UNION OF INDIAversusHASSAN ALI KHAN AND ANR.

                        [2011] 11 S.C.R. 778


A                         UNION OF INDIA
                                  v.
                  HASSAN ALI KHAN AND ANR.
                (Criminal Appeal No. 1883 of 2011)

                      SEPTEMBER 30, 2011
B
                    [ALTAMAS KABIR AND
                 SURINDER SINGH NIJJAR, JJ.]

        BAIL: Allegations against respondent no. 1 that he had
C huge amount of unaccounted money, that documents
  recovered from his premises contained instructions issued by
  him for transfer of various amounts to different persons from
  the bank accounts held by him outside India and the said
  monies were the proceeds of crime and by depositing the
o same in his bank accounts, respondent no. 1 had attempted
  to project the same as untainted money - Further allegation
  that the said amount ran into billions of dollars; that
  respondent no. 1 had obtained at least three passports in his
  name by submitting false documents, making false
E statements and by suppressing the fact that he already had
  a passport; that Income Tax Department had for the
  Assessment Years 2001-02 to 2007-08 assessed his total
  income as Rs. 110, 412, 68, 853031- - Investigations also
  revealed that he sold a diamond from the collection of Nizam
F of Hyderabad and routed the proceeds through his account
  in Bank in Switzerland to a Bank in United Kingdom - High
  Court allowed bail application of respondent no. 1 - On appeal,
  held: There was no attempt on part of respondent no. 1 to
  disclose the source of the large sums of money handled by
G him - The allegations may not ultimately be established, but
  the burden of proof that the said monies were not the proceeds
  of crime and were not tainted shifted to respondent no. 1 uls.24
  of PML Act - The amount lying in the Swiss bank was not
  explained by respondent no. 1 - He was also not able to

H                               778
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.             779


establish that the sum of Rs.110,412,68,853031- were neither    A
proceeds of crime nor tainted property - Manner irr which he
procured three different passports in his name after his
original passport was directed to be deposited in court a/so
lend support to apprehension that if released on bail, he may
abscond - Bail granted to Respondent no. 1 cancelled -          B
Prevention of Money Laundering Act, 2002 - s.4 - FEMA -
Code of Criminal Procedure, 1973 - s.439.

    Bail - Application for cancellation of bail, and appeal
against order granting bail - Distinction between.
                                                                c
    State of U. P. v. Amarmani Tripathi (2005) 8 SCC 21 :
2005 (3) Suppl. SCR 454 - relied on.

     Sanjay Dutt v. State through CBI, Bombay (II) (1994) 5
SCC 410: 1994 (3) Suppl. SCR 263; Uday Mohan/a/ Acharya         D
v. State of Maharashtra (2001) 5 SCC 453: 2001 (2) SCR 878
- referred to.

                     Case Law Reference:
  1994 (3) Suppl. SCR 263 referred to             Para 17       E
  2001 (2) SCR 878           referred to          Para 17
  2005 (3) Suppl. SCR 454 relied on               Para 27

    CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 11383 of 2011.                                              F

    From the Judgment & Order dated 12.8.2011 of the High
Court of Bombay i Criminal Bail Appliction No. 994 of 2011.
    A. Mariarputham, Rajiv Nanda, Revati Mohite, T.A. Khan,     G
Anirudh Sharma, Anando Mukherjee, Harsh Parekh and B.
Krishna Prasad for the Appellant.
    lshwari Prasad A. Bagarla, Vijay Bhaskar Reddy, Santosh
Paul, Uma lshwari Bagaria, Arti Singh, Arvind Gupta, Mohita
                                                                H
    780       SUPREME COURT REPORTS                 [2011] 11 S.C.R.


A   Bagati, Kamal Nijhawan and Asha Gopalan Nair for the
    Respondents.

          The Order of the Court was delivered by

                               ORDER
B
          ALTAMAS KABIR, J. 1. Leave granted.

           2. The Special Leave Petition out of which this Appeal
      arises has been filed against the judgment and final order dated
 C 12th August, 2011, passed by the Bombay High Court in Crl.
· .. Bail Application No.994 of 2011, whereby the High Court
    · granted bail to the Respondent No.1, Rassan Ali Khan, in
      connection with Special Case No.1 of 2011, wherein the
      Respondent No.1 is the Accused No.1.

