Mr. Narendra Kumar Gupta (Petitioner) was arrested on the basis of an ECIR registered for offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA) for allegedly abetting in the offence of International Trade Based Money Laundering by receiving proceeds of crime in the Bank Account of the Hong Kong Company owned by him, and thereby caused loss of Foreign Exchange to the tune of Rs. 22.60 crores. The Petitioner while praying for bail claimed that he was a mere scapegoat in the hands of one Sukhjeet and that three similarly places persons involved in the alleged offence were granted bail. The Petitioner also claimed that he was suffering from a terminal disease and was entitled to bail.

The Madras High Court was inclined to grant bail on the following grounds:

  • No prima facie case with regard to active participation of the petitioner in the scam is established with respect to the alleged accumulation of "proceeds of crime".
  • The petitioner has complied with the twin conditions for the grant of bail as provided under Section 45(1) of PLMA.
  • The medical reports produced by the petitioner showed the severity of the aliment that the Petitioner had been suffering for years and the court noted that he required medical intervention at once. The requirement of his personal liberty on health grounds, cannot be curtailed on the basis of mere suspicion of his role and half-baked investigation.

Narendra Kumar Gupta vs. State rep. by Assistant Director, Directorate of Enforcement, Government of India, Ministry of Finance, Department of Revenue, No. 84, Greams Road Thousand Lights, Chennai – 600006, Crl. O.P. No. 25190 of 2022

[Madras High Court]


While Police was on patrolling duty and Nakabandi, a secret informer gave information that an oil truck was bringing furnace oil made from Haryana and was using secret or abandoned passages for the purposes of entry into Punjab, in order to evade tax by cheating the Government. Based on the said information, FIR was registered under Sections 420/120-B Indian Penal Code, 1860 (IPC) and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000.

A petition was filed under Section 482 CrPC for quashing the FIR on the basis that no criminal offence under IPC could be made out.

The Hon'ble Punjab & Haryana High Court went on to quash the FIR and hold that there is no provision for registration of an FIR in matters of alleged evasion of tax. The VAT Act only provides for mandatory penalty. It is well-settled proposition of law that if a special provision has been made regarding a particular subject (Value Added Tax), the said subject is excluded from the general provisions (IPC). Since, the provisions of VAT Act do not provide for the registration of FIR and the said Act is a Code in itself, the provisions of IPC cannot be invoked.

Deepak Kumar v. State of Punjab, CRM-M-38352-2014

[Punjab & Haryana High Court]


A complaint case was instituted against Bijaya Manjari (Petitioner), General Secretary of M/s. Bijaya Laxmi Trust, for the commission of offences under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), on account of dishonour of cheque issued by Dinabandhu Mishra as the President of the Trust. The Magistrate took cognizance of the offence and issued summons to the Petitioner and Dinabandhu Mishra. Aggrieved, the Petitioner approached the Orissa High Court for quashing of the order.

The Hon'ble Orissa High Court observed that it failed to aver clearly as to who was in charge of the 'Trust' at the time the offence was committed by perusing through the complaint. The Petitioner was neither the signatory of the cheque nor was in charge of and responsible to the Trust for the conduct of its business.

The Bench placed reliance on the recent decision of the Apex Court in Pawan Kumar Goel v. State of Uttar Pradesh & Anr., (2022) SCC OnLine SC 1598 wherein it was held that if the complainant fails to make specific averments against the company in the complaint for the commission of an offence under Section 138 NI Act, the same cannot be rectified by taking recourse to general principles of criminal jurisprudence

The court went on to clarify that Section 141 NI Act imposes vicarious liability by deeming fiction which requires the commission of the offence by a company or firm. The persons mentioned in Sections 141(1) and 141(2) NI Act would not be liable to be convicted on the basis of the principles of vicarious liability unless a company or firm has committed the offence as a principal accused.

