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Synopsis

The Delhi High Court, on Tuesday, granted bail to businessman Amit Katyal for his involvement in the ‘land for jobs scam’. "There has been no endeavour from him to tamper with the evidence which is essentially documentary in nature or to influence the witnesses”, the bench of Justice Neena Bansal Krishna held. 

The court further added, “The investigations vis-à-vis him already stands concluded and the Prosecution Complaint stand filed… No purpose for his further detention in judicial custody has been made out”. 

Katyal was accused of playing a key role in a conspiracy with former Railway Minister Lalu Prasad Yadav and Prem Chand Gupta to accept illegal payments in exchange for jobs in the Indian Railways. Acting under Yadav's direction, Katyal acquired properties in Patna and transferred M/s AK Infosystems Pvt. Ltd., along with assets worth ₹1.35 crore, to Rabri Devi and Tejaswi Yadav for just ₹1 lakh in 2014, despite the properties being valued 3-4 times higher. The ED claimed that Katyal, with Suman Kumar Nayak, Yadav's Chartered Accountant, manipulated the affairs of companies linked to Yadav's family to evade detection and make past transactions appear legal.

Nayak started receiving a salary as the auditor for M/s AK Infosystems Pvt. Ltd. and M/s AB Exports Pvt. Ltd. from 2017-18, and the balance sheets were altered to reflect assets worth ₹70 lakh acquired in 2010. Katyal was also accused of manipulating these balance sheets to conceal liabilities and proceeds of crime. In 2010, M/s AK Infosystems Pvt. Ltd. purchased property from Yadav's sons for ₹70 lakh, and the company was transferred back to Yadav's family in 2014 for ₹1 lakh. Katyal’s involvement extended to laundering the proceeds of corruption from Yadav’s tenure as Railway Minister and hiding illicit transactions by manipulating company shares and registered addresses while projecting them as legitimate.

Katyal was formally arrested on November 11, 2023, despite not being named in the ECIR. On May 22, 2024, the trial court rejected his bail application, which Katyal argued was flawed, claiming the charges did not constitute money laundering, the law was misinterpreted, and no evidence linked him to the proceeds of crime. 

Katyal had challenged the ECIR but was dismissed by the high court in November 2023. However, in June 2024, the high court directed the AIIMS Director to form a medical board to evaluate Katyal’s health, noting that the court could not independently assess his condition based solely on medical records. Therefore, he was granted interim bail noting that he required care and attention with minute monitoring to achieve adequate physical, mental, and psychological well-being.

ED, represented by Special Counsels Zoheb Hossain and Manish Jain, vehemently opposed the grant of bail, emphasizing that Katyal manipulated records, and covered up past illegalities making him an active participant in the offence. 

Katyal, represented by Senior Advocates Geeta Luthra and Vikas Pahwa, argued that the ED had provided no evidence linking him to the scam or proving that he had benefitted from it. He maintained that he had, in fact, suffered financial losses, which were still recorded in the company’s accounts.

Senior Advocates Geeta Luthra further noted that M/s AK Infosystems Pvt. Ltd. was sold to Rabri Devi and Tej Pratap Yadav through a full shareholding transfer, after which he resigned from the company’s directorship. He emphasized that at the time of the transaction, neither he nor his family members held any government position, and there were no legal barriers to the sale.

The court first remarked that “It is no longer res integra that the predicate offence and the offence under PMLA, 2002 are independent offences and even if the person is not an accused in the predicate offence, he can still be arrayed as an accused under PMLA, 2002”. 

The court observed that Katyal, though alleged to have committed the scheduled offence, was prima facie shown to have laundered the proceeds of the crime. The court rejected the argument of Katyal, noting that, “The petitioner can be an accused under PMLA, 2002 without being an accused in the said RC/CBI case/predicate offence”. 

Furthermore, the court noted that Katyal had cooperated with the investigation under Section 50 of PMLA and was arrested unexpectedly while travelling, without a clear justification for the arrest being provided by the authorities. This selective approach to arresting Katyal, while others had not been arrested, was criticized and deemed to entitle Katyal to bail. 

“Even if it is accepted that the non-arrest of the main accused persons may not be a relevant fact and the role of each accused has to be considered individually and that in itself would not entitle the petitioner to bail, what thus, becomes important to consider is whether the allegations made against the petitioner entitle him to the benefit of proviso to S.45 PMLA wherein he need not satisfy the twin test in order to get Bail”, the court outlined. 

Finally, the court noted that Katyal's involvement in the laundering case, limited to one land transaction worth Rs. 10.83 lakhs, fell under the proviso exempting them from the twin conditions for bail. Given that the investigation was concluded, and the prosecution complaint had been filed, the court found no justification for further detention, as Katyal was not a flight risk and had not attempted to tamper with evidence or influence witnesses.

For Petitioner: Senior Advocates Geeta Luthra and Vikas Pahwa with Advocates Bina Gupta, Gurpreet Singh, Bakul Jain, Jatin S. Sethi, Namisha Jain, Nancy Shamim, Aakansha, Sheena Tauqli, Aadarsh Kothari, Manit Walia, Shivam Bansal, Aayushee Gautam and Rishabh Dahiya
For Respondent: Special Counsels Zoheb Hossain and Manish Jain with Advocates Vivek Gurnani, Vivek Guurav, Kanishk Maurya, Pranjal Tripathi and Kartik Sabharwal
Case Title: Amit Katyal v Directorate Of Enforcement (2024:DHC:7113)