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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MILIND N. JADHAV, J.
Suraj Satish Chavan - Applicant
Versus
Directorate of Enforcement & Anr. - Respondents
Criminal Bail Application No. 4141 of 2024
Decided On : 04-02-2025
(A) Prevention of Money Laundering Act, 2002 - Sections 3 and 4 - Bail application filed under Section 439 of Cr.P.C. - Applicant arrested on 17.01.2024, seeking bail after dismissal of previous application - Allegations of misappropriation of public funds during COVID-19 pandemic through fraudulent contracts - Prosecution claims Applicant received illegal gains amounting to Rs. 1.35 Crores - Court finds no chargesheet filed in predicate offence, and trial unlikely to commence soon - Applicant's continued incarceration violates right to speedy trial under Article 21 of the Constitution. (Paras 1, 22, 23)
(B) Bail - Conditions for grant - Applicant granted bail with conditions including reporting to Investigating Officer and not leaving the state without permission. (Paras 23)
Facts of the case:
The Applicant is accused of money laundering related to contracts for supplying food during the COVID-19 pandemic, with allegations of receiving illegal funds through fraudulent means.
Findings of Court:
The court noted the lack of a filed chargesheet in the predicate offence and the unlikelihood of a timely trial, leading to the conclusion that continued detention would infringe upon the Applicant's rights.
Issues: The main issues included the legality of the arrest, the sufficiency of evidence against the Applicant, and the implications of prolonged detention without trial.
Ratio Decidendi: The court emphasized that the right to a speedy trial is fundamental and that the Applicant's continued detention without a clear timeline for trial is unjust.
Result: Bail granted subject to conditions.
JUDGMENT :
[MILIND N. JADHAV, J.]
1. This Application is filed by Applicant / Accused (Sole Accused) for grant of bail under Section 439 of Cr.P.C. read with Section 45 of Prevention of Money Laundering Act, 2002 (for short “PMLA”). Applicant has been arrested and is in jail since 17.01.2024. The designated Special Court by order dated 09.09.2024 dismissed the Bail Application preferred by the Applicant. Bail Application is filed in connection with the alleged offence under Section 3 of the PMLA which is punishable under Section 4 of the said Act. Six volumes of the charge-sheet is filed as compilation by Applicant. Reference to relevant documents is as per the documents appearing in the compilation.
2. Briefly stated, prosecution case is that Mumbai police registered FIR on 01.09.2023 on the basis of Complaint filed by Gopal Pandurang Lavne - EOW officer in respect of two specific Work orders issued by the Municipal Corporation of Greater Mumbai (for short “MCGM”) dated 14.04.2020 and 17.04.2020 to supply cooked food (khichdi) during the COVID-19 Pandemic lock down period between March 2020 and July 2020 to the Ward Offices for distribution to the citizens. Delay in filing the complaint is prima facie evident. Work order dated 14.04.2020 was issued in favour of M/s. Vaishnavi Kitchen (Sahyadri Refreshments) and Work order dated 17.04.2020 to M/s. Force One Multi Services for supply of 300 gms of food packet (khichdi) @Rs.33/- per packet plus GST. MCGM paid Rs.8.64 Crores to M/s. Force One Multi Services and Rs.5.93 Crores to M/s. Vaishnavi Kitchen (M/s. Sahyadri Refreshments) on completion of the above Work orders. Work orders were fully delivered and completed. Sanction of completion and satisfaction was issued by the Standing Committee of MCGM vide Resolution dated 10.02.2021. Said sanction is appended on page No.154 of Volume-III. On 23.04.2021, MCGM issued letter of completion and appreciation to M/s. Force One Multi services for completing the Work order.
3. Allegation in the complaint filed by Gopal Pandurang Lavne on 01.09.2023 is that both the aforesaid entities illegally gained public money to the tune of Rs.3.64 Crores out of the total money paid by MCGM to them under the twin Work orders which was fraudulently transferred to Applicant’s Bank Account in the guise of his salary as an employee of M/s. Force One Multi Services and this led to a total loss of Rs.6.37 Crores of public money. On the basis of this allegation FIR of Scheduled Offence i.e. ECIR is filed on 17.10.2023 in the Special designated Court.
4. Briefly stated case of prosecution is as follows:-
4.1. Primary allegation is that contractual obligation under the Work orders was to supply 300 gram packet of food (khichdi) but M/s. Force One Multi Services supplied food packet weighing 100 grams and thus unjustly enriched itself.
4.2. Second allegation is that M/s. Force One Multi Services did not have its own kitchen facility and was majorly involved in sand transport business despite which it obtained the Work order due to influence exerted by Applicant on the Nodal Officer of MCGM. Thereafter M/s. Force One Multi Services entered into two sub- contracts with M/s. Sneha Caterers and Decorators and M/s. Golden Star Banquet Hall & Catering Services paid Rs.4.20 Crores to M/s. Sneha Caterers and Decorators and Rs.84,00,000/- to M/s. Golden Star Banquet Hotel & Catering Services for supplying the food (khichdi) packets and illegally misappropriated the balance amount of Rs. 3.64 Crores.
5. Third allegation is that there was no specific mechanism framed by MCGM to check the actual quantity delivered by M/s. Force One Multi Services of the food (khichdi) packets.
6. Fourth allegation is that the amount of Rs.3.64 Crores in the hands of M/s. Force One Multi Services is ‘proceeds of crime’ which was partly diverted into the personal bank account of Applicant and into another bank account of Applicant’s partnership firm called M/s. Fire Fighters Enterprises.
7. Fifth alleg
AI
The right to a speedy trial is fundamental, and prolonged detention without trial violates constitutional rights, warranting bail under PMLA.
The right to bail is fundamental, and prolonged incarceration without trial violates Article 21, especially when the trial is unlikely to conclude in a reasonable time.
Prolonged detention without trial violates the right to a speedy trial under Article 21; mere reliance on co-accused statements without corroborating evidence is insufficient for continued incarcerat....
Prolonged incarceration without trial violates Article 21 rights; bail granted due to lack of prima facie evidence against the accused.
The court emphasized the right to a speedy trial and liberty, allowing bail under the Prevention of Money Laundering Act after 15 months of custody, citing no likelihood of trial commencement.
The court emphasized that in economic offences, especially under the PMLA, bail should not be granted unless the accused demonstrates they are not guilty and unlikely to commit further offences.
The right to a speedy trial under Article 21 of the Constitution prevails, allowing bail under Section 436A of the CrPC despite statutory restrictions in the PMLA.
The right to a speedy trial is fundamental under Article 21, and prolonged incarceration without trial infringes on this right, warranting bail despite serious allegations.
Bail – Offence of money laundering – If incarceration of an undertrial accused is continued for an unreasonably long time, provisions may be exposed to vice of being violative of Article 21 of Consti....
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