2025:CGHC:4698 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR CRMP No. 3190 of 2024 Reserved on : 20.12.2024 Delivered on : 27.01.2025 Ranu Sahu, W/o Jai Prakash Mourya, Aged About 39 Years, R/o D-2/29, Officers Colony, Devendra Nagar, Raipur, District- Raipur (C.G.) --- Applicant Versus Directorate of Enforcement, Represented through Assistant Director, Raipur Zonal Office (C.G.) --- Respondent For Applicant : Mr. Manu Sharma, Advocate along with Mr. Mahendra Dubey, Advocate. For Respondent : Dr. Saurabh Kumar Pande, Advocate. Hon'ble Shri Justice Narendra Kumar Vyas CAV ORDER 1. The petitioner has filed this petition under Section 528 of the Bhartiya Nagrik Suraksha Sanhita, 2023 for quashing of arrest of the applicant in Crime No. ECIR/RPZO/02/2023 dated 20.03.2023 registered at Police Station- Directorate of Enforcement, Zonal Office, Raipur (C.G.) for the offence punishable under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002 (for short “the PMLA, 2002”) and ARUN KUMAR DEWANGAN Digitally signed by ARUN KUMAR DEWANGAN Date: 2025.01.28 11:52:06 +0530 subsequent remand order dated 17.10.2024 passed by the learned Special Judge, PMLA, Fourth Additional Sessions Judge, Raipur. 2. The applicant herein was arrested on 17.10.2024 by the respondent for the alleged commission of the offence punishable under Section 3 & 4 of PMLA, 2002. On 17.10.2024, the applicant was remanded to ED's custody for a period of 5 days, i.e. up to 22.10.2024. Thereafter, on 22.10.2024, the applicant was remanded to judicial custody for 14 days, which has been continued vide subsequent orders from time to time passed by the learned Special Judge, Raipur. 3. The case of the prosecution, in brief, is that the case relates to corruption and financial irregularities while releasing District Mineral Fund (DMF). It is also case of the Enforcement Directorate that said irregularities came into the knowledge of the Enforcement Directorate through open source information and FIR registered in this case. It is also case of the prosecution that during the preliminary investigation, intelligence input was received wherein it has come to the notice that the Government officials are involved in demanding for commission to release the payment for DMF work done by the contractors. The Enforcement Directorate has also collected and analyzed the bank details of the suspected persons/contractors and on equiry, it was observed that there is clear sign of siphoning off DMF and as per the prosecution case, the applicant was involved in the commission of offence. It is further case of the prosecution that the applicant who is an IAS Officer and posted as District Collector, Balod in 2019 and from June 2021 to June 2022 in Korba has demanded bribe from the contractors. The Enforcement Directorate has recorded the statements under Section 50 of the PMLA, 2002 of various vendors working under DMF and the Chief Executive Officers of Janpad Panchayat in Balod and Korba wherein some of the vendors have stated that they have paid illegal commission to the applicant. One of Chief Executive Officer, Janpad Panchayat posted in the District where the applicant was posted, has also stated that commission against DMF work has been paid to the applicant. It is also case of the Enforcement Directorate that during investigation, various corroborative evidences have also been gathered which confirms the receipt of bribe by the applicant. During investigation, the prosecution has recorded the statement of accused person, their associates, entry provider and seller of property to the accused persons and their family members. Against the present applicant, the Enforcement Directorate recorded statement on 16.08.2023, 17.08.2023, 18.10.2024, 19.10.2024, 20.10.2024, 21.10.2024 & 22.10.2024. The prosecution has collected the evidence to prove that the accused and properties are involved in the money laundering which prima facie suggests the involvement of the applicant in the crime in question. The Enforcement Directorate has recorded statement of Rakesh Kumar Shukla one of the vendor who has got DMF contracts during the Collectorship of the applicant who has stated that commission amounting to Rs. 10,42,44,960/- @ 40% received was given to the applicant through B.S. Rai. Similarly another vendor Sanjay Shende whose statement was recorded on 22.07.2023 has stated that the applicant told him that tender will not be given to his firm without commission amount. He agreed to give 20% commission to the applicant in lieu of tenders under DMF accordingly, he has paid Rs. 19,26,96,861/- which approximately @ 20% of the payment received from DMF work in Korba District. He has also stated that money has been collected from Manoj Kumar Dwivedi and applicant’s brother Piyush Sahu and his man on instructions of Maya Variyar. The Enforcement Directorate has also collected the material regarding receipt of bribe of Manoj Kumar Dwivedi who was controlling and managing NGO namely Udgam Sewa Samiti and his NGO was awarded training related DMF work in Korba and Balod District with the help of the applicant for which commission was paid by Manoj Kumar Dwivedi. The details have also been annexed with the ECIR. Similarly the Enforcement Directorate has also detailed receipt of bribe from vendors namely Ashok Kumar Agrawal, Mukesh Kumar Agrawal & other contractors as mentioned above that Rs. 55,37,45,515/- have been received as commission from these vendors. Thus, prima facie the investigation has collected the evidence which clearly establishes that the applicant is directly involved and knowingly party in the process connected with the proceeds of crime i.e. acquisition, possession, concealment, use and projection of such proceeds of crime as untainted and thus, committed the offence of money launder as defined under Section 3 of the PMLA, 2002 and liable to be prosecuted under Section 4 of the PMLA, 2002. 