# Pankaj Grover (In Jail) v. Directorate of Enforcement, Govt. Of India, Lucknow

- **Citation:** (2021) 8 ILRA 423
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-26
- **Case number:** Criminal Misc. Anticipatory Bail Application U/S 438 No. 7661 of 2021
- **Bench:** Chandra Dhari Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/pankaj-grover-in-jail-v-directorate-of-enforcement-govt-of-india-lucknow-47220
- **Pages:** 14

## Headnote

A. Criminal Law - Code of Criminal
Procedure, 1973-Section 438 - Prevention
of Money Laundering Act, 2002 - Section
3/4-grant of anticipatory bail-applicationrejection-evidence collected revealed that
the applicant in connivance with his father
constantly manipulate the records to
conceal the "Proceeds of Crime" and sold
off half of the factory property after
knowledge
of
initiation
of
present
proceedings
under
PMLA-the
written
directions given by father to his son which
were recovered during the search clearly
establish
that
the
said
person
in
possession or use of the property
acquired out of /in lieu of "Proceeds of
Crime" in the instant case were prone to
encash
the
same
at
the
earliest
opportunity to frustrate the proceedings
under PMLA.(Para 1 to 37)

B.
Usually
socio-economic
offenders
abscond to some other country and after
that it becomes difficult to bring them
back
and
complete
the
criminal
proceeding against them. their monetary
sound condition particularly proceed of
crime obtained not by honest working but
by deceiving others causes more prone
situation for influencing witnesses and
other
evidences.
Furthermore,
status,
position of offender provides opportunity
to influence investigation and prosecution.
(Para 38)

The application is rejected. (E-5)

List of Cases cited:

## Text

_Characters 0–39,653 of 47,096. This is a partial read: ask again with offset=39653 for what follows._

8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
423
(2021)08ILR A423
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 26.08.2021

BEFORE

THE HON'BLE CHANDRA DHARI SINGH, J.

Criminal Misc. Anticipatory Bail Application U/S
438 No. 7661 of 2021

Pankaj Grover ...Applicant(In Jail)
Versus
Directorate of Enforcement, Govt. Of
India, Lucknow ...Opposite Party

Counsel for the Applicant:
Priyam Kumar Singh, Amit Shukla, Dhruv
Rajpurohit, Kshitij Agnihotri, Neha Shukla

Counsel for the Opposite Party :
A.G.S., Shiv P. Shukla

A. Criminal Law - Code of Criminal
Procedure, 1973-Section 438 - Prevention
of Money Laundering Act, 2002 - Section
3/4-grant of anticipatory bail-applicationrejection-evidence collected revealed that
the applicant in connivance with his father
constantly manipulate the records to
conceal the "Proceeds of Crime" and sold
off half of the factory property after
knowledge
of
initiation
of
present
proceedings
under
PMLA-the
written
directions given by father to his son which
were recovered during the search clearly
establish
that
the
said
person
in
possession or use of the property
acquired out of /in lieu of "Proceeds of
Crime" in the instant case were prone to
encash
the
same
at
the
earliest
opportunity to frustrate the proceedings
under PMLA.(Para 1 to 37)

B.
Usually
socio-economic
offenders
abscond to some other country and after
that it becomes difficult to bring them
back
and
complete
the
criminal
proceeding against them. their monetary
sound condition particularly proceed of
crime obtained not by honest working but
by deceiving others causes more prone
situation for influencing witnesses and
other
evidences.
Furthermore,
status,
position of offender provides opportunity
to influence investigation and prosecution.
(Para 38)

The application is rejected. (E-5)

List of Cases cited:

1. Gurbaksh Singh Sibbia Vs St. of Punj. (1980)
AIR SC 1632

2. Siddharam Satlingappa Mhetre Vs St. of
Mah.(2011) 1 SCC 694

3. Jai Prakash Singh Vs St. of Bih. & Anr.(2012)
4 SCC 379

4. Nikesh Tarachand Shah Vs U.O.I .&
anr.(2018) 11 SCC 1

5. Nagaland Senior Govt. Employees Welfare
Assn. & ors. Vs St. of Nagaland & ors. (2010) 7
SCC 643

6. Molar Mal (dead) thru L.Rs. Vs M/s Kay Iron
Works (Pvt) Ltd.(2000) 4 SCC 285

7. Dr. Shah Faesal & ors. Vs U.O.I. & anr.(2020)
4 SCC 1

8. Sh. Balchand Jain Vs St of M.P.(1976) 4 SCC
572

9. Satpal Singh Vs St. of Punj.(2018) 13 SCC 813

10. Sushila Aggarwal & ors . Vs St.(NCT of
Delhi) & anr. (2020) 5 SCC 1

11. P. Chidambaram Vs ED (2019) 9 SCC 24

12. Okram Ibobi Singh Vs ED (2020) SCC
OnLine Mani 365

13. Vinod Bhandari Vs Assistant Divector (2018)
SCC OnLine MP 1559

14. St. of Guj. Vs Mohanlal Jitamalji Porwal
(1987) 2 SCC 364
424 INDIAN LAW REPORTS ALLAHABAD SERIES
15. Himanshu Chandravadan Desai Vs St. of
Guj. (2006) AIR SC 170

(Delivered by Hon'ble Chandra Dhari
Singh, J.)

