No coercive steps against Bhushan Steel ex-promoter Neeraj Singal in PMLA matter related to fraud case: Delhi HC to ED

By: |
December 18, 2019 6:42 PM

The ex-promoter of Bhushan Steel has sought quashing of the Enforcement Case Information Report (ECIR) lodged by the agency in connection with the fraud case against him and the consequential proceedings, saying the offence was added to the schedule of offences under PMLA after the Act was amended.

Bhushan Steel, Delhi High Court, Neeraj Singal, PMLA, Enforcement Directorate, Companies Act, SFIO, ECIRAccording to Singal’s plea, section 447 of the Companies Act which provides the punishment for fraud was added to the scheduled offences after the amendment and, therefore, the ED cannot take action against him for that.

The Delhi High Court on Wednesday directed the Enforcement Directorate (ED) not to take any coercive steps against Bhushan Steel ex-promoter Neeraj Singal pursuant to summons issued to him in a money laundering case registered in connection with alleged siphoning of funds worth over Rs 2,000 crore. A bench of Chief Justice D N Patel and Justice Rekha Palli issued notice to the Centre and ED, seeking their stand on Singal’s plea for a declaration that the Prevention of Money Laundering Act (PMLA) cannot be made applicable retrospectively, and directed him to cooperate with the investigation.

The ex-promoter of Bhushan Steel has sought quashing of the Enforcement Case Information Report (ECIR) lodged by the agency in connection with the fraud case against him and the consequential proceedings, saying the offence was added to the schedule of offences under PMLA after the Act was amended. Under the PMLA, there is a schedule of offences in connection with which ED has the power to register money laundering cases. According to Singal’s plea, section 447 of the Companies Act which provides the punishment for fraud was added to the scheduled offences after the amendment and, therefore, the ED cannot take action against him for that.

His petition has claimed that when the offence of fraud was allegedly committed by him, it was not in the schedule of offences. He has said that the Serious Fraud Investigation Office (SFIO) was probing the allegations of fraud against him in connection with the alleged siphoning of funds worth over Rs 2,000 crore. The ED, represented by central government standing counsel Amit Mahajan, told the court that only section 447 of Companies Act was added in the schedule under PMLA after the amendment and the other charges he is facing are part of the schedule.

After hearing both sides, the court said, “Notice. Returnable on February 25. Meanwhile, no coercive steps be taken against the petitioner by the respondents keeping in mind the amendment in PMLA, especially in the schedule of offences with regard to section 447 of Companies Act….” The court directed Singal to cooperate with the investigation.

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