4. Learned counsel for the applicant would submit that the grounds of arrest and reasons to believe on the basis of which the Enforcement Directorate has arrested the petitioner in ECIR/RPZO/02/2023 are in contravention with the safeguard envisaged under Section 19 of the PMLA, 2002, therefore, petitioner’s arrest and subsequent remand order passed by the learned Special Judge deserves to be quashed as illegal, as such, the applicant ought to be released on bail. He would further submit that the reasons to believe demonstrate that Enforcement Directorate has not collected any evidence apart from purported statements of seven vendors and one Chief Executive Officer of Janpad Panchayat recorded under Section 50 of the PMLA, 2002 which are vague in nature and not supported with other cogent material/evidence, therefore, the reasons to believe does not satisfy the threshold of nature of material and the strength of opinion required to exercise discretion on power of arrest under Section 19 of PMLA, 2002. He would further submit that no independent enquiry has been conducted by the Investigating Officer to ascertain the veracity of claims of such witnesses since there is absence of material in support of such claims relied upon by the Enforcement Directorate while recording reasons to believe under Section 19 of the PMLA, 2002. He would further submit that in absence of any identification or quantification of proceeds of crime, it cannot be said that the applicant has either acquired such proceeds or dealt with them in any manner as it is trite law that the proceeds of crime are a sine qua non for commission of offence under PMLA, 2002 and in absence of the same, there cannot be a reason to believe that the offence has been committed by the petitioner under the PMLA, 2002. He would further submit that the entries in diary seized in the present case is neither relevant nor specific or explained in detail so as to constitute material sufficient to form reasons to believe as it is well settled that the petitioner cannot be held liable for any wrong doing merely on the basis of entries contained in private diaries maintained by third parties. There is no material to connect such purported diary entries with the petitioner and there is no averment to allege the same. He would further submit that the petitioner since Collector/ Chairperson of the DMF Trust is only administrative sanction authority who can only approve work after due approval is by the Governing council, therefore, there is no direct link between the District Collector and the vendors. It appears that the Enforcement Directorate has not done any verification of the duty, powers and function of the District Collector in DMFT as per the DMFT Rules, 2016 so as to assess the extent and possibility of involvement of the District Collector in the allocation of contracts under DMFT to vendors or disbursement of allocated amounts. 5. He would further submit that no independent FIR has been lodged against the petitioner in relation to any non-compliance of DMFT Rules, 2016 despite other FIRs pending in relation to purported DMF scam from 2016. The only FIR No. 03/2024 has been registered against the petitioner by the Enforcement Directorate in relation to DMF in which she has not been questioned by the ACB which shows that the said FIR has been lodged to somehow overcome the legal defect of absence of scheduled offence qua the petitioner as other DMF FIRs which are on the basis of ECIR/RPZO/02/2023 registered after the tenure of the petitioner as District Collector, Korba. He would further submit that the Enforcement Directorate has targeted and adopted selective manner as the petitioner was only implicated as on the ground of her being District Collector, Korba, which is rich coal district and none of the predecessors and successors has been implicated by the Enforcement Directorate. He would further submit that the arrest of the petitioner was solely for the purpose of investigation which is in violation of Section 19(1) of the PMLA, 2002, but no cogent material in order to make out the case against the petitioner under PMLA, 2002 has been placed by the Enforcement Director, therefore, the arrest of the petitioner is clearly premature and liable to be set aside. He would further submit that the reasons to believe supplied by the Enforcement Directorate has concealed material details of the persons/vendors on whose statement recorded under Section 50 of the PMLA, 2002, the petitioner has been purported guilt, as such, the reasons to believe furnished by the Enforcement Directorate is bad in law and liable to be set aside on this ground alone. He would further submit that the grounds of arrest along with reasons to believe are generic and vague and suppressed all material particulars forming basis facts which may have been necessary for the petitioner to argue remand/bail, therefore, the arrest of the petitioner is in violation of Section 19 of the PMLA, 2002. He would further submit that the arrests have been made by two investigating agencies in nexus with each other in a manner to sabotage the bail granted to the petitioner without duly informing the Hon’ble Courts about the next strategically placed arrest of the petitioner. He would further submit that Enforcement Directorates has failed to show any facts and circumstances which necessitated petitioner’s arrest who is already in judicial custody in another matter, could have been questioned by the Enforcement Directorate for the purposes of investigation without being arrest. The Enforcement Directorate has also failed to show that only an arrest could have made the petitioner to cooperate with the investigating process. The Enforcement Directorate has also failed to show or indicate more than prima facie why the custodial interrogation is required for the purpose of investigation. He would further submit that no other equally efficacious remedy is available with the petitioner for protecting her fundamental right guaranteed under the Constitution of India and the petitioner is entitled for grant of relief and would pray for allowing this petition. 6. To substantiate his submission, learned counsel for the applicant would refer to the judgment rendered in case of Arvind Kejriwal Vs. Directorate of Enforcement [2024 SCC OnLine SC 1703], Vijay Madanlal Chaudhary & others Vs. Union of India & others [2022 SCC OnLine SC 929], Prabir Purkayastha Vs. State of NCT of Delhi [(2024) 8 SCC 254], Pankaj Bansal Vs. Union of India [(2024) 7 SCC 576] & V. Senthil Balaji Vs. State & others [(2024) 3 SCC 51]. 