Arvind Vyas vs State of Jharkhand

R.R. Prasad, J.—Heard Mr. Y.V. Giri, learned Sr. Counsel appearing for the Petitioner and Mr. A.K. Das, learned Counsel appearing for the Directorate of Enforcement.

This application has been filed for grant of bail in connection with Complaint Case arising out of E.C.IR./02/PAT/09/AD registered u/s 4 of the Prevention of Money Laundering Act, 2002.

Learned Counsel appearing for the Petitioner submits that on the basis of complaint lodged by one Rajeev Sharma, a Vigilance P.S. case No. 9 of 2009 was registered under Sections 409, 423, 424, 465 and 120B of the Indian Penal Code against Madhu Koda, Ex. Chief Minister, Kamlesh Singh, Bandhu Tirkey and Bhanu Pratap Sahi, Ex. Ministers. Subsequently, the C.B.I under the order of this Court took up the investigation and registered a case as R.C. No. 58 of 2009. After investigation of the case, the C.B.I submitted charge sheet against Madhu Koda, Vinod Kumar Sinha and Sanjay Choudhary u/s 120B of the Indian Penal Code as well as Sections 9 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 on the charge that Madhu Koda, the then Chief Minister and also the Mines Minister on being influenced by the co-accused, Binod Kumar Sinha and Sanjay Choudhary granted mining lease by abusing his official position to M/s. Coal Industries Pvt. Ltd and received illegal gratification to the tune of Rs. 7.65 crores. In course of investigation, the C.B.I did not find involvement of this Petitioner, who is a bullion merchant and is proprietor of M/s. Balaji Bulliion Bazar, a resident of Mumbai. At the same time, the Enforcement Directorate also lodged Enforcement Case Information Report (ECIR) No. 02 of 2009 under Sections 420, 423, 424 and 120B of the Indian Penal Code and also under Sections, 7, 10 and 13 of the Prevention of Corruption Act, 1988 against those persons who were charge sheeted by the C.B.I as well as some other persons but not against the Petitioner, still a complaint was lodged against this Petitioner by the Enforcement Directorate alleging therein that the accused persons such as, Vikash Kumar, Binod Kumar Sinha, and Sanjay Choudhary as well as Dhananjay Choudhary after collecting ill-gotten money from Madhu Koda invested it in the companies situated in India and also at abroad and this Petitioner played a major role in investment of all those ill-gotten money and that the Petitioner has had close nexus with the aforesaid accused persons, who laundered proceeds of crime and that the Petitioner entered into large number of financial transactions in projecting the ill-gotten money as untainted and bona fide transaction but that allegation is only for the sake of allegation whereas nothing has transpired to show that any proceed of crime obtained or derived directly or indirectly from the commission of schedule offence has been pocketed by this Petitioner and that it has been alleged that ill-gotten money has been invested in certain companies but it has not been established that the money invested in the companies mentioned in the complaint are proceeds of crime and as such, the Petitioner cannot be said to have committed any offence under the Prevention of Money Laundering Act, 2002.

It was further submitted that the Petitioner has been alleged to have entered into the transactions of ill-gotten money worth Rs. 1020.96 crores and U.S. $ 1214994 but surprisingly, the C.B.I did find the proceeds of crime to the extent of only Rs. 7.65 crores and as such, the entire allegations made by the Enforcement Directorate get falsified.

It was further submitted that the amount which has been alleged to have been invested in several companies has been taken to be ill-gotten money but, in fact, all those transactions are legitimate, source of which is unconnected with the proceeds of crime. In this respect learned Sr. counsel highlighted that the Petitioner being Bullion Merchant entered into business in the year 2006, keeping in view the special scheme floated by the Government of Uttar Pradesh whereby the Petitioner invested the amount for the purchase of gold from the Bank and to sell out in the open market. The money which was received was either deposited in the Bank or invested in purchasing gold and in this manner, the Petitioner did business worth Rs. 982 crores. The transactions were made mostly by cheques as well as cash which can be ascertained from the purchase receipts and the delivery challans as well as purchase bills of I.C.I.C.I. Bank and the Union Bank of India.

It was further pointed out that the said business which has begun in November, 2006, lasted till March, 2007, whereas it is the case of the Directorate of Enforcement that the Petitioner came into contact with the accused persons only in the money of July, 2007 and as such, the aforesaid money which the Petitioner earned cannot be proceeds of crime.

Thus, it was submitted that keeping in view the aforesaid fact that the Enforcement Directorate has failed to establish any nexus in between the properties belonged to the Petitioner and the proceeds of crime, the Petitioner be admitted to bail as he has been in custody since last ten months, particularly in view of the decision rendered in a case of 2002 (1) PLJR 63 (SC) observing therein that custody of six months would be enough for the purpose of grant of bail, keeping in view that the punishment prescribed u/s 13 of the Prevention of Corruption Act is 7 years.

Mr. A.K. Das, learned Counsel appearing for the Enforcement Directorate submitted that the accused persons against whom C.B.I have submitted the charge sheet amassed huge money through corrupt and illegal means by committing scheduled offence and the proceeds of crime so accumulated were invested not only in India but in several other countries so as to project the same as untainted properties.

In this regard it was submitted that the modus operandi adopted by the accused persons as disclosed by one of the witnesses, who happens tobe a Chartered Accountant is that some Chartered Accountants/Entry Operators maintained several files of companies which only exists on paper for providing accommodation entries to the intending persons who want to invest their undisclosed income in the books of account of the company as share capital/unsecured loan.

It was further submitted that during investigation it has transpired that this Petitioner involved himself in the laundering of illegally acquired money by investing Rs. 5 crore in M/s. Satyam Art and Media Pvt. Ltd which had been opened by this Petitioner along with the co-accused Vinod Sinha. The said money had been arranged by the Petitioner with a view to project the same as untainted money.

Learned Counsel further submitted that this Petitioner in course of interrogation admitted that he had purchased billion wroth of Rs. 985 crores from the Bank based at Noida and that the Petitioner had sold the gold in favour of several companies including M/s. Goburdhan Traders but in course of investigation, it transpired that the said company does not exist and not only that gold has been shown to have been sold to several companies including one Ketan Seroff but the said. Ketan Seroff has denied about any such transaction and similarly, other persons have also denied that he had purchased any gold from M/s. Balajee Bullion Bajaj.

Thus, it was submitted that sufficient materials are there indicating therein that this Petitioner has had close nexus with other accused persons who after getting ill-gotten money from the Ex-Chief Minister invested the same with the help of this Petitioner in order to get the tainted money as untainted.

Learned Counsel submitted that illegal transaction which was found during investigation concerning this Petitioner is that of Rs. 1020,94 crores whereas the C.B.I has confined his case with respect to one transaction only.

Regard being had to the facts and circumstances, there appears to be laundering of huge public money and also the submission advanced on behalf of the Enforcement Directorate relating to involvement of the Petitioner in the alleged offence, I am not inclined to grant bail to the Petitioner. Hence, the prayer for bail of the Petitioner is rejected.