M. S. Karnik, J
1. Heard Shri Mundargi, learned senior advocate appearing for the applicant and Shri Ashish Chavan, learned counsel for the respondent no.1.
2. This is an application for bail under section 439 of the Code of Criminal Procedure read with section 45 of the Prevention of Money Laundering
Act, 2002 (“PMLAâ€, for short) in connection with ECIR No. ECIR/MBZO-I/57/2022 registered with the Enforcement Directorate, Mumbai
Zonal Office-1 (“EDâ€, for short) for the offences punishable under sections 3 read with 4 of the PMLA.
3. The applicant is the accused no.2 in the aforesaid ECIR registered by ED. The said ECIR arises out of a private complaint bearing no. 12 of 2022
dated 10/03/2022 lodged by the Ministry of Environment, Forest and Climate before the Judicial Magistrate First Class, Dapoli for violation of section
19 and section 15 read with section 7 of the Environment (Protection) Act, 1986. Section 15 read with section 7 being a scheduled offence under the
PMLA, the said ECIR came to be registered. The applicant was arrested on 13/03/2023.
4. There are in all 6 accused in respect of the said ECIR. At the relevant time, the applicant was working as a Sub-Divisional Officer at Dapoli,
posted since 19/11/2015. On 27/07/2017, an application was made on behalf of accused no.1- Sadanand Kadam for conversion of land into NA in
respect of Gat No. 446 at Murud for approximately one acre accompanied by a proposal for construction of twin bungalows. The applicant in his
capacity as Sub-Divisional Officer allowed the application on 12/09/2017 and granted NA permission. The accusation is that the applicant has misused
his authority as despite the land falling within CRZ- III in respect of which no permission could have been granted, the applicant knowlingly proceeded
to grant such permission. So far as the role played by the accused no.1 and the present applicant is concerned, the same is part of PMLA complaint,
the relevant portion of which reads thus :
“12.ROLE PLAYED BY THE ACCUSED & CHARGES UNDER PMLA:
12.1 Accused Sadanand Kadam acted on behalf of Anil Parab to negotiate the purchase of agricultural land admeasuring 42 Gunta located at Gut
No.446, Murud Dapoli, Ratnagiri knowing very well that the said land falls within Coastal Regulation Zon-III which is No Development Zone and any
new construction is strictly prohibited therein as per Coastal Regulation Zone Notification of 2011.
Further, Sadanand Kadam in connivance with Vinod Depolkar and on the instance of Shri Anil Perab filed an application for conversion of the said
land into non agriculture for the purpose of construction of Twin Bungalow, under the forged signature of erstwhile owner Vibhas Sathe. Thereafter,
Sadanand Kadam influenced and pressurized Revenue Department Authorities viz. Jayraz Deshpande, the then SDO, Dapoli & Sudhir Shantaram
Pardule, the then Circle officer, Dapoli, for acquiring illegal permission for conversion as well as construction over the said Agricultural Land and only
after that Revenue Department authorities granted illegal permission for conversion of the said land into non agricultural and construction therein.
Sadanand Kadam on behalf Shri Anil Parab also looked after the construction of unauthorized structure end changed the construction plan to resort
viz. Sai Resort NX even though the construction plan approved by Revenue Department was of Twin Bungalow. Further, Sadanand Kadam on behalf
of Anil Parab had again used influence of Anil Parab, the then MLC and pressurized Suresh Shankar Tupe, Sarpanch & Anant Koli, Gram Sevak of
Murud Gram Panchayat to assess & levy the tax immediately on the said unauthorized and illegal resort and to make entries in Gram Panchayat Form
No.8, therefore, tax was levied on the incomplete structure due to pressure and influence of Shri Anil Parab used by Sadanand Kadam.
Accused Sadanand Kadam has also manipulated the balance sheets and invoices in order to show expenses made for the construction of Sai Resort
NX on his account and further falsified the ledger so that to justify the construction cost and hide the actual expenses made in cash by Shri Anil
Parab.
