Bombay High Court
Tanaji Dattu Padwal vs Director Of Enforcement And Anr on 14 October, 2024
Author: Madhav J. Jamdar
Bench: Madhav J. Jamdar
2024:BHC-AS:40673 10-BA-2251-2023.DOC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL BAIL APPLICATION NO.2251 OF 2023
Tanaji Dattu Padwal ...Applicant
Versus
Director of Enforcement & Anr. ...Respondents
Mr. Hasnain Kazi a/w. Ms. Shraddha Vavhal, Mr. Athar Qureshi, Mr.
Raeed Kazi, Mr. Hafiz Kazi, Advocates, for the Applicant.
Mr. Hiten S. Venegavkar, SPP, a/w. Ms. Diksha Ramnani, for the
Respondent No.1-ED.
Mr. C. D. Mali, APP, for the Respondent No.2-State.
CORAM: MADHAV J. JAMDAR, J.
DATED : 14th OCTOBER 2024
JUDGMENT:
1. Heard Mr. Kazi, learned Counsel for the Applicant and Mr.
Venegavkar, learned Special Public Prosecutor, for the Respondent
No.1-ED.
2. The Applicant has been enlarged on bail by this Court by
order dated 7th October 2024 passed in Criminal Bail Application
No.2528 of 2023 as far as the scheduled offence is concerned. The
present Application is arising out of the offence punishable under
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Section 4 of the Prevention of Money Laundering Act, 2002
(“PMLA”). The relevant details are as follows:
1. C. R. No. Special Case No.485 of 2021
registered in connection with
ECIR/MBZO-II/03/2020.
2. Date of registration of 08/01/2020
F.I.R.
3. Name of Police Station Shivaji Nagar, Dist. Pune
(Directorate of Enforcement)
4. Section/s invoked 406, 408, 409, 420, 468, 471
(Scheduled Offence) r/w. 34 of Indian Penal Code,
1960 along with Sections 3, 4
and 5 of the Maharashtra
Protection of Interest of
Depositors (In Financial
Establishments) Act, 1999
5. Section/s invoked 4 of the Prevention of Money
(PMLA Offences) Laundering Act, 2002
(“PMLA”)
6. Date of arrest 24/02/2020 in IPC
Offences/Scheduled Offences05/03/2021 – In the offence
under PMLA.
3. Mr. Kazi, learned Counsel appearing for the Applicant raised
following contentions:-
(i) The role of the present Applicant and co-Accused-Shailesh
Bhosale is at par. Shailesh Bhosale has been granted bail in
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10-BA-2251-2023.DOCscheduled offence by a learned Single Judge by order dated 10 th
October 2023 passed in Criminal Bail Application No.1110 of 2023
and in PMLA offence this Court has granted bail to said co-accused
by order dated 6th September 2024 passed in Bail Application
No.3204 of 2022. He therefore, submitted that the Applicant is
entitled to be released on bail on the ground of parity.
(ii) As far as merits are concerned, he submits that the Applicant
is not beneficiary and there is no recovery at the instance of the
Applicant and therefore the Applicant is entitled to be released on
bail.
(iii) He submits that in any case, the Applicant is entitled to be
released on bail due to long incarceration and he is entitled for
benefit of Section 436A of the CrPC. He submitted that the
Applicant has been arrested in the scheduled offence on 24 th
February 2020 and in PMLA offence on 5th March 2021. He submits
that the Applicant is incarcerated since 3 years and 7 months in
PMLA offence. He submits that the maximum punishment under
Section 4 of the PMLA is seven years and therefore, the Applicant
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10-BA-2251-2023.DOCis entitled for the benefit as provided under Section 436A of the
Cr.P.C.
4. On the other hand, Mr. Venegavkar, learned Special Public
Prosecutor strongly opposes the Bail Application. He raised the
following contentions:-
(i) He submitted that the contention raised by Mr. Kazi, learned
Counsel appearing for the Applicant that the Applicant is entitled
to be released on bail on merits as he is not the beneficiary and
there is no recovery at the instance of the Applicant is contrary to
the material on record. He submitted that material on record
clearly shows that the Applicant is involved in very serious crime.
(ii) Mr. Venegavkar, learned Special Public Prosecutor pointed
out the statements of following witnesses:-
(a) Mr. Santosh Sahebrao Kale, Loan Officer, Shivajirao
Bhosale Sahakari Bank (“the said Bank”) (Page 87).
(b) Mrs. Sunita Lalasaheb Bandal, Branch Manager of the
said Bank (Page 88).
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(b) Mrs. Preeti Nitinrao Patil, Cashier of the said Bank (Page
89).
(c) Vinod Kachardas Paliwal, Branch Manager of Deccan
Gymkhana Branch of the said Bank (Page 90).