 1. The present application under
Section 438 Cr.P.C. has been filed seeking
anticipatory bail apprehending arrest in
ECIR
No.01/PMLA/LZO/2012
dated
14.04.2012 (Complaint No.115 of 2018),
under Section 3/4 of Prevention of Money
Laundring Act, 2002, Enforcement Agency
E.D., District Lucknow.

2. Shri I. B. Singh, learned Senior
Counsel assisted by Shri Amit Shukla,
learned counsel appearing for the applicant
has submitted that the applicant is the
erstwhile
sleeping
Director
of
M/s
Surgicoin Medequip Pvt. Ltd. (for short
'company'). The respondent lodged the
instant Enforcement Case Information
Report (for short 'ECIR') against all the
persons
named
in
F.I.R.
No.
RC1(A)/2012-CBI/SC.II/New
Delhi
Dated
02.01.2012. The applicant was never
named in the predicate offence and no first
information report was lodged against him.
He has also submitted that the applicant
was also not named in the ECIR and no
role whatsoever has been assigned in the
ECIR.

3. Shri Singh has submitted that the
Hon'ble High Court vide order dated
15.11.2011 passed in W.P. No.3611/2011
(PIL), W.P. No.3301/2011 (PIL) and W.P.
No.2647/2011 (PIL) directed the Central
Bureau of Investigation (for short 'CBI') to
conduct a Preliminary Enquiry in the
matter of execution and implementation of
National Rural Health Mission (for short
'NRHM') and utilization of funds at various
levels during such implementation in the
entire State of Uttar Pradesh and also
directed to register regular cases in respect
of the persons against whom prima facie
cognizable
offence
is
made
out
in
accordance with law.

4. It is submitted that in pursuance to
the aforementioned orders of the Court,
five separate preliminary enquiries were
registered in different branches of CBI.
Preliminary
Enquiry
No.5(A)/2011/SC.II/CBI/New Delhi was
registered on 19.11.2011 in respect of
alleged irregularities in the utilization of
funds of Government of India. On
02.01.2012, a first information report being
R.C. No.1(A)/2012-C.B.I./SC II/New Delhi
was registered by CBI under Sections 120B r/w Sections 420, 409 of IPC and Section
13(2)
r/w
Section
13(1)(d)
of
the
Prevention of Corruption Act against
several persons. Further, Directorate of
Enforcement lodged Enforcement Case
Information
Report
No.ECIR/01/PMLA/LZO/2012
dated
14.04.2012 against all the persons named in
FIR
No.RC-1(A)/2012-CBI/SC.II/New
Delhi.
Thereafter,
Directorate
of
Enforcement passed order of Provisional
Attachment
dated
05.04.2017
and
provisionally
attached
two
of
the
properties.

5. It is further submitted that
Directorate
of
Enforcement
preferred
Original Complaint on 11.05.2017 under
Section 5(5) of the Prevention of Money
Laundering Act, 2002 (for short "PMLA")
being OC No. 773 of 2017 before learned
Adjudicating Authority, PMLA, New Delhi
seeking confirmation of the Provisional
Attachment Order No. 03 of 2017 dated
05.04.2017 which vide judgment and order
dated 13.09.2017 confirmed the order of
Provisional
Attachment.
Thereafter,
8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
425
Directorate of Enforcement filed Complaint
under Section 45 of PMLA against M/S
Surgicoin Mediquip Pvt. Ltd., Naresh
Grover, Pankaj Grover, Abhay Kumar
Bajpai.

6. Shri Singh has submitted that
Directorate of Enforcement misled the
learned Special Judge, PMLA, Lucknow
and only disclosed the confirmation of
Attachment order by the Adjudicating
Authority
dated
13.09.2017.
The
complainant has chosen not to disclose
before the Court the part setting aside of
order dated 13.09.2017 passed by learned
Appellate Authority, PMLA, New Delhi in
Appeal
No.FPA-PMLA-2058/LKW/2017
being preferred by Bajaj Finance Ltd. vide
its judgment and order dated 28.06.2018.

7. It is submitted that learned Special
Judge, PMLA, Lucknow vide its order
dated
23.10.2018
on
the
basis
of
misrepresentation being made by the
complainant took cognizance of Complaint
No.115 of 2018 and passed summoning
order against the applicant alongwith
others. It is further submitted that learned
Special Judge, PMLA issued bailable
warrant which was served on the applicant
and
bonds
were
furnished
by him.
Thereafter, the applicant preferred an
anticipatory bail application before the
learned Special Judge, PMLA, Lucknow
being Bail No.3812 of 2021, which was
rejected/dismissed
vide
order
dated
12.07.2021.