Bijaya Manjari Satpathy v. State of Orissa & Ors., Crl. MC No. 1392 of 2016

[Orissa High Court]


An FIR was registered against Ram Gopal Meena (Petitioner) for offences under Section 120-B read with Section 420 of Ranbir Penal Code and Section 4-H read with Sections 5(2) and 5(1)(d) of J&K Prevention of Corruption Act. The FIR was lodged only after the preliminary enquiry was concluded, i.e., after eight months.

The petitioner challenged the preliminary enquiry on the grounds laid down by the Supreme Court in Lalita Kumari v. Govt of UP & Ors., (2014) 2 SCC 1 wherein it was held that the preliminary enquiry had to be completed within a period of seven days, however, in the instant case, the preliminary enquiry had been conducted for about eight months after which the FIR was registered.

The Jammu & Kashmir & Ladakh High Court ruled that merely because the preliminary enquiry has taken a long time to complete, the same cannot be said to have vitiated the criminal proceedings initiated in a corruption case, particularly when no prejudice has been caused to the accused by the act of the enquiry officer. The Hon'ble Court also observed that the FIR was lodged only upon the conclusion of the preliminary enquiry conducted by the respondent-investigating agency, after meticulously scanning the records procured from CPWD and Central University, Kashmir which does not appear to be unreasonably long.

Ram Gopal Meena v. CBI, CRM(M) No. 406/2021

[Jammu & Kashmir & Ladakh High Court]


Dr. Mayank Jain (Applicant) was accused of offences punishable under Sections 13(1)(E), 13(2) of the Prevention of Corruption Act, 1988 (POCA). After investigating the matter, the Lokayukt filed a closure report, however, the Lower Court declined to accept the report and directed the State to obtain sanction for prosecuting the Applicant. Aggrieved, the Applicant moved an application under Section 482 CrPC

The Hon'ble Court held that a Magistrate cannot decline to accept the closure report and simultaneously direct the State to obtain sanction for prosecution in a corruption case, and doing so would go beyond the scope of the jurisdiction of the Magistrate as laid down by the Supreme Court in Vasanti Dubey v. Stater of M.P., (2012) 2 SCC 731 vide paragraph 20.

The Madhya Pradesh High Court went ahead and stated that the Magistrate could proceed further in only one of the three ways as described in the Vasanti Dubey case, which are as follows:

  • They may accept the report and drop the proceedings by dismissing the complaint.
  • They may take cognizance of the offence under Section 190(1)(a) CrPC on the basis of the original complaint and proceed to examine the complainant under Section 200 CrPC.
  • Despite disagreeing with the police report, they may either take cognizance at once upon the complaint, direct an enquiry under Section 202 CrPC and after such enquiry take action under Section 203 CrPC.

Dr. Mayank Jain v. Special Police Establishment Lokayukt, Misc. Crl. Case No. 46422 of 2020

[Madhya Pradesh High Court]


The office of Lokayukt had prepared a report against a public servant who was accused of amassing properties and assets beyond the known sources of his income. The report was placed before the sanctioning authority in order to seek sanction to prosecute him under Section 19 of Prevention of Corruption Act, 1988 (POCA). However, the authority refused to grant sanction. Aggrieved, the office of Lokayukt moved to Court.

The Court held that since the role of the Lokayukt ends with the submission of the report, it has no locus to challenge the refusal of the State to grant sanction to prosecute the public servant.

Special Police Establishment v. the State of Madhya Pradesh & Ors., Writ Petition No. 25917 of 2021

[Madhya Pradesh High Court]


CBI registered an FIR against M/s. ISEC Services Pvt. Ltd. (ISEC) and former Mumbai Police Commissioner, Sanjay Pandey under Sections 120B, 409 and 420 of Indian Penal Code, 1860 (IPC); Sections 69B, 72, 72A of Information Technology Act, 2000 (IT Act); Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988 (POCA) for alleged illegal phone tapping of employees of the National Stock Exchange (NSE). Thereafter, an ECIR was registered by the Enforcement Directorate (ED) on allegations for the commission of scheduled offences.