On the basis of these statements, he submitted that the Applicant is
involved in the serious crime.
(iii) Learned Special Public Prosecutor also pointed out detailed
affidavit-in-reply dated 2nd January 2024 filed on behalf of the
Respondent No.1-ED of Mr. Sunil Kumar, Assistant Director, Zonal
Office-II, Mumbai Directorate of Enforcement, Ministry of Finance,
Department of Revenue, Government of India. He pointed out
paragraph Nos.7.1 to 7.6 of the said affidavit-in-reply which sets
out the prosecution case. He also pointed out the role which the
present Applicant has played in the crime which is described at
page Nos.1214 to 1217 of the said affidavit-in-reply.
5. Before considering the rival submissions, it is necessary to
set out the prosecution case. The same is set out in paragraph
Nos.7.1 to 7.6 of the said affidavit-in-reply, which reads as under:
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10-BA-2251-2023.DOC“7.1. That, Shivajinagar Police Station, Pune
registered FIR No. 0026/2020 dated 08.01.2020
against Mr. Anil Shivajirao Bhosale, Mr. Suryaji
Pandurang Jadhav, Mr. Tanaji Dattu Padwal, Mr.
Shailesh Sampatrao Bhosale and others on the basis
of complaint filed by the Complainant Mr. Yogesh
Rajgopal Lakade, Chartered Accountant (Partner of
M/s Torvi Pethe &Co.) invoking Sections 420 read
with Sections 34, 406, 408, 409, 468 and 471 of
Indian Penal Code, 1860 (herein after referred to as
‘the IPC, 1860’).
7.2. That, it is alleged in the FIR that RBI team
during their periodical visit at head office of M/s
Shivajirao Bhosale Co-operative Bank Ltd. at Pune
on 26.04.2019, noticed various discrepancies in
records / books of accounts of the bank. Further, the
RBI vide letter dated 16.05.2019 had given
direction to M/s Torvi Pethe & Co. (Chartered
Accountant Firm and Statutory auditor of the Bank)
for verification of cash record of all the branches
and head office of the Bank. Accordingly, on
25.05.2019 & 27.05.2019, statutory auditor verified
all available cash of the branches and head office of
the bank with their respective cash books. The
Statutory auditor noticed that the entry of cash of
Rs. 71.78 Crore which was kept pending at Head
Office of the bank during the visit of RBI team was
made by the head office of the bank on 04.05.2019
in their cash book. Further, in the head office of M/s
Shivajirao Bhosale Co-operative Bank, the statutory
auditor found less cash of Rs. 71.78 Crore than their
cash book. The same was communicated to RBI and
District Special Auditor Co-operative Dept., Pune by
the statutory auditor. Consequently, the
Complainant, Mr. Yogesh Rajgopal Lakade,
Chartered Accountant (Partner of M/s Torvi Pethe &
Co.) had lodged the said FIR.
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7.3. That, it is mentioned in the FIR that Mr. Anil
Shivajirao Bhosale (Accused No. 2) who was the
Chairman of Shivajirao Bhosale Sahakari Bank Ltd.
had misused his position and conspired with the co-
accused and siphoned off the amount totalling to
tune of Rs 71,78,87,723/- from Shivajirao Bhosale
Sahakari Bank Ltd & its branches for personal gains.
7.4. That, subsequently EOW, Pune City carried out
investigation and filed charge sheet bearing No.
32/2020 dated 18.05.2020 before the Hon’ble
Additional Sessions Judge, Special M.P.I.D Court,
Shivajinagar, Pune against Mr. Anil Shivajirao
Bhosale, Mr. Suryaji Pandurang Jadhav, Mr. Tanaji
Dattu Padwal, Mr. Shailesh Sampatrao Bhosale and
others for constituting the offences punishable
under Sections 34, 406, 408, 409, 420, 468 and 471
of IPC, 1860 read with Section 3, 4&5 of MPID Act.
7.5. That, Mr. Anil Shivajirao Bhosale and his 3
associates including the present applicant were
arrested by the Crime Branch, Pune and produced
before Additional Session Judge and Special
Maharashtra Protection of Interest of Depositors Act
(MPID) Judge Shivaji Nagar, Pune. Subsequently,
the said Court sent / remanded them into Police
custody till 19 March 2020 and thereafter in the
judicial custody.
7.6. That, a case under PMLA, 2002 was recorded
vide ECIR/MBZO- II/03/2020 dated 07.02.2020 by
the Enforcement Directorate, Mumbai Zonal Office-
Il, Mumbai, against Mr. Anil Shivajirao Bhosale, Mr.
Suryaji Pandurang Jadhav, Mr. Tanaji Dattu Padwal,
Mr. Shailesh Sampatrao Bhosale and others as
sections 420, 467 & 471 of IPC invoked in the FIR
are scheduled offence under PMLA, 2002 within the
meaning of section 2(1) (y) of PMLA, 2002 read
with Part A Paragraph 1 of the schedule to the
PMLA, 2002.”
