Delhi HC stays ED proceedings in Money Laundering Case Against Hero MotoCorp Chairman & MD Pawan Kant Munjal [Read Order]

In a recent development, the Delhi High Court has granted an interim stay in the case of Pawan Kant, a key executive at Hero MotoCorp, who is facing charges under the Prevention of Money Laundering Act, 2002 . Pawan Kant Munjal, represented by a legal team led by Mr. Mukul Rohtagi, sought directions from the court to quash the ED case and all subsequent proceedings. The petitioner argued that the predicate offense under the Customs Act, 1962, which led to the money laundering allegations, had already been stayed by the court in a previous order dated 03.11.2023. The court, after hearing arguments from both sides, issued an order allowing an ex-parte ad-interim stay on the proceedings against Pawan Kant until the next hearing scheduled for 21.03.2024. The court noted the petitioner's exoneration by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) and the subsequent affirmation by a Division Bench of the court. The counsels appearing for the applicant/petitioner submit that the proceedings in the said ECIR ought to be stayed against the petitioner as the predicate offense for the said ECIR are the proceedings under Section 135 of the Customs Act, 1962 titled as DRI v. Salt Experience and Management Pvt. Ltd. & Ors., which has already been stayed by this Court, observing that the adjudication proceedings against the petitioner had been dismissed by the Customs Excise and Service Tax Appellate Tribunal in Pawan Munjal vs. Commissioner of Customs, and the same has since been affirmed by a Division Bench of this Court in “Commissioner of Customs, New Customs House, New Delhi vs. Pawan Kant” Thus,relying upon Vijay Madanlal Choudhary v. Union of India, counsels for the petitioner submitted that the petitioner cannot be prosecuted on notional basis or an assumption that a scheduled offense has been committed. They further submitted that once the petitioner stands exonerated by the CESTAT and the proceedings initiated by the Department of Revenue stand stayed by this Court vide order dated 03.11.2023, the proceedings under the PMLA cannot be allowed to continue against the petitioner as the same shall amount to abuse of the process of law. On the other hand, the state representative submitted that, “the petitioner is not covered by the judgment passed in Vijay Madanlal Choudhary as the offense under the PMLA being a standalone offense is not predicated on the offense committed under the Customs Act.” He further added that “in any case, the benefit can only be given when the accused is discharged, whereas in the present case, only the proceedings have been stayed, and the petitioner has not been finally discharged/ acquitted.” Based on the presented facts, the court acknowledged the merit in the petitioner's submissions and, considering the common set of facts across the CESTAT proceedings, the complaint case, and the current ECIR, along with the earlier stay order on Revenue Department proceedings and held a prima facie opinion that there is ample evidence to stay the proceedings against the petitioner. Accordingly, the Single Bench of Justice Saurabh Banerjee held that, "till the next date of hearing, ECIR/DLZO-I/39/2023 dated 17.07.2023 and all proceedings emanating therefrom, including the summoning order dated 10.11.2023, shall remain stayed qua the petitioner”, allowing interim relief to the Hero Motocorp Head in the PMLA case. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates