The Delhi High Court on November 17 issued a stay on the Enforcement Directorate's proceedings against Hero Motorcorp's Chariman and Managing Director (CMD) Pawan Kant Munjal.
The high court noted that since the Director of Revenue Intelligence's (DRI) complaint which is the genesis of ED's investigation has itself been stayed by the HC on November 3, the ED proceedings need to be stayed as well. The court has however clarified that the stay has been issued only in relation to Munjal and ED can continue its investigation with respect to others in the case. The case is now likely to come up for hearing on March 21.
The probe originated from a DRI complaint against an individual purportedly close to Munjal. This person was under scrutiny for allegedly carrying undeclared foreign currency.
Senior advocate Mukul Rohatgi, representing Munjal, argued that the ED is "piggy riding" on the DRI's complaint, and therefore, the ED proceedings should be stayed. Rohatgi told the court that these alleged events took place five years ago, however they are being investigated upon now.
On the other hand, lawyer Zoyeb Hossain, representing the ED, countered that the central agency's investigation is not dependent on the DRI's investigation. Hussain further told the court that the customs department was concerned with Rs 81 lakhs apprehended at the customs border while the ED is investigating a larger offence involving an amount of over Rs 41 crore which Munjal benefited from. Hossain further argued that the ED has reasons to believe that Munjal was the beneficiary of the undeclared foreign currency.
On November 3, the Delhi HC stayed the proceedings relating to foreign currency registered by the DRI. In its order, the court noted that Munjal has been exonerated by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the same set of facts, however this was not disclosed at the trial court and that the petitioner has been able to make out a case for interim protection.
"Considering the contentions raised by the senior counsel appearing for the petitioner, especially the fact that the summoning order has been passed without giving any reasons for the same, this court is of the opinion that prima facie, the matter requires consideration," the order by Justice Saurabh Banerjee said.
ED attaches assets linked to Munjal:
On November 10, the ED provisionally attached three immovable properties of Munjal in Delhi under the Prevention of Money Laundering Act (PMLA). The ED conducted raids against Munjal and his companies in August following the initiation of a PMLA case. This case was filed based on the Directorate of Revenue Intelligence (DRI) charge sheet, which accused him of illegally taking foreign exchange/currency out of India.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
