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Synopsis

The Delhi High Court on Friday last week sought the ED's stand on a petition by Hyderabad businessman Ramchandra Pillai challenging his arrest and remand in a money laundering case related to the alleged Delhi excise policy scam.

Pillai has claimed that "third-degree" methods were applied to obtain information. "Third degree" refers to brutality by police officers interrogating an accused.

The bench of Justice Swarana Kanta Sharma asked the probe agency to file a response with respect to the maintainability of the plea.

Advocate Nitesh Rana, appearing for Pillai argued that the March 6 arrest order of the Enforcement Directorate (ED) and the subsequent remand orders passed by the trial court sending him to the agency’s custody and then to judicial custody, were in violation of the provisions of the Prevention of Money Laundering Act (PMLA).

In his plea, the petitioner stated that no grounds for arrest, either oral or written, were ever provided to him, as required under Section 19(1) of the PMLA, and that this also violated the petitioner's constitutional rights. It further contended that the remand orders did not record any satisfaction of whether the ED had materials on record to form “reasons to believe” that the petitioner was guilty of an offence under the PMLA.

“The Directorate of Enforcement, in a vindictive manner and solely as a witch-hunting exercise, has employed coercive tactics to obtain information and used third-degree measures on the petitioner/applicant herein as well as the other accused,” the plea stated.

The ED “was enabled to act in such an illegal manner by the impugned arrest order as well as the impugned remand orders, which in itself is grounds to quash the said impugned arrest order and the impugned remand orders,", it stated.

The counsel for ED contended that the petition was "not maintainable".

Accordingly, the court listed the matter for further hearing on November 3, 2023 when the petitioner’s bail plea is also scheduled for consideration.

Earlier this month, Pillai had sought bail in the case, saying there was "not an iota of evidence" to keep him in jail.

On June 8, the trial court dismissed Pillai’s plea for bail, saying his role was more serious than that of some other accused who were still in jail and that prima facie ED’s case was genuine.

Pillai was not only a participant in the "conspiracy,” but prima facie, he was also found to have been connected with different activities related to the proceeds, including its concealment, possession, acquisition, or use, and projecting it as untainted property, the trial court had said.

The ED has claimed in its chargesheet that Pillai was a close associate of BRS MLC K Kavitha. The ED’s money laundering case stems from a Central Bureau of Investigation (CBI) FIR.

According to the CBI and the ED, irregularities were committed while modifying the Delhi Excise Policy 2021-22 (now scrapped), and undue favors were extended to license holders. The Delhi government implemented the excise policy on November 17, 2021, but scrapped it at the end of September 2022 amid allegations of corruption.

Case Title: Ramchandra Pillai v. Directorate of Enforcement