The Union of India vs Ramani Mistry

A.K. Banerjee, J.—This appeal would arise out of an order passed by the Appellate Tribunal, Prevention of Money Laundering Act, New Delhi, whereby the Tribunal exonerated the respondent from all the charges brought against him under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the PML Act) with cost imposed on the authority for Rs. 15,000/-. Being aggrieved, the authority preferred this statutory appeal that we heard on the abovementioned date.

The facts that led to the controversy would relate back to an incident occurred on September 12, 2007 when the Sub-Inspector, Diglipur Police Station, North & Middle Andaman, arrested the respondent Ramani Mistry on the charge of selling cannabis (ganja) and thereby prosecuted him under the Narcotic Drugs & Psychotropic Substances Act, 1985 (hereinafter referred to as the NDPS Act). The prosecution story as we find from the judgment of the Criminal Court so discussed in the judgment of the Appellate Tribunal impugned herein, would depict, Ramani Mistry a resident of Village Subash Gram under Diglipur Tehsil, District of North & Middle Andaman, was arrested by the police on the charge of selling cannabis (ganja). The police party along with the Executive Magistrate, Diglipur and the B.D.O., Diglipur searched the house of Ramani on September 12, 2007. During search the police party seized 48 grams of cannabis (ganja) recovered from his residence. An FIR was lodged u/s 20(b)(ii)A of the NDPS Act, 1985. The appellant was arrested and subsequently released on bail. Other than 48 grams of cannabis (ganja) neither any incriminating document nor any cash or valuable was recovered from his house. The learned Sessions Judge, Andaman & Nicobar Islands, framed the charges as per the charge-sheet filed on January 16, 2009. The learned Sessions Judge by his order dated April 09, 2009 observed, recovered quantity was very meagre and the accused did not have any reported antecedent. Moreover, the accused pleaded guilty. The learned Judge passed the following order:-

That the accused Ramani Mistry is held guilty u/s 229 Cr.P.C. on his own plea of guilt u/s 20(ii)(A) of the NDPS Act and is hereby sentenced to suffer imprisonment only for one day i.e. till rising of the court on this day and to pay fine of Rs. 500/- i/d to suffer R.I. for 10 days.

Thus, the criminal case initiated against him under the NDPS Act attained finality by the said order dated April 09, 2009 and more so, he suffered the punishment on the same day. He also deposited the fine so directed. After about two years the appellant filed a complaint through the Deputy Director, Directorate of Enforcement, Government of India, u/s 5(1) of the PML Act and prayed for confirmation of his provisional attachment order dated June 27, 2011. Significant to note, the authority attached his Savings Bank Account maintained in A & N State Co-operative Bank, Diglipur Branch attaching Rs. 2,88,845/- lying as closing balance as on December 15, 2010 with interest accrued thereon. It further appears that after about 8 months of the conviction imposed and suffered by the accused the authority filed the case on December 23, 2009 under the PML Act and commenced investigation and ultimately attached the Bank Account as stated above. During investigation, the authority came to know, Ramani''s father owned a plot of land measuring 30 bighas at Diglipur. He constructed a house that was rented to four tenants at the rate of Rs. 1,500/- each. Ramani also purchased an Auto Rickshaw out of the money he earned from timber business and agriculture, he sold the Auto at Rs. 1.4 lakhs. He also took Rs. 50,000/- from each of the tenants as advance. Thus, he explained the source of money that was lying in his Bank Account. The authority was not satisfied with the explanation and filed a complaint for confirmation of the provisional attachment order. The adjudicating authority under the PML Act registered the case as O.C. No. 108 of 2011 and adjudicated the issue. Ramani contended, he already pleaded guilty before the Criminal Court and suffered punishment. He had income from various sources that he explained. Moreover, he was an income tax payer and gave details of his tax return. The money lying in the Bank had no nexus with alleged sale of cannabis (ganja). He prayed for dismissal of the complaint. The authority also noted the admission of Ramani, he purchased 48 grams of cannabis (ganja) for self consumption from one Raju whose address was not known to him. The adjudicating authority observed, when the defendant himself admitted his guilt and underwent the sentence it would not be appropriate to look at it differently. Since the guilt was proved the adjudicating authority confirmed the provisional attachment by observing, the proceeds of the crime would come within the domain of the Enforcement Directorate. The adjudicating authority ordered the Bank to hand over the amount lying in the Bank along with accrued interest.

Being aggrieved, Ramani preferred an appeal before the Appellate Tribunal. The Appellate Tribunal re-apprised the whole issue and observed, though the appellant and his house were searched by police he was not found selling cannabis (ganja) and only 48 grams was recovered from his possession. The Court of Sessions already held him guilty and on the basis of his confession sentenced him. The Appellate Tribunal also observed, neither during search by police nor during investigation any evidence was found to indicate, he was selling cannabis (ganja). No cash or valuable was recovered from his possession. The Tribunal also considered the Bank statement. The deposits made in 2000 and 2003 and interest accrued thereon could not be the proceeds of the crime that was alleged in 2007. The Tribunal also observed, the schedule offence was already over on April 09, 2009. On April 29, 2010 the authority recorded the statement of the appellant. He disclosed the source of his earnings and the purpose for which he possessed cannabis (ganja). The Appellant also filed documents disclosing source of income. Hence there was no reason to issue such provisional attachment. The Tribunal considered the Apex Court decisions on the issue and ultimately held the seized cannabis (ganja) valued at Rs. 250/- only could not by itself prove the charge of selling cannabis (ganja) and thereby attracting attachment of the Bank Account in 2011. The Tribunal observed, plain reading of the reasoning given by the adjudicating authority would show, various presumptions raised by him were farfetched and without any basis and as such were not sustainable by any stretch of imagination. The appellate authority not only set aside the order of the adjudicating authority but also imposed cost on the respondent authority for Rs. 15,000/-. Being aggrieved, the authority preferred the instant appeal that we heard on the abovementioned date.