7. On the other hand, Mr. Saurabh Pandey, learned counsel for the respondent would submit that the case is related to corruption in the use of funds released by District Mineral Funds Trust. DMFT is a trust funded by the revenue generated from excavation of minerals which has been set up in all districts of Chhattisgarh with an aim to work for the benefits of those affected by mining related projects and activities. However, huge corruption and financial irregularities came into the knowledge of ED through open-source information and FIRs registered in this case. He would further submit that ECIR bearing No. ECIR/RPZO/02/2023 dated 20.03.2023 was recorded on the basis of an FIR bearing No. 24/2019 dated 16.10.2019 registered against Shrikant Dubey and others by EOW/ACB, Raipur, Chhattisgarh under Section 13(1)(a) of the Prevention of Corruption Act, 1988 read with Sections 409 and 120-B the IPC. Further, FIR bearing No. 08/2023 dated 17.07.2023 registered by Chhattisgarh Police, P.S. Tadoki, Distt. Kanker under Sections 120(B), 420, 267 & 471 of IPC in respect of embezzlement of DMF by the public servants in connivance with the private vendors was also incorporated in the ECIR by way of issuing addendum dated 29.08.2023. In the first FIR bearing No. 24/2019 dated 16.10.2019, closure report has been filed by EOW/ACB Raipur, which has been accepted by the Court. However, first addendum to ECIR was issued on the basis of an FIR filed by Chhattisgarh Police in Kanker District before the above closure report. He would further submit that another FIR No. 02/2024 dated 16.01.2024 registered by EOW, Raipur against Mrs. Ranu Sahu, Sanjay Shende, Ashok Kumar Agarwal, Mukesh Kumar Agarwal, Hrishabh Soni, Manoj Kumar Dwivedi, Ravi Sharma, Piyush Soni, Piyush Sahu, Abdul and Shekhar on the basis of disclosure made by Directorate of Enforcement under Section 66(2) of the PMLA, 2002. The said FIR No. 02/2024 dated 16.01.2024 was registered for criminal conspiracy in the allotment of various types of tenders under DMF for receiving illegal benefit and thereby causing illegal loss to the Government by committing financial irregularities in the use of District Mineral funds, which are punishable under Sections 120B, 420 of IPC and Sections 7 & 12 of the PC Act. These offences are also scheduled offences included in Paragraph-1 & 8 of Part -A of the Schedule to PMLA, 2002 as defined under Section 2 (1) (y) of the PMLA, 2002, therefore, this FIR was also incorporated in the ECIR by way of issuing addendum dated 23.02.2024. 8. He would further submit that on the basis of confidential verification and investigation of ED, it came to light that there is huge corruption and financial irregularities by public servants in connivance with contractors and others in the use of funds released by District Mineral Funds Trust. On scrutiny of the bank statements of the suspected persons/contractors, the data received from District Office, Korba in respect of use of DMF Funds and other financial details along with field enquiry/discreet enquiry in respect of suspected contractors, it is observed that there are clear signs of siphoning off of DMF funds. He would further submit that the purpose of identification/unearthing of the proceeds of crime and gathering evidence/record related to money laundering, searches were conducted on various suppliers/vendors and public servants and statement of these suppliers/vendors and public servants were recorded. Original applications filed for retention of the seized record and property have been confirmed by Adjudicating Authority (PMLA) in respect of above search and seizure. He would further submit that the vendors were agreed to pay commission to the public servants in lieu of work allotted under DMF. In pursuance thereof, major part of the funds credited in the bank account of the vendors was withdrawn in cash directly by the vendors or transferred to entities of accommodation entry providers against which cash was received. These transactions with the firm of any providers were shown as purchase of goods without actual purchase of goods. This cash was used to the purpose of paying illegal commission to the officials responsible for allotting the DMF work vendor clearing bills in this regard and part amount of this cash was used by the vendors. He would further submit that the funds for DMF work is sanctioned to various executive agencies by the District Collector who is also Ex- officio Chairman of District Mineral Fund. There were various executive agencies in the District for getting the work done by using DM Fund. Janpad Panchayat is one of the executive agencies for executing the work under DMF and CEO is head of Janpad Panchayat and entire DMF work under Janpad Panchayat is supervised by CEO, Janpad Panchayat. Moreover, CEO, Janpad Panchayat is responsible for releasing the bill amount to the concerned vendors/contractors. During the investigation, it is found that major part of DMF funds received by the vendors was withdrawn in cash by way of fake purchase, which shows that funds were misappropriated or siphoned off. Further, statement of various vendors were recorded, wherein they stated that before getting the tender under DMF, they agreed to pay the commission against the allotment of tender to the CEOs and then District Collector, the applicant. This percentage was upto 40-42% of total funds received by the vendors. Further, vendors also paid some commission to the accommodation entry providers for withdrawing these funds in cash. Thus, it is evident that proceeds of crime as defined under Sections 2(1)(u) of PMLA, 2002 were generated in this case by way of siphoning of DMF funds. 