New Delhi: The Supreme Court Friday questioned the Enforcement Directorate’s (ED’s) proceedings against a senior civil servant in the previous Bhupesh Baghel government and his son in connection with an alleged liquor syndicate racket in Chhattisgarh, under the Prevention of Money Laundering Act (PMLA).
A bench of Justices Abhay S. Oka and Ujjal Bhuyan noted in oral observations that the central agency initiated the probe in the absence of a predicate offence (a crime that is a component of a more serious crime) and proceeds of crime.
“If there’s no predicate offence, there are no proceeds of crime. Therefore, there can’t be money laundering,” the bench told Additional Solicitor General S.V. Raju, who was appearing for the ED.
A predicate offence that generates illegal proceeds of crime leads to a separate probe by the ED.
The bench was hearing former IAS officer Atul Tuteja and his son Yash Tuteja’s petition assailing the ED’s move to initiate investigation against them under the PMLA based on an income tax raid against them.
According to the ED, Anil Tuteja, who is said to be close to former Chhattisgarh CM and Congress leader Bhupesh Baghel, is the kingpin of the over Rs 2,000 crore liquor syndicate racket in the state.
Both father and son approached the top court in May last year, claiming PMLA proceedings were premised on an income tax raid, which is not a predicate offence under the anti-money laundering law.
The top court bench then led by Justice Sanjay Kishan Kaul (now retired) had restrained the ED from arresting or acting against Anil and Yash Tuteja, apart from the other accused in the case.
This protection order was issued on 18 July, while around 10 days later the ED complained to the Uttar Pradesh police about fake holograms being manufactured in a company near Noida. These holograms were allegedly being used in bottles distributed in the illegal liquor syndicate.
Based on the UP Police’s FIR lodged in the case, which named Anil and Yash Tuteja, the ED was about to register another case against them under the PMLA. However, it was stopped from doing so when the father and son filed an application before the SC, arguing that the ED had violated the SC’s 18 July order that directed the agency not to take any steps in connection with the alleged liquor scam.
They claimed the new FIR was a ploy by the ED to create a scheduled offence so as to overcome its shortcoming in the liquor scam case. At this, the top court on 7 August asked the UP Police to stay their hands in the case.
On Friday, at the outset, Justice Oka remarked that the ED complaint cannot be entertained since there was no predicate offence.
However, Raju informed the bench a fresh predicate offence was registered and the ED would file a fresh case on its basis. The law officer was referring to the case registered in UP in connection to the alleged fake holograms.
Asked why the ED hadn’t registered any complaint till now, Raju said it was not done due to the stay order given by the SC (in July last year). “The fresh complaint could not operate,” he said.
But the bench remained firm and said it was only concerned with the liquor scam case.
Asking the ED to proceed with its complaint in the fake hologram case, the bench observed: “As far as this case is concerned, there is no predicate offence, therefore there cannot be any proceeds of crime, and therefore the complaint needs to be quashed.”
The hearing has been deferred to 8 April, after the bench asked Raju to clarify whether some other petitions listed with Anil and Yash Tuteja’s petition pertained to the same case.
(Edited by Nida Fatima Siddiqui)