Transfer of probe to SFIO doesn't bar parallel proceedings under PMLA: Delhi High Court

The Delhi High Court recently held that transfer of investigation to the Serious Fraud Investigation Office (SFIO) under the Companies Act of 2013 does not bar parallel proceedings under the Prevention of Money Laundering Act, 2002 [Sanjay Aggarwal v Union of India & Ors].  

A Division Bench of Justices Anil Kshetarpal and Harish Vaidynathan Shankar said that  SFIO’s authority extends only to offences under the Companies Act and does not prevent other agencies from probing distinct offences under other laws. 

“Moreover, a purposive and harmonious construction of the statutory regime confirms that the [Companies] Act of 2013 is merely applicable to the offences relating to companies and does not extend to offences under other laws, including the PMLA. While Section 212 [of Companies Act] is a self-contained code governing SFIO investigations into company affairs, its scheme does not preclude other agencies, in their own domain, from probing offences under separate laws,” the Court observed. 

The Bench made the observations while dismissing a batch of petitions filed by businessmen challenging the Enforcement Directorate’s (ED) provisional attachment of their properties in connection with an alleged ₹6,000-crore foreign exchange remittance scam involving shell companies and falsified trade documents.

It was argued by the petitioners that once the Central government handed the case over to the SFIO in October 2015, both the CBI and ED were barred from continuing parallel investigations. They also contended that no chargesheet under the Code of Criminal Procedure (CrPC) had been filed against them, making the attachment of their properties illegal. 

After considering the case, the Court rejected these arguments and also ruled that a pre-attachment chargesheet is not mandatory under PMLA.

Therefore, it dismissed the petitions. 

Advocates Naveen Malhotra, Ritvik Malhotra, Nilansh Malhotra, RK Handoo, Yoginder Handoo, Aditya Chaudhary, Ashwin Kataria, Garvit Solanki, Fateh Singh, Gaurav Vishwakarma and Aditya Aggarwal appeared for the petitioners. 

Special Counsel Anupam S Sharrma with advocates Vivek Gurnani, Harpreet Kalsi, Abhishek Batra, Ripudaman Sharma, Vashisht Rao, Riya Sachdeva, Vishesh Jain and Anant Mishra appeared for the ED.

CGSC Ripudaman Bhardwaj with advocates Kushagra Kumar and Amit Kumar Rana appeared for the Central government. 

[Read Judgment]