D      3. The allegation against the Respondent No.1 and the
  other accused is that they have committed an offence
  punishable under Section 4 of the Prevention of Money
  Laundering Act, 2002, hereinafter referred to as 'the PML Act'.
  The said case has been registered on the basis of a complaint
E filed by the Deputy Director, Directorate of Enforcement,
  Ministry of Finance, Department of Revenue, Government of
  India, on 8th January, 2007, on the basis of Enforcement Case
  Information Report No.02/MZ0/07 based on certain information
  and documents received from the Income Tax Department. On
F the said date, the Income Tax Department carried out a search
  in the premises owned and/or possessed by the Respondent
  No.1 and a sum of Rs.88,05,000/- in cash was found in his
  residence at Peddar Road, Mumbai, and was seized. A
  number of imported watches and some jewellery were also
G found and seized during the search.

         4. The search also revealed that the Respondent No.1 had
    purchased an expensive car, worth about Rs.60 lakhs, from
    orie Anil Shankar of Bangalore through one Sheshadari and
    that he had paid till then a sum :of Rs.46 lakhs towards purchase
H
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                   781
             [ALTAMAS KABIR, J.]
of the said car. It also appears that the documents which were       A
recovered by the Income Tax Department contained several
transfer instructions said to have been issued by the
Respondent No.1 for transfer of various amounts to different
persons from the bank accounts held by him outside India. The
said amounts forming the subject matter of the instructions          B
issued by the Respondent No.1 ran into billions of dollars. The
Income Tax Department assessed the total income of the
Respondent No.1 for the Assessment Years 2001-02, 2006-
07 and 2007-08 as Rs.110,412,68,85,303/-. Furthermore,
during the investigation, the Directorate of Enforcement also        c
obtained a document said to have been signed by the
Respondent No.1 on 29th June, 2003, which was notarized by
one Mr. Nicolas Ronald Rathbone Smith, Notary Public of
London, on 30th June, 2003.

    5. Further, an investigation was conducted under the D
Foreign Exchange Management Act, 1999, hereafter referred
to as 'FEMA'. Show-cause notices were issued to the
Respondent No.1 for alleged violatio'n of Sections 3A and 4 of
FEMA for dealing in and acquiring and holding foreign
exchange to the extent of US$ 80,004,53,000, equivalent to E
Rs.36,000 crores approximately in Indian currency, in his
account with the Union Bank of Switzerland, AG, Zurich,.
Switzerland.

     6. Inquiries also revealed that Shri Hassan Ali Khan had        F
obtained at least three Passports in his name by submitting
false documents, making false statements and by suppressing
the fact that he already had a Passport. In addition to the above,
it was also indicated that investigations had revealed that he
had sold a diamond from the collection of the Nizam of               G
Hyderabad and had routed the sale proceeds through his
account in Sarasin Bank in Basel, Switzerland, to the Barclays
Bank in the United Kingdom.

    7. Based on the aforesaid material, the Directorate of
Enforcement, Mumbai Zonal Office, arr.ested the Respondent           H
        782     SUPREME COURT REPORTS               [2011] 11 S.C.R.


    A No.1 on 7th March, 2011, and, thereafter, he was produced
      before the Special Judge, PMLA, Mumbai, on 8th March, 2011,
      and was remanded in custody: Subsequently, by an order dated
      11th March, 2011, the Special Judge, PMLA, rejected the
      prayer made on behalf of the Directorate of Enforcement for
    B remand of the Respondent No.1 to its custody and released
      him on bail. However, since a Public Interest Litigation was
      pending in this Court in which the Directorate of Enforcement
      was required to file a status report in respect of the
      investigations carried out in connection with the case, the fact
    c that the Respondent No.1 had been released on bail was
      brought to the notice of this Court and this Court stayed the
      operation of the bail order and authorized the detention of the
      Respondent No.1 in custody, initially for a period of four days.
      The Union of India thereupon filed Special Leave Petition (Crl.)
      No.2455 of 2011 and upon observing that the material made
    0
      available on record prima facie discloses the commission of
      an offence by the Respondent No.1 punishable under the
      provisions of the PML Act, this Court vide order dated 29th
      March, 2011, disposed of the appeal as well as the Special
      Leave Petition and set aside the order dated 11th March, 2011,
    E of the Special Judge, PMLA, Mumbai, and directed that the
•     Respondent No.1 be taken into custody. Thereafter, the
      Respondent No.1 was remanded into custody from time to time
      and the complaint came to be filed on 6th May, 2011. A further
      prayer for bail was thereafter made on behalf of the Respondent
    F No.1 on 1.st July, 2011, but the same was dismissed by the
      Special Judge, PMLA, Mumbai, on the same day.

