SANJAY RAGHUNATH AGARWAL versus THE DIRECTORATE OF ENFORCEMENT

Citation: [2023] 5 S.C.R. 461 · Decided: 20-04-2023 · Supreme Court of India · Bench: V. RAMASUBRAMANIAN · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A
B
C
D
E
F
G
H
461
[2023] 5 S.C.R. 461
461
SANJAY RAGHUNATH AGARWAL
v.
THE DIRECTORATE OF ENFORCEMENT
(Criminal Appeal No. 1198 of 2023)
APRIL 20, 2023
[V. RAMASUBRAMANIAN AND PANKAJ MITHAL, JJ.]
Bail – A criminal complaint u/ss. 406, 407, 415 to 420, 120B
r/w s.34 IPC was filed against six persons, including the appellant
– Complaint was, that Farmax India Ltd. availed the services of the
accused in raising Global Depository Receipts (GDRs), to the tune
of INR 318 crores; that though the accused raised the said amount,
they transferred to Farmax only a sum of INR 2.20 crores – According
to the Enforcement Directorate, the appellant and the others had
committed the offence of money-laundering – Enforcement Case
Information Report (ECIR) was lodged – Appellant was arrested on
26.09.2022 – Enforcement Directorate also filed a prosecution
complaint u/ss. 44 and 45 of Prevention of Money-laundering Act,
2002 – From 26.09.2022 appellant was in jail – Held: ECIR and
the lodging of the prosecution complaint in the year 2022 were a
sequel to the registration of the FIR filed in 2013 – No final report
filed in the FIR for the predicate offence, for the past nine years –
De-facto complainant in the FIR for the predicate offence, was
sought to be arrested as an accused in connection with the ECIR,
but the application of the Enforcement Directorate for remand was
rejected – Prosecution complaint filed by the Enforcement
Directorate, gives room for a valid argument that the second
condition found in Clause (ii) of sub-section (1) of Section 45 of
PMLA is satisfied qua the appellant – The continued incarceration
of the appellant not justified – Appellant directed to be enlarged on
bail.
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
1198 of 2023.
From the Judgment and Order dated 07.12.2022 of the High Court
for the State of Telangana at Hyderabad in CRLP No. 9695 of 2022.
A
B
C
D
E
F
G
H
462
SUPREME COURT REPORTS
[2023] 5 S.C.R.
R. Basant, Sr. Adv., M/s. Shakil Ahmad Syed, Tanmaya Mehta,
Syed Ahmed Saud, Lalit Valecha, Daanish Ahmed Syed, Mohd Parvez
Dabas, Uzmi Jameel Husain, Aqib Baig, Advs. for the Appellant.
S. V. Raju, ASG, Mukesh Kumar Maroria, Zoheb Hussain, Annam
Venkatesh, Ashok Panigrahi, Ms. Sairica Raju, Advs. for the Respondent.
The Judgment of the Court was delivered by
PANKAJ MITHAL, J.
1. Leave granted.
2. Heard Shri R. Basant, senior counsel and Shri S.V. Raju, learned
Additional Solicitor General for the parties.
3. A criminal complaint in FIR No.664/2013 was registered on
29.10.2013 with the Cyberabad Police, against six persons, including the
appellant herein for alleged offences under Sections 406, 407, 415 to
420, 120B read with Section 34 IPC. The FIR was registered on the
basis of a complaint lodged by one M. Srinivas Reddy, who was the
Managing Director of a Company by name M/s Farmax India Limited1.
The gist of the complaint was, that Farmax availed the services of the
accused in raising Global Depository Receipts (GDRs), to the tune of
USD 71.09 millions equivalent to INR 318 crores; that though the accused
raised the said amount, they transferred to Farmax only a sum of USD
0.4 millions equivalent to INR 2.20 crores; and that upon enquiry with
the bank, the complainant company came to know that the accused has
misappropriated the balance amount by forging the signatures, with the
help of the pledged documents.
4. It is relevant to note here that the aforesaid FIR was registered,
pursuant to an Order passed by the VI Metropolitan Magistrate,
Cyberabad at Medchal, Rangareddy District, under Section156(3) of
the Code of Criminal Procedure, 1973.
5. Though the FIR was registered more than nine years ago, no
final report has been filed so far. However, the raising of GDR by Farmax
became the subject matter of enquiry by Securities and Exchange Board
of India2. SEBI passed an Order dated 14.07.2020 holding that there
were violations of various provisions of Securities and Exchange Board
1 hereinafter referred to as “Farmax”
2 For Short “SEBI”
A
B
C
D
E
F
G
H
463
of India Act, 1992 and various regulations of Securities and Exchange
Board of India (Prohibition of Fraudulent and Unfair Trade Practices
relating to Securities Market) Regulations, 2003. More particularly, SEBI
found one Mr. Arun Panchariya and a few others guilty of misleading
Indian investors through 14 identical GDR issues involving fraudulent
schemes.
6. Pursuant to the aforesaid, the Enforcement Directorate filed
an information report i
Excerpt shown. Read the full judgment & AI analysis in Lexace.