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6. In the said affidavit-in-reply role of the present Applicant is
also set out in paragraph No.8.3. The same reads as under:
“8.3. That, the Management of the bank is vested in
the Chief Executive Officer and Managing directors
of the bank. Mr. Tanaji Dattu Padwal being a CEO of
the bank, used to supervise all the 14 branches of
the bank and used to prepare policies for
implementation in the day-to-day affairs of the
bank. He failed to comply his duties as a Chief
Executive Officer of the bank. He neither adhered
by laws of the bank nor guidelines of RBI issued
from time to time while discharging his duties. He
followed instructions regarding illegal withdrawal
of cash for Anil S. Bhosale and Suryaji Pandurang
Jadhav without filling any voucher/slip while taking
out cash from the bank. He is also the person who
used to manage and instruct employees of the bank
to make bogus entries in the cash register to cover
up the cash shortfall/ mismanagement. Mr. Tanaji
Dattu Padwal in his statement dated 09.03.2021 has
also admitted that the cash entries, in the cash
register which was submitted as evidence in
prosecution complaint, against him and others are
true. At the outset, Mr. Tanaji Dattu Padwal knew
about the cash siphoning off of Rs 71,78,87,723
from Shivajinagar Branch during the period 2016 to
2019 and he was actively assisting them in the cash
siphoning off. Mr. Tanaji Dattu Padwal was in direct
contact with Anil S. Bhosale and Suryaji Pandurang
Jadhav and used to receive
instructions/calls/messages from them in respect of
their cash requirement, and subsequently, the same
instructions used to be passed on to branch
manager of Shivajinagar Branch. He never
complained to any regulatory body including RBI.
He used to produce all the books of accounts of thePage 8 of 28
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10-BA-2251-2023.DOCbank before Auditors for audit purposes based on
which Audit Reports of the Banks were prepared.
Had the real figures & condition of the bank been
produced before the Auditors of the Bank for Audit,
it could have saved the Shivajirao Bhosale Sahakari
Bank Limited from such massive fraudulent
activities and the interest of the depositors of the
bank could have been protected. He, being an
expert in banking sector, knew about al
irregularities towards NPA, investment, cash
embezzlement etc. but he never placed these facts
before any regulatory bodies. Thus, the financial
condition of the bank was adversely impacted, and
it suffered huge loss for which the pity depositors
have paid the price. He has been privy to the cheat
the depositors of the Bank and has actively assisted
Mr. Anil Shivajirao Bhosale and Mr. Suryaji
Pandurang Jadhav in generation of proceeds of
crime. The branch managers of the concerned
branches of Shivajirao Bhosale Sahakari Bank have
unambiguously stated in their statements under
PMLA, 2002, that they used to get instructions from
Mr. Tanaji Dattu Padwal for cash requirement and
making adjustments/ bogus entries to cover up the
1216 fraud. As per statement of Sunita L. Bandal,
Branch Manager of Shivajinagar Branch, it is
revealed that she always used to receive instructions
from Head office staff, Tanaji Dattu Padwal,
Shailesh S. Bhosale and Santosh Sahebrao Kale in
respect of illegally cash taken out from Shivajinagar
branch for Anil S. Bhosale and Suryaji Pandurang
Jadhav. Names of the persons to whom cash to be
handed over by branch were instructed to her by
Tanaji Dattu Padwal along with other officials on
behalf of Mr. Anil Shivajirao Bhosale and Mr. Suryaji
Pandurang Jadhav. She also stated that she had
informed Mr. Tanaji Dattu Padwal regarding the
shortfall in cash in Shivajinagar Branch and
liquidity problems faced by the depositors since
April 2019, this implies that Mr. Tanaji Dattu
Padwal was very well aware about the financialPage 9 of 28
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10-BA-2251-2023.DOCcrisis faced by the bank due to illegal cash
withdrawal. In reply to the same, Mr. Tanaji Dattu
Padwal informed Mrs. Sunita Bandal that Mr. Anil
Shivajirao Bhosale will repay the cash to the bank at
the earliest. She also stated that Mr. Tanaji Dattu
Padwal passed on instructions to her for cheque
discounting to reduce the percentage of NPA. A
Forced Loan account was created by the
Administrator of Shivajirao Sahakari Bank Limited
in the name of Mr. Tanaji Dattu Padwal for Rs.
2,14,00,000/- for cash withdrawal of the said
amount from the IDBI Bank, Yes Bank and Axis
Bank even after restriction imposed by the RBI for
cash withdrawal by the Bank. This implies that Mr.
