Coal Levy Scam Case| ‘Involved In Extortion Racket, Managed Illegal Cash’: Chhattisgarh HC Denies Pre-Arrest Bail To Alleged Kingpin’s Brother

The bench of Justice Narendra Kumar Vyas noted that he knowingly and actively participated in the extortion racket and acted as the accountant who managed the illegal cash.

As per the ED’s case, Rajnikant Tiwari, his brother Suryakant Tiwari, Saumya Chaurasia, former deputy secretary to Chhattisgarh Chief Minister Bhupesh Baghel, and 5 others were operating a cartel involving senior bureaucrats, businessmen, politicians and middlemen for extorting a levy of Rs 25 per tonne for coal transported in Chhattisgarh.

All of them have been booked under Sections 186, 204, 353, 120B, 384 of IPC, Sections 3 & 4 of the Prevention of Money Laundering Act, 2002.

It is also the case of the ED that the proceeds of the crime were being used by them for taking undue advantage and to influence public servants by corrupt and illegal means and by the exercise of personal influence.

The role attributed to Tiwari is that he was the focal point where all the extorted cash was deposited and was stored and subsequently dispatched for utilization as per the instructions of Suryakant Tiwari.

Seeking anticipatory bail in the case, Tiwari moved the High Court while contending that the applicant would be entitled to the benefit under the exceptions carved out under Section 45 of the PMLA, 2002.

For context, the conditions under Section 45 PMLA state that when an accused in a money laundering case applies for bail, the court has to first give an opportunity to the public prosecutor to be heard and if the public prosecutor opposes, the Court can grant bail only when it is satisfied that the accused is not guilty and unlikely to commit a similar offence when he is on bail.

It was further submitted by his counsel that he has cooperated with the Investigating Agency on all occasions and there is no further possibility of the applicant misusing the bail or influencing in any manner the investigation or tampering with the evidence nor is there any possibility of the present applicant absconding either.

Importantly, it was also submitted that the non-arrest of the present applicant entitles him to get anticipatory bail in view of Section 19 of the PMLA, 2002.

For context, Section 19 of the PMLA Act provides for inbuilt safeguards to be adhered to by the authorized officers, such as recording reasons in writing for the belief regarding the involvement of the person in the offence of money laundering and informing the person being arrested of the grounds of his arrest.

On the other hand, opposing his plea for anticipatory bail, the counsel for the respondents argued that the applicant had directly indulged in the offence of Money Laundering as per Section 3 of the PMLA, 2002 as he was the keeper of the accounts and cash for the entire scam and that he was responsible for acquisition, possession, concealment, use of the proceeds of crime.

It was also contended that as the investigation in the present case is ongoing and therefore, his custodial interrogation may be required for questioning during further investigation, hence, he should not be granted anticipatory bail as the same would have the effect of impeding the investigation.

At the outset, the Court noted that as per Section 19 of the PMLA, 2002, the authorities, while conducting the investigation, can arrest the person who appears to be guilty of an offence punishable under the PML Act, however, the Court added that non arrest of such person doesn’t entitle him to pre-arrest bail.

“The authorities while conducting the investigation has not opted for this option which was available with them, but it does not mean that the right of arrest to a person who is involved in the commission of offence under the PMLA, 2002 has come to an end. This can be exercised by them as and when the reasons are available with them for arresting. Thus, the submission that arresting of the present applicant has not been done by the Enforcement Directorate, therefore, the present applicant is entitled to be released on anticipatory bail,” the Court said.

Regarding the twin conditions which are required for the grant of bail under the PMLA, 2002, the Court noted that prima facie, the involvement of the applicant is reflected in the case as the material collected by the Enforcement Directorate has not been rebutted.

In view of this, considering the law, gravity of offence, possibility of tempering of the witnesses and prima facie the fact that the applicant is unable to satisfy twin conditions of Section 45 of PMLA, 2002 for grant of anticipatory bail, the Court rejected his bail plea.