8. Shri Singh has submitted that
accusations have been made only with
ulterior motive and offence under Section 3
of PMLA cannot be made out against the
applicant as none of the essentials of
Section 3 has been met in the present case
in respect of the applicant. It is submitted
that Section 3 of PMLA mandates the
existence of 'Proceeds of Crime', however,
in the present case, there are no 'Proceeds
of Crime'. Section 3 of PMLA is
reproduced hereinbelow:

"3.
Offence
of
moneylaundering.-
Whosoever
directly
or
indirectly attempts to indulge or knowingly
assists or knowingly is a party or is
actually involved in any process or activity
connected [proceeds of crime including its
concealment, possession, acquisition or use
and projecting or claiming] it as untainted
property shall be guilty of offence of
money-laundering."

9. It is submitted that in the present
case, the properties in question were
acquired by the applicant in the year 2002
and 2001 and the alleged year of
commission of crime is 2010-11. The
properties in question were never owned by
the applicant nor the sale consideration of
the properties was paid by the applicant.
Hence, no question of proceeds of crime
arises.

10. Shri Singh has submitted that
custodial interrogation is not required in the
present case as the investigation has
already been completed and complaint has
been filed.

11. It is further submitted that the
present complaint has been filed by the
respondent after the lapse of eight years
since lodging of ECIR and upon conclusion
of enquiry, which was duly supported by
the applicant as and when directed, hence,
the custody of the applicant in any event is
not required. It is also submitted that the
maximum punishment provided for alleged
commission of offence under Section 3 of
PMLA is from 3 to 7 years in terms of
426 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 4 of PMLA and the Hon'ble
Supreme Court in a catena of judgments
while citing Section 41 and 41A of Cr.P.C.
has held that where the arrest is not
required for the offences punishable upto 7
years, the arrest shall not be made.

12. It is submitted that pre-trial
detention of the accused - applicant would
serve no useful purpose since the accused -
applicant has deep root in the society and
there can be no apprehension of him
absconding from justice or otherwise
harassing or intimidating witnesses or
hampering the trial.

13. In support of his argument,
learned Senior Counsel has relied upon
judgments of the Hon'ble Supreme Court in
the case of Gurbaksh Singh Sibbia vv.
State of Punjab - AIR 1980 SC 1632 &
Siddharam Satlingappa Mhetre v. State of
Maharashtra - (2011) 1 SCC 694, wherein
it has been held that the Court dealing with
a bail application should be satisfied that it
is necessary to keep an accused behind bars
for ensuring the presence during trial
before refusing him bail and when this
condition is absent, the right of the accused
to liberty shall not be put on peril.

14. He has also relied upon another
judgment of Hon'ble Supreme Court in the
case of Jai Prakash Singh v. State of Bihar
& Anr. - (2012) 4 SCC 379, wherein it is
held
that
"parameters
for
grant
of
anticipatory bail in a serious offence are
required to be satisfied and further while
granting such relief, the Court must record
the reasons therefor. Anticipatory bail can
be
granted
only
in
exceptional
circumstances where the Court is prima
facie of the view that the applicant has
falsely been enroped in the crime and
would not misuse his liberty."

15 . Shri Singh has submitted that in
view of the aforesaid ratio of the
judgments, since the applicant does not
have any previous criminal history and he
is a respectable citizen, and there is no
chance of his fleeing away from the justice,
anticipatory bail may be granted to him.

16. Per Contra, Shri S.B. Pandey,
learned Senior Advocate/Assistant Solicitor
General of India assisted by Shri Shiv P.
Shukla,
Advocate
appearing
for
respondent/Directorate of Enforcement has
sought dismissal of the present anticipatory
bail application and submitted that in terms
of the twin conditions prescribed in Section
45 of PMLA, this Court could grant
anticipatory bail to the applicant only after
recording a satisfaction that there were
reasonable grounds for believing that the
applicant was not guilty of the alleged
offence and that while on bail he was not
likely to commit any offence. It is further
submitted
that
though
in
Nikesh
Tarachand Shah v. Union of India and
Anr. - (2018) 11 SCC 1, Section 45(1) of
PMLA, as it then stood, had been declared
unconstitutional by the Hon'ble Supreme
Court but the defect pointed out by the
Hon'ble Supreme Court, which formed the
basis
to
declare
Section
45(1)
as
unconstitutional, had been cured by the
Legislature through its Act No.13 of 2018.
As per Act No.13 of 2018 the offending
expression "punishable for a term of an
imprisonment of more than three years
under Part A of the Schedule" has been
substituted with "under this Act". In view
of the aforesaid amendment the twin
conditions prescribed under Section 45(1)
of the PMLA stood revived. The amended
Section 45(1) of the PMLA has not been
challenged by the applicant and therefore,
the applicant as also this Court is bound by
the aforesaid twin conditions.
8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
427

17. It is further submitted that in
terms of the law laid down by the Hon'ble
Supreme Court in the case of Nagaland
Senior Government Employees Welfare
Association and others vs. State of
Nagaland and others - (2010) 7 SCC 643,
a statute is deemed to be constitutionally
valid till struck down by a competent
Court. In the case of Molar Mal (dead)
through L.Rs. v. M/s. Kay Iron Works
(Pvt.) Ltd., - (2000) 4 SCC 285, the
Hon'ble Supreme Court had held that where
the constitutional validity of a provision
was not under challenge such provision
would bind the Court.

