The Chhattisgarh High Court refused to grant bail for the accused who was arrested for the offence under the Prevention of Money Laundering Act, 2002 (“the PMLA”) as the prosecution has prima facie established the link between one of the accused in the coal scam. The court found the involvement of the applicant in commission of offence under Sections 7, 7A & 12 of the Prevention of Corruption Act, 1988 ( PC Act), which is economic offence.
Manish Upadhya, applicant filed bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 for grant of regular bail to the applicant who has been arrested on 15.08.2024 in connection with Crime No.
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03/2024 registered at Police Station- Anti Corruption Bureau/ Economic Offence Wing Chhattisgarh, Raipur, District- Raipur (C.G.) for the offence punishable under Sections 420, 120-B, 384 of IPC and Sections 7, 7-A, 12 of the Prevention of Corruption Act, 1988.
On 11.01.2024, one Mr. Sandeep Ahuja, Deputy Director, Directorate of Enforcement, Raipur through Mr. Farhan Qureshi, Deputy Superintendent of Police lodged a complaint before the Director General of Police Anti Corruption Bureau & Economic Offences Wing, Chhattisgarh pertaining to predicate offence discovered during money laundering in investigation File No. ECIR/RPZO/09/2022 was done under Section 66(2) of the Prevention of Money Laundering Act, 2002 (“the PMLA”).
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Thereafter, an offence bearing FIR No. 03/2024 has been registered on 17.01.2024 at Police Station ACB/EOW Raipur (C.G.) against 35 accused persons .Further case of the prosecution is that a syndicate comprised of private individuals and other State Government functionaries like Smt. Saumya Chaurasia, Director, Geology & Mining Department and with the backing of some political executives, they managed to make deliberate policy changes.
As part of the well-planned conspiracy, the applicant with the active support of the politicians & some of the senior.
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State Government functionaries, managed to influence the then Director of Geology & Mining, and got issued a Government Order dated 15.07.2020 which became the fountain head of this extortion system by converting the online system of issuance of Transport Permits into a manual system. They started a network of extortion to collect Rs. 25 per on every ton of coal transported in the State of Chhattisgarh.
The investigation conducted by the Enforcement Directorate revealed that other senior bureaucrats viz., Smt. Saumya Chaurasia and Smt. Ranu Sahu, IAS were also involved in this conspiracy and were providing assistance to the applicant in running the extortion racket. Smt. Soumya Chourasiya while working as Deputy Secretary in the office of Chief Minister, had assisted the applicant and his associates in collecting the extortion money by posting pliable officers of mining department in the coal mining areas. Smt. Ranu Sahu IAS, who worked as District Collector in coal rich Districts viz., Korba & Raigarh, had close association with the applicant and helped his associates in collecting extortion money from the coal transporters and other businessmen.
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It is also case of the prosecution that by this system of extortion, a huge amount of cash started accumulating with the syndicate and with this money, the applicant has purchased benami assets and a huge amount of money was transferred to the applicant, spent on political funding and transferred as per the instructions of higher powers. The
Enforcement Directorate investigation further established that Smt. Ranu Sahu had aided and abetted the applicant in collection of illegal levy amounts from the coal transporters. Smt. Ranu Sahu was in touch through WhatsApp with Roshan Singh, associate of the applicant.
Mr. Harshwardhan Parganiha, counsel for the applicant submitted that the applicant is innocent and has been falsely implicated in the crime in question. He would further submit that the arrest of the applicant is bad in law as it violates multiple legal safeguards and procedural requirements mandated under the Cr.P.C. as the applicant was taken into custody by the non-applicant on 14.08.2024 but was formally arrested only on 15.08.2024, with the time of arrest recorded as 21:45 hours. The applicant was neither informed about the grounds of his arrest as required under Section 50(1) of Cr.P.C. nor adhered to the safeguards under Section 41-B Cr.P.C. These provisions are fundamental to ensuring an arrest is lawful and not arbitrary.
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Additionally, the failure to issue any notice or summons to the applicant in 8 months following the registration of the FIR and directly arresting him highlights a blatant disregard for due process as held by Hon’ble the Supreme Court in case of Pankaj Bansal v.Enforcement Directorate [2023 SCC Online SC 1244] and Prabir Purkayastha v. State (NCT of Delhi) [2024 ].
Further submitted that FIR in the instant case has been registered pursuant to the information shared by the Enforcement Directorate under Section 66(2) of the PMLA, 2002 and despite specific allegations against the present Applicant being made in the charge-sheet dated 18.07.2024 filed the FIR before the learned Special Court (PC Act), Raipur, the applicant was not named as an accused to deliberately misuse the power of arrest as mere power to arrest simply does not give rise to the necessity to arrest as held by Hon’ble the Supreme Court in case of Arvind Kejriwal Vs. Directorate of Enforcement [2024].
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It was stated that the alleged link between the applicant and the so-called coal syndicate is purely hypothetical and based solely on his familial relationship with the alleged kingpin namely Mr. Suryakant Tiwari without any substantive evidence to establish his involvement as the applicant is an independent businessman with no connection to the or its operations and mere association by relation cannot be a ground to implicate the applicant in the alleged crime and no credible material has been presented to demonstrate his involvement in any illegal operations.
The court observed that the applicant has nowhere disclosed in the bail petition that what is his profession and from which sources he has generated the funds. Whereas the prosecution has prima facie establishes the link between one of the accused in the coal scam. Thus, prima facie material has been collected by the prosecution against the applicant. Thus, from perusal of FIR and the material available in the case diary, involvement of the applicant in commission of offence under Sections 7, 7A & 12 of the PC Act, which is economic offence, is prima facie reflected.
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The single bench of Shri Justice Narendra Kumar Vyas held that the grant of bail by the High Court can be set aside, when such grant is based on non-application of mind or is innocent of the relevant factors for such grant.
The court found that it is not a fit case where the applicant should be granted regular bail and rejected the instant bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023.
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