HC grants bail remand in multi-crore bank scam

STATE TIMES NEWS

JAMMU: Justice Sanjay Dhar of Jammu & Kashmir and Ladakh High Court on Monday observed that 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.
This significant order has been passed in a petition filed by Anil Kumar Aggarwal challenged 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 has also been thrown to Arrest Memo dated February 6, 2024, Arrest Order dated February 6, 2024 and Remand Order dated February 7, 2024 passed by the learned 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 this Court under Article 226 of the Constitution of India read with section 482 of the Code of Criminal Procedure(Cr.P.C.). By way of interim relief, the petitioner has sought his release from the custody of the respondent.
That brief facts of the case is that investigation against M/s Bharat Papers Limited (hereinafter referred to as BPL) and its Directors including Anil Kumar Aggarwal were initiated as they alleged to have perpetrated bank loan fraud amounting to approx. 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 Cr. with total debt of Rs. 125.00 Cr. (75 Cr. availed from State Bank of India as Term Loan) in Dec, 2006. The balance Rs. 50.00 Cr. was availed from PNB and J&K Bank. The project was expected to commence commercial production w.e.f. April, 2008 but due to the delay in the implementation, there was cost-overrun of Rs.51.54 Cr. in the project which was funded by way of an additional term loan of Rs. 35.00 Cr. (20.00 Cr. availed from Stale Bank of India) and the balance amount b) 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 Rank of India. SCB, Miller Ganj. ludhiana for a second re-structuring of Term I, Loans to better Alien the repayment obligations with the stabilization of production and estimated generation of cash Hows, which was approved on June 10, 2009. However, even after commencement of operation in FY 2009-10, the unit had tailed to honors its commitments for payment of interest & term loan instalments. Hence, the bank declared the said account NPA on September 30, 2010. Later, the account was declared fraud by the bank on July 1, 2019 and the same Mas reported to RBI on July 17, 2019.
That FIR bearing number RC0042020A0001 dated 12.02.2020 was registered by ACB, CBI Jammu under Sections 5(1 )(d) r/w 5(2) of J&K PC Act. Samvat. 2006 (Pari-Materia to Section 13(l)(d) r/w 13(2) of the Prevention of Corruption Act 1988) and Sections 120-B and 420 of J&K RPC (Pari-Materia to Sections 120-B and 420 of the Indian Penal Code 1860) against M/s Bharat Paper Ltd. Vill. Logate Kathua, its MD Rajinder Kumar, Parveen Kumar (Director), Baljinder Singh (Director), Anil Kumar (Director) and others unknown.
As per the FIR, it was alleged that the accused persons have perpetrated bank loan fraud amounting to approx. 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 said FIR was registered on the basis of complaint reference letter No. SAMB Ldh/T-2/2052 dated 11.02.2020 filed by Shri. Jagdish Lal, the then Deputy General Manager, Stressed Asset Management Branch, State Bank of India, Ludhiana, Punjab before ACB CBI Jammu for the offence of criminal conspiracy, cheating, Criminal Breach of trust and Criminal Misconduct.
On the basis of the afore-stated FIR, Investigation under the provisions of Prevention of Money Laundering Act, 2002 (PMLA) was initiated by this Directorate after recording of an ECIR bearing No. ECfR/JMSZO/02/2023 dated March 31, 2023. Justice Sanjay Dhar after hearing both the sides observed that 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 said 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. In view of this, Court is of prima facie view that the impugned order dated 07.02.2024 passed by the Special Judge, PMLA smacks of non application of mind. For all what has been discussed hereinbefore, the petitioner has been able to carve out a case for grant of interim relief. Accordingly, the petitioner is directed to be released from custody in the subject ECIR, provided he fulfils the following conditions that he shall furnish bail bond with two sureties in the amount of 1 Rs. 1.00 lac 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.