9. He would further submit that the petitioner was posted as District Collector, Balod in 2019 and later as District Collector, Korba from June 2021 to June 2022 and she was Ex-officio Chairman of District Mineral Fund Trust (DMFT). The collector/chairperson of the trust gives the administrative approval to the implementing agencies and issue sanction order to the implementing agencies in respect of various works under DMF. He would further submit that statements of various vendors working under DMF were recorded under Section 50 of PMLA, 2002, wherein some of the vendors stated to have paid illegal commission to the petitioner. The statement of Sanjay Shende, Ashok Kumar Agrawal, Mukesh Kumar Agrawal, Rishabh Soni, Manoj Dwivedi, Rakesh Shukla, Jignesh Patel, B.S. Raj were recorded by the Enforcement Directorate which clearly speaks about involvement of the applicant in connection with the crime in question. He would further submit that during arrest of applicant, all due procedures of arrest defined under section 19 of PMLA, 2002 were complied with and all the prevalent guidelines issued by Hon'ble Supreme Court were followed. During investigation, multiple evidences were collected on the basis of which reasons to believe was formed by the non-applicant to the effect that applicant had committed offence of Money Laundering by acquisition of proceeds of crime as defined under Section 2(1)(u) of PMLA. 2002 and her custodial interrogation was essential for advancement of investigation, therefore, the applicant was arrested by this office with permission of learned Special Judge (PMLA) Court. The applicant was also provided with copy of grounds of arrest and reasons to believe. He would further submit that the learned Special Judge after going through all the arrest documents and having been satisfied about legality of arrest, granted the ED custody and consequential judicial custody of applicant which cannot be said to be illegal or warrants interference by this Court. He would further submit that closure report filed in FIR No. 24/2019, it is submitted that offence as described in FIR no. 24/2019 is not the only scheduled offence for the ongoing PMLA investigation in instant ECIR but on the basis of the ECIR, the FIR No. 08/2023 dated 17.07.2023 has been lodged at P.S.- Tadoki, Kanker and FIR No. 02/2024 dated 16.01.2024 has been lodged by EOW/ACB Raipur for the scheduled offence to the ECIR No. ECIR/RPZO/02/2023 dated 20.03.2023. He would further submit that both these FIRs pertain to misappropriation of DMF by the public servants and have been incorporated in the ECIR by issuing addendum to ECIR. He would further submit that statements of multiple persons have been recorded under section 50 of PMLA, 2002 and in their statements, they have disclosed incriminating information in respect of the applicant. Further, the arresting officer had collected substantial material from the scrutiny of the bank statements of the suspected contractors of DMF, scrutiny of the data received from District Office, Korba in respect of use of DMF Funds and other financial details along with field enquiry/discreet enquiry carried by this Department, on the basis of which reasons to believe was formed that the applicant had been knowingly involved in offence of Money Laundering by acquisition of proceeds of crime as defined under Section 2(1)(u) of PMLA, 2002. He would further submit that after arrest of applicant, grounds of arrest in writing were duly forwarded to learned Adjudicating Authority (PMLA) as per direction of Hon'ble the Supreme Court in various judgment. He would further submit that the prosecution complaint has been filed in the case before the learned Special Judge (PMLA) on 09.12.2024. He would further submit that more arrest shall be made if need arises in the case to trace further proceeds of crime and to unearth role played by the other persons involved in money laundering as such, the contention of the applicant that the respondent department has not arrested any other persons in the case, is deserves to be rejected. He would further submit that the respondent had not arrested the applicant when there was no necessity of arrest, but was arrested when there arises a situation as per the mandate of Section 19 PMLA, 2002. By not arresting the applicant on some prior occasion when she was cooperating well, shows the bonafide on the part of the respondent. 10. He would further submit that the applicant is trying to mix two different independent cases with ulterior motive as ECIR bearing No. ECIR/RPZO/09/2022 dated 29.09.2022 pertains to illegal coal levy scam wherein the applicant is one of the accused persons and was arrested in that case for her role discovered in the coal scam whereas present ECIR pertains to misappropriation of DMF which is entirely different from coal case. The present ECIR/RPZO/02/2023 is an independent case and doesn't depend on the existence or outcome of ECIR/RPZO/09/2022. He would further submit that there is sufficient materials for the Enforcement Directorate to arrest the applicant, therefore, it cannot be said that without any foundation or reason to believe, they have arrested the applicant. He would further submit that whatever the submission made by learned counsel for the applicant is defence of the accused which can be ascertained after thread bearing evidence before the trial Court, therefore, the submission questioning the grounds of arrest and reason to believe are deserved to be rejected by this Court. 11. To substantiate his submission, he would also refer to the judgment rendered by Hon’ble the Supreme Court in case of Arnesh Kumar Vs. State of Bihar [(2014) 8 SCC 273], Vijay Madanlal Chaudhary & others Vs. Union of India & others [2022 SCC OnLine SC 929], State of Gujarat Vs. Mohanlal Jitamalji Porwal & others [(1987) 2 SCC 364]. 12. I have heard learned counsel for the parties and perused the documents placed on record including case diary with utmost satisfaction. 13. On the above factual foundation and submission, the point required for determination by this Court is:- “Whether the grounds of arrest and reasons to believe are available in the case and whether the remand order dated 07.10.2024 and subsequent remand orders are legal and justified or not.” 14. To appreciate this point, it is expedient for this Court to extract Section 19 of the PMLA, 2002 which reads as under:- “Section 19- Power to arrest.