18.

It
is
submitted
that
the
observations of the Hon'ble Supreme Court
in Nikesh Tarachand Shah's case (supra)
that Section 45(1) of the PMLA would not
apply to the grant of anticipatory bail were
obiter as this was not the issue which the
Hon'ble Supreme Court had been called
upon to consider and decide. In any case
the findings returned by the Hon'ble
Supreme Court that Section 45(1) would
not apply to anticipatory bails were per
incuriam since Section 45(1) applied to
bails which would also include anticipatory
bails. In this regard he has placed reliance
on the law laid down by the Hon'ble
Supreme Court in Dr. Shah Faesal and
Ors. vs. Union of India and Anr. - (2020)
4 SCC 1, Sh. Balchand Jain vs. State of
Madhya Pradesh - (1976) 4 SCC 572,
Satpal Singh vs. State of Punjab - (2018)
13 SCC 813 and Sushila Aggarwal and
Ors. vs. State (NCT of Delhi) and Anr. -
(2020) 5 SCC 1.

19. Shri Pandey has submitted that a
perusal of the voluminous oral and
documentary evidence collected during the
course of investigation has revealed that
Naresh Grover, Director of M/s Surgicoin
Medequip Pvt. Ltd. in connivance with his
son Pankaj Grover (present applicant) has
been constantly trying to manipulate the
records to conceal the "Proceeds of Crime"
and has also clandestinely sold off half of
the factory property after knowledge of
initiation of present proceedings under the
PMLA. The written directions given by
Naresh Grover to his son Pankaj Grover,
which were recovered during the search
clearly establish that the said persons in
possession or use of the property acquired
out of/in lieu of "Proceeds of Crime" in the
instant case were prone to encash/sell the
same at the earliest opportunity to frustrate
the proceedings under this Act and thus, the
properties identified in their hands in lieu
of "Proceeds of Crime" were attached by
PAO No.3/2017 dated 05.04.2017. It is
vehemently submitted that in the instant
case, the investigation has established that
Proceeds of Crime to the tune of
Rs.21,20,87,617/- has been generated.

20.

It
is
submitted
that
the
investigation has further revealed that out
of the said "Proceeds of Crime" a sum of
nearly Rs.10 Crore has been paid by way of
bribe/commission to various officials and
ministers and their associates leaving the
balance "Proceeds of Crime" of about
Rs.11 Crore in the hands of M/s Surgicoin
Medequip Pvt. Ltd. However, the said sum
has been siphoned off by manipulating
records and showing fictitious transactions
to frustrate the proceedings under PMLA.
Moreover, the allegation in respect of the
balance remaining out of the "Proceeds of
Crime" in the hand of M/s Surgicoin
Medequip Pvt. Ltd. is also contained in two
other ECIRs registered by the Department
bearing
ECIR
No.0607/PMLA/LKZO/2012
both
dated
14.04.2012 is nearly Rs.8.65 Crore. Thus,
the cumulative balance of the "Proceeds of
428 INDIAN LAW REPORTS ALLAHABAD SERIES
Crime" in the hands of M/s Surgicoin
Mediquip Pvt. Ltd. is over Rs.19 Crore

21. It is submitted that in the case of
P.
Chidambaram
v.
Directorate
of
Enforcement - (2019) 9 SCC 24, the
Hon'ble Supreme Court has held that the
power under Section 438 Cr.P.C. was an
extraordinary power and the same was to
be exercised sparingly. It is also held that
privilege of the pre-arrest bail should be
granted only in exceptional cases.

22. It is submitted that the present
applicant is involved in a serious offence
and his custodial interrogation is essential
to know as to whether other benefits have
been received by him from NRHM scheme
scandal or from any other influential person
directly or indirectly, whether the applicant
has diverted his ill-gotten money to
anybody else. It is further submitted that
economic offence constitute a class apart
having serious social ramifications and
there being prima-facie materials to show
the applicant involvement in the economic
offence with larger scale conspiracy, his
application for anticipatory bail deserves to
be rejected.