           8. The said order of the Special Judge, PMLA, Mumbai,
      rejecting the Respondent No.1 's prayer for bail was challenged
    G before the Bombay High Court in Bail Application No.994 .dated
      2nd July, 2011. After a contested hearing, the Bombay High
      Court by its order dated 12th August, 2011, granted bail to the
      Respondent No.1 and the said order is the subject matter of
      the present proceedings before this Court.
    H
   UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                    783
               [ALTAMAS KABIR, J.]
       9. Learned Additional Solicitor General, Mr. Haren P.            A
    Raval, appearing for the Union of India, submitted that the High
    Court failed to appreciate the astronomical amounts of foreign
    exchange dealt with by the Respondent No.1, for which there
    was no accounting and in respect whereof the Income Tax
    Department had for the Assessment years 2001-02 to 2007-            B
. · 08 assessed the total income as Rs.110,412,68,85,303/-. The
    learned ASG also submitted that transfer of the huge sums
    from one bank to another was one of the methods adopted by
    persons involved in money-laundering to cover the trail of the
    monies which were the proceeds of crime. The learned ASG            c
    ~ontended that the large sums of unaccounted money, with
    which the Respondent No.1 had been dealing, attracted the
    attention of the Revenue Department and on investigation
    conducted under the Foreign Exchange Management Act,
    1959, (FEMA), show cause notices were issued to the                 D
    Respondent No.1 for alleged violation of Sections 3A and 4
    thereof for acquiring and holding foreign exchange and dealing
    with the same to the extent of US$ 80,004,53,000, equivalent
    to Rs.36,000/- crores, approximately, in Indian currency, in his
    account with the Union Bank of Switzerland, AG, Zurich,
    Switzerland.                                                        E

        10. Mr. Raval submitted that the Respondent No.1, Shri
  Hassan Ali Khan, used the different passports which he had
  acquired by submitting false documents, to open bank accounts
  in foreign countries to engage in the laundering of tainted money     F
  which brought such transactions squarely within the scope and
  ambit of Section 3 of the PML Act, 2002. Mr. Raval submitted
  that Section 3 of the aforesaid Act by itself was an offence
  since it provides that any person directly or indirectly attempting
  to indulge in or knowingly assisting or knowingly being a party       G
  or actually involved in any process or activity connected with
  the proceeds of crime and projecting it as untainted property,
  would be guilty of the offence of money-laundering. The learned
  ASG submitted that the key expressions used in Section 3 are
  "proceeds of crime" and "projecting it as an untainted property".     H
    784      SUPREME COURT REPORTS                [2011] 11 S.~.R.

                                                          .
A   In other words, in order to prove an offence of money-
    laundering, it has to be established that the monies involved
    are the proceeds of crime and having full knowledge of the
    same, the person concerned projects it as untainted property.
    The process undertaken in doing so, amounts to be offence of
B   money-laundering.

       11. In this connection, the learned ASG referred to Section
  2(u) of the PML Act, which describes "proceeds of crime". to
  meal') any property derived or obtained, directly or indirectly by
C any person as a result ofcriminal activity relating to a scheduled
  offence or the value of any such property. He, thereafter,
  referred to the definition of "scheduled offence" in Section 2(y)
  of the above Act to mean (i) the offences specified under Part
  A of the Schedule; or (ii) the offences specified under Part B
  of the Schedule if the total value involved in such offences
D amounted to Rs.30 lakhs or more.

