Money Laundering Case: Delhi HC Stays Proceedings Against Hero Motocorp’s Pawan Munjal

The Delhi High Court on Friday stayed the proceedings against Hero Motocorp chairman Pawan Kant Munjal in the money laundering case being probed by the Enforcement Directorate (ED).

Justice Saurabh Banerjee issued notice to the investigating agency on Munjal’s petition against the ED case and granted it time to file its reply.

While granting the interim relief, the judge observed that a similar stay order was recently passed on the predicate offence under the Customs Act and the petitioner has been exonerated by the Customs, Excise and Service Tax Appellate Tribunal in that matter.

The court ordered, “Accordingly, there shall be a stay of proceedings under the ECIR.”

The court clarified that the stay was in relation to the petitioner only and the ED was free to proceed further according to law.

The Directorate of Revenue Intelligence filed a prosecution complaint last year on charges of allegedly “carrying, attempting to export and illicit export of prohibited items, that is, foreign currency” against Munjal, a 3rd party service provider company called SEMPL and individuals identified as Amit Bali, Hemant Dahiya, KR Raman and some others.

DRI, an investigation arm of the Central Board of Indirect Taxes and Customs, filed a charge sheet before a Delhi court under section 135 of the Customs Act (evasion of duty or prohibitions) in the case.

Subsequently, ED registered the current case under various sections of the Prevention of Money Laundering Act.
On November 3, the high court stayed the proceedings in the DRI matter.

Senior advocate Mukul Rohatgi, appearing for the petitioner, argued that when the proceedings in the DRI case that is the predicate offence has been stayed, the money laundering case can’t go on.

The senior lawyer argued, “The cause of action is the (DRI) complaint. The show cause resulted in exoneration. In that case, the court has stayed the proceeding then this ECIR, summons should be stayed. Result in this case will depend on the first matter.”

The ED counsel opposed the petition on the ground that it wasn’t maintainable and was premature. He stated money laundering was a separate offence, which can be probed even if there was a stay order in the predicate offence.

ED alleged that Munjal used foreign currency issued in the name of others for his personal expenditure abroad to “override” RBI rules and attached his assets worth Rs 24.95 crore as part of the money laundering investigation.

The central agency stated in a statement, 3 immovable properties (in the form of lands) of Munjal located in Delhi have been provisionally attached under the provisions of the PMLA.

The ED earlier carried out raids against Munjal and his companies in August after filing a criminal case under the PMLA against him.