23. I have heard learned counsel for
the parties and perused the records.

24. Learned Assistant Solicitor
General for the respondent (Directorate of
Enforcement) opposes the prayer for grant
of anticipatory bail on the ground that the
offence is grave in nature. He has also
drawn my attention to the amended
provisions of PMLA and submitted that the
Hon'ble Supreme Court in the case
of Nikesh Tarachand Shah (supra) struck
down Section 45 of the PMLA, 2002, so far
as it imposes further two conditions for
release on bail, to be unconstitutional is
concerned, he has submitted that now the
Government has brought an amendment in
the Finance Act, 2018, which has come into
effect from 19.4.2018 to Section 45(1) of
the PMLA, thereby inserting words ''under
this Act' in Section 45(1) of PMLA. He has
submitted that in view of the said
amendment, the original Sub-section (ii) of
Section 45(1) which imposes the said twin
conditions automatically stands revived and
the said condition therefore, remained in
the statute book and hold the field even as
of today for deciding the application for
bail/anticipatory bail by an accused under
PMLA and the judgment delivered by the
Hon'ble Supreme Court in the case
of Nikesh Tarachand Shah (supra) has
become ineffective and, therefore, the
prayer for anticipatory bail of the applicant
has to be considered in view of the
amended provision of Section 45(1) of the
PMLA.

25. The Hon'ble Supreme Court in the
case of Nikesh Tarachand Shah (supra) has
in unequivocal terms held in para 44 that
''we have struck down Section 45 of the Act
as a whole'. It is further held by the Hon'ble
Supreme Court in para 45 that, "we declare
Section 45(1) of the PMLA in so far as it
imposes two further conditions for release
on bail to be unconstitutional as it violates
Articles 14 and 21 of the Constitution of
India."

26. In the case of Okram Ibobi Singh
Vs. The Directorate Enforcement - 2020
SCC OnLine Mani 365, the High Court of
Manipur at Imphal has held that it can be
easily deciphered, on comparative reading
of Section 45 (1) of the PMLA, preamendment and post amendment, that
Clause (ii) of sub- Section (1) remained as
it stood before amendment. The issue
which arises for consideration is as to
8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
429
whether the Hon'ble Supreme Court's
decision in case of Nikesh Tarachand Shah
(supra) can be said to have lost its
significance because of the aforesaid
amendment in Section 45(1) of the PMLA.
The Court after considering submission of
both sides and the law laid down in case of
Nikesh Tarachand Shah (supra), and also
referring to several decisions has held that
the Hon'ble Supreme Court has taken into
consideration
the
illustrations
while
arriving at a conclusion that the twin
conditions is unconstitutional. It was
observed that the Hon'ble Supreme Court
has
clearly
held
that
indiscriminate
application of the provisions of Section 45
will certainly violate Article 21 of the
Constitution of India. In the background, it
is to be seen as to whether the amendment
introduced in Section 45 of the PMLA shall
amount to reframing the entire Section 45
and thereby reviving and resurrecting the
requirement of twin-conditions under subSection (1) of Section 45 of the PMLA for
grant of bail. In view of clear language
used in paragraph 46 of the Hon'ble
Supreme Court's decision in case of Nikesh
Tarachand Shah (supra), the Court has no
hesitation in reaching a definite conclusion
that the amendment in sub-Section (1) of
Section 45 of the PMLA introduced after
the Hon'ble Supreme Court's decision in the
case of Nikesh Tarachand Shah (supra)
does not have the effect of reviving the
twin-conditions for grant of bail, which
have been declared ultra vires Articles 14
and 21 of the Constitution of India.

27. In the case of Vinod Bhandari v.
Assistant Director - 2018 SCC OnLine MP
1559, the High Court of Madhya Pradesh
has held that the original Section 45 has
neither revived nor resurrected by the
Amending Act and, therefore, as of today
there is no rigor of said two further
conditions under original Section 45(1)(ii)
of PMLA for releasing the accused on bail
under the said Act.

28. In view of the above, it can safely
be concluded that the twin conditions as
imposed by Section 45 of PMLA cannot be
looked
into
while
deciding
the
bail/anticipatory bail application as the
same are violative of Articles 14 and 21 of
Constitution of India. Thus, the contention
advanced by Shri Pandey in respect of
applicability of Section 45 cannot be
accepted.

29. Learned Assistant Solicitor
General for respondent to oppose the
prayer of pre-arrest bail has laid much
emphasis on the fact that since the
applicant has been indicted in an economic
offence and sufficient materials are there
showing his indictment in the aforesaid
serious offence, his custodial interrogation
is needed to unearth the involvement of any
other persons or the larger angle of
conspiracy in commission of the offence
alleged to have been committed by the
applicant. In support of his contention he
has placed reliance on a decision of the
Hon'ble Supreme Court in the case of P.
Chidambaram (supra).

