At least three recent rulings of the High Court of Punjab and Haryana in the Rs 5,600-crore National Spot Exchange Ltd (NSEL) fraud has put the Enforcement Directorate (ED) in Maharashtra on the backfoot in its ongoing investigation into the alleged money laundering of at least Rs 800 crore by Maharashtra’s former deputy chief minister Chhagan Bhujbal and his kin, said officials familiar with the development.
The court, in a series of orders between July 25 and August 5, ruled that an accused not arrested by the ED during investigation cannot be arrested once the agency has filed a chargesheet and a competent court has taken cognisance of that complaint. The Indian Express has reviewed the orders passed by the High Court of Punjab and Haryana in connection with two defaulting companies— PD Agro Processors and Ark Imports — which collectively owe at least Rs 1,390 crore to NSEL.
The directors of the two companies, summoned by the ED after the arrest of the promoter of NSEL Jignesh Shah on July 13, moved court fearing arrests by the agency. “…it is made clear that the question of any arrest under Section 19 of the Act (Prevention of Money Laundering Act or PMLA) ibid does not arise at post cognisance stage,” said a July 27 order of the division bench of the High Court of Punjab and Haryana.
According to ED sources, the order essentially means that if the probe agency unearths new evidence against an accused after filing a chargesheet in the trial court, it cannot arrest the accused. Now, the agency fears that the 28 accused in the Chhagan Bhujbal case who have not been arrested during investigation, too will move the Bombay High Court to block arrest on the basis of the orders of the High Court of Punjab and Haryana.
The ED has requested its head office to challenge the orders of the High Court of Punjab and Haryana in the Supreme Court. “The high court order has put fetters on the powers of investigation. We feel that the 28 accused in the Bhujbal case will try to stop arrest using this order as a precedent,” said a source.
On March 30, the agency had filed a chargesheet naming Chhagan Bhujbal, Pankaj, Sameer and 27 other individuals from firms such as Chamankar Developers, Prime Builders and Developers, DB Realty, Balwa group, Neelkamal Realtors and Builders, Neelkamal Central Apartment LLP and Kakade Infrastructure among others.
So far, the ED has arrested only two (Chhagan Bhujbal and Sameer Bhujbal) of the 30 accused in a case where the agency has alleged the Bhujbal family conspired along with several others to divert or ‘launder’ kickbacks received by Chhagan Bhujbal, when he was state Public Works Department minister.
Bhujbal’s son and NCP legislator Pankaj, also an accused, has recently been granted interim protection from arrest by the Bombay High Court.
Currently, the ED is fighting over 42 cases in various courts filed by the Bhujbal family and the 27 other accused named in the chargesheet. The cases pertain to anticipatory bail, quashing of non-bailable warrant and challenging the constitutional validity of arrests made under PMLA.