- (1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (that reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub- section, to the Adjudicating Authority, in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a [Special Court or] [Inserted by Finance Act, 2018 (Act No. 13 of 2018) dated 29.3.2018.] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the [Special Court or] [Inserted by Finance Act, 2018 (Act No. 13 of 2018) dated 29.3.2018.] Magistrates Court.” 15. From bare perusal of Section 19 of the PMLA, 2002, it is quite vivid that for arresting any person, any officer authorized has on the basis of material on his possession and through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002, then only, he is at liberty to arrest. This Section further provides that the said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception. 16. From the case diary and the statements of vendors recorded by the Enforcement Directorate, prima facie, there are grounds for arrest and reason to believe, are available in the case. The statement of Rakesh Kumar Shukla who is one of the vendors and beneficial owner of two NGOs namely Gyankosh Sikahan Samiti and Jamman Foundation and got DMF contracts during the collectorship of Ranu Sahu, has been recorded on 06.03.2024 under Section 50 of PMLA, 2002 wherein he has stated that 40% commission was given to senior officers including Ranu Sahu, Maya Varrier and other persons and due to hefty rate of commission/bribe, the quality of work/goods was compromised. He has further stated that the 40% commission was for Ranu Sahu was given through BS Raj and handed over entire 40% commission to BS Raj which has been corroborated by the statement of BS Raj who accepted that he collected commission from Rakesh Shukla for Ranu Sahu. In the statement recorded on 07.03.2024 and 19.03.2024, he has further stated that commission amounting to Rs. 10,42,44,960/- (40% of payments received was given to Ranu Sahu through BS Raj and the commission in cash was paid to BS Raj in multiple occasions at his residence and at other places. Similarly statement of another vendor, Sanjay Shende was recorded on 22.07.2023 under Section 50 of PMLA, 2002 wherein he has stated that when the applicant told him that the tender will not be given to his firms without commission amount, he agreed to give 20% commission to her in lieu of tenders under DMF. After that, she advised him to form 2-3 more firms of his own and participate in the tender through all the firms so that it appears that different people have participated in the tender process. In this way, Sanjay Shende got tenders worth around Rs. 120 crore and paid 20% commission of Rs. 20 crores approx. which comes out to Rs. 19,26,96,861/- to the applicant in lieu of these tenders. He has further stated that the commission money was collected by Manoj Kumar Dwivedi and applicant's brother Piyush Sahu and his men on instructions of Maya Varrier. He further stated that the applicant asked him to talk to Maya Varrier about the commission and after that Maya Varrier used to call him again and again, to enquire about applicant’s commission and used to tell him how and where to give the commission money, Sanjay Shende further stated that Maya Varrier provided him mobile number of Manoj Kamar Dwivedi (one of the vendors) and commission amount for the applicant was delivered to him 3-4 times. He further stated that Maya Varrier also provided mobile number of applicant’s brother Piyush Sahu to him and he had paid Rs. 1 to 12 crore to Piyush for the applicant and apart from the payment of approx. Rs. 20 crore by him, he has collected commission from Ashok Agrawal and Mukesh Agrawal (vendors for DMF works in Korba) for DMF related works and handed over to a person on instruction of Maya Varrier. This has also been accepted by Ashok Agrawal in his statement recorded under Section 50 of the PMLA, 2002 and the same has also been corroborated by the CDR analysis of mobile numbers of Ashok Agrawal, Mukesh Agrawal and Sanjay Shende. Page 18 of 27 17. Similarly statements of another DMF vendor Hrishabh Soni was also recorded on 26.07.2023 under Section 50 of PMLA, 2002 wherein he has stated that it was pre-decided that he would have to pay bribe to get contracts under DMF at a hefty rate of 15%, therefore, when he started submitting his bills for the work completed by him, he contacted by applicant’s middleman, Mr. Manoj Kumar Dwivedi and Maya Varrier to give commission for clearance of bills and when the bribe was paid by him to the applicant then only his bills were cleared. From the details submitted by Hrishabh Soni, it is evident that Rs. 8,31,70,775/- was given by him to the applicant as commission. He has further stated that on instructions of Maya Varrier, Manoj Kumar Dwivedi used to contact him on the phone and collected commission amount from his house. After handing over the commission money to Maya Varrier's men, he used to call Maya Varrier to confirm payment on phone and after that his bill was cleared within two-three days. Statement of Hrishabh Soni is also corroborated by the statement of Manoj Kamar Dwivedi wherein he has accepted that he used to collect the bribe amount from Hrishabh Soni and others on behalf of the applicant and on active instructions of Maya Varrier. From statement of Hrishabh Soni, it is also substantiated that Manoj Kumar Dwivedi was regularly in contact of Hrishabh Soni as per CDR data received from the telecom provider companies. 