Ms. Tamali Biswas, learned counsel appearing for the appellants, would contend, the respondent admitted his guilt as per the charge brought against him. Hence the charge of selling cannabis (ganja) was proved to be hilt by his admission. The punishment suffered under the NDPS Act would have no bearing on the proceeding under the PML Act as both the acts would operate in different fields, although emanating from same incident. According to her, the respondent could not give plausible answer to the source of income that the adjudicating authority considered. The explanation offered by the respondent before the adjudicating authority did not inspire confidence on them. The Appellate Tribunal should not have upset the same. She also prayed for setting aside of the cost so awarded in favour of the respondent.

We have considered the rival contentions. We have carefully considered the decisions of the adjudicating authority, the appellate authority as well as the order of the learned Sessions Judge. The incident occurred in 2007. Ramani suffered punishment in 2009 by way of pleading guilty. We fully agree with the appellant, two Acts would operate in a different field. NDPS Act would deal with the criminality involved in the incident whereas PML Act would deal with the proceeds received by the accused out of the crime. In the instant case, the incident occurred in 2007 that would relate to a minimal quantity of cannabis (ganja). The NDPS Act would itself recognise the difference between small quantity and commercial quantity. Cannabis (ganja) below 1000 grams was not considered as commercial quantity. Hence charge of selling cannabis could not be proved. If we look to the charge that the Criminal Court framed against him, we would find, he was punished for illegal possession of 48 grams of cannabis (ganja) and thus punished u/s 20(b)(ii)A that would not deal with the commercial activity. Section 20(b)(ii)A would provide, whoever in contravention of any provision of the said Act produces, manufactures, possesses, sells, purchases, transports, imports inter-State, exports inter-State or uses cannabis shall be punishable and where such contravention relates to sub-clause (b) involving small quantity, that would attract imprisonment for maximum term of six months. "Small quantity" was defined u/s 2(xxiiia) that would mean, any quantity lesser than quantity specified by the Central Government by notification. In case of cannabis (ganja) the notification would suggest, "small quantity" would be less than 1000 grams. 48 grams would amount to only 5% of the maximum small quantity. While pleading guilt Ramani gave his explanation that could be reasonable and sustainable. He would contend, he purchased it for his own consumption. Mere possession of 48 grams would itself not suggest, he was doing business by selling cannabis (ganja). The question of proceeds would only come when the authority would be in a possession to prove the crime. Moreover, Ramani could give explanation as to the source of money. Even if the authority was not fully convinced that the source the money had been deposited much prior to the occurrence in no stretch of imagination it could come within the mischief of the said Act of 2002.

Section 5 would have three pre-requisites. (a) The person must be in a possession of the proceeds of crime. (b) He has been charged for the schedule offence. (c) Proceeds are likely to be concealed, transferred or dealt with. The present case would satisfy (b). However, so far (a) and (c) are concerned, the authority would level their case on the basis of surmise and conjectures. The money attached were all reflected in Income Tax return for the consecutive years. There was no attempt to withdraw the money abruptly. How this could within the mischief of Section 5, is not intelligible to us.

The learned Appellate Tribunal rightly applied the Apex Court decision in the case of Sheo Nath Singh Vs. Appellate Assistant Commissioner of Income Tax, Calcutta, . The Apex Court therein observed, "reason to believe" must be that of an honest and reasonable person based upon reasonable grounds. A reasonable man must be convinced that the property which he was dealing with, was liable to confiscation. The Appellate Tribunal treated the entire Bank Statement a part of the judgment. We find, the deposits were made since January 2000. The deposits would suggest, the money accrued interest. There was no abrupt withdrawal. From 2000 to 2008 there was no withdrawal. In 2009 there was a withdrawal of Rs. 34,000/- whereas in January 2010 there was withdrawal of Rs. 30,500/-. The incident occurred in 2007. From the statement we find, there was no withdrawal in the said year. If someone would sell cannabis (ganja) he would not only deposit the proceeds but also would withdraw a part of it for purchase of the same from the supplier. Assuming it was through cultivation the cost of cultivation would also feature in the accounts.

The adjudicating authority was not satisfied about two cash deposits in 2009 for Rs. 80,000/- and Rs. 1 lakh respectively. Though the appellants could not accurately explain the source about the said two entries there was no doubt his father had agricultural land from which they had income on regular basis. Moreover, he had income from Auto and other source that would reflect in the Income Tax returns. From a sum total of the facts that we find from the available records, we are constrained to observe, the respondent was harassed unnecessarily.

We have carefully considered the issue in detail and do not find any scope to interfere. As observed earlier, Ms. Biswas insisted, we should make the cost easy. We do not feel it prudent to do so.

The appeal fails and is hereby dismissed. There would be no order as to costs.

Tapabrata Chakraborty, J.

I agree.