        12. The learned ASG submitted that the enormous sums
  of money held by Shri Hassan Ali Khan in foreign accounts in
  Switzerland, United Kingdom and Indonesia and the
E transactions in respect thereof, prima facie indicated the
  involvement of the Respondent No.1 in dealing with proceeds
  of crime and projecting the same as untainted property, which
  was sufficient to attract the provisions of Section 3 of the PML
  Act, 2002. The learned ASG submitted that under Section 24
F of the aforesaid Act, when a person is accused of having
  committed an offence under Section 3, the burden of proving
  that the monies involved were neither proceeds of crime nor
  untainted property, is on the accused. It was urged that once a
  definite allegation had been made against Shri Hassan Ali Khan
G on the basis of documents seized, that the monies in n1s
  various accounts were the proceeds of crime, the burden of
  proving that the money involved was neither the proceeds 01'
  crime nor untainted, shifted to-him and it was upto him to prove
  the contrary. The learned ASG soomitted that Shri Ha~san Ali
  Khan had failed to discharge the said burden and hence the
H
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                   785
             [ALTAMAS KABIR, J.]
large sums of money in the several accounts of the Respondent         A
No.1 would have to be treated as tainte.d property, until proved
otherwise. The learned ASG submitted that the Respondent
No.1 had himself made certain statements which were recorded
under Section 50 of the PML Act, parts whereof were not hit
by the provisions of Section 27 of the Indian Evidence Act.           B

      13. The learned ASG also referred to the provisions of
Section 45 of the aforesaid Act which make offences under the
said Act cognizable and non-bailable and also provides that
notwithstanding the provisions of the Code of Criminal                C
Procedure, no person accused of an offence punishable for a
term of imprisonment of more than three years under Part A of
the Schedule to the Act, is to be released on bail or on his own
bond, unless the Public Prosecutor has been given an
opportunity to oppose the application for such release and
where the Public Prosecutor opposes the application, the Court        D
is satisfied that there are reasonable grounds for believing that
the accused is not guilty of such offence and that he is not likely
to commit any offence while on bail. The learned ASG
submitted that an exception had been made for persons under
the age of 16 years or a woman or a person who is sick or             E
infirm.

     14. Referring to Part A of the Schedule to the PML Act,
the learned ASG submitted that the same had been divided into
paragraphs 1 and 2. While paragraph 1 deals with offences             F
under the Indian Penal Code under Sections 121 and 121-A
thereof, paragraph 2 deals with offences under the Narcotic
Drugs & Psychotropic Substances Act, 1985. The learned ASG
submitted that, on the other hand, Para B is divided into five
paragraphs. Paragraph 1 deals with offences under the Indian          G
Penal Code, while paragraph 2 deals with offences under the
Arms Act, 1959. Paragraph 3 deals with offences under the
Wild Life (Protection) Act, 1972, paragraph 4 deals with
offences under the Immoral Traffic (Prevention) Act, 1956, and
paragraph 5 deals with offences under the Prevention of
                                                                      H
    786     SUPREME COURT REPORTS                [2011] 11 S.C.R.


A Corruption Act, 1988. The learned ASG submitted that the facts
  of the case attracted the provisions of paragraph 1 of Part A
  of the Schedule, since the money acquired by Shri Hassan Ali
  Khan, besides being the proceeds of crime, is also connected
  with transactions involving the international arms dealer, Adnan
B Khashoggi. The learned ASG submitted that the same became
  evident from the notarized document which had been obtained
  by· the Directorate of Enforcement during the course of
  investigation which had been signed by the Respondent No.1
  on 29th June, 2003, at London and notarized by Mr. Nicolas
c Ronald Rathbone Smith, Notary Public of London, England, on
  30th June, 2003. It was also submitted that the said document
  certified the genuineness of the signature of the Respondent
  No.1 and also mentioned his Indian Passport No. Z-1069986.
  The learned ASG further contended that the said notarized
D document also referred to Dr. Peter Wielly, who was a link
  between Mr. Adnan Khashoggi, and one Mr. Retro Hartmann
  on whose introduction the Respondent No.1 opened an account
  at UBS, Singapore, and was also linked with Mr. Kashinath
  Tapuriah. The learned ASG sub1~itted that there were other
  materials to show the involvement of Dr. Wielly in the various
E transactions of the Respondent No.1, Hassan Ali Khan.