18. Similarly statements of Manoj Kumar Dwivedi who was controlling and managing NGO namely Udgam Sewa Samiti and awarded training related DMF works in Korba and Balod District with the help of applicant, was recorded wherein it has been stated that Rs. 32,71,14,274/- & Rs. 3,31,31,713/- were given to the applicant as commission through B.S. Raj & V.K. Rathore respectively as such total Rs. 6,58,45,987/- has been paid by him to the applicant as commission. He has further stated that he has paid commission @ 20% to 25% to the applicant for the work done by him in Balod District, which comes to Rs. 57,86,932/- for DMF related works allotted to his NGO in Balod District. Hence, total commission of Rs. 7,16,32,919/- was given by him to the appliant for DMF related works done by his NGO in Balod and Korba District through CEOs and Piyush Sahu. 19. Similarly statements of another DMF vendors, Ashok Kumar Agrawal & Mukesh Kumar Agrawal were recorded under Section 50 of the PMLA, 2002 wherein they have stated that ensuring contracts under DMF, the applicant had asked for 15% of the contract value as bribe to which they agreed, thereafter, during her collectorship of Korba, their firms were awarded DMF works amounting to Rs. 76 Crore approx. in the District. They further stated that commission @15% amounting to Rs. 10,20,00,000/- in lieu of tenders awarded under DMF, was paid by them to the applicant and this fact has been affirmed by the suppliers from whom the cash was received by them. These witnesses have further clarified the modus of payment to the applicant and they stated that they have given it Manoj Kumar Dwivedi. 20. Similarly statement of Bhuvneshwar Singh Raj (one of the CEO posted in Korba District) recorded under Section 50 of PMLA, 2002 wherein he has stated that Manoj Kumar Dwivedi mostly did training related work in which he could give more commission i.e. up to 40% of the tender amount. Further, Rakesh Kumar Shukla's NGO namely Gyankosh Sikahan Samiti was also given the contract work in Balod and Korba and bribe money was taken from him. He further stated that many times, he had given him bribe amount in cash for the applicant, which he had sent to Maya Varrier at her government residence. Apart from this, he had shared the mobile number of the person given by Maya Varrier which is Manoj Kumar Dwivedi and then handed over the commission amount to them. Two to three times, he had asked Manoj Kumar Dwivedi to give illegal commission amount to applicant’s brother Piyush Sahu, as per the instructions of Maya Varrier. 21. Further statement of Bharosa Ram Thakur (Nodal Officer, DMF Korba) was also recorded under Section 50 of PMLA, 2002 wherein he has stated that commission was paid to the applicant for DMF related works and in lieu of commission, contractors compromised with quality of work and get the same approved from the officers with the help of bribes. He has further stated that that contractor Jignesh Patel from Raipar used to come to him for getting payment cheques cleared and the applicant used to give him prompt direction regarding payment to Jignesh Patel. It is pertinent to mention here that during the investigation in another PMLA case, statement of Jignesh Patel was recorded under Section 50 of the PMLA, 2002 wherein he inter-alia stated that he was running a firm under which he has done work under DMF. With the help of an associate of Suryakant Tiwari key accused in other PMLA case, two tenders under DMF were awarded to his firm by the then Collector of Korba/ the applicant. The total cost of the project was Rs. 6 crore and Rs. 60 lakh as commission was paid to the associates of Suryakant in lieu of DMF work. Thus, from the statement of the vendors and the Chief Executive Officer, the details of commission amount received by the applicant are as under:- S.No. Vendors from whom commission received Amount (Rs.) 1. Rakesh Kumar Shukla 10,42,44,960/- 2. Sanjay Shende 19,26,96,861/- 3. Hrishabh Soni 8,31,70,775/- 4. Manoj Kumar Dwivedi 7,16,32,919/- 5. Ashok Agrawal & Mukesh Agrawal 10,20,00,000/- Total Rs. 55,37,45,515/- 22. Now this Court has to examine the case of the applicant vice versa case of the Enforcement Directorate whether there is compliance of Section 19 of the PMLA is done by the Enforcement Directorate or not. For considering this issue, it is expedient for this Court to extract the grounds of arrest and reason to believe dated 17.10.2024 recorded by the Enforcement Directorate, which read as under:- “Grounds of Arrest- During the investigation under PMLA, it is found that you are involved in the offence of money laundering under section 3 of the Prevention of Money Laundering Act, 2002 on following grounds: (i). An ECIR/RPZO/02/2023 was recorded on 20.03.2023 against Sh. Shrikant Dubey and others for commission of offence of money laundering as defined under section 3 of PMLA and punishable under section 4 of Prevention of Moncy Laundering Act, 2002. Further, 2 addendums to ECIR were issued on 29.08.2023 and 23.02.2024 on the basis of other 2 FIRs in respect of huge corruption and financial irregularities in the use of DMF funds. In one of the FIR, you are named as an accused by the EOW/ACB, Raipur. (ii). During the course of investigation, it has revealed that the funds for DMF work is sanctioned to various executive agencies by the District Collector who is also Ex- officio Chairman of District Mineral Fund Trust. Further, statement of various vendors were recorded, wherein they stated that before getting the tender under DMF. they agreed to pay the commission against the allotment of tender to the CEOs and District Collector. This percentage was upto 40-42% of total funds received by the vendors. Thus, it is evident that proceeds of crime as defined u/s 2(1)(u) of PMLA, 2002 were generated in this case by way of siphoning of DMF funds. Page 22 of 27 (iii). Further, you were posted as District Collector, Balod in 2019 and later you were posted as District Collector, Korba from June 2021 to June 2022. District Collector is the Ex-officio Chairman of District Mineral Fund Trust (DMFT). The collector/chairperson of the Trust gives the administrative approval to the implementing agencies and issue sanction order to the implementing agencies in respect of various works under DMF. (iv). During the investigation, it is found that DMF funds were being siphoned off by the public servants and the vendors in connivance with each other. For this purpose, the funds credited in the bank account of the vendors were withdrawn in cash directly by the vendors or transferred to entities of accommodation entry providers against which cash was received. These transactions with the firm of entry providers were shown as purchase of goods, however the same was fake purchase. (v). Further, this cash was used for the purpose of paying commission to the officers and officials responsible for sanctioning