In furtherance to this, when various complaints regarding the illegal construction of Sai Resort NX transpired, Accused Sadanand Kadam helped Shri
Anil Parab to shift the onus and to conceal the illegalities and irregularities vis a vis construction of the said resort within CRZ-III i.e. No Development
Zone, made a make-believe arrangement with Sadanand Kadam and sold the said land to him on paper, however, the fact that there was a structure
over the said land was once again not brought into light in the sald sale deed.
Thus, accused Sadanand Kadam by acts of using, utilizing and projecting the said property viz. Sai Resort NX (proceeds of crime), as untainted, has
indulged in money laundering activities in terms of Section 3 of PMLA, 2002 and based on the investigation conducted, he was arrested on 10.03.2022
under the provisions of Section 19 of the PML Act, 2002 for his role in money laundering activities
Accused Sadanand Kadam, therefore, was an active participant in the generation of proceeds of crime and actually involved in the laundering of the
said proceeds of crime as defined under Section 3 and is liable for punishment under Section 4 of PMLA, 2002.
12.2 Accused Jayram Vinayak Deshpande during his tenure as SDO, Dapoli, Ratnagiri has misused his position and directly assisted in money
laundering activities of accused Sadanand Kadam which has been done on behalf of Shri Anil Parab, as defined u/s 3 of PMLA, 2002 punishable u/s 4
of PMLA, 2002. He granted illegal permission for conversion of agricultural land located at Gut No 446, Murud, Dapoli, Ratnagiri knowing very well
that the said land falls within Coastal Regulation Zone-III which is No Development Zone and any new construction is strictly prohibited therein as per
Coastal Regulation Zone Notification of 2011.
He had knowingly taken on record the false and fabricated inspection report wherein his subordinate officer Sudhir Shantaram Pardule, the then Circle
Officer has stated that Gram Panchayat Road is there, panchanama without details of panchas wherein Sudhir Shantaram Pardule stated there is no
violation of the provisions of Coastal Regulation Zone Act.
Further, Shri Jayram Deshpande also completed disregard and did not take on record, the reply from Town Planning Authorities wherein they had
completely advise against the conversion of the said land into Non- Agricultural as well as construction therein as the said land fell into CRZ-III i.e.
No Development Zone as per the coastal map.
Further, accused Jayram Vinayak Deshpande passed illegal approval order dated. 12.09.2017 for conversion and construction of twin bungalow and
later subsequent to receipt of reply from Town Planner, rather than cancelling the illegal order, did not take the said reply on record.
Thus, accused Jayram Vinayak Deshpande, directly & knowingly has indulged in generation of Proceeds of Crime in terms of section 2 (1)(u) of
PMLA, 2002, r/w explanation to Section 2 (1)(v) of the Act, 2002, therefore, based on the investigation conducted, he was arrested on 13.03.2022
under the provisions of Section 19 of the PML Act, 2002 for his role in money laundering activities Accused Jayram Vinayak Deshpande, therefore
was an active participant in the generation of proceeds of crime and actually involved in the laundering of the said proceeds of crime as defined under
Section 3 and is liable for punishment under Section 4 of PMLA, 2002. â€
5. The applicant preferred PMLA Bail Application No. 236 of 2023 before the Special Court under the PMLA Act. By an order dated 26/10/2023, the
application for bail was rejected by the Special Court.
6. At this stage, it is pertinent to note that the co-accused no.1 had preferred Bail Application No. 3233 of 2023 in this Court. By an order dated
06/12/2023, the application for bail came to be rejected by this Court. The order dated 06/12/2023 was challenged before the Supreme Court by way
of Criminal Appeal No. 815 of 2024. The Supreme Court by order dated 12/02/2024 allowed the appeal and thereby enlarged the co-accused no.1 on
bail. According to me, the fate of this application depends much on the order dated 12/02/2024 and hence, the same is reproduced which reads thus :
“Leave granted.
Heard the learned counsel senior counsel appearing for the appellant and the learned ASG appearing for the first respondent/Directorate of
Enforcement.
The present appellant has been arrested on 10th March, 2023 in connection with the offence punishable under Section 3 of the Prevention of Money-
Laundering Act, 2002 (for short, ""the PMLA"").