Tanaji Dattu Padwal was responsible for illegal cash
withdrawal even after restriction imposed by RBI.
Mrs. Sunita Bandal also stated that cash amount of
Rs.28,53,00,000/- was handed over to Mr. Santosh
Sahebrao Kale, Mr. Shailesh Bhosale and Mr. Amar
Pawar on the directions of Mr. Tanaji Dattu Padwal
who was instructed by Mr. Anil Shivajirao Bhosale
and Mr. Suryaji Pandurang Jadhav. As per statement
of Vinod Paliwal, Branch manager of Deccan
Gymkhana branch, it is revealed that he used to get
instructions from Tanaji dattu Padwal for making
bogus entries for cash deposits in the bank account
no. 1 and 2 of Anil S. Bhosale and his wife Mrs.
Reshma Anil Bhosale. When he contacted Mr. Tanaji
Dattu Padwal and apprised about the discrepancies
at the branch, Mr. Tanaji Padwal said that this is in
his knowledge, and ti would be adjusted later on.
Even, Mr. Tanaji Dattu Padwal instructed him to
credit the account of Mr. Anil S Bhosale and Mrs.
Reshma Bhosale with cash deposits as and when
required. Mr. Tanaji Dattu Padwal instructed Mr.
Vinod Paliwal for keeping 67 cheques pending for
amount of Rs.5,82,90,175/- without having
insufficient balance in the account of Anil S.
Bhosale. As per statement of Santosh Saherao Kale,
he admitted that he used to get instructions from
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10-BA-2251-2023.DOCJadhav and Mr. Tanaji Dattu Padwal on landline
phone of the office for illegal cash withdrawal from
various branches of Shivajirao Bhosale Sahakari
Bank Limited. Mr. Tanaji Dattu Padwal, even after
imposing restrictions on 03.05.2019 by RBI on
withdrawal of cash more than Rs 1000/-, had issued
cheques to withdraw an amount of Rs 2.14 crores
on various dates from the period of 26.06.2019 to
18.11.2019 from accounts of Shivajirao Bhosale
Sahakari Bank which are maintained with Axis
bank, IDBI bank and Yes Bank.”
7. The material on record shows that the Applicant was
working as the Chief Executive Officer of the said bank. He has
duty to supervise all the 14 branches of the said Bank and he has
facilitated illegal withdrawal of the cash on the instructions of the
co-Accused. The material on record shows that the Applicant has
actively participated in the commission of the crime. The Applicant
as Chief Executive Officer could have prevented the commission of
the offence, if he would not have participated in the commission of
the offence. As the Chief Executive Officer of the said Bank, it is
the duty of the Applicant to see that the Bank functions in
accordance with the provisions of law. Perusal of record shows that
Loan account was created of Shivajirao Sahakari Bank Limited in
the name of the Applicant – Tanaji Dattu Padwal for
Rs.2,14,00,000/- for cash withdrawal of the said amount from the
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IDBI Bank, Yes Bank and Axis Bank even after restriction imposed
by the RBI for cash withdrawal by the Bank. The Applicant even
after imposing restrictions on 3rd May 2019 by RBI on withdrawal
of cash more than Rs.1000/-, had issued cheques to withdraw an
amount of Rs.2.14 crores on various dates from the period of 26 th
June 2019 to 18th November 2019 from accounts of Shivajirao
Bhosale Sahakari Bank which are maintained with Axis bank, IDBI
bank and Yes Bank. Thus, it is clear that the Applicant is involved
in a very serious crime.
8. Mr. Venegavkar, learned Special Public Prosecutor also
pointed out paragraph Nos.6 and 7 of this Court’s order dated 7th
October 2024 passed in Criminal Bail Application No.2528 of 2023
regarding scheduled offences. In said paragraph Nos. 6 and 7 after
considering the record, it is prima facie recorded that the material
on record shows that the Applicant is involved in very serious
offence and therefore, not entitled to be released on bail on merits.
By said order the Applicant has been granted bail on the ground of
long incarceration.
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9. Perusal of the record of the present case also clearly shows
that the Applicant is involved in very serious offence and therefore,
not entitled to be released on bail on merits. Prima facie, there is
no substance in the contention of Mr. Kazi, learned Counsel
appearing for the Applicant that the Applicant is not beneficiary
and therefore, he is not involved in the crime.
10. However, it is required to be noted that in the scheduled
offence the Applicant is incarcerated since 24 th February 2020 and
the Applicant has been granted bail by this Court vide order dated
7th October 2024 passed in Criminal Bail Application No.2528 of
2023. As far as the offence under PMLA is concerned, the
Applicant is incarcerated since 5th March 2021. Thus, the Applicant
has completed imprisonment of about 3 years and 7 months. It is
an admitted position that the punishment for offence punishable
under Section 4 of the PMLA is rigorous imprisonment for not less
than 3 years but which may extend to 7 years. Thus, the maximum
punishment for the offence punishable under Section 4 of the
PMLA is 7 years of rigorous imprisonment. The Applicant has
completed 3 years and 7 months i.e. more than one-half of the
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maximum period of imprisonment specified for the offence alleged
against him.