and allotting the DMF work or clearing bills in this regard and part amount of this cash was used by the vendors. (vi). Statements of various vendors working under DMF and the then CEOs of Janpad Panchayats in Balod and Korba were recorded u/s 50 of PMLA, 2002, wherein some of the vendors stated to have paid illegal commission to you. Further, one CEO stated that commission against DMF work was paid to you. Therefore, it is evident that you were receiving commission against the DMF work allotted to the vendors. (vii). Thus, you have acquired the proceeds of crime generated by way of siphoning of DMF funds. That, it is evident that you have directly & knowingly involved in acquisition of the Proceeds of Crime and use of the Proceeds of crime. (viii). Investigation further revealed that you have knowingly involved in processes e Money Laundering by acquisition of proceeds of crime. Though the Enforcemen Directorate has collected substantial material to show the facts narrated in deta above, it is only after your custodial interrogation that the investigation is capab of being fully completed and the truth being unraveled. (ix). That your custodial interrogation, which is qualitatively more elicitation oriented, is absolutely necessary in this case as there are many aspects of the investigation that need to be carried out. (x). From the above facts, I. Vinod Kumar, Assistant Director. Directorate of Enforcement, Raipur Zonal Office, have reason to believe that you have committed an offence as specified under Section 3 of PMLA 2002 and is liable for punishment under Section 4 of PMLA 2002. You have directly attempted to indulge and are actually involved in process or activity connected with the proceeds of crime. There are sufficient evidences on record, which clearly brings out that the above specified offence is being committed with full disregard to the statutory provisions with an intention to launder money. Therefore, you are guilty of the offence of Money Laundering as defined under section 3 and punishable under Section 4 of the PMLA. 2002. Therefore, in view of above and in order to complete the investigation expeditiously, your custodial interrogation is necessary. Your arrest under section 19(1) of PMLA, 2002 is necessary to- i. To explain the evidences gathered in the case. ii. To confront her with various persons who are involved in these activities. iii. To trace out the diverted funds which is the proceeds of crime. iv. To identify other persons involved in these activities.” 23. On the basis of investigation conducted by the Enforcement Directorate, statement of vendors and other witnesses recorded under Section 50 of the PMLA, 2002 which has already been referred by this Court in foregoing paragraph, has recorded its finding with regard to reason to believe which reads as under:- “Reasons to Believe- xxx xxx xxx (ix). Thus. Ranu Sahu has acquired the proceeds of crime generated by way of siphoning of DMF funds. That, it is evident that Mrs. Ranu Sahu has directly & knowingly involved in acquisition of the Proceeds of Crime and use of the Proceeds of crime. (x). Investigation further revealed that Mrs. Ranu Sahu is knowingly involved in processes of Money Laundering by acquisition of proceeds of crime. Though the Enforcement Directorate has collected substantial material to show the facts narrated in detail above, it is only after the custodial interrogation of Mrs. Ranu Sahu that the investigation is capable of being fully completed and the truth being unraveled. (xi). That the custodial interrogation, which is qualitatively more elicitation oriented, of Mrs. Ranu Sahu is absolutely necessary in this case as there are many aspects of the investigation that need to be carried out. (xii). From the above facts, I have reason to believe that Mrs. Ranu Sahu has committed an offence as specified under Section 3 of PMLA 2002 and is liable for punishment under Section 4 of PMLA 2002. She has directly attempted to indulge and is actually involved in process or activity connected with the proceeds of crime. There are sufficient evidences on record, which clearly brings out that the above specified offence is being committed with full disregard to the statutory provisions with an intention to launder money. Therefore, she is guilty of the offence of Money Laundering as defined under section 3 and punishable under Section 4 of the PMLA. 2002. The investigation about properties, purchased from proceeds of crime is going on. Therefore, in view of above and in order to complete the investigation expeditiously, her custodial interrogation is necessary. Her arrest under section 19(1) of PMLA. 2002 is necessary to- i. To explain the evidences gathered in the case ii. To confront her with various persons who are involved in these activities. iii. To trace out the diverted funds which is the proceeds of crime. iv. To identify other persons involved in these activities.” 24. On the basis of material submitted by the Enforcement Directorate, the learned Special Judge (PMLA) has passed order of remand on 17.10.2024. From bare perusal of the remand order dated 17.10.2024 passed by the learned Special Judge (PMLA) granting remand of the applicant has given reason wherein it has clearly stated that after long period of registration of ECIR/RPZO/02/2023, the applicant has been arrested, which cannot be a ground to create doubt regarding the proceedings or the proceedings can be termed as illegal. Since the investigation is at the initial stage and the accused has been produced before the Court within time period, the information regarding arresting has been communicated to the family member of the applicant, as such the defence taken by the applicant to question the custodial remand, is not sustainable and has rejected the same. It is pertinent to mention here that before rejecting the same, the learned trial Court has considered the prima facie facts reflected in the remand application and necessity to interrogate the applicant, has granted custodial remand on 17.10.2024 which has been further extended. Thus, learned Special Judge (PMLA) has categorically recorded its reason and satisfaction while granting the remand of the applicant to the Enforcement Directorate. Thus, there is compliance of Section 19 of the PMLA, 2002 and the order dated 17.10.2024 passed by the learned Special Judge (PMLA) is legal, justified and does not warrant any interference by this Court. 