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2024 Supreme(Online)(MP) 38359
HIGH COURT OF MADHYA PRADESH
PRAKASH CHANDRA GUPTA, J
MR. ASIF HANIF THARA – Appellant
Versus
ENFORCEMENT DIRECTORATE – Respondent
MISC. CRIMINAL CASE No. 44309 of 2024
For the Appellants/Petitioners: Shri Sidhharth Agrawal, Shri Manu Maheshwari, Ms. Smriti Sinha, Ms. Radhika Subhash, Ms. Arshiya Ghose, Shri Ritesh Kumar Sharma
For the Respondents: Shri Himanshu Joshi, Shri Dilip Singh Shaktawat
Failure to comply with procedural requirements under the Prevention of Money Laundering Act invalidated arrest and led to the granting of bail.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 3, 4, 19, and 45 - Bail application in a money laundering case - Allegations against the applicant concern fraudulent import of poppy seeds through benami firms; applicant claimed his arrest and investigation did not comply with legal requirements regarding admissibility of co-accused statements and that necessary procedural safeguards under Section 19 had not been fulfilled. (Paras 1-14)
(B) On examination of procedural compliance, the court determined that the failure to record reasons for arrest under Section 19 rendered the alleged guilt insufficient for denial of bail, thereby granting bail to the applicant. (Paras 14-15)
Facts of the case:
The applicant was arrested under allegations of involvement in money laundering with substantial financial implications tied to improper import authorization practices.
Findings of Court:
The provisions of Section 19 of the PMLA were not complied with during arrest, and thus the applicant was entitled to bail.
Issues: The court addressed the legality of the arrest concerning adherence to the PMLA procedural requirements.
Ratio Decidendi: The court asserted that a failure to comply with the established legal framework for arrest and investigation under the PMLA invalidated the prosecution’s basis for denying bail, emphasizing the necessity of documented reasoning for belief of guilt.
Result: Bail application allowed.
| Table of Content |
|---|
| 1. allegations involve fraudulent business practices related to import. (Para 1 , 2) |
| 2. legal arguments presented concerning compliance with pmla. (Para 3 , 4) |
| 3. ed's failure to follow proper procedures in arrest. (Para 5 , 6) |
| 4. court highlights importance of procedural adherence under pmla. (Para 7 , 8 , 9 , 10 , 12) |
| 5. bail granted due to non-compliance with mandated procedures. (Para 14 , 15 , 16) |
ORDER
Heard with the aid of case diary.
This is first bail application filed under Section 4 39 of Cr.P.C. (now section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023) read with Section 4 5 of PMLA for grant of bail to the applicant, in connection with FIR/No.ECIR NO.ECIR/STF/15/2023 registered at Enforcement Directorate S.T.F. HQ., New Delhi for commission of offence punishable under sections 3/4 of the Prevention of Money Laundering Act, 2002 .
2. As per prosecution case, an FIR bearing crime no.421/2023 dated 16.06.2023 was registered at P.S.- Morar, District- Gwalior (M.P.) against the applicant Asif Hanif Thara and co-accused persons namely Hanif Kadir, Putta Swamy, S. Murthy, Noor Ahmad, Shankar, Lokesh A, Irfan Pasha, Ali Mulla Sarif, Kiran Kumar, Amjad Khan and ors., as alleged who are proprietors of 9 Benami Firms, u/s 417, 420 and 120-B of the IPC at the instance of Assistant Enforcement Officer, Enforcement Directorate S.T.F. Branch, Government of India, New Delhi (hereinafter referred as ED). In the said FIR, it was alleged that during period 16.07.2014 to 16.06.2023 the applicant fraudulently obtained import authorization in the name of his Benami entities by cheating the Government authorities with an intent to acquire wrongful gain for himself by circumventing the existing guideline issued by Department of Revenue, Ministry of Finance and obtained maximum share of country quota by misleading the authority and concealing the fact from them and causing wrongful loss to government exchequer. Sections 417, 420 and 120 B of the IPC as mentioned in the aforesaid FIR are scheduled offences under the Prevention of Money Laundering Act, 2002 (hereinafter referred as PMLA) accordingly, the ECIR bearing no. ECIR/STF/15/2023 dated 02/11/2023 was recorded for investigation under the PMLA.
3. During PMLA investigation it was revealed that the applicant is involved in importing poppy seeds from China and Turkey by misrepresenting/ hiding the facts and circumventing the stipulated guidelines issued by competent authority in the name of aforesaid 9 Benami firms situated around the same place. He has been obtaining import authorisation from Central Bureau of Narcotics, Gwalior in a fraudulent manner in a different proprietorship and firms set up in the name of his family members and employees/ co-accused persons but beneficiary owned and controlled by him in gross violation of the licensing provision for import of the poppy seeds as stipulated by the Department of Revenue, Ministry of Finance and Government of India. It was also revealed that the applicant is the master mind behind the entire scheme of obtaining import licence of poppy seeds. He played an active role in getting up various proprietorship firms in the name of his family members and employees/ co-accused persons with malafide intention to receive maximum share in the import of poppy seeds which is capped at a specific quantity per country. He managed and controlled the operation of aforesaid 9 proprietorship firms including their bank accounts. The applicant fraudulently imported poppy seeds worth Rs. 141.8 Crores which is nothing but proceeds of crime involved in the offence of money laundering. The applicant used to import the poppy seeds from distinct countries and sell it to the domestic buyers within the country. Therefore, it is clear that the applicant is directly indulged into the activities connected with the proceeds of crime in terms of section 3 of the PMLA.
4. Learned counsel appearing for the applicant/ accused submits that, mandatory prov
