The Delhi High Court held that the issuance of summons to join the investigation and give evidence and documents to the agency cannot be presumed to culminate in the arrest of a person being so summoned.
The family of the petitioner owns the Krrish group of companies and has been in the business of Breweries and Distilleries since the year 1983, and in the real estate business also since 2008. It is stated that the company namely M/s Iceberg Industries Ltd. was incorporated in the year 1994 and the petitioner had become its whole-time director from the date of its incorporation.
The properties measuring 9527 sq. ft. purchased by M/s AK Infosystem Pvt. Ltd. in the year 2007, situated in Rupaspur, Danapur, Patna, Bihar, was purchased for a sale consideration of Rs.10,83,000/-, paid in cash and the owner of the said land Sh. Hazari Rai was a relative of one of the recruits in Group D in the Railway Department. M/s Iceberg Industries Ltd. was also sold to M/s Molson Coors International by means of transfer of complete shareholding.
It is stated that the petitioner had received complete money with respect to sale conducted for his company from the family of Sh. Lalu Prasad Yadav in 2017. The Central Bureau of Investigation (CBI) under Section 120-B of the Indian Penal Code, 1860 and Sections 11/12/13(2) read 13(1) of the Prevention of Corruption Act, 1988 against the then Railway Minister Sh. Lalu Prasad Yadav and others, for entering into a criminal conspiracy to abuse an official position in order to obtain pecuniary benefits in the form of land parcels being transferred to his family members and companies thereof in return for appointment to the post of substitute under the various zones of the Indian Railways.
The grievance of the petitioner is that the Directorate of Enforcement has now summoned him vide two impugned notices whereby he has been called upon to produce more than 20 years old documents that are not related to the petitioner in any manner as he is no longer associated with any of the entities of which documents are summoned and those entities were sold long back in the year 2010-11 to other international and national companies and thus, the said documents could not be produced by him.
The Senior Counsel for the petitioner argues that the petitioner has been absolved from the scheduled offenses in the RC registered by the CBI and thus, the proceedings under the Prevention of Money Laundering Act (PMLA) are not maintainable in terms of the law laid down in the case of Vijay Madanlal Choudhary v. Union of India.
The Special Counsel for the respondent/Directorate of Enforcement, while opposing the present petition, argues that the prayer in this petition seeking quashing of the Enforcement Case Information Report (ECIR) against the petitioner herein is not maintainable. In this regard, reliance is placed on the decision in the case of Hukum Chand Garg & Anr. v. State of Uttar Pradesh & Ors. to argue that a person who is not named in the ECIR has no locus to seek relief such as quashing of ECIR.
The Bench comprising of Justice Swarana Kanta Sharma held that “merely because once again a summon has been issued under Section 50 of PMLA, no case for grant of no-coercive steps can be made out. It is also clear as per the scheme of PMLA that the power to issue summons under Section 50 of PMLA is different from the power to arrest under Section 19 of PMLA, and the issuance of summons to join the investigation and gives some evidence or document to the investigation agency cannot be presumed to culminate into the arrest of the person being so summoned”.
Therefore, considering the law laid down by the Apex Court and the facts of the present case, no case was made out for directing the respondent to not take any coercive steps against the petitioner. Thus, the court was not inclined to quash the impugned summons or the ECIR against the petitioner or to grant any relief of no-coercive steps as prayed by the petitioner.
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