Accordingly, a bail application was filed by Sanjay Pandey to enlarge him on regular bail in the ECIR registered on the basis of the FIR.

The Delhi High Court took into account the following grounds while granting bail to Mr. Sanjay Pandey:

  • For bail application in PMLA cases, it is only required to look into scheduled offences in FIR and other offences are irrelevant.
  • No offence under Section 72 of IT Act is made out as Mr. Pandey or ISEC had never been conferred any powers in terms of the enactment or rules and regulations made therein.
  • The prima facie ingredients of Sections 120-B read with 409 and 420 IPC are not made out.
  • Prosecution has failed to satisfy the ingredients of criminal breach of trust under Section 405 of IPC, since there is not even a whisper misappropriation of property.
  • ED has failed to show the nature of information which was shared or misused, or intended to be misused, or to cause any wrongful loss or wrongful gain. Moreover, such 'customers' have not filed any complaint nor have they been made witnesses in the complaint.
  • Since none of the ingredients of the scheduled offences are made out, there is no occasion to allege acquisition or retention of "proceeds of crime."

Sanjay Pandey v. Directorate of Enforcement, Bail Application 2409/2022 & Crl. M. (Bail) 957/2022

[Delhi High Court]


Rajesh Kumar Sharma (Applicant) filed an application under Section 438 CrPC seeking anticipatory bail in the event of arrest in a case registered under Section 120B read with 420, 467, 468, 471 of Indian Penal Code, 1860 (IPC) and Sections 13(2) read with 13(1)(d) Prevention of Corruption Act, 1988 (POCA). A preliminary objection was raised by the CBI stating that the accused has already been arrested in September 2022 in another case in Chandigarh and therefore, the anticipatory bail plea is not maintainable.

The Allahabad High Court took into account the Rajasthan High Court's observation in the case of Sunil Kallani v. State of Rajasthan Through Public Prosecutor, 2021 SCC OnLine Raj 1654, wherein it was held that the anticipatory bail application of a person, already in custody in connection to a criminal case, will not be maintainable with respect to another criminal case registered for the commission of similar or different offences.

In light of the Sunil Kallani case, the preliminary objection taken by CBI was upheld by the Allahabad High Court and the anticipatory bail application was held to be not maintainable.

Rajesh Kumar Sharma v. CBI, Crl. Misc. Anticipatory Bail Application under Section 438 CrPC 4633 of 2022

[Allahabad High Court]


Bani Prasad (Petitioner) had moved an application before the Lower Court under Section 156(3) CrPC alleging offences punishable under Section 13 of Prevention of Corruption Act, 1988 (POCA) and under Sections 420, 467, 468, 471, 120-B of Indian Penal Code, 1860 (IPC) against two public servants (Respondents). However, the same was rejected by the special judge for want of sanction for prosecution by the competent authority in light of the law laid down by the Apex Court in Anil Kumar & Ors. v. M.K. Aiyappoa & Anr., (2013) 10 SCC 705. The reason assigned by the judge relying on the judgement was the want of sanction for prosecution by the competent authority as required under Section 17A of POCA. Aggrieved by the decision, the Petitioner moved to the Court.

The Hon'ble Madhya Pradesh High Court held that a special court constituted under POCA is not barred under Section 17A of the Act from initiating an enquiry on receipt of the complaint under Section 156(3) CrPC and made the following observations:

  • The legislature has used the term "approval" and not "sanction" in the provision under Section 17A of POCA and approval denotes giving consent, while sanction is grant of formal permission or impose/authorise punishment.
  • The judgement in Anil Kumar case was passed prior to the provision under Section 17A POCA came into existence.
  • The embargo to initiate enquiry/inquiry/investigation under Section 17A POCA is placed upon the police and not on the court.

Shri Bani Prasad Chansoriya v. The State of Madhya Pradesh & Ors., Cr.R. No. 1629/202

[Madhya Pradesh High Court]

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.