Bail granted in multi-crore bank scam
Excelsior Correspondent
JAMMU, Mar 18: High Court has held that charges under the Prevention of Money Laundering Act (PMLA) cannot proceed if the investigation into the original crime (known as the predicate offence) is stalled.
“Offences under PMLA are stand alone offences, yet their origin is the scheduled offences. Once the scheduled offence ceases to exist or is extinguished, an accused cannot be proceeded against in respect of offences under PMLA”, court observed.
These observations were made by Justice Sanjay Dhar in a petition filed by Anil Kumar Aggarwal challenging his arrest in a case arising out of Enforcement Case Information Report (ECIR) bearing No. ECIR/JMSZO/02/2023 dated 31.03.2023 registered by the respondent.
Challenge was also thrown to Arrest Memo dated 06.02.2024, Arrest Order dated 06.02.2024 and Remand Order dated 07.02.2024 passed by the Special Judge, (PMLA) Jammu, whereby the petitioner has been remanded to custody of the respondent. In this regard, the petitioner has invoked the jurisdiction of High Court under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure (CrPC). By way of interim relief, the petitioner has sought his release from the custody of the respondent.
The brief facts of the case are that investigation against M/s Bharat Papers Limited and its Directors including Anil Kumar Aggarwal were initiated as they alleged to have perpetrated bank loan fraud amounting to Rs 200 cr with consortium of banks with lead bank as State Bank of India other banks being J&K Bank, PNB and Karur Vysya Bank.
The original project cost for BPL was estimated at Rs 183.60 crore with total debt of Rs 125 crore (Rs 75 crore availed from State Bank of India as Term Loan) in December 2006. The balance Rs 50 crore was availed from PNB and J&K Bank. The project was expected to commence commercial production with effect from April 2008 but due to the delay in the implementation, there was cost-overrun of Rs 51.54 crore in the project which was funded by way of an additional term loan of Rs 35 crore (Rs 20 crore availed from State Bank of India) and the balance amount by way of equity infusion by both BBFIL and the promoters. The commercial production was then re-scheduled to commence from July, 2009.
However, in June 2009, Bharal Paper Ltd again approached the State Bank of India. SCB, Miller Ganj. Ludhiana for a second re-structuring of Term loan to better alien the repayment obligations with the stabilization of production and estimated generation of cash flows, which was approved on 10.06.2009. However, even after commencement of operation in FY 2009-10, the unit had failed to honors its commitments for payment of interest & term loan instalments. Hence, the bank declared the account NPA on 30.09.2010. Later, the account was declared fraud by the bank on 01.07.2019 and the same was reported to RBI on 17.07.2019.
Accordingly, FIR was registered by ACB, CBI Jammu under Sections 5(1 )(d) read with 5(2) of J&K PC Act and Sections 120-B and 420 of J&K RPC against M/s Bharat Paper Ltd, Kathua, its MD Rajinder Kumar, Parveen Kumar (Director), Baljinder Singh (Director), Anil Kumar (Director) and others unknown.
After hearing both the sides, High Court observed, “in the instant case, the case diary that has been produced by the DSGI would reveal that the grounds of arrest have been furnished to the petitioner immediately after his arrest. However, a perusal of the impugned Order of Remand passed by the Special Judge, PMLA reveals that it is nowhere recorded in the order as to whether or not the grounds of arrest have been furnished to the petitioner”.
“The Special Judge has simply recorded that she has carefully perused the case diary and entire material on record and because investigation of the case is at initial stage and the accused is involved in a serious non bailable and economic offence, as such, he is remanded to custody of the Enforcement Directorate. The Judge has not even recorded a finding as to whether or not she has perused the grounds of arrest so as to ascertain whether the ED had recorded reasons to believe that the petitioner was guilty of an offence under PMLA and whether or not there was proper compliance with the mandate of Section 19 of the PMLA”, High Court said.
“Prima facie the impugned order dated 07.02.2024 passed by the Special Judge, PMLA smacks of non application of mind”, High Court said, adding “petitioner has been able to carve out a case for grant of interim relief. Accordingly, the petitioner is directed to be released from custody provided he fulfills the conditions that he shall furnish bail bond with two sureties in the amount of Rs 1 lakh each to the satisfaction of the Special Judge designated under PMLA, Jammu. He shall cooperate with the respondent during investigation of the case and he shall not hamper or tamper with the evidence. He shall deposit his passport with Assistant Director, Enforcement Directorate Jammu and shall undertake that he shall not leave the limits of the country without prior permission of the Special Judge.
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