Sanjay Rungta V. Union of India through the Directorate of Enforcement, Ranchi

A.B.A./10906/2022

AI Insights

Sanjay Rungta, a director of M/s Khalari Cement Ltd, sought anticipatory bail in connection with an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA), 2002. The case involved allegations against Madhu Koda, former Chief Minister of Jharkhand, who was accused of acquiring money through corrupt means and laundering it, which allegedly included investments in M/s Khalari Cement Ltd. The Directorate of Enforcement opposed the bail, citing the complex nature of the money laundering scheme involving shell companies and substantial proceeds of crime. The court, after considering the arguments and the legal provisions, granted anticipatory bail to Rungta.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 806538 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 18-05-2023
• Assessment Year: misc
• Other Referred Cases: (2022) 1 SCC 676, 2021 SCC OnLine SC 941
• Laws Referred To: Prevention of Money Laundering Act, 2002, Indian Penal Code, Prevention of Corruption Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMIT DAS
• Assessee Lawyers: PANDEY NEERAJ RAI SINHA AKSHANSH KISHORE
• Keywords: Accommodation entries; Anticipatory bail; Corruption; Investment; Money laundering; Proceeds of Crime; Shell company
• Section: 11; 13; 10; 7; 44; 45; 409; 120-B; 120-B; 420; 465; 438(2); 423; 424

Judgement Text

"1 IN THE HIGH COURT OF JHARKHAND AT RANCHI A. B. A. No. 10906 of 2022 ----- Sanjay Rungta … …. Petitioner Versus Union of India through the Directorate of Enforcement, Ranchi … …. Opp. Party ----- CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY ----- For the Petitioner : M/s Pandey Neeraj Rai, Advocate, R.R. Sinha & Akshansh Kishore, Advocates For the E.D. : Mr. Amit Kumar Das, Advocate ----- Oral Order 04 / Dated : 18.05.2023 1. Apprehending his arrest, petitioner- Sanjay Rungta has moved this Court for grant of anticipatory bail in connection with ECIR/02/PAT/2009/AD registered under Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (hereinafter called as PMLA), pending in the court of Addl. Distt. & Sessions Judge- XVI-cum-Special Judge, PML Act, Ranchi. 2. Heard the parties. 3. As per the prosecution case, Sri Madhu Koda who held the office of Minister of Mines and Cooperative from February, 2005 to September, 2006 and of the Chief Minister of Jharkhand from September, 2006 to August 2008, acquired money through corrupt and illegal means regarding which FIR No.9/2009 for offence under Sections 409, 420, 423, 424, 465, 120 B of IPC and under sections seven, 10, 11 and 13 of the Prevention of Corruption Act was registered by the CBI as RC No.5A/2010/AHD-Ranchi dated 11.8.2010, punishment to the order passed in WP(PIL) No.4700/2008. 14. The properties were acquired by corrupt means were invested in collusion with his accomplices to project it as untainted. The Enforcement Directorate registered ECIR/2002/PAT/2009/80 on 8.10.2009. 15. The Enforcement Directorate in its investigation under PMLA five successive complaints against Madhu Koda and his accomplices and various companies involved in money laundering. Attachment and confiscation proceedings were initiated and three provisional attachment orders were issued vide PAO No.4/2010 dated 10.11.2010, PAO No.1/2013 dated 28.2.2013 and PAO No.2/2014 dated 26.11.2014. The orders were confirmed by the Adjudicating Authority, PMLA, New Delhi vide its order dated 6.4.2011, 27.2,2013 and 25.3.2015. 2 16. Out of the properties so attached where properties of M/s Khalari Cements Ltd, which were attached by the PAO No.4/2010 dated 10.11.2010. The properties of M/s Khalari Cements Ltd where share capital of Rs 26, 62, 39, 000/-and fix assets worth ₹ 6, 07, 21, a 21 as on 31.3.2009. 17. The petitioner is one of the Directors of Khalari Cement Limited. and proceeds of crime generated by Madhu Koda, former Chief Minister of Jharkhand has been concealed, transferred and invested by his accomplices in different companies including M/s Khalari Cement Ltd. The modes operandi adopted by the accused person was complicated in nature and the money was laundered by a complex web of layering, starting from collection of cash through various parties and arranging accommodation entries through different companies. These companies were engaged in the business of investment, trading and non-banking and financial transaction with certain other companies and transactions were limited to provide the accommodation in lieu of cash. 4. During investigation, it found that the proceeds of crime to the tune of Rs.6,07,21,821/- was concealed and invested in M/s Khalari Cement Ltd. in an attempt to project the tainted properties as untainted. The petitioner and his father Sri Ram Swarup Rungta in collusion with Vijay Joshi, Vikash Sinha and Binod Sinha allowed the proceeds of crime to be concealed and invested in M/s Khalari Cement Ltd. 5. It is submitted by learned counsel for the petitioner that there is no material against the petitioner to show that the company or its Directors were involved in cheque and cash which was being invested in the company. It is further submitted that the amount that was invested was drawn by cheque from other company and the company is a reputed cement company and it is nowhere alleged that it was a Shell company. Lastly, it is submitted that after investigation, the prosecution complaint has also been filed and there is no further requirement of custodial interrogation and it is not in dispute that the petitioner has fully cooperated in the investigation. 6. Reliance is placed on the ratio laid down by the Hon’ble Apex Court in (2022) 1 SCC 676, 2021 SCC OnLine SC 941. It is further submitted that when the arrest has not been made in terms of Section 19 and therefore rigours of Section 45 will not apply. 7. Learned counsel for the Directorate of Enforcement has opposed the prayer for bail. It is submitted that petitioner is one of the Directors of the Private Limited Company and the crime proceeds were invested in this Company of the crime 3 proceeds that was generated by the then Chief Minister (Mr. Madhu Kora) which was routed through Shell company. It is submitted that proceeds of the crime to the tune of Rs.6,07,21,821/- was concealed and invested in M/s Khalari Cement Ltd. in an attempt to project the tainted property(s) as untainted one. The modus operandi involved is the investment of collected cash in shell company engaged in business of trading and non-trading banking transactions and the amount was transferred by the cheque. It is submitted that Mr. Vikash Sinha who used to receive the bribe amount on behalf of Mr. Madhu Kora (the then Chief Minister) invested in the shell company(s) through the Shell company. 8. Considering the submissions of learned counsel and the fact as discussed above, the anticipatory bail application is allowed. Hence, in the event of his arrest or surrender within a period of two weeks from the date of this order, the petitioner named above shall be released on bail on furnishing bail bond of Rs.1,00,000/- (Rupees One Lakh) with two sureties of the like amount each to the satisfaction of learned Court below and subject to the condition that one of the bailor(s) must be Income Tax Payee and subject to the conditions laid down under Section 438(2) Cr. P.C. (Gautam Kumar Choudhary, J.) Sandeep/ Uploaded. "