA.
Remedy Sought
Applicants sought quashing of orders dated 15th February 2021 and 28th January 2021 passed by Special Judge, Mumbai, and direction to release them from confinement in ECIR No.ECIR/MBZO-III/20/2020, and also sought bail.
Filing Reason
Applicants were arrested in connection with ECIR under PMLA based on FIR alleging cheating and criminal breach of trust of Rs.12,17,84,451/-.
Previous Decisions
Special Judge by order dated 28th January 2021 remanded applicants to judicial custody; by order dated 15th February 2021 extended judicial custody and rejected bail.
Issues
Whether the impugned orders of the Special Court are liable to be quashed under Section 482 CrPC?
Whether the applicants are entitled to bail under the PMLA?
Submissions/Arguments
Applicants argued that the orders were illegal and they were entitled to bail.
Respondent-ED opposed, submitting that the twin conditions under Section 45 PMLA were not satisfied and investigation was ongoing.
Ratio Decidendi
The twin conditions under Section 45 of the PMLA must be satisfied for grant of bail. The Special Court's orders extending judicial custody and rejecting bail were justified as the applicants failed to show reasonable grounds for believing they were not guilty or unlikely to commit offences while on bail.
Judgment Excerpts
By the present Application No.201 of 2021, under Section 482 read with Section 483 of the Code of Criminal Procedure, 1973, the Applicants have impugned Order dated 15th February, 2021 passed below Exhs-7 and 8 in PMLA RA No.117 of 2021 and Order dated 28th January, 2021 passed in Remand Application No.117 of 2021 by learned Special Judge, Mumbai and for direction to release the Applicants from confinement from Jail in ECIR No.ECIR/MBZO-III/20/2020.
Application No.974 of 2021 is for seeking bail by Applicants.
Procedural History
FIR No.109/2020 lodged on 7th March 2020 at City Chowk Police Station, Aurangabad. ED received complaint on 10th July 2020 and registered ECIR. Applicants arrested and produced before Special Judge. On 28th January 2021, Special Judge remanded them to judicial custody. On 15th February 2021, Special Judge extended judicial custody and rejected bail. Applicants filed APL No.201/2021 and BA No.974/2021 before High Court, which were dismissed on 16th March 2021.
Acts & Sections
- Code of Criminal Procedure, 1973 (CrPC): 482, 483
- Indian Penal Code, 1860 (IPC): 406, 420, 34
- Prevention of Money Laundering Act, 2002 (PMLA): 45
