PMLA Arrest for Wrongful loss of Rs. 951.88 cr by fraud: Delhi HC Grants Bail u/s 45 citing prolonged Custody [Read Order]

Ajay Yadav, the applicant filed application under section 45 of the Prevention of Money Laundering Act, 2002 [PMLA, 2002] on behalf of the applicant Ajay Yadav for grant of bail in Corruption Case 01/2024 titled as “Enforcement of Directorate vs. Sunstar Overseas & Ors.” arising out of ECIR/GNZO/09/2021 dated 09.04.2021.

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The present ECIR arises out of FIR being RCHG2020A0021 dated 31.12.2020 registered with CBI on a complaint filed by the then Chief Manager of Punjab National Bank, Sonipat [‘PNB’] against M/s Sunstar Overseas Ltd. [‘SOL’] and its Directors. As per the FIR, accounts of five banks, namely, PNB, ICICI Bank, IDBI Bank and State Bank of India were declared Non-Performing Assets [‘NPAs’].

It was alleged that SOL had availed various credit facilities from consortium of nine lender banks and had diverted /siphoned off the said loan amount, thereby failing to repay the said loan amounts to the banks. It was also alleged that the accused company had violated the terms and conditions of the loan agreements in respect of the hypothecated goods as the said goods were disposed of without depositing sale proceeds in the cash credit accounts.

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The case of CBI is that SOL, through its Directors/Promoters/employees and others had committed fraud by siphoning off and diverting funds, criminal misappropriation, criminal breach of trust, cheating, fraud etc., thereby causing wrongful loss of approximately Rs. 951.88 crores to the consortium of nine lenders banks.

It has been alleged that SOL, after July 2017 failed to submit stock report to the consortium of lender banks, and subsequently, the said loan accounts of SOL were declared NPAs with effect from 31.03.2015 by the Statutory Auditor on 31.03.2017 and the consortium of lender banks approved a Master ReStructuring Agreement Package on 07.11.2015.

The allegation against SOL is that it, through its Directors had sold its entire stocks but the sale proceeds were not deposited with the banks in the loan accounts. It has also been alleged that SOL had advanced sums received by way of the credit facilities for investment in real estate, which is non-core business activity of the company.

The entire case of the Enforcement Directorate is that SOL had misappropriated the funds availed through loan from consortium of banks and thereafter diverted the same into different entities and used Umaiza, of which, applicant is the partner to acquire control of the said company through resolution plan passed by NCLT. It is thus the case of the ED that the entire process of the ED was misused and that the present applicant is a key member in the crime conspiracy.

Admittedly, the predicate offence registered by the CBI is against the SOL and its Directors and Promoters. It is also an admitted case that applicant is not an accused in the charge sheet filed in the predicate offence. Applicant is the successful resolution applicant of SOL, which has been taken over by the orders of NCLT after the resolution plan of Umaiza Infracon LLP was approved by the NCLT.

It is evident that the trial is not likely to conclude in a reasonable time, Section 45 cannot be allowed to become a shackle which leads to unreasonably long detention of the accused persons. What is reasonable and unreasonable would have to be assessed in light of the maximum and minimum sentences provided for in the statute. In cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The same has to be kept in mind while considering the period of incarceration which has been undergone.

The whole case of the respondent is that applicant acted on the advice and instructions of the ex-promoters/Directors of SOL – Rohit Aggarwal and submitted the resolution plan in NCLT to acquire SOL with a view to facilitate the diversion of proceeds of crime to Rohit Aggarwal, who thus is stated to be the main beneficiary. However, the alleged main beneficiary of the proceeds of crime, Rohit Aggarwal has not been arrested.

Even though, ED not having arrested the co-accused persons, against whom there are more serious allegations, would not be dispositive of a bail plea one way or the other, it will not be wholly irrelevant. In the case of Ashish Mittal Vs. SFIO, 2023 SCC OnLine Del. 2484, the Court held that considering the nature of the offence where the gravamen of the offence is that several persons acting in concert have siphoned off and “laundered” monies, it is manifestly arbitrary for the ED to have made selective arrests and arraignments.

The role of co-accused Paramjeet is that he being an exemployee of SOL and close aide of ex-promoter of SOL i.e. Rohit Aggarwal, while acting as C.O.O./Director/ Shareholder/Controller of M/s. Shivakriti Agro Private Limited played a key role and facilitated the transfer of proceeds of crime through sham transactions of Shivakriti Agro Private Limited with SOL and other companies and facilitated the takeover of SOL indirectly via Umaiza. The role alleged against co-accused Paramjeet, already granted bail, is no lesser than the role of the present applicant.

There is nothing on record to indicate the previous criminal antecedents of the applicant, no reasonable apprehension has been raised by the ED to demonstrate that applicant will commit similar offence while on bail.

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A single bench of Justice Ravinder Dudeja considering the period of incarceration already undergone by the applicant coupled with the absence of any real likelihood of the trial concluding in near future, the rigors of Section 45 of the PMLA must yield to the constitutional safeguard under Article 21.

The Court viewed that the continued detention of the applicant cannot be justified on the sole of ground of statutory bar under Section 45. The Court is inclined to grant bail to the present applicant. The applicant is directed to be released upon his furnishing a personal bond in the sum of Rs. 1 lakh with two sureties of the like amount each to the satisfaction of trial court/Duty Magistrate.

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