11. Section 436A of the CrPC provides as under:
“436-A. Maximum period for which an undertrial
prisoner can be detained.–Where a person has, during
the period of investigation, inquiry or trial under this
Code of an offence under any law (not being an offence
for which the punishment of death has been specified as
one of the punishments under that law) undergone
detention for a period extending up to one-half of the
maximum period of imprisonment specified for that
offence under that law, he shall be released by the Court
on his personal bond with or without sureties:
Provided that the Court may, after hearing the
Public Prosecutor and for reasons to be recorded by it in
writing, order the continued detention of such person for
a period longer than one-half of the said period or
release him on bail instead of the personal bond with or
without sureties:
Provided further that no such person shall in any
case be detained during the period of investigation,
inquiry or trial for more than the maximum period of
imprisonment provided for the said offence under that
law.
Explanation.–In computing the period of
detention under this section for granting bail, the period
of detention passed due to delay in proceeding caused by
the accused shall be excluded.”
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12. However, it is required to be noted that the offence alleged
against the present Applicant is under PMLA.
13. Section 45 of the PMLA Act is as follows :-
“45. Offences to be cognizable and non-bailable.–(1)
[Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), no person
accused of an offence [under this Act] shall be released
on bail or on his own bond unless–]
(i) the Public Prosecutor has been given an opportunity
to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application,
the court is satisfied that there are reasonable grounds
for believing that he is not guilty of such offence and
that he is not likely to commit any offence while on bail:
Provided that a person, who, is under the age of
sixteen years, or is a woman or is sick or infirm 113[or
is accused either on his own or along with other co-
accused of money-laundering a sum of less than one
crore rupees], may be released on bail, if the Special
Court so directs:
Provided further that the Special Court shall not
take cognizance of any offence punishable under Section
4 except upon a complaint in writing made by–
(i) the Director; or
(ii) any officer of the Central Government or a
State Government authorised in writing in this
behalf by the Central Government by a general or
special order made in this behalf by that
Government.
[(1-A) Notwithstanding anything contained in
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the Code of Criminal Procedure, 1973 (2 of
1974), or any other provision of this Act, no
police officer shall investigate into an offence
under this Act unless specifically authorised, by
the Central Government by a general or special
order, and, subject to such conditions as may be
prescribed.]
(2) The limitation on granting of bail specified in [* * *]
subsection (1) is in addition to the limitations under the
Code of Criminal Procedure, 1973 (2 of 1974) or any
other law for the time being in force on granting of bail.
[Explanation.–For the removal of doubts, it is clarified
that the expression “Offences to be cognizable and non-
bailable” shall mean and shall be deemed to have always
meant that all offences under this Act shall be cognizable
offences and non-bailable offences notwithstanding
anything to the contrary contained in the Code of
Criminal Procedure, 1973 (2 of 1974), and accordingly
the officers authorised under this Act are empowered to
arrest an accused without warrant, subject to the
fulfilment of conditions under Section 19 and subject to
the conditions enshrined under this section.] ”
14. Thus, as per Section 45 of the PMLA Act, the following
requirements are mandatory to be complied with before releasing
the accused on bail:
(i) The Public Prosecutor is to be given an
opportunity to oppose the Application seeking bail;
(ii) Where the Public Prosecutor opposes the
Application :
(a) The Court is required to record
satisfaction that there are reasonable grounds
for believing that the Applicant is not guilty ofPage 16 of 28
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(b) The Court is required to record
satisfaction that the Applicant is not likely to
commit any offence while on bail.
15. In this Bail Application, the Respondent No. 1 – ED filed
affidavit opposing the Bail Application and Mr. Venegavkar, learned
Special Public Prosecutor for Respondent No.1 has opposed the
Bail Application. Thus, requirement as set out in Clause (i) herein
above is satisfied. Thus, now what is required to be seen is whether
twin conditions as contained in Clause (ii) noted hereinabove are
fulfilled and effect of the said twin conditions on the entitlement of
the Applicant in getting bail.
