: The Enforcement Directorate (ED) cannot assume the role of questioning the fairness of contractual terms entered into between private parties, a Delhi court has ruled as it dropped money laundering charges against former Sirsa legislator and businessman Gopal Goyal Kanda and his brother Gobind Kumar Goyal in connection with the case involving realty firm Supertech Limited and its chairman Ram Kishore Arora.
ED named Kanda, promoter of MDLR Group, a real estate developer, and his brother as accused in its supplementary charge sheet filed in January this year in the PMLA case against Supertech.
The case stems from allegations that Supertech collected advances from nearly 600 homebuyers and borrowed from banks, which were diverted to buy properties in Gurugram instead of completing existing projects in Noida. ED filed a charge sheet naming Arora and nine others in August 2023, pegging proceeds of crime at ₹228 crore.
The supplementary charge sheet, however, revised the proceeds of crime to ₹746 crore, including an additional ₹49.67 crore linked to Kanda and his brother for allegedly colluding with Arora to execute a sham compromise deed against obtaining licence for a land from the Haryana government for a land purchased from Kanda’s firm.
Coming down heavily on ED, special judge Jitendra Singh (MP/MLA cases) at Rouse Avenue Court in his order on Wednesday said: “The pivotal issue which arises in this case, therefore, is whether the ED can, in law, travel beyond the scope of the predicate offences to term any amount as ‘proceeds of crime’ in the absence of a corresponding allegation in such offences. When the FIRs themselves quantify the cheated amount at ₹228 crores, the projection of ₹697 crores, and further attribution of ₹49.67 crores to A-11 (Gopal Kanda) and A-12 (Gobind Goyal), appears legally unsustainable...”
{{/usCountry}}Coming down heavily on ED, special judge Jitendra Singh (MP/MLA cases) at Rouse Avenue Court in his order on Wednesday said: “The pivotal issue which arises in this case, therefore, is whether the ED can, in law, travel beyond the scope of the predicate offences to term any amount as ‘proceeds of crime’ in the absence of a corresponding allegation in such offences. When the FIRs themselves quantify the cheated amount at ₹228 crores, the projection of ₹697 crores, and further attribution of ₹49.67 crores to A-11 (Gopal Kanda) and A-12 (Gobind Goyal), appears legally unsustainable...”
{{/usCountry}}Dropping money laundering charges against Kanda and his brother, the court warned ED to ensure that “all future actions are undertaken strictly within the four corners of law and remain firmly anchored to the predicate offence”.
Noting that ED cannot assume the role of “questioning the fairness or wisdom of contractual terms entered into between private parties”, the court said: “The jurisdiction of ED under PMLA is confined to establishing a demonstrable nexus between the proceeds of crime arising from a scheduled offence and the property or transaction sought to be attached or prosecuted. Unless the transaction in question is shown to be a facade or camouflage designed for the purpose of laundering the tainted funds relatable to the predicate offence, ED cannot, under the guise of investigating money laundering, sit in judgment over the contractual bargains voluntarily undertaken between parties.”
HT reached out to Kanda’s legal team, but they refused to comment on the matter.