(B.R. Gavai and Sandeep Mehta, JJ.)
Jaskaran Singh Chawla ______________________________ Petitioner;
v.
Union of India and Others ________________________ Respondent(s).
Writ Petition (Criminal) No(s). 246 of 2022, decided on February 27, 2024
The Order of the Court was delivered by
Mehta, J.:—
1. The petitioner who is a practising advocate has invoked the jurisdiction of this Court under Article 32 of the Constitution of India raising an important issue regarding failure of the concerned agencies to address the humongous fraud allegedly committed by M/s. Amtek Auto Limited (hereinafter being referred to as ‘AAL’) and its associate companies in its banking related transactions, debt obligations, etc.
2. During the course of hearing of the writ petition, this Court was informed that one of the journalists who was investigating into the matter and was trying to reach at the bottom of the matter, was being followed by certain unknown elements/persons. Looking to the serious nature of allegations, the office of the learned Attorney General was directed to take measures for ensuring the personal safety of the said person and his family.
3. Mr. Kavin Gulati, learned Senior Advocate was requested to assist the Court as an Amicus Curiae. On 3rd November 2022, the learned counsel representing the parties submitted that the affairs of the corporate entity in question (AAL) are presently being investigated into by two agencies, namely, Central Bureau of Investigation (hereinafter being referred to as ‘CBI’) and the Serious Fraud Investigation Office (hereinafter being referred to as ‘SFIO’).
4. It was stated that the investigation undertaken by the SFIO was at an advanced stage while the investigation by the CBI was yet to take off.
5. Learned counsel for the petitioner contented that nineteen banking institutions were involved in the matter out of which only five had responded and only one bank had confirmed that the transactions in question could be called and summed up as ‘fraud’. Accordingly, the SFIO and CBI were directed to enquire with all the banks/financial institutions concerned and present the status report for perusal of the Court.
6. Today, during the course of the hearing, the status reports on behalf of the SFIO and CBI have been presented in the Court. A perusal of these reports would indicate that the Central Government issued a supplementary order dated 22nd April, 2020 to investigate affairs of the companies, namely, M/s. Amtek Auto Limited, ARGL Limited and Metalyst Forgings Limited. These directions were given on the representation made by the Insolvency and Bankruptcy Board of India.
7. The SFIO has appointed a Chartered Accountant firm on 3rd June 2022, but owing to the voluminous record and complex transactions and large number of entities involved in the affairs of the Companies Under Investigation (hereinafter being referred to as ‘CUIs’), the firm could not complete the process. It is mentioned in the report that the Amtek group has created a web of more than 500 companies. Dummy directors have been appointed in the related entities. Misrepresentation has been made in books. There has been diversion and siphoning of loans through related and controlled entities by various modes.
8. Prima-facie the evidence collected thus far has indicated that the funds of CUIs were diverted in land deals and real estate projects, etc. Undue benefits have been given to the family members and close relatives of the directors. It is contended by the learned counsel for the petitioner that the total amount involved in the fraud may touch the figure of Rs. 27,000 crores.
9. This Court was also apprised that large number of banks/PSUs have closed the loan accounts by accepting mere 20 percent repayment. Doubts have also been cast on the role of the accounting firm owing to the Resolution Professional being its erstwhile employee.
10. Be that as it may, looking to the above facts, we feel that the possibility of large-scale money laundering having taken place in relation to public monies procured from the Public Sector Banks cannot be ruled out and is rather imminent.
11. Learned counsel representing the petitioner, vehemently and fervently contented that the investigation should be directed to be conducted under the supervision of a retired Judge of this Court in order to ensure fairness, non-arbitrariness and for instilling public confidence.
12. Mr. Kavin Gulati, learned Amicus Curiae also submitted that the investigation conducted so far has not yielded any tangible results. For reaching to the root of the humongous fraud and for ensuring speedy and fair investigation, further investigation may be assigned to the specialized agency i.e. the Enforcement Directorate (hereinafter being referred to as ‘ED’) who has available, a comprehensive mechanism tailor made to conduct the investigation into the fraud of huge proportions which has come to light after preliminary investigation by the SFIO and the CBI.
13. Learned ASG-Mr. Sanjay Jain also does not oppose the said prayer. It is not disputed that the ED is armed with extensive mechanism to conduct investigation into the subject transactions which may also lead to unearthing of money laundering offences punishable under Prevention of Money Laundering Act, 2002.
14. In this view of the matter, we hereby direct that an exhaustive investigation of the issues raised by the petitioner in this writ petition pertaining to huge banking fraud which may run into Rs. 27,000 crores of public money shall be conducted by the ED. We request the learned ASG to issue necessary directions to the ED for compliance of this order.
15. However, the investigation/enquiry being carried out by the SFIO and the CBI shall continue and will not be prejudiced by this order. Both the agencies shall fully cooperate with and complement the ED in the process of collection of evidence. Copies of the enquiry reports submitted on behalf of the SFIO and the CBI shall be provided to learned Amicus Curiae as well as learned counsel for the petitioner.
16. We also make it clear that mere closure/settlement of the accounts by the banks concerned shall not come into the way of the ED to investigate the matter fully and also regarding the entire amounts involved in the fraud.
17. The matter shall be renotified after six months for receiving status report from the ED.
18. List on 2nd September, 2024.
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