Delhi court criticizes ED for faulty investigation in money laundering case

A Delhi court criticized the Enforcement Directorate (ED) for its defective investigation in a money laundering case. The court ordered an Assistant Director to show cause why penal and disciplinary action should not be recommended against him. It said that ED must introspect as to what steps are required to be taken by it for ensuring expeditious and fair investigation in all the cases.

Special Judge Mohd Farrukh observed that Pankaj Kumar, who was the Investigating Officer (IO) in the case, had failed to conduct a fair and proper investigation in the case. The court further mentioned that despite having prosecutable material against two persons, they were not made accused.

The Special Judge was dealing with a complaint case filed by ED against five individuals for alleged commission of offences under Section 3 and 4 of the Prevention of Money Laundering Act. One of the individuals died during the trial.

Allegedly in 2009, the accused persons conspired among themselves to forge and fabricate eight cheques. Among those, three cheques were encashed and Rs. 1,46,71,000 was credited to bank accounts operated by two accused persons, causing wrongful loss to PNB and its account-holders and wrongful gain to themselves.

In addition, it was also alleged that the accused attempted to encash the remaining five forged and fabricated cheques, however, their attempts could not fructify as the forgery of cheques were detected by banks.

Highlighting the defects in the ED investigation, the court slammed the IO (Assistant Director, ED) for not arraigning two individuals as accused in the case despite ample evidence that they assisted the primary accused in laundering proceeds of crime. It further mentioned that the ED did not take steps to trace the whereabouts of one of the individuals or take coercive steps against him.

The judge stated that both notices under Section 91 of CrPC were given to the concerned banks to produce documents of the persons who opened the accounts and had been operating them.

The court also said that the IO failed to conduct any investigation as to who were the persons operating the bank accounts and under what circumstances, the tainted money was credited to such accounts.

The court added that the proceedings asseverate to be not only a glaring case of faulty investigation but also a case of seemingly an investigation coloured with motivation or an attempt to ensure that certain persons can go scotfree.

The court remarked that there was not only undue, unwarranted and unexplained delay for over 9 to 10 years in presenting the chargesheet or complaint, but also the investigation was faulty. It underlined that it is for the competent authority of ED to look into the circumstances and reasons for the delay and defects in the investigation and fix the responsibility of erring officers liable for such lethargy.

The court further convicted two accused in the case, and acquitted the other two accused persons. The court also summoned the two individuals for whom it criticised the IO to face the trial afresh and separately under Section 3 and 4 of PMLA.