30. The importance and relevance of
custodial interrogation of the accused in a
case of the present nature and also that the
Court should be loathed in grant of
bail/pre-arrest bail in respect of persons
indicted in economic offences has been
elaborated by the Hon'ble Supreme Court
in P. Chidambaram's case (supra) as
follows:
"76.
In Siddharam
Satlingappa
Mhetre v. State of Maharashtra (supra), the
Supreme Court laid down the factors and
parameters to be considered while dealing
430 INDIAN LAW REPORTS ALLAHABAD SERIES
with anticipatory bail. It was held that the
nature and the gravity of the accusation and
the exact role of the accused must be
properly comprehended before arrest is
made and that the court must evaluate the
available material against the accused very
carefully. It was also held that the court
should
also
consider
whether
the
accusations have been made only with the
object of injuring or humiliating the
applicant by arresting him or her.

77. After referring to Siddharam
Satlingappa
Mhetre judgment
and
observing that anticipatory bail can be
granted only in exceptional circumstances,
in Jai Prakash Singh v. State of Bihar, the
Supreme Court held as under : (SCC p.386,
para 19)

"19. Parameters for grant of
anticipatory bail in a serious offence are
required to be satisfied and further while
granting such relief, the court must record
the reasons therefor. Anticipatory bail can
be
granted
only
in
exceptional
circumstances where the court is prima
facie of the view that the applicant has
falsely been enroped in the crime and
would not misuse his liberty. (See D.K.
Ganesh Babu v. P.T. Manokaran, State of
Maharashtra v. Modh. Sajid Husain Mohd.
S. Husain and Union of India v. Padam
Narain Aggarwal.)

Economic Offences:

78. Power under Section 438
Code of Criminal Procedure being an
extraordinary remedy, has to be exercised
sparingly; more so, in cases of economic
offences. Economic offences stand as a
different class as they affect the economic
fabric of the society. In Directorate of
Enforcement v. Ashok Kumar Jain, (1998)
2 SCC 105, it was held that in economic
offences, the Accused is not entitled to
anticipatory bail.

79. The learned Solicitor General
submitted that the "Scheduled offence" and
"offence
of
money
laundering"
are
independent of each other and PMLA being
a special enactment applicable to the
offence of money laundering is not a fit
case for grant of anticipatory bail. The
learned Solicitor General submitted that
money laundering being an economic
offence committed with much planning and
deliberate design poses a serious threat to
the
nation's
economy
and
financial
integrity and in order to unearth the
laundering and trail of money, custodial
interrogation of the Appellate is necessary.

80. Observing that economic
offence is committed with deliberate design
with an eye on personal profit regardless to
the consequence to the community, in State
of
Gujarat v. Mohanlal
Jitamalji
Porwal, (1987) 2 SCC 364, it was held as
under:

5. ....... The entire community is
aggrieved if the economic offenders who
ruin the economy of the State are not
brought to book. A murder may be
committed in the heat of moment upon
passions being aroused. An economic
offence is committed with cool calculation
and deliberate design with an eye on
personal
profit
regardless
of
the
consequence to the community. A disregard
for the interest of the community can be
manifested only at the cost of forfeiting the
trust and faith of the community in the
system to administer justice in an evenhanded manner without fear of criticism
from the quarters which view white collar
crimes with a permissive eye unmindful of
8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
431
the damage done to the national economy
and national interest.......

81. Observing that economic
offences constitute a class apart and need
to be visited with different approach in the
matter of bail, in Y.S. Jagan Mohan
Reddy v. CBI, (2013) 7 SCC 439, the
Supreme Court held as under:

34. Economic offences constitute
a class apart and need to be visited with a
different approach in the matter of bail.
The economic offences having deep-rooted
conspiracies and involving huge loss of
public funds need to be viewed seriously
and considered as grave offences affecting
the economy of the country as a whole and
thereby posing serious threat to the
financial health of the country.

35. While granting bail, the court
has to keep in mind the nature of
accusations, the nature of evidence in
support thereof, the severity of the
punishment which conviction will entail,
the
character
of
the
Accused,
circumstances which are peculiar to the
Accused, reasonable possibility of securing
the presence of the Accused at the trial,
reasonable apprehension of the witnesses
being tampered with, the larger interests of
the
public/State
and
other
similar
considerations.

82.
Referring
to Dukhishyam
Benupani, Assistant Director, Enforcement
Directorate
(FERA) v. Arun
Kumar
Bajoria, (1998) 1 SCC 52, in Enforcement
Officer, Ted, Bombay v. Bher Chand Tikaji
Boara, (1999) 5 SCC 720, while hearing an
appeal by the Enforcement Directorate
against the order of the Single Judge of the
Bombay High Court granting anticipatory
bail to the Respondent thereon, the
Supreme Court set aside the order of the
Single Judge granting anticipatory bail."

