[IHFL case] Delhi High Court restrains ED from taking coercive action against Harish Fabiani, others

The Delhi High Court on Monday restrained the Directorate of Enforcement (ED) from taking any coercive action against Harish Fabiani and other officials of Indiabulls Housing Finance Limited (IHFL) in a case alleging financial irregularities on their part [Harish Fabiani and Ors v. Enforcement Directorate and Ors]..A Division Bench of Justices Siddharth Mridul and Anup Jairam Bhambhani passed the order in a matter related to the ED’s investigation into offences alleged in the first information report (FIR) registered at the Wada Police Station in Maharashtra’s Palghar district. It was made clear today that the protection is being given only to officials who were before the Court in the present petition..Fabiani and others had approached the Delhi High Court arguing that even though the Bombay High Court had stayed the Palghar FIR in April last year, the ED registered an Enforcement Case Information Report (ECIR) based on the same FIR and is continuing with its investigation.The said FIR had been lodged by one Ashutosh Kamble, who claimed to be one of the shareholders of IHFL, alleging that the company’s promoters and directors were involved in siphoning off funds and committing accounting irregularities.The Bombay High Court questioned the bona fides of the complainant and stayed all the proceedings emanating from the FIR..Senior Advocate Rajiv Nayar, appearing for Fabiani and others, stated today that despite the Bombay High Court order, the ED has registered an ECIR based on which summons are being issued and a Look-Out Circular (LOC) has been opened against Fabiani, who is a non-resident Indian (NRI).Advocate Amit Mahajan, appearing for the ED, said that the petition has challenged the vires of several sections of the Prevention of Money Laundering Act (PMLA) that are already pending before the Supreme Court. Therefore, the Bench in the instant case should wait for its outcome..Though Nayar asked for a stay on the LOC issued against Fabiani, the Court refused the relief and issued notice to the ED and others on the prayer relating to the quashing of the ECIR.The respondents have been directed to file their responses within two weeks. A week has been granted to file the counter-affidavit thereafter.The case will now be considered on March 16.