After the submissions are heard, the learned ASG has fairly left it to the Court to decide the prayer for grant of bail to the appellant.
Even otherwise, we find that the appellant is entitled to be enlarged on bail in accordance with Section 45(1)(ii) of the PMLA on appropriate terms
and conditions, till the disposal of the complaint case filed by the first respondent/Directorate of Enforcement under the PMLA. In view of the fair
stand taken by the learned ASG, we are not recording detailed reasons.
For that purpose, we direct that the appellant shall be produced before the Special Court within a period of one week from today. The Special Court
shall enlarge the appellant on bail on appropriate terms and conditions, till the trial of the complaint case concludes.
The Appeal is, accordingly, allowed.â€
(emphasis supplied by me)
7. So far as the present applicant is concerned, it would be material to refer to the stand of the ED before the Sessions Court and observations made
by the Special Court while rejecting the bail application preferred by the present applicant. In paragraph 45 which has a material bearing for a decision
on this application, the Special Court observed thus:
“Admittedly, role of the applicant (A2) is not of generating proceeds of crime as defined under Sec.2(1)(u) and laundering the same as per Sec.3
of the PML Act. Even it is not contention of the ED that the applicant (A2) is beneficiary of POC or recipient thereof. Even ED's contention is clear
that the applicant (A2) has not laundered the POC. Paragraph 12.2 of the Prosecution Complaint has clear mention that during his tenure as SDO,
Dapoli, the applicant (A2) misused his position and directly assisted in money-laundering activities of accused Sadanand Kadam (A1). So, the role
attributed to the applicant. (A2) is that he had knowingly assisted' the process of money-laundering.â€
8. Learned Senior Advocate Shri Mundargi submitted that in the light of the order passed by the Supreme Court in respect of the accused no.1 and
having regard to the observations of the Special Court in paragraph 45 of the bail application preferred by this applicant, the applicant deserves to be
enlarged on bail as the role of this applicant is much lesser compared to that of the accused no.1.
9. Learned counsel Shri Chavan appearing for the respondent was at pains to support the order passed by the trial Court. It is submitted that the
applicant granted illegal permission for conversion of agricultural land to non-agricultural land though he was fully aware that the land fell within
Coastal Regulation Zone-III, where any new construction is strictly prohibited as per the Coastal Regulation Zone Notification of 2011. It is then
submitted that the applicant knowingly took on record a false and fabricated inspection report dated 31/07/2017 prepared by his subordinate officer,
Sudhir Shantaram Pardule, Circle Officer. The report falsely stated that there was no violation of the provisions of the Coastal Regulation Zone Act. It
is then submitted that the applicant deliberately with malafide intentions ignored the reply dated 12/10/2017 from Town Planning Authorities who
opined against the conversion of the land into non-agricultural use and construction thereon due to its location within CRZ-III. Learned counsel
submitted that the applicant passed an illegal approval order on 12/09/2017 for the conversion and construction of twin bungalows despite being aware
of the illegalities. It is pointed out that upon receipt of the reply from the Town Planner advising against the conversion, he failed to cancel the illegal
order or take the reply into account. My attention is then invited to the statements under section 50 of the PMLA, 2002, where the applicant admits
the acts of commission and omission due to the pressure and influence from Anil Parab. My attention is also invited to the statements of Sudhir
Pardule, the then Circle Officer and statement of Shankar Koravi, the then Nayab Tahsildar. Shri Chavan emphasized that the applicant was an active
participant in the generation of proceeds of crime and involved in the laundering of said proceeds, as defined under section 3 of PMLA, making him
liable for punishment under section 4 of the PMLA Act. Shri Chavan submitted that though the accused no.1 has been enlarged on bail by the
Supreme Court, however, considerations for enlarging the present applicant are fundamentally different as the role played by the applicant is
completely different from the accused no.1. It is submitted that not only the applicant has misused his authority but is also being proceeded against
with under the Prevention of Corruption Act. It is submitted that merely because the accused no.1 has been enlarged on bail is no reason to grant the
applicant bail having regard to the serious nature of the accusations against him and the role played as an active participant not only in the generation
of proceeds of crime but due to his involvement in the laundering of the said proceeds