31. Responding to the aforesaid
contention of Shri Pandey, learned Senior
Counsel appearing for the applicant by
placing reliance on several judgments of
the Hon'ble Supreme Court has submitted
that there is no restriction in Section 438
Cr.P.C.
to
entertain
a
prayer
for
anticipatory bail in respect of a person
accused in economic offence. There is no
such prohibition to entertain such prayer in
respect of accused person indicted in
economic offences in Section 438 of
Cr.P.C., provided the offence committed is
non-bailable one. It is only in respect of
offences as enumerated under Section
438(4) of Cr.P.C. and also in respect of
offence under special statute wherein
jurisdiction under Section 438 of Cr.P.C.
has been specifically ousted, even if the
offences are non-bailable, a person cannot
invoke the jurisdiction under Section 438
of Cr.P.C. seeking pre-arrest bail. In the
case
of Sushila
Aggarwal (supra)
the
Hon'ble Supreme Court in paragraphs-69,
70 and 71 have held as follows:--

"69. It is important to notice, here
that there is nothing in the provisions of
Section 438 which suggests that Parliament
intended to restrict its operation, either as
regards the time period, or in terms of the
nature of the offences in respect of which,
an applicant had to be denied bail, or
which special considerations were to apply.
In this context, it is relevant to recollect
that the court would avoid imposing
restrictions or conditions in a provision in
the absence of an apparent or manifest
absurdity, flowing from the plain and
literal interpretation of the statute (Ref
Chandra Mohan v. State of Uttar Pradesh).
In Reserve
Bank
of
India v. Peerless
432 INDIAN LAW REPORTS ALLAHABAD SERIES
General
Finance and (1967)
1
SCR
77 Investment Co. Ltd., the relevance of
text and context was emphasized in the
following terms:

"33. Interpretation must depend
on the text and the context. They are the
bases of interpretation. One may well say if
the text is the texture, context is what gives
the colour. Neither can be ignored. Both
are important. That interpretation is best
which makes the textual interpretation
match the contextual. A statute is best
interpreted when we know why it was
enacted. With this knowledge, the statute
must be read, first as a whole and then
Section by section, Clause by clause,
phrase by phrase and word by word. If a
statute is looked at, in the context of its
enactment, with the glasses of the statutemaker, provided by such context, its
scheme, the sections, clauses, phrases and
words may take colour and appear
different than when the statute is looked at
without the glasses provided by the context.
With these glasses we must look at the Act
as a whole and discover what each section,
each clause, each phrase and each word is
meant and designed to say as to fit into the
scheme of the entire Act. No part of a
statute and no word of a statute can be
construed in isolation. Statutes have to be
construed so that every word has a place
and everything is in its place.

70. Likewise, in Directorate of
Enforcement v. Deepak Mahajan 40 this
court referred to Maxwell on Interpretation
of Statutes, Tenth Edn., to the effect that if
the ordinary meaning and grammatical
construction : (scc PP.453-54, PARA 25)

"25......leads
to
a
manifest
contradiction of the apparent purpose of
the enactment, or to some inconvenience or
absurdity,
hardship
or
injustice,
presumably not intended, a construction
may be put upon it which modifies the
meaning of the words..."

71. This court, long back, in State
of Haryana v. Sampuran Singh. observed
that by no stretch of imagination a Judge is
entitled to add something more than what is
there in the statute by way of a supposed
intention of the legislature. The cardinal
principle of construction of statute is that
the true or legal meaning of an enactment
is derived by considering the meaning of
the words used in the enactment in the light
of any discernible purpose or object which
comprehends the mischief and its remedy to
which the enactment is directed. It is
sufficient, therefore to notice that when
Section 438 - in the form that exists today,
(which is not substantially different from
the text of what was introduced when
Sibbia was decided, except the insertion of
sub-section (4)) was enacted, Parliament
was aware of the objective circumstances
and prevailing facts, which impelled it to
introduce that provision, without the kind
of conditions that the state advocates to be
intrinsically imposed in every order under
it."

32. So also, in the case of Gurbaksh
Singh Sibbia (supra), the Hon'ble Supreme
Court has negatived the proposition that the
larger interest of the public and State
demand that in serious cases like economic
offences involving blatant corruption at the
higher rungs of the executive and political
power, the discretion under Section 438 of
the Code should not be exercised, so also
did not endorse the view of the High Court
that anticipatory bail cannot be granted in
respect of offences like criminal breach of
trust for the mere reason that the
punishment
provided
therefor
is
8 All. Pankaj Grover Vs. Directorate of Enforcement, Govt. Of India, Lucknow
433
imprisonment for life as circumstances may
broadly justify the grant of bail in such
cases too, though of course, the Court is
free to refuse anticipatory bail in any case
if there is material before it justifying such
refusal. The Hon'ble Supreme Court has
also not held that in case of a person
accused of economic offence though nonbailable in nature, cannot invoke the
jurisdiction of Section 438 of Cr.P.C. for
his release on pre-arrest bail nor the
aforesaid is the contention of the learned
counsel for the applicant. The Hon'ble
Supreme Court in different decisions,
however, held that economic offences
constitute a class apart, the Court need to
visit the same with a different approach in
the matter of bail/anticipatory bail and
should be loathed while extending the
benefit of bail/pre-arrest bail to a person
accused of such offences. The aforesaid is
also the view of the Hon'ble Supreme Court
in the case of P. Chidambaram (supra).

