SC gives ex-Chhattisgarh bureaucrat interim protection from arrest in liquor scam case booked in UP

In February 2020, the Income Tax Department searched premises owned by Tuteja and lodged a case before the Tis Hazari Additional Chief Metropolitan Magistrate Court. Based on the income tax complaint, the ED registered an Enforcement Case Information Report (ECIR) on November 18, 2022, alleging that a liquor scam had come to light in Chhattisgarh.

In April 2023, the magistrate court returned the income tax complaint citing lack of territorial jurisdiction.

In the meantime, the ED wrote to the additional director-general of police of an Uttar Pradesh Special Task Force, with certain information about a company called M/s Prizm Holography & Security Films Pvt Ltd, Noida. On the basis of this, the UP police registered an FIR against five people including Tuteja.

The company was allegedly illegally granted a tender to supply holograms (to be fixed on liquor bottles for its authentication and to confirm excise duty payments) to the Chhattisgarh excise department.

The Supreme Court later quashed the ECIR saying there was no scheduled offence as contemplated under the Prevention of Money Laundering Act for registering it.

The accused then approached the Allahabad High Court seeking the quashing of the Uttar Pradesh FIR on the ground that it was also registered on the basis of same witness statements.

However, the high court rejected the plea. “We are of the view that when on the date when the ED had communicated to the State of Uttar Pradesh on 28.7.2023 (purportedly under section 66(2) of the PML Act 2002) then on that date, the prosecution complaint was very much surviving and, therefore, there was nothing wrong in the communication being sent on 28.7.2023 and in the lodging of the FIR on 30.7.2023,” the court said.

The high court further said, “The answer to the question that whether when the prosecution complaint itself had been done away with, could the FIR stand on the basis of the statements etc. which were recorded under section 50 of the PML Act, 2002, would be that definitely the information which was gathered under section 50 of the PML Act, 2002, was a material in the possession of the Director of ED which had to be transmitted to the concerned agency for necessary action.

“In the instant case, the State of Uttar Pradesh was the concerned agency which had to look into the fact as to whether the work of manufacturing holograms was given to M/s. Prizm Holography and Security Films Pvt. Ltd. illegally by the accused persons and whether the accused persons for their illegal acts had charged commission. Also, the State of Uttar Pradesh had to see that when duplicate holograms, in connivance with the accused persons, were being made and for this purpose, the ED had passed on information in its possession to it, then it had to further investigate and bring the guilty to book.”