       15. Further submissions on behalf of the Appellant were
  advanced by Mr. A. Mariarputham, learned Senior Advocate,
  who referred to the purported theft of the jewellery of the Nizam
F of Hyderabad and the sale of the same by the Respondent
  No.1, on account whereof US$ 700,000 had been deposited
  by the Respondent No.1 in the Barclays Bank in London.

       16. Mr. Mariarpurtham then submitted that although the
  High Court had retied on the provisions of Section 167(2)
G Cr.P.C. in granting bail to the Respondent No.1, the said
  provisions were not attracted to the facts of this case since
  charge sheet had already been filed within the statutory period
  and the High Court could not, therefore, have granted statutory
  bail to the Respondent No.1 on the ground that it had been
H
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                      787
             [AlTAMAS KABIR, J.]
submitted on behalf of the Appellant that it would still take some       A
time for the Appellant to commence the trial. Mr. Mariarputham
submitted that while the Respondent No.1 had been arrested
on 7th March, 2011 and had been produced before the Special
Judge and remanded to custody on 8th March, 2011, the charge
sheet had been filed on 6th May, 2011 within the prescribed              B
period of 60 days. It was submitted that the High Court had
wrongly interpreted the provisions of Section 167(2) Cr.P.C. in
granting .bail to the Respondent No.1.

      17. In support of his submissions, the learned counsel
referred to the Constitution Bench decision of this Court in             C
Sanjay Dutt Vs. State through CBI, Bombay (II) [(1994) 5 SCC
410), wherein it was held that the indefeasible right of an
accused to be released     on   bail by virtue of Section 20(4)(bb)
of the TerroristandDisruptive Activities (Prevention) Act, 1987,
was enforceable only prior to the filing of the challan and it did       D
not survive or remain enforceable on the challan being filed, if
not already availed of. Their Lordships held further that if the
right to grant of statutory bail had not been enforced till the filing
of the challan, then there was no question of its enforcement
thereafter, since it stood extinguished the moment the challan           E
was filed because Section 167(2) Cr.P.C. ceased to have any
application. Reference was also made to the decision of a
Three Judge Bench of this Court in Uday Mohan/al Acharya
 Vs. State of Maharashtra [(2001) 5 SCC 453), wherein the
scope of Section 167(2) Cr.P.C. and the proviso thereto fell for         F
consideration and it was the majority view that an accused had
an indefeasible right to be released on bail when investigation
is not completed within the specified period and that for availing
of such right the accused was only required to file an application
before the Magistrate seeking release on bail alleging that no           G
challan had been filed within the period prescribed and if he
was prepared fo offer bail on being directed by the Magistrate,
the Magistrate was under an obligation to dispose of the said
application and even if in the meantime a charge-sheet had
been filed, the right to statutory bail would not be affected. It        H
    788       SUPREME COURT REPORTS                [2011) 11 S.C.R.


A was, however, clarified that if despite the direction to furnish
  bail, the accused failed to do so, his right to be released on
  bail would stand extinguished.

         18. It was, therefore, submitted that the Bombay High Court
    had granted bail to the Respondent No.1 on an incorrect
8
    interpretation of the law and the said order granting bail was,
    therefore, liable to be set aside.