10. Heard learned counsel.
11. The allegations and the role played by the applicant, that by the co-accused no.1 is elaborated in the earlier part of this order. The relevant
observations of the Special Court while rejecting the application for bail of the applicant are reproduced hereinbefore. The Special Court in paragraph
45 has observed that the role of the applicant is not of generating proceeds of crime as defined under section 2(1) (u) and laundering the same as per
section 3 of the PML Act. It is further observed that it is not even the contention of ED that the applicant is beneficiary of proceeds of crime or
recipient thereof. The Special Court recorded the contention that the applicant has not laundered the proceeds of crime. The Special Court then
referred to paragraph 12.2 of the prosecution complaint where it is mentioned that during the applicant’s tenure as Sub-Divisional Officer, Dapoli,
the applicant misused his position and directly assisted in money laundering activities of accused Sadanand Kadam. In this context, it is important to
note the observation of the trial Court that the role attributed to the applicant is that he had ‘knowingly assisted’ the process of money
laundering.
12. In the light of the observations of the Special Court, it is significant to note the observations of the Hon’ble Supreme Court while enlarging the
accused no.1 on bail which is already reproduced hereinbefore. Section 45 of PMLA provides that no person, accused of an offence under this Act
shall be released on bail unless twin conditions mentioned therein are satisfied. A reading of the order passed by the Supreme Court in respect of the
accused no.1 makes it clear that Their Lordships held accused no.1-Sadanand Kadam entitled to be enlarged on bail in accordance with section 45(1)
(ii) of the PMLA on appropriate terms and conditions, till the disposal of the complaint case filed by the ED under the PMLA. Further, the Supreme
Court has in no uncertain terms observed that in view of the fair stand taken by the learned ASG, detailed reasons are not recorded. In view of the
order enlarging the accused no.1 on bail by the Supreme Court, the observations of the Special Court in paragraph 45 of its order assume significance.
The Special Court observed that the role attributed to the applicant is that he had ‘knowingly assisted’ the accused no.1 in the process of money
laundering. The co-accused no.1 is the prime accused. The role of the present applicant is much lesser compared to the accused no.1 against whom
the allegations are of money laundering and generating proceeds of crime. The Special Court having observed that the role of the applicant is not of
generating proceeds of crime as defined under section 2(1)\ (u) and laundering the same as per section 3 of the PMLA, I have no hesitation
whatsoever in allowing the present application.
13. Learned counsel Shri Chavan submitted that it is the stand of the ED before the Special Court that the applicant is also responsible for generating
proceeds of crime and money laundering. This submission was dealt with by the Special Court. The submission is in the teeth of the observations of
the Special Court in paragraph 45 of the order. I have therefore not dealt with the other contentions of Shri Mundargi, learned senior advocate and
Shri Chavan as I am more than satisfied that as the co-accused no.1 who is the prime accused having been enlarged on bail by the Supreme Court in
accordance with section 45(1)(ii) of the PMLA, even the present applicant can be enlarged on bail. Hence, the following order.
ORDER
(a) The bail application is allowed.
(b) The applicant â€" Jayram Vinayak Deshpande be released on bail in respect of ECIR/MBZO-I/57/2022 (PMLA Special Case No. 634 of 2023)
on his furnishing P.R. Bond of Rs.1,00,000/- (Rs. One Lakh) with one or more sureties in the like amount.
(c) Until the applicant- Jayram Vinayak Deshpande furnishes surety, he be released on cash security of Rs. 1 lakh along with PR bond as directed
above.
(d) The applicant shall undertake not to leave India without prior permission of the Court and also deposit his passport with the Registrar(S) of the trial
Court.
(e) The applicant shall undertake not to pressurize the prosecution witnesses, tamper with the evidence and co-operate further with the investigation of
the ED pertaining to this ECIR.
(f) The applicant shall attend each and every date of the trial of this case unless his personal appearance is exempted.
14. Learned counsel Shri Chavan at this stage prayed that operation of this order be stayed for a reasonable period. The request is rejected.
15. The bail application is disposed of.