16. In this background of the matter, it is required to be noted
that the Supreme Court in the case of Vijay Madanlal Choudhary
(supra) in Paragraph Nos.412 to 421 considered the applicability
of Section 436A of the CrPC which is concerning the maximum
punishment for which an under trial prisoner can be detained to
the offence punishable under PMLA, in view of Section 45 of PMLA
imposing twin conditions before considering application of the
Accused facing prosecution for the offences under the PMLA. It has
been held that Section 436A of the CrPC has come into effect on
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23rd June 2006 and the said provision is the subsequent law
enacted by the Parliament after enactment of PMLA and Section
436A will prevail and will apply in spite of rigors of Section 45 of
the PMLA Act. The relevant part of the said Paragraphs Nos.412 to
421 read as under :
“412. As a result, we have no hesitation in observing
that in whatever form the relief is couched including the
nature of proceedings, be it under Section 438 of the
1973 Code or for that matter, by invoking the
jurisdiction of the Constitutional Court, the underlying
principles and rigors of Section 45 of the 2002 must
come into play and without exception ought to be
reckoned to uphold the objectives of the 2002 Act,
which is a special legislation providing for stringent
regulatory measures for combating the menace of
money-laundering.
413. There is, however, an exception carved out to the
strict compliance of the twin conditions in the form of
Section 436A of the 1973 Code, which has come into
being on 23.6.2006 vide Act 25 of 2005. This, being the
subsequent law enacted by the Parliament, must prevail.
Section 436A of the 1973 Code reads as under:
“656[436A. Maximum period for which an undertrial
prisoner can be detained.– Where a person has, during
the period of investigation, inquiry or trial under this
Code of an offence under any law (not being an offence
for which the punishment of death has been specified as
one of the punishments under that law) undergone
detention for a period extending up to one-half of the
maximum period of imprisonment specified for that
offence under that law, he shall be released by the Court
on his personal bond with or without sureties:
Provided that the Court may, after hearing the Public
Prosecutor and for reasons to be recorded by it in
writing, order the continued detention of such personPage 18 of 28
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release him on bail instead of the personal bond with or
without sureties:
Provided further that no such person shall in any case be
detained during the period of investigation, inquiry or
trial for more than the maximum period of
imprisonment provided for the said offence under that
law.
Explanation.-In computing the period of detention
under this section for granting bail, the period of
detention passed due to delay in proceeding caused by
the accused shall be excluded.]
415. In Hussainara Khatoon v. Home Secretary, State of
Bihar, Patna, this Court stated that the right to speedy
trial is one of the facets of Article 21 and recognized the
right to speedy trial as a fundamental right. This dictum
has been consistently followed by this Court in several
cases. The Parliament in its wisdom inserted Section
436A under the 1973 Code recognizing the deteriorating
state of undertrial prisoners so as to provide them with a
remedy in case of unjustified detention. In Supreme
Court Legal Aid Committee Representing Undertrial
Prisoners v. Union of India, the Court, relying on
Hussainara Khatoon, directed the release of prisoners
charged under the Narcotic Drugs and Psychotropic Act
after completion of one-half of the maximum term
prescribed under the Act. The Court issued such direction
after taking into account the non obstante provision of
Section 37 of the NDPS Act, which imposed the rigors of
twin conditions for release on bail. It was observed:
“15. …We are conscious of the statutory provision finding
place in Section 37 of the Act prescribing the conditions
which have to be satisfied before a person accused of an
offence under the Act can be released. Indeed we have
adverted to this section in the earlier part of the
judgment. We have also kept in mind the interpretation
placed on a similar provision in Section 20 of the TADA
Act by the Constitution Bench in Kartar Singh V. State of
Punjab. Despite this provision, we have directed as above
mainly at the call of Article 21 as the right to speedy trial
may even require in some cases quashing of a criminalPage 19 of 28
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10-BA-2251-2023.DOCproceeding altogether, as held by a Constitution Bench of
this Court in A.R. Antulay v. R.S. Nayak, release on bail,
which can be taken to be embedded in the right of
speedy trial, may, in some cases be the demand of Article
21. As we have not felt inclined to accept the extreme
submission of quashing the proceedings and setting free
the accused whose trials have been delayed beyond
reasonable time for reasons already alluded to, we have
felt that deprivation of the personal liberty without
ensuring speedy trial would also not be in consonance
with the right guaranteed by Article21. Of course, some
amount of deprivation of personal liberty cannot be
avoided in such cases; but if the period of deprivation
pending trial becomes unduly long, the fairness assured
by Article 21 would receive a jolt. It is because of this
that we have felt that after the accused persons have
suffered imprisonment which is half of the maximum
punishment provided for the offence, any further
deprivation of personal liberty would be violative of the
fundamental right visualised by Article 21, which has to
be telescoped with the right guaranteed by Article 14
which also promises justness, fairness and reasonableness
in procedural matters. …”
416. The Union of India also recognized the right to
speedy trial and access to justice as fundamental right in
their written submissions and, thus, submitted that in a
limited situation right of bail can be granted in case of
violation of Article 21 of the Constitution. Further, it is to
be noted that the Section 436A of the 1973 Code was
inserted after the enactment of the 2002 Act. Thus, it
would not be appropriate to deny the relief of Section
436A of the 1973 Code which is a wholesome provision
beneficial to a person accused under the 2002 Act.