          19. Appearing for the Respondent No.1, Hassan Ali Khan,
    learned counsel, Shri lshwari Prasad A. Bagaria, firstly
C   contended that an offence which did not form part of the
    scheduled offences referred to in Section 45 of the PML Act
    would not attract the provisions of Section 3 of the said Act. It
    was submitted that whatever be the amounts involved and even
    if the same had been unlawfully procured, the same might
D   attract the provisions of the Income Tax Act or FEMA,--but that
    would not satisfy the two ingredients of Section 3 which entails
    that not only should the money in question be the proceeds of
    crime, but the same had also to be projected as untainted
    property. Mr. Bagaria submitted that in the instant case all that
E   has been disclosed against the Respondent No.1 is that he
    dealt with large sums of money, even in foreign exchange and
    operated bank accounts from different countries, which in itself
    would not indicate that the monies in question were the
    proceeds of crime. Mr. Bagaria also submitted that at no stage
F   has it been shown that the said amounts lying in the accounts
    of the Respondent No.1 in Switzerland, the United Kingdom
    and Indonesia had been projected as untainted money.
    Furthermore, as far as the allegation regarding the theft of the
    Nizam's jewellery is concerned, except for mere allegations,
G   there was no material in support of such submission in the face
    of the case made out by the Respondent No.1 that he had
    brokered the sale of some portions of the jewellery for which
    he had received a commission of US$30,000 which he had
    spent in Dubai.

H         20. Mr. Bagaria submitted that in the complaint, reference
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                  789
             [ALTAMAS KABIR, J.]
had been made in paragraph 13 thereof to "scheduled offences"       A
which have been set out in sub-paragraphs 13.1 to 13.5. Mr.
Bagaria pointed out that the offences indicated related to
alleged offences under the provisions of the Indian Penal Code,
the Passport Act, 1967 and the Antiquities and Art Treasures
Act, 1972, which do not come either under Part A or Part B of       8
the Schedule to the PML Act, 2002, except for the offences
under the Indian Penal Code, the sections whereof, which have
been included in paragraph 1 of Part B, are not attracted to
the facts of this case. Mr. Bagaria submitted that as a result,
none of the offences mentioned as scheduled offences in the         C
charge-sheet were covered by the Schedule to the PML Act,
2002, and could at best be treated as offences under the Indian
Penal Code, the Passport Act and the Antiquities and Art
Treasures Act, 1972. On the question of the alleged absconsion
of the Respondent No.1, Mr. Bagaria submitted that the said
Respondent had not gone to Singapore on his own volition, but       D
had there been taken by one Amalendu Kumar Pandey and Shri
Tapuriah. Shri Pandey was subsequently made a witness and
Shri Tapuriah was made a co-accused with the Respondent
No.1.
                                                                    E
    · 21. Mr. Bagaria also contended that once bail had been
granted, even if the special leave petition is maintainable, the
power to cancel grant of such bail lies with the High Court or
the Court of Sessions under Section 439(2) Cr.P.C. and,
consequently, all the principles laid down by this Court relating   F
to cancellation of bail, would have to be considered before the
order granting bail could be cancelled. Mr. Bagaria submitted
that even though the offences were alleged to have been
committed by the Respondent No.1 as far back as in the year
2007, till he was arrested on 7th May, 2011, there had been         G
no allegation that he had in any manner interfered with the
investigation or tampered with any of the witnesses. Mr.
Bagaria submitted that even the apprehension expressed on
behalf of the appellant that there was a possibility of the
Respondent No.1 absconding to a foreign country on being
                                                                    H
    790      SUPREME COURT REPORTS                 [2011] 11 S.C.R.


A   released on bail, was without any basis, since such attempts,
    if at all made, could be secured by taking recourse to various
    measures. Mr. Bagaria submitted that such a submission could
    not be the reason for cancelling the bail which had already been
    granted to the Respondent No.1.
B      22. Mr. Bagaria submitted that in the absence of any
  provisions in the PML Act that the provision thereof would have
  retrospective effect, the provisions of the PML Act could not
  also be made applicable to the Respondent No.1. Mr. Bagaria
  submitted that once it is accepted that the PML Act, 2002,
C would not apply to the Respondent No.1, the provisions of
  Section 45 thereof would also not apply to the Respondent's
  case and his further detention would be unlawful. Mr. Bagaria
  concluded on the note that, in any event, the PML Act had been
  introduced in the Lok Sabha on 4th August, 1998, and all the
D offences alleged to have been committed by the Respondent
  No.1, were long prior to the said date.