25. From the material available in the case diary and the statement of the vendors recorded under Section 50 of the PMLA, 2002 and also considering the facts that while arresting the applicant, reasons have been assigned by the Enforcement Directorate and in the remand order also, the learned trial Court has applied its mind. As such, the contention raised by learned counsel for the applicant that the custodial remand order dated 17.10.2024 and subsequent extended order of remand, are bad in law, deserve to be rejected and accordingly, it is rejected. Accordingly, the point determined by this Court, is answered against the applicant. Even otherwise, the exercise of power by the High Court under Section 482 of the Cr.P.C. which is analogous to Section 528 of Bhartiya Nagrik Suraksha Sanhita, 2023 has been considered by Hon’ble the Supreme Court in case of State of Chhattigarh Vs. Aman Kumar Singh & others [AIR 2023 SC 1441] wherein it has been held the proper course for the High Court in case under PC Act would be to permit the investigation to be taken to its logical conclusion and leave aggrieved party to pursue to the remedy made by law at appropriate stage and the Court should be careful circumspect and cautious in quashing FIR on the basis of allegation of malafide motive. Hon’ble the Supreme Court in paragraph 74 has held as under:- “74. Finally, following the above, what is of substantial importance is that if criminal prosecution is based upon adequate evidence and the same is otherwise justifiable, it does not become vitiated on account of significant political overtones and mala fide motives. We can say without fear of contradiction, it is not in all cases in our country that an individual, who is accused of acts of omission/commission punishable under the P.C. Act but has the blessings of the ruling dispensation, is booked by the police and made to face prosecution. If, indeed, in such a case (where a prosecution should have been but has not been launched) the succeeding political dispensation initiates steps for launching prosecution against such an accused but he/she is allowed to go scot-free, despite there being materials against him/her, merely on the ground that the action initiated by the current regime is mala fide in the sense that it is either to settle scores with the earlier regime or to wreak vengeance against the individual, in such an eventuality we are constrained to observe that it is criminal justice that would be the casualty. This is because, it is difficult to form an opinion conclusively at the stage of reading a first information report that the public servant is either in or not in possession of property disproportionate to the known sources of his/her income. It would all depend on what is ultimately unearthed after the investigation is complete. Needless to observe, the first information report in a disproportionate assets case must, as of necessity, prima facie, contain ingredients for the perception that there is fair enough reason to suspect commission of a cognizable offence relating to “criminal misconduct” punishable under the P.C. Act and to embark upon an investigation. Having regard to what we have observed above in paragraph 49 (supra) and to maintain probity in the system of governance as well as to ensure that societal pollutants are weeded out at the earliest, it would be eminently desirable if the high courts maintain a hands-off approach and not quash a first information report pertaining to “corruption” cases, specially at the stage of investigation, even though certain elements of strong-arm tactics of the ruling dispensation might be discernible. The considerations that could apply to quashing of first information reports pertaining to offences punishable under general penal statutes ex proprio vigore may not be applicable to a P.C. Act offence. Majorly, the proper course for the high courts to follow, in cases under the P.C. Act, would be to permit the investigation to be taken to its logical conclusion and leave the aggrieved party to pursue the remedy made available by law at an appropriate stage. If at all interference in any case is considered necessary, the same should rest on the very special features of the case. Although what would constitute the special features has necessarily to depend on the peculiar facts of each case, interference could be made in exceptional cases where the records reveal absolutely no material to support even a reasonable suspicion of a public servant having intentionally enriched himself illicitly during the period of his service and nothing other than mala fide is the basis for subjecting such servant to an investigation. We quite appreciate that there could be cases of innocent public servants being entangled in investigations arising out of motivated complaints and the consequent mental agony, emotional pain and social stigma that they would have to encounter in the process, but this small price has to be paid if there is to be a society governed by the rule of law. While we do not intend to fetter the high courts from intervening in appropriate cases, it is only just and proper to remind the courts to be careful, circumspect and cautious in quashing first information reports resting on mala fide of the nature alleged herein.” 26. In view of the above law laid by Hon’ble the Supreme Court in case of Aman Kumar Singh (supra) and considering the facts, the instant petition filed under Section 528 of the Bhartiya Nagrik Suraksha Sanhita, 2023 is liable to be and is hereby rejected. 27. The observation made by this Court is not bearing any effect on the trial of the case. The learned trial court will decide the criminal trial in accordance with evidence, material placed on record, without being influenced by any of the observation made by this Court while deciding the present petition. Sd/- (Narendra Kumar Vyas) Judge Arun