However, Section 436A of the 1973 Code, does not
provide for an absolute right of bail as in the case of
default bail under Section 167 of the 1973 Code. For, in
the fact situation of a case, the Court may still deny the
relief owing to ground, such as where the trial was
delayed at the instance of accused himself.
417. Be that as it may, in our opinion, this provision is
comparable with the statutory bail provision or, so to say,
the default bail, to be granted in terms of section 167 of
the 1973 Code consequent to failure period of the
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investigating agency to file the chargesheet within the
statutory and, in the context of the 2002 Act, complaint
within the specified period after arrest of the person
concerned. In the case of Section 167 of the 1973 Code,
an indefeasible right is triggered in favour of the accused
the moment the investigating agency commits default in
filing the chargesheet/complaint within the statutory
period. The provision in the form of Section 436A of the
1973 Code, as has now come into being is in recognition
of the constitutional right of the accused regarding
speedy trial under Article 21 of the Constitution. For, it is
a sanguine hope of every accused, who is in custody in
particular, that he/she should be tried expeditiously – so
as to uphold the tenets of speedy justice. If the trial
cannot proceed even after the accused has undergone
one-half of the maximum period of imprisonment
provided by law, there is no reason to deny him this
lesser relief of considering his prayer for release on bail
or bond, as the case may be, with appropriate conditions,
including to secure his/her presence during the trial.
418. Learned Solicitor General was at pains to
persuade us that this view would impact the objectives of
the 2002 Act and is in the nature of super imposition of
Section 436A of the 1973 Code over Section 45 of the
2002 Act. He has also expressed concern that the same
logic may be invoked in respect of other serious offences,
including terrorist offences which would be
counterproductive. So be it. We are not impressed by this
submission. For, it is the constitutional obligation of the
State to ensure that trials are concluded expeditiously
and at least within a reasonable time where strict bail
provisions apply. If a person is detained for a period
extending up to one-half of the maximum period of
imprisonment specified by law and is still facing trial, it is
nothing short of failure of the State in upholding the
constitutional rights of the citizens, including person
accused of an offence.
419. Section 436A of the 1973 Code, is a wholesome
beneficial provision, which is for effectuating the right of
speedy trial guaranteed by Article 21 of the Constitution
and which merely specifies the outer limits within which
the trial is expected to be concluded, failing which, the
accused ought not to be detained further. Indeed, Section
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436A of the 1973 Code also contemplates that the relief
under this provision cannot be granted mechanically. It is
still within the discretion of the Court, unlike the default
bail under Section 167 of the 1973 Code. Under Section
436A of the 1973 Code, however, the Court is required to
consider the relief on case-to-case basis. As the proviso
therein itself recognises that, in a given case, the
detention can be continued by the Court even longer than
one-half of the period, for which, reasons are to be
recorded by it in writing and also by imposing such terms
and conditions so as to ensure that after release, the
accused makes himself/herself available for expeditious
completion of the trial.
420. However, that does not mean that the principle
enunciated by this Court in Supreme Court Legal Aid
Committee Representing Under trial Prisoners, to
ameliorate the agony and pain of persons kept in jail for
unreasonably long time, even without trial, can be
whittled down on such specious plea of the State. If the
Parliament/Legislature provides for stringent provision of
no bail, unless the stringent conditions are fulfilled, it is
the bounden duty of the State to ensure that such trials
get precedence and are concluded within a reasonable
time, at least before the accused undergoes detention for
a period extending up to one-half of the maximum period
of imprisonment specified for the concerned offence by
law. [Be it noted, this provision (Section 436A of the
1973 Code) is not available to accused who is facing trial
for offences punishable with death sentence]
421. In our opinion, therefore, Section 436A needs to
be construed as a statutory bail provision and akin to
Section 167 of the 1973 Code. Notably, learned Solicitor
General has fairly accepted during the arguments and
also restated in the written notes that the mandate of
Section 167 of the 1973 Code would apply with full force
even to cases falling under Section 3 of the 2002 Act,
regarding money-laundering offences. On the same logic,
we must hold that Section 436A of the 1973 Code could
be invoked by accused arrested for offence punishable
under the 2002 Act, being a statutory bail.”
(Emphasis added)
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17. Thus, the Supreme Court in Vijay Madanlal Choudhary vs.
Union of India1 has held that Section 436A of the CrPC will apply
even to the offences under the PMLA. Thus, what has been held is
that in case of violation of Article 21 of the Constitution of India,
the rigors of Section 45 of PMLA can suitably be relaxed.
