Grant of anticipatory bail was rejected to persons accused of money laundering worth Rs. 220 Cr

Jagadish Nangineni Vs Directorate of Enforcement (Punjab and Haryana High Court)

Conclusion: Since ED alleged that both assessees were actively involved in the planning and execution of all the transactions involving repeated transfer of funds and were accused of serious economic offences, therefore, grant of anticipatory bail to assessees at this stage would certainly result in putting a spoke in the wheel of the investigating agency and dampen their efforts in elucidating the required information from assessees. Thus, the Court rejected the anticipatory bail application.

Held: Chintels India Limited (Chintels), which owned 149.093 acres of land in Gurugram, applied to the DTCP for the grant of a licence under the 1975 Act for developing a residential colony. On the strength of the licences obtained by Chintels and the collaboration development agreements between Chintels, Sobha and QVC, the land, which was covered under the licences, was started to be developed as a residential colony under the name of ‘International City’. DTCP wrote to the Station House Officer, Police Station village Bajghera, through which the police was informed that as per the agreement terms of the licence Chintels was required to reserve and allot 249 NPNL plots. However, it had been found that only 84 NPNL plots had been allotted and out of these 84 plots, 55 had been allotted by Sobha to Limited Liability Partnerships (for short – LLPs) created by Sobha itself. Thus, by allotting the NPNL plots to virtually itself, Sobha, Chintels and QVC had conspired to commit fraud as also had violated the terms of the licence agreement. Therefore, the police was requested to take penal action against Chintels, Sobha, QVC and the LLPs under Section 10 of the 1975 Act. During the search operations conducted by the ED on the premises of Sobha, Chintels, and QVC several incriminating documents have been found which include documents showing payment of over Rs.220 crores by Sobha to Chintels/ QVC including Rs.120 crores (approximately) as non-refundable deposit paid by Sobha to Chintels/ QVC much before the issuance of the license. Assessees sought anticipatory bail in view of the emergent situation being faced in the country due to rising cases under the Covid-19 pandemic. It was held that on the basis of the investigation conducted so far the ED alleged that assessees had earned huge profits from the sale of Villas constructed by them on the plots which were required to be allotted on a no profit no loss basis; with an attempt to smoke screen their dishonest acts assessees wove a web of agreements; on 25.05.2012 Sobha and co-accused Chintels executed 59 separate agreements to sell 59 NPNL plots to LLPs created by Sobha; since the agreed price for each plot was Rs.48 lakhs (approximately), the cumulative sale consideration payable to Sobhal Chintels was over Rs.28 crores; such payment was agreed to be made on or before 25.05.2014; on 15.06.2012 the LLPs created by Sobha agreed to sell the aforesaid 59 plots to Eunomia, another LLP created by Sobha; since the agreed sale consideration herein for each plot was about Rs.50 lakhs, the total sale consideration payable inter-se the LLPs created by Sobha was over Rs.29 crores; such payment was to be made by 15.06.2014; between 17.03.2012 and 02.07.2012 Eunomia and Sobha entered into joint development agreements and agreed to share revenue in the ratio 17:83; after construction of the Villas they were sold to the general public not by the final vendor under the aforesaid agreements to sell i.e. Eunomia but by Sobha and co-accused Chintels; the rates for these Villas were not at NPNL rates but equal to or even higher than rates fixed for Villas sold under the general category and that though as per the conveyance deed each of the Villas had been sold for Rs.3.56 crores, some of the purchasers, on being questioned by the ED, had stated that they had paid Rs.4.25 crores for the same. The ED alleged that both assessees were actively involved in the planning and execution of all the above transactions involving repeated transfer of funds and that since investigations qua assessees were still going on this might only be the tip of the iceberg. As per the afore allegations both assessees were accused of serious economic offences. The ED was in the midst of analysing the exact role of each of assessees qua the offences they were accused of. Grant of anticipatory bail to assessees at this stage would certainly result in putting a spoke in the wheel of the investigating agency and dampen their efforts in elucidating the required information from assessees. Thus, the Court rejected the anticipatory bail application.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

This order shall dispose of two petitions being CRM-M-9659 of 2021 – Jagadish Nangineni vs. Directorate of Enforcement and CRM-M­16596-2021 – Jagdish Chandra Sharma vs. Directorate of Enforcement both of which have been filed for the grant of anticipatory bail in case bearing No.ECIR/01/HIU/2019 dated 25.01.2019 registered under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (for short – the PMLA), arising out of FIR No.291 dated 13.12.2018 registered under Section 10 of the Haryana Development and Regulation of Urban Area Act, 1975 (for short – the 1975 Act) and Section 420 IPC at Police Station Bajghera, District Gurugram.

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