33. Now, coming to the other
contention of learned counsel for the
respondent
that
since
custodial
interrogation is much more fruitful for
collection of further evidence, and the
interrogation of the applicant is required to
unveil the larger conspiracy in the aforesaid
heinous and serious offence in which crores
of rupee has been collected by the
company, of which money trail was found
with the applicant, pre-arrest bail should
not be granted to him.

34. In the case of Gurbaksh Singh
Sibbia (supra), the Hon'ble Supreme Court
in paragraph-19 has held as under:--

"19. A great deal has been said
by the High Court on the fifth proposition
framed by it, according to which, inter alia,
the power under Section 438 should not be
exercised if the investigating agency can
make a reasonable claim that it can secure
incriminating material from information
likely to be received from the offender
under Section 27 of the Evidence Act.
According to the High Court, it is the right
and the duty of the police to investigate into
offences brought to their notice and
therefore, courts should be careful not to
exercise their powers in a manner which is
calculated
to
cause
interference
therewith............"

35. In the case of Gurbaksh Singh
Sibbia (supra), in Paragraph - 15, it is held
that:--

"15. Judges have to decide cases
as they come before them, mindful of the
need to keep passions and prejudices out of
their decisions. And it will be strange if, by
employing judicial artifices and techniques,
we cut down the discretion so wisely
conferred upon the Courts, by devising a
formula which will confine the power to
grant anticipatory bail within a straitjacket. While laying down cast-iron rules in
a matter like granting anticipatory bail, as
the High Court has done, it is apt to be
overlooked that even Judges can have but
an imperfect awareness of the needs of new
situations. Life is never static and every
situation has to be assessed in the context
of emerging concerns as and when it
arises. Therefore, even if we were to frame
a ''Code for the grant of anticipatory bail',
which really is the business of the
legislature, it can at best furnish broad
guide-lines and cannot compel blind
adherence. In which case to grant bail and
in which to refuse it is, in the very nature of
things, a matter of discretion. But apart
from the fact that the question is inherently
of a kind which calls for the use of
discretion from case to case, the legislature
434 INDIAN LAW REPORTS ALLAHABAD SERIES
has, in terms express, relegated the
decision of that question to the discretion of
the court, by providing that it may grant
bail "if it thinks fit". The concern of the
courts generally is to preserve their
discretion without meaning to abuse it. It
will be strange if we exhibit concern to
stultify the discretion conferred upon the
Courts by law."

36. In the instant case, during the course
of investigation under the PMLA, 2002,
searches were conducted under Section 17 of
PMLA, 2002 at the office, factory and
residential premises of Naresh Grover,
Director of M/s Surgicoin Medequip Pvt. Ltd.
During these searches several incriminating
documents were seized. These documents
included letters written by Naresh Grover,
who was in judicial custody at that time, to
his son Pankaj Grover directing him to
manipulate the accounts and records to defeat
the allegation of supply of material under
NRHM Scheme at astronomical rates of
profit as well as of short supply of the said
material. In the statements recorded under
Section 50 of PMLA, 2002 both Pankaj
Grover as well as Mr. Rajendra Kaul have
admitted
that
the
profit
margin
on
procurement/manufacture of certain items
ranged up to 200%. Moreover, the fact that
Naresh Grover had directed Pankaj Grover in
writing not to submit the original invoices
and the ledgers of the sundry creditors and
debtors to the ED as well as to manipulate the
records of the genuine creditors with other
fictitious entries establishes that he was
wilfully and knowingly trying to frustrate the
proceedings under the Act and was also
attempting
to
deflect
the
process
of
investigation

37. A perusal of the voluminous oral
and documentary evidence collected during
the course of investigation has revealed that
Naresh Grover, Director of M/s Surgicoin
Medequip Pvt. Ltd. in connivance with his
son Pankaj Grover (present applicant) has
been constantly trying to manipulate the
records to conceal the "Proceeds of Crime"
and has also clandestinely sold off half of
the factory property after knowledge of
initiation of present proceedings under the
PMLA. The written directions given by
Naresh Grover to his son Pankaj Grover,
which were recovered during the search
clearly establish that the said persons in
possession or use of the property acquired
out of/in lieu of "Proceeds of Crime" in the
instant case were prone to encash/sell the
same at the earliest opportunity to frsutrate
the proceedings under PMLA. It is
vehemently submitted that in the instant
case, the investigation has established that
Proceeds of Crime to the tune of
Rs.21,20,87,617/- has been generated.

38. Change in society has caused
complete change in nature, cause, mode,
rate and impact of crime on individual
member of the society and society at large.
Further, all and every stereotype of crime
and criminals have completely changed and
it is causing greater problem to criminal
justice.