NEW DELHI: The Delhi High Court has partly allowed the quashing of an Enforcement Directorate (ED) probe in a money laundering case against a real estate company director accused of siphoning funds collected from flat buyers.
Justice Amit Sharma ordered that the agency cannot continue its investigation in a 2019 Enforcement Case Information Report (ECIR) as far as it concerned two First Information Reports (FIRs), registered in 2018 and 2019 as they have been quashed or compounded.
"..the proceedings undertaken concerning the said two FIRs qua the present petitioner in the present ECIR stand quashed," the recently passed order said.
In both the FIRs, the flat buyers had alleged that despite payment of monies in 2006-07, they did not receive possession of flats, as was promised by the accused company Uppal Chadha HiTech. It was alleged that in his capacity as a director of the said firm, the petitioner was responsible for siphoning off the funds collected from the complainants.
However, during the pendency of the respective trials in FIRs, the accused persons therein settled the dispute with the respective complainants amicably, the high court was told.
The accused persons were accordingly acquitted for offenses under cheating, and breaching of trust among other charges by a magistrate court, it was informed.
On the other hand, the central agency submitted that only some of the complainants were settled and that another FIR with similar allegations was still pending, which was registered by the EOW.
In the order, referring to Supreme Court judgments, Justice Sharma pointed out that once the FIR or predicate offense stands quashed, the offense of money laundering tied to such a predicate offense cannot be prosecuted.
"..Thus, in the considered opinion of this Court, in the present case, there can be no prosecution under the PMLA concerning the scheduled offenses in the first two FIRs," the order read.
The High Court, however, stated that ED can continue its investigation in a third FIR by the Economic Offences Wing (EOW) which was registered in 2021 and taken on record in the same ECIR.
It further said, "It is pertinent to note that even in an FIR being investigated by the local police involving multiple complainants, compounding with some of them will not be a ground for quashing of the said FIR. However, partial compounding/quashing is permissible."