18. The said observations in the decision of Vijay Madanlal
Choudhary (supra) were considered by the Supreme Court in the
decision of Ajay Ajit Peter Kerkar v. Directorate of Enforcement &
Anr.2. The Supreme Court in Paragraph No.3 of the said decision,
has held as follows:-
“3. In the facts of this case, the appellant will
complete 3½ years of incarceration on 26 th May,
2024. Thus, he will complete half of the prescribed
sentence. In this case, obviously the trial has not
started, as the charge has not been framed. This
Court has held that Section 436A of the Code of
Criminal Procedure, 1973 (for short “CRPC”) will
apply even to a case under the PMLA. But the Court
can still deny the relief owing to the ground such as
where the trial was delayed at the instance of the
accused. As stated earlier, here there is no occasion
for the appellant to cause the delay in trial, as even
charge has not been framed. Moreover, there is no
other circumstance brought on record which will1 (2023) 21ITR-OL 1: 2022 SCC OnLine SC 929
2 Criminal Appeal Nos.2601-2602 of 2024 [Arising out of S.L.P. (Criminal) Nos.6090-
6091 of 2024]Page 23 of 28
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10-BA-2251-2023.DOCcompel us to deny the benefit of Section 436A of
the CRPC to the appellant.”
(Emphasis added)
19. Speedy trial is one of the facets of right to life and liberty
guaranteed under Article 21 of the Constitution of India. Speedy
trial is an essential ingredient of “reasonable, fair and just”
procedure guaranteed by Article 21 and it is the constitutional
obligation of the State to device such a procedure as would ensure
speedy trial to the Accused.3
20. As far as the scheduled offences are concerned i.e. C. R. No.
26 of 2020, there are about 256 witnesses proposed to be
examined by the prosecution. Insofar as the present case is
concerned, 9 witnesses are proposed to be examined by the
prosecution. The Charge-sheet in both the cases is voluminous. It is
an admitted position that both the cases will be tried
simultaneously and trial has not yet commenced. Thus, this is a
case where the trial is unlikely to conclude any time soon and is
likely to take a considerably long time. As noted herein above, the
Applicant has completed more than half of the punishment and
3 Hussainara Khatoon (IV) v. Home Secy., State of Bihar, (1980) 1 SCC 98
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therefore, entitled to the benefit of Section 436A of the CrPC.
There is no material on record to show that the Applicant is
responsible for delay in conducting the trial. There is no other
circumstance brought to the notice of this Court which will
disentitle the Applicant to seek benefit of Section 436A of CrPC.
21. In the present case, the Applicant has been arrested in the
scheduled offences on 24th February 2020. The Applicant has been
arrested in the PMLA case on 5th March 2021 when he was in
custoday in scheduled offences. Thus, the Applicant is behind bar
for about 4 years and 8 months. As the Applicant has been arrested
in the PMLA case on 5th March 2021 and therefore even if the date
of arrest in the PMLA case i.e. 5 th March 2021 is taken into
consideration then also the Applicant is incarcerated for about 3
years and 7 months which is half of the maximum punishment (i.e.
7 years) prescribed for offence punishable under Section 4 of the
PMLA.
22. Thus, case is made for grant of bail to the Applicant on the
ground of long incarceration.
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23. Accordingly, the Applicant can be enlarged on bail by
imposing conditions.
24. In view thereof, the following order:-
ORDER
(a) The Applicant- Tanaji Dattu Padwal be released on
bail in Special Case No.485 of 2021 registered in
connection with EICR/MBZO-II/03/2020, registered
at Mumbai Zonal Office-II, Mumbai, for the offence
punishable under Section 4 of the Prevention of
Money Laundering Act, 2002, on his furnishing P.R.
Bond of Rs.50,000/- with one or two local solvent
sureties in the like amount.
(b) On being released on bail, the Applicant shall furnish
his cell phone number and residential address to the
Investigating Officer and shall keep the same updated,
in case of any change thereto.
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(c) The Applicant shall report to the Mumbai Zonal
Office-II, Mumbai once in a month, on first Friday
between 11:00 a.m. and 1:00 p.m. until the
conclusion of the trial.
(d) The Applicant shall not directly or indirectly make any
inducement, threat, or promise to any person
acquainted with the facts of the case, so as to dissuade
such a person from disclosing the facts to the Court or
to any Police personnel.
(e) The Applicant shall not tamper with the prosecution
evidence and shall not contact or influence the
Complainant or any witness in any manner.
(f) The Applicant shall attend the trial regularly. The
Applicant shall co-operate with the Trial Court and
shall not seek unnecessary adjournments thereat.
(g) The Applicant shall surrender his passport, if any, to
the Investigating Officer.
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25. The Bail Application is disposed of accordingly.
26. It is clarified that the Trial Court shall decide the case on its
merits, uninfluenced by the prima facie observations made in this
order.
[MADHAV J. JAMDAR, J.]
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