         23. Having carefully considered the submissions made on
    behalf of the respective parties and the enormous amounts of
E money which the Respondent No.1 had been handling through
    his various bank accounts and the contents of the note signed
    by the Respondent No.1 and notarized in London, this case
    has to be treated a little differently from other cases of similar
    nature. It is true that at present there is only a nebulous link
F between the huge sums of money handled by the Respondent
    No.1 and any arms deal or intended arms deals, there is no
    attempt on the part of the Respondent No.1 to disclose the
    source of the large sums of money handled by him. There is
    no denying the fact that allegations have been made that the
    said monies were the proceeds of crime and by depositing the
G . same in his bank accounts, the Respondent No.1 had
    attempted to project the same as untainted money. The said
    allegations may not ultimately be established, but having been
    made, the burden of proof that the said monies were not the
    proceeds of crime and were not, therefore, tainted shifted to
H
 UNION OF INDIA v. HASSAN ALI KHAN AND ANR.                  791
             [ALTAMAS KABIR, J.]
the Respondent No.1 under Section 24 of the PML Act, 2002.          A
For the sake of reference, Section 24 is extracted hereinbelow


    "24. Burden of proof. - When a person is accused of
    having committed the offence under Section 3, the burden        8
    of proving that proceeds of crime are in tainted property
    shall be on the accused."

     24. The High Court having proceeded on the basis that the
attempt made by the prosecution to link up the acquisition by
the Respondent No.1 of different Passports with the operation       C
of the foreign bank accounts by the said Respondent, was not
believable, failed to focus on the other parts of the prosecution
case. It is true that having a foreign bank account and also
having sizeable amounts of money deposited therein does not
ipso facto indicate the commission of an offence under the PML      D
Act, 2002. However, when there are other surrounding
circumstances which reveal that there were doubts about the
origin of the accounts and the monies deposited therein, the
same principles would not apply. The deposit of US$ 700,000
in the Barclays Bank account of the Respondent No.1 has not         E
been denied. On the other hand, the allegation is that the said
amount was the proceeds of the sale of diamond jewellery
which is alleged to have been stolen from the collection of the
 Nizam of Hyderabad. In fact, on behalf of the Respondent No.1
it has been submitted that in respect of the said deal, the         F
 Respondent No.1 had received by way of commission a sum
of US$ 30,000 which he had spent in Dubai.

     25. Although, at this stage, we are also not prepared to
accept the convoluted link attempted to be established by the       G
learned ASG with the opening and operation of the bank
accounts of the Respondent No.1 in the Union Bank of
Switzerland, AG, Zurich, Switzerland, the amounts in the said
bank account have not been sought to be explained by the
Respondent No.1. We cannot also ignore the fact that the total
income of the Respondent No.1 for the assessment years 2001-        H
     792      SUPREME COURT REPORTS                 [2011] 11 S.C.R.


A 02 to 2007-08 has been assessed at Rs.110,412,68,85,303/-
  by the Income Tax Department and in terms of Section 24 of
  the PML Act, the Respondent No.1 had not been able to
  establish that the same were neither the proceeds of crime nor
  untainted property. In addition to the above is the other factor
B involving the notarized document in which the name of Adnan
  Khashoggi figures.

      26. Lastly, the manner in which the Respondent No.1 had
  procured three different passports in his name, after his original
  passport was directed to be deposited, lends support to the
C apprehension that, if released on bail, the Respondent No.1
  may abscond.

        27. As far as Mr. Bagaria's submissions regarding Section
  439(2) Cr.P.C. are concerned, we cannot ignore the distinction
D between an application for cancellation of bail and an appeal
  preferred against an order granting bail. The two stand on
  different footings. While the ground for cancellation of bail would
  relate to post-bail incidents, indicating misuse of the said
  privilege, an appeal against an order granting bail would
E question the very legality of the order passed. This difference
  was explained by this Court in State of U.P. Vs. Amarmani
  Tripathi [(2005) 8 SCC 21].

         28. Taking a different view of the circumstances which are
     peculiar to this case and in the light of what has been indicated
'F   hereinabove, we are of the view that the order of the High Court
     needs to be interfered with. We, accordingly, allow the appeal
     and set aside the judgment and order of the- High Court
     impugned in this appeal and cancel the bail granted to the
     Respondent No.1.
G
     D.G.                                           Appeal allowed.