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