A special court of Delhi’s Patiala House Court has discharged 3 accused Manoj Jayaswal, Ramesh Jaiswal and Abhijeet Infrastructure Limited in connection with the alleged wrongful receipt of coal block allotment letter and laundering of around Rs 650 crore rupees.
The money was received by the Abhijeet Group as share application money and term loan from banks after having secured allocation of the Brinda, Sisai and Meral Coal blocks from the Coal Ministry.
Manoj Jayaswal and Abhijeet Infrastructure Ltd. were both represented by Advocate Vijay Agarwal before Special Judge Arun Bhardwaj. This is the first case of discharge granted in any case filed by the ED in coal block allocation related matters.
ED alleged that the company allotted shares at a premium of multiple times the value of the shares and thus inflated its net worth from 30 Crores at the pre-allocation stage to about 750 crores after getting the coal block allocated and on the basis of the inflated net worth, obtained huge loans from banks.
It was alleged that after de-allocation of the block, the net worth of Abhijeet Group came down to minus 69 crores in the year 2018.
The ED’s case arose out of a CBI case relating to the obtainment of allocation of coal blocks, Brinda, Meral and Sisai by Abhijeet Infrastructure Ltd by using forged documents and by misrepresenting about its status prepared to the Screening Committee and Steel and Coal Ministry.
Manoj Kumar Jayaswal of the Abhijeet Group has been made an accused in 6 cases by the CBI and in almost an equal number of cases by the ED.
On behalf of the accused, Advocate Vijay Agarwal argued that the ED’s case in the matter is baseless as ED has no power to presume the commission of an offence and act on it, but rather, the offence of money laundering which the ED is empowered to investigate must necessarily be confined within 4 corners of the scheduled offence.
Further, it was argued that if ED makes attempts to make a case beyond the confines of the scheduled offence or by presuming, then the case so presented must necessarily disintegrate and crumble, for the lack of any base to sustain the superstructure of the case.
Advocate Vijay Agarwal also argued that there is only one scenario in which proceeds of crime can be stated to be generated out of an allocation and that is when the coal from the block is extracted sold and the amount so generated gets utilized.
Advocate appearing for the accused highlighted that, the assumption of the ED that mere investment into the shares of the company would amount to generation of proceeds of crime is a fundamentally flawed one and the ED has made a futile attempt to join the CBI case with the ED case by attempting to mask the allocation letter as property but case of the ED is not sustainable as when the thinly veiled attempt of the ED is unmasked, it gets revealed that there is no umbilical cord to connect the ED’s case with the CBI’s case and both the cases are independent in their own universes which is not the scheme envisaged in the Prevention of Money Laundering Act (PMLA) 2002.
On behalf of the ED, it was strongly opposed that the contentions of the counsel for the accused and argued that the Supreme Court in the matter of Manoharlal Sharma held the allocation letter to be a grant of largesse by the government and therefore the same should be construed as proceeds of crime.
Further he relied upon the judgment of the Supreme Court in Vijay Madanlal Chaudhary for claiming that the offence of money laundering is an independent offence. He also showed the statement of a witness to the court who claimed that he bought the shares of M/s Abhijeet Infrastructure Ltd. at a high premium only because the company had been allocated a coal block.
Furthermore, ED also alleged that the accused indulged in insider trading as they knew that their fortunes would skyrocket.
The Court noted that the ED’s witness, who was the sole witness and claimed to have invested in the company due to the company having been allocated a coal block that have invested a mere 0.01% of the total amount of Rs 320 crores alleged to have been obtained on account of the allocation of coal block and the Trial Court noted the same to be a hollow statement.
Also, the Trial Court noted that even though upon a query of the court, the IO of the case stated the directors of some of the companies that could not be contacted for serving notice, the counsel for the accused were successfully able to show that the same directors deposed as witnesses before the Court in another matter and therefore could have been served in this case also.
