Delhi Court raps ED for defective probe, flags attempt to save certain individuals

A Delhi Court recently came down upon the Enforcement Directorate (ED) for its defective investigation in a money laundering case and ordered an Assistant Director to show cause why penal and disciplinary action should not be recommended against him..Special Judge Mohd Farrukh said that Pankaj Kumar, who was the Investigating Officer (IO) in the case, had failed to conduct a fair and proper investigation in the case.The Court pointed out that despite having prosecutable material against two persons, they were not made accused. .It also remarked that his conduct of not probing the bank accounts in which the accused had transferred the proceeds of crime and non-examination of those account holders “smacks of intentional mischief to misdirect the investigation as well as withhold material evidence which would have implicated them”“These proceedings asseverate to be not only a glaring case of faulty investigation but also a case of seemingly an investigation coloured with motivation or an attempt to ensure that certain persons can go scot free,” the Court said..The Court made the observations while delivering its judgment on ED’s complaint under Prevention of Money Laundering Act (PMLA) against accused Mukesh Jain, Shiv Kumar Bhargava, Benu Jain, Nipun Bansal and Mohd Nauman (who died during trial).The complaint originated from a case by Central Bureau of Investigation (CBI) alleging that during October 2008 to March 2009, the five accused along with others had conspired for forging and fabricating eight cheques, out of which three were encashed from a branch of Punjab National Bank in Lucknow. .In its verdict on the PMLA complaint, Judge Farrukh at the outset concluded that there can be no money laundering offence against accused Bhargava and Benu Jain since they were acquitted in the predicate offence (A predicate offence is a crime which is a component of larger crime and an offence like money laundering begins with an offence under the Indian Penal Code, which is considered the predicate offence). The Court also looked into the merits of the case against them and came to the conclusion that prosecution had failed to prove the allegations against them. Thus, it acquitted them in the PMLA case as well..However, the Court found sufficient evidence to convict Mukesh Jain and Bansal. It also looked into the defects of the investigation against them.The Court noted that out of ₹1.67 crore credited amount, Mukesh Jain had transferred ₹60.6 lakh thousand into the bank account of M/s Analytical Impex Private Limitd (AIPL) whose Director was Pramod Kumar Pandey.From that account, ₹10 lakh was transferred to the bank account of M/s Saint Grandeur (SG) and ₹50 Lakh were withdrawn in cash.“Thus, an amount of ₹61,000 out of the amount of ₹60,61,000 was still lying in the Bank Account of M/s. AIPL at the time of recording of ECIR,” the order noted..In this regard, the Court observed that the bank account of AIPL was used for laundering the proceeds of accounts and Pandey assisted Mukesj Jain in it. It further noted that SG’s account operated by Adhiraj Kumar was also used for laundering money.“There was ample material before IO that both of them assisted Mukesh Jain in laundering of PoC,” the judge said, adding that nothing prevented ED from proceeding against them.Finding sufficient evidence to proceed against Pandey and Adhiraj Kumar for allegedly having assisted Mukesh Jain, the Court summoned them to face trial under the provisions of PMLA..Likewise, the Court flagged the lack of probe into the money transfers from bank accounts operated by accused Bansal. However, the Court did not find prosecutable evidence against those account holders and thus did not issue any direction.Finding that that IO had prima facie committed acts of omissions and commissions that result in a defective investigation, the Court issued notice to him to show cause why a disciplinary and penal action should not be recommended against him. .The Court also said that there was no explanation why it took around a decade to complete the probe in the money laundering case.“It appears from the record that Officers concerned in DoE were just kept sitting over the file and they did not bother to supervise investigation of the present case,” it said.Special Public Prosecutor Naveen Kumar Matta represented the Enforcement Directorate.Advocates Deepak Bhadana, Qamar Ali and RP Shukla represented the accused. [Read Judgment]