Delhi HC stays proceedings in money laundering case against Pawan Munjal

New Delhi: The Delhi High Court on Friday stayed the proceedings against Hero Motocorp chairman Pawan Kant Munjal in a 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 (CESTAT) in that matter.

"Accordingly, there shall be a stay of proceedings under the ECIR," the court ordered.

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 (DRI) had 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 third party service provider company called SEMPL and individuals identified as Amit Bali, Hemant Dahiya, K R Raman and some others.

DRI, an investigation arm of the Central Board of Indirect Taxes and Customs (CBIC), 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 present case under various sections of the Prevention of Money Laundering Act (PMLA).

On November 3, the high court stayed the proceedings in the DRI matter.

Senior advocate Mukul Rohatgi, appearing for the petitioner, Friday argued that when the proceedings in the DRI case i.e the predicate offence has been stayed, the money laundering case cannot go on.

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

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

Recently, 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 a money laundering investigation.

Three immovable properties (in the form of lands) of Munjal located in Delhi have been provisionally attached under the provisions of the Prevention of Money Laundering Act (PMLA), the central agency said in a statement.

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

The ED has said Salt Experience and Management Pvt Ltd (SEMPL) allegedly "illegally exported foreign currency equivalent to about Rs 54 crore to various countries during the period 2014-2015 to 2018-2019 which was ultimately used for personal expenses of P K Munjal".

SEMPL, it has alleged, got issued foreign exchange to the tune of about Rs 14 crore in the name of its officials/ employees such as Hemant Dahiya, Mudit Aggarwal, Amit Makker, Gautam Kumar, Vikram Bajaj and Ketan Kakkar over and above the annual permissible limit of USD 2,50,000 in various financial years.

SEMPL has also drawn foreign exchange/ travel forex cards in huge amounts in the name of other employees who didn't even travel abroad, it has claimed.

The matter would be heard next on March 21.