2024 (3) TMI 358 - HC - Money Laundering

Seeking grant of Default bail - case of petitioner is that on the date of filing of the prosecution complaint, the investigation was incomplete - complaint was not accompanied by the FSL report - ED after filing of the complaint has issued summon to one director of Supertech - HELD THAT - The right to default bail has been recognised as a statutory right. This right accrues in favour of an accused, if the chargesheet or complaint as the case may be, is not filed within the stipulated period. The Courts have also in no uncertain terms held that filing of an incomplete chargesheet/complaint would not come in the way of this indefeasible right of the accused - In the present case indisputably, the respondent had filed its complaint within the period of 60 days. The application for default bail came to be filed approximately 30 days after filing of the complaint. In the present case, the respondent has already submitted the requisite documents for obtaining expert opinion from FSL. Preparation of the FSL report is not in the control of investigating agency, though it can take steps for expediting the process - it is the categorical stand of the respondent that investigation against the present petitioner is complete. Mere issuance of summons to another person or seeking leave of the Court to file additional evidence, without there being any other sufficient material to challenge, the petitioner cannot be held to be entitled to a default bail. There are no merit in the petition and the same is accordingly dismissed.

Summary

Issues Involved:
1. Whether the petitioner's application for default bail under Section 167(2) Cr.P.C. was rightly dismissed.
2. Whether the complaint filed by the Enforcement Directorate (ED) was incomplete due to the pending FSL report and ongoing investigations.

Summary:

Issue 1: Application for Default Bail under Section 167(2) Cr.P.C.

By way of the present petition filed under Section 482 and 167(2)(a)(ii) Cr.P.C. read with Section 65 of the Prevention of Money Laundering Act, 2002 ('PMLA'), the petitioner seeks setting aside of the order dated 14.10.2023 passed by learned ASJ-05, Patiala House Courts, New Delhi, vide which his application seeking default bail under Section 167(2) Cr.P.C came to be dismissed.

The petitioner contended that on the date of filing of the prosecution complaint, the investigation was incomplete. This contention is premised on two grounds: firstly, that the complaint was not accompanied by the FSL report, and secondly, that ED after filing of the complaint has issued summons on 14.09.2023 to one Anil Kumar Jain, director of Supertech, which implies that investigations are still pending, including against the present petitioner.

Respondent, while contesting the petition, contends that petitioner's role came to the fore after carrying out exhaustive investigation. Though further investigation on certain crucial aspects is pending, the same would not invalidate the complaint already filed against the petitioner.

The right to default bail has been recognised as a statutory right. This right accrues in favour of an accused if the chargesheet or complaint, as the case may be, is not filed within the stipulated period. The Courts have also in no uncertain terms held that filing of an incomplete chargesheet/complaint would not come in the way of this indefeasible right of the accused.

In the present case, indisputably, the respondent had filed its complaint within the period of 60 days. The application for default bail came to be filed approximately 30 days after filing of the complaint.

Issue 2: Completeness of the Complaint Filed by ED

The allegations relate to siphoning off and diverting the funds received from home buyers to group companies. The diverted funds are alleged to have been used for the purchase of land in the name of group companies, instead of completing the projects for which funds were collected. The funds are alleged to be diverted to M/s Sarv Realtors Private Limited to the extent of Rs. 444 crores; M/s ASP Sarin Reality Pvt. Ltd. to the extent of Rs. 154.99 crores; M/s Palash Building Solutions Private Limited to the extent of Rs. 39.94 crores; and M/s Goodtime Builders Private Limited to the extent of Rs. 14.63 crores.

It is also alleged that to hide certain assets i.e., commercial properties purchased in Meerut and Dehradun along with certain funds transferred to the petitioner or subsidiary of R.K. Arora Family Trust to the extent of Rs. 44.25 crores from NCLT proceedings, the petitioner siphoned off the same in the guise of back-dated loan agreements. The investigation has revealed that except M/s Sarv Realtors Private Limited, the remaining companies were already acquired by the Supertech Group.

Further, an earlier transaction of Rs. 24 crores from petitioner to Supertech was converted into a loan @ 24% interest rate, while he himself had availed a major portion of the said loan at the interest rate of only 14%. It is also alleged that Supertech rotated its own money and projected it as a loan (without interest) to a subsidiary company, which held prime rent-earning properties near Dehradun and Meerut and to alienate the aforesaid properties, the loan from petitioner to Supertech was inflated to Rs. 46 crores.

During the investigation, a search was conducted at the office premises of Supertech Ltd. and certain documents namely loan agreement dated 03.03.2015, notice for repayment of loan dated 01.03.2019, and settlement agreement dated 01.06.2019 were seized. The same were sent for FSL analysis, as there were doubts surrounding their authenticity i.e., these were backdated with the specific intent of siphoning off the assets of Supertech Ltd. It is the FSL report of these documents which has not been received and whose non-filing has been raised as a contention by the petitioner.

Insofar as the role of the present petitioner is concerned, it is alleged that he was the main decision-maker in Supertech at the material time i.e., when the offence was committed. The home buyers approached the Supreme Court, whereafter they were allowed to approach NCLT in the capacity of financial creditors. It is alleged that after commencement of the proceedings before the NCLT, the petitioner transferred prime rent-earning properties of Supertech worth Rs. 40 crores to his family trust under the guise of fake and back-dated loan agreements.

The respondent has filed its reply to the present petition, whereby it has been stated that the investigation against the petitioner is complete and the same is evidenced by the criminal complaint dated 24.08.2023, and that only further investigation in terms of Explanation (ii) to Section 44 (1) is being undertaken. As per the complaint filed, it was the applicant who was directly in control of the administrative and financial functions of the said group companies. It is contended that mere issuance of summons to another Director would not ipso facto imply that the investigation against the petitioner is incomplete. The right to further investigate is well recognised under Section 173(8) Cr.P.C.

Insofar as the issue of the pending FSL report is concerned, this Court takes note of the decision in Dinesh Dalmia (Supra), wherein the Supreme Court was in seisin of a similar issue regarding default bail. In the said case, though a charge-sheet had been filed, it was stated that further investigation on vital points including the end use of funds and other foreign investigations were still continuing and that after completion of the remaining investigation, a report would be filed under Section 173 (8) Cr.P.C in due course.

In the present case, the respondent has already submitted the requisite documents for obtaining expert opinion from FSL. Preparation of the FSL report is not in the control of the investigating agency, though it can take steps for expediting the process. As already noted above, it is the categorical stand of the respondent that the investigation against the present petitioner is complete. Mere issuance of summons to another person or seeking leave of the Court to file additional evidence, without there being any other sufficient material to challenge, the petitioner cannot be held to be entitled to a default bail.

Conclusion:

Consequently, I find no merit in the petition and the same is accordingly dismissed. Pending application is disposed of as infructuous.

Dasti