Under PMLA, Your Police Investigation Has Boundaries: Orissa HC Weighs In

In the spotlight is the case "Gangadhar Chhatria Vs State of Odisha," where the Orissa High Court tackled a pivotal issue concerning the scope of police investigation powers under the Prevention of Money Laundering Act (PMLA). The crux of the matter revolved around the police's authority to investigate PMLA-related issues.

The accused, facing allegations of money laundering and fraud, sought bail. However, a significant revelation emerged: under the PMLA, the police are restricted from initiating investigations or presenting complaints to the Special Court without obtaining special permission. In this scenario, the police, bypassing this requirement, filed a charge-sheet against the accused, which the court subsequently scrutinized.

For you, this ruling is a beacon of procedural fairness. The Orissa High Court's decision highlights the delineated powers of the police under the PMLA. It stresses that before diving into investigations related to PMLA matters, the police must secure special authorization. In this case, the oversight by the police led to the accused being granted bail, emphasizing the significance of adhering to procedural norms.

This case serves as a reminder of the importance of understanding the nuances of the law, ensuring that due process is followed, and recognizing that even law enforcement agencies must operate within the boundaries set by legislation.

Court Name : Orissa High Court

Parties : Gangadhar Chhatria Vs State of Odisha 

Decision Date : 13 July 2023

Judgement ref : BLAPL No. 420 of 2023

ORDER

13.07.2023

1. This matter is taken up through Hybrid

Arrangement (Virtual /Physical Mode).

2. Since both the bail applications arise out of

same case record, both the bail applications are heard

together and disposed of by this common order with

the consent of the learned counsel for the parties.

3. These are applications U/S.439 of Cr.P.C. by

the petitioners for grant of bail in connection with G.R.

Case No.247 of 2022 arising out of Binka P.S. Case

No.263 of 2022 pending in the file of learned J.M.F.C.,

Binka, for commission of offences punishable under

Sections 420/34 of IPC read with Section 4 & 5 of P.C.

& M.S. (Banning) Act and Section 4 of Money

Laundering Act, on the allegation of cheating

Rs.39,50,000/- (Rupees Thirty-nine Lakhs Fifty

Thousand) from the informant and some five to six

others of village Silati, along with co-accused persons.

4. In the course of hearing of both the bail

applications, Mrs. S.R. Sahoo, learned ASC files the

copy of the information received from the IIC, Binka

P.S. wherein the IIC has reported that there is no such

investment found to connect with the fact in issue with

regard to purchase of land, purchase of motor cycle and

others after the occurrence, but even after taking

adjournments, learned ASC could not apprise the Court

about the criminal proclivity of the petitioners in BLAPL

No.420 of 2023, despite being directed to obtain the

same by an order passed on 27.02.2023. Similarly,

Mrs. Sahoo also could not apprise the Court about the

criminal antecedent of the petitioner in BLAPL No.559

of 2023 despite order being passed since 30.01.2023 to

obtain it.

5. Heard Mr. S. Sourav, learned counsel for the

petitioners in BLAPL No.420 of 2023 and Mr. P.C. Das,

learned counsel for the petitioner in BLAPL No.559 of

2023 and Mrs. S.R. Sahoo, learned ASC in the matter

and perused the record. It is also submitted on behalf

of the petitioners in BLAPL No.420 of 2023 that

although the petitioners have been detained in custody

since 25.11.2022, but they have been falsely implicated

in this case and the materials on record do not disclose

their direct involvement in this case. Similarly, Mr. P.C.

Das, learned counsel for the petitioner in BLAPL No.559

of 2023 also submits that the petitioner is a lady and as

such, she is entitled to bail, in view of the first proviso

to Section 437 of Cr.P.C.

6. On the other hand, Mrs. S.R. Sahoo, learned

ASC, however, strongly opposes the bail application of

the petitioners by taking this Court through the

allegations on record and she inter-alia submits that

although she had written letter to concerned authority

to obtain criminal antecedent of the petitioners, but

since the petitioner Naina Koshal in BLAPL No.559 of

2023 is a resident of Jharkhand, the authority could not

be able to obtain any criminal antecedent of the

petitioner. She, however, fairly concedes that the

allegations appearing in this case is with regard to

cheating of the informant and some others.

7. Albeit, it appears to the Court from the

certified copy of the charge-sheet produced in this case

that the I.O. has submitted charge-sheet under Section

4 of Prevention of Money Laundering Act (PMLA), but as

per the provision of PMLA, police is neither authorized

to investigate the matter unless being specially

permitted nor a police officer can submit a complaint

before the Special Court under PMLA.

8. After having considered the rival submissions

made and taking into consideration the nature and

gravity of accusations raised against the petitioners and

keeping in view the nature and strength of supporting

materials available on record and taking into account

the law laid down by the Apex Court in Satendra

Kumar Antil Vrs. Central Bureau of Investigation;

(2021) 10 SCC 773 and on going through the other

circumstance on record in entirety including absence of

any direct evidence to show that the petitioners had

collected money and lack of authority of general police

to investigate under PMLA, this Court admits the

petitioners to bail.

9. Hence, both the bail applications of the

petitioners stand allowed and the petitioners are

allowed to go on bail on furnishing bail bonds of

Rs.1,00,000/- (Rupees One Lakh) each with two

solvent sureties for the like amount to the satisfaction

of the learned Court in seisin of the case on such terms

and conditions as deem fit and proper by it with

following conditions:-

(i) the petitioners shall not commit any

offence while on bail,

(ii) the petitioners shall attend the trial

Court on each date of posting without fail

unless his attendance is dispensed with,

(iii) the petitioners shall not leave the

jurisdiction of the trial Court without

prior permission till disposal of the case

and

(iv) the petitioners shall report

attendance before the Jurisdictional Police

Station as well as I.O. once in a fortnight

preferably on a Sunday in between 10

A.M. to 12 Noon for six(06) months from

the actual date of release from the

custody.

The I.I.C., of Jurisdictional Police Station shall

not detain the petitioners unnecessarily after recording

their attendance beyond the time as stipulated.

It is clarified that the Court in seisin of the

case will be at liberty to cancel the bail of the

petitioners without further reference to this Court, if

any of the above conditions are violated or a case for

cancellation of bail is otherwise made out. In the wake

of aforesaid, the subsequent involvement of the

petitioners in future for grave and serious offences on

prima facie accusations may be treated as a ground

for cancellation of bail in this case.

10. Accordingly, the BLAPL stands disposed of.

11. Issue urgent certified copy of the order as per

Rules.

(G. Satapathy)

Judge

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IN THE HIGH COURT OF ORISSA AT CUTTACK

BLAPL No.420 of 2023

Gangadhar Chhatria and

Another

… Petitioners

Mr. S. Sourav, Advocate

-versusState of Odisha … Opposite Party

Mrs. S.R. Sahoo, ASC

BLAPL No.559 of 2023

Naina Koshal … Petitioner

Mr. P.C. Das, Advocate

-versusState of Odisha … Opposite Party

Mrs. S.R. Sahoo, ASC

CORAM:

JUSTICE G. SATAPATHY