Delhi court expresses anguish over ED's 'casual and cavalier' approach in PMLA probe

A Delhi court has expressed “anguish” over the “casual and cavalier approach” in which investigation was conducted by the Enforcement Directorate in a money laundering case.

Special Judge Dharmender Rana made these observations while granting bail to a businessman Jatinder Pal Singh in a case of money laundering related to a corruption deal, as it found various discrepancies in the investigation and the arguments made before the court.

“Before proceeding to deal with the issue on merits, in pains, I must admit at the very outset that the conduct of ED in the instant matter is highly disappointing, if not deplorable as suggested by the defence.

"In its zeal to ensure the sustained detention of the applicant/accused, ED seems to have thrown out the baby with the water,” the judge said.

According to the ED, Singh purchased cloth worth Rs 6.60 crore from Astonishing Pvt Ltd and sold it to Shree Shyam Dhani Trading Company, a proprietorship concern of one Sanjay Kumar, for Rs 12.23 crore.

ED claimed that both -- Astonishing Private Limited and Shree Shyam Dhani Trading Company - are sham companies and were not traceable.

“In my considered opinion, the activities ascribable to accused are merely layering activities and accused appears to be a mere cog in the wheel,” the judge said in the order passed on January 17.

He said that under such circumstances, the focus of investigation should in fact be the 'source of money' used to purchase the fabric, so as to decide the crucial issue as to if the money came from a tainted source or not.

“However, unfortunately, instead of focusing upon the source of money, accused is the focus of investigation in the instant matter,” the judge noted.

He further observed that having failed to detect the source of money and apprise the court if it came from a tainted source or not, ED, during the course of arguments, improved upon its own case and came up with an altogether different contention that the 'commission generated' by the accused on account of fabric shown to have sold off by them to Shree Shyam Dhani Trading Company was in fact the proceeds of crime in the instant case.

“However, if the said contention is accepted to be correct and the proceeds of crime in the instant matter is admitted to be the commission generated, the very arrest of accused in the case at hand becomes seriously questionable,” the judge said.

The court further noted that as per ED records while the knowledge about the generation of commission came into the notice of ED only on January 12, 2022, the permission to accused's arrest was accorded on December 30, 2021 and was made on December 31, 2021 itself.

“A fact which came into the notice of ED on January 12, 2022 only could obviously not have been a reason to grant permission to sanction the arrest of accused. Therefore, it is apparent that either the source of money till date remains undetected or the contention now adopted by the ED regarding the proceeds of crime is merely an afterthought and the arrest of the accused was absolutely unjustified on December 31, 2021,” the judge held.

The judge held that in either case, the accused deserved to be admitted on bail.

Advocate Zoheb Hussain appeared for the ED.

In its order, the court also rejected ED's contention that the investigation was at an initial stage, saying the agency made a conscious choice to arrest the accused without doing proper preliminary enquiry.

“Having made a conscious choice to place the cart before the horse and apprehend the accused upon the basis of half baked facts, ED cannot cry hoarse now that the investigation is at a nascent stage,” the judge said.

He further said that the contention of the defence that the ED seemed to be perturbed by the bail granted to the accused by the court could not be brushed aside lightly as ED “seems to have acted in haste and the focus of investigation seems to be accused and not the crime or the actual criminals”.

Under such circumstances, ED cannot claim that the investigation is at nascent stage. More so, the raid in the instant matter was carried out on February 10, 2020 and the accused has been remanded to ED custody for a sufficiently long period, the court said.

“Now the continued detention of accused seems to be absolutely unwarranted,” it said.

In it's order, the judge further added, “Before parting, this court is constrained to bring on record its anguish regarding the casual and cavalier approach in which the investigation is being conducted.

"Unfortunately, even the supervisory officers have miserably failed to guide the Investigating Officer in the instant matter to ensure fair and impartial investigation.”

He said that it appeared that the officers involved in the investigation of the instant matter had even attempted to hoodwink their own Special Director while procuring the permission for arrest under Prevention of Money Laundering Act by not disclosing the facts in its entirety or at least in the correct perspective before the worthy Special Director.

“In view of the same, I deem it appropriate to bring the matter to the notice of higher echelons of ED,” the judge said.

The judge, however, put various conditions on the accused, including that he shall continue to cooperate in the ongoing investigation and will not leave the country without the permission of the court.

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