Dismissed

Hitesh Gandhi v. Ed

Himachal Pradesh HC8 Nov 2024CRMPM/1746/2024

Case brief

AI extract

What is this about?

The applicant sought bail in an ECIR registered for alleged fraud in scholarship funds under the PMLA. The Court dismissed the application, holding that the applicant failed to satisfy the twin conditions of Section 45 of the PMLA and distinguishing cases where bail was granted on specific facts.

What the court decided

AI extract

Hitesh Gandhi Vs Ed — Money Laundering | Himachal Pradesh HC (2024)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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CrMP(M) No. : 1746 of 2024 Reserved on : 22.08.2024 Decided on : 08.11.2024 Hitesh Gandhi …Applicant Versus Enforcement Directorate Office (ED) …Respondent

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Coram

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The Hon’ble Mr. Justice Virender Singh, Judge.

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Whether approved for reporting?¹

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For the applicant : Mr. Ashok Sharma and Mr. N.S. Chandel, Senior Advocates, with Mr. Jyotirmay Bhatt and Mr. Sushmit Bhatt, Advocates. For the respondent : Mr. Balram Sharma, Deputy Solicitor General of India, with Mr. Ajeet Singh Saklani, standing counsel.

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Virender Singh, Judge.

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By way of the present application, filed, under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter referred to as the ‘BNSS’), a prayer has

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been made to release applicant-Hitesh Gandhi, on bail, in

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1 Whether Reporters of local papers may be allowed to see the judgment? Yes.

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case No. ECIR/SHSZO/04/2019, dated 22.07.2019, registered with the Enforcement Directorate Office (ED), Sub-Zonal Office, Rani Villa, Bagrian House, Strawberry Hills, Chhota Shimla, Shimla, Himachal Pradesh, on the ground that he remained in judicial custody for almost two years.

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It is the case of the applicant that he has been arrested on the basis of convenient presumption on the part of ED and such presumption cannot be the basis for keeping him in custody.

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As per the applicant, he is an innocent person, has not committed any offence and has falsely been implicated, in this case.

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According to the applicant, the case of the prosecution is based on the alleged documents, which are already in the possession of the ED and the charge sheet already stands filed before the Competent Court of Law and, as such, there is no probability of tampering with the record.

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The property, lockers, etc. of the applicant is stated to have been attached by the ED and nothing has to

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be recovered from him. The passport of the applicant is also stated to have been handed over to CBI. According to the applicant, there are no chances of his absconding, in the event of bail, being granted to him.

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Apart from this, the applicant has given certain undertakings, for which, he is ready to abide by, in case, he is ordered to be released on bail.

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Earlier, the applicant had filed CrMP (M) No. 2636 of 2023 for grant of regular bail, before this Court, however, the same was dismissed, by this Court, vide order dated 12.01.2024.

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Thereafter, vide order dated 28.06.2024, passed in CrMP (M) No. 1264 of 2024, the jail authorities were directed to take the applicant to the hospital, where, his uncle was stated to be admitted and in pursuance of the directions of this Court, the applicant was taken to the hospital, where, his uncle was admitted.

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Also, vide order, dated 9^th July, 2024, passed by this Court, in CrMP (M) No. 1470 of 2024, six days’ interim bail, with effect from 16.07.2024 to 21.07.2024, was granted to the applicant.

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Thereafter, vide order, dated 6^th August, 2024, passed in CrMP (M) No. 1662 of 2024, the applicant has been ordered to be released, on interim bail, with effect from 7^th August, 2024 till 15^th August, 2024.

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On the basis of above facts, a prayer has been made to allow the present application.

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When put to notice, the status report/reply, on behalf of ED, has been filed, mentioning therein that the applicant has been arrested, under Section 19 of the PMLA, as per the procedure, established, under law.

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In the status report, filed by the respondent, the grounds, upon which, the case has been registered, have been reiterated by pleading that:

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13.1. The matter revolves around a scam, involving the allocation of scholarships to SC, ST and OBC students, under the Post Matric Scheme. In this fraudulent activity, officials from the Department of Higher Education, alongwith private Educational Institutions and Banks, were involved, which has resulted into misappropriation of scholarship funds of more than ₹ 200 crore.

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13.2. The applicant, according to the stand, taken by ED, along with others, has played a major role in the scam, wrongfully withholding the rightful scholarship entitlement of the scholarships of the students, belonging to SC, ST and OBC categories of Himachal Pradesh. According to ED, they have diverted the said funds into their pockets/ accounts. 22 institutions are stated to be involved. In this regard, ED has relied upon the charge sheet submitted by CBI. The investigation is stated to be going on to unearth the illicit money and ascertain the proceeds of crime (PoC), obtained by way of this scam.

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13.3. After recording the reasons to believe in writing, the applicant and his co-accused were arrested by ED on 30^th August, 2023, under Section 19 of PMLA, in the said ECIR. Thereafter, they were produced before the Special Designated Court (PMLA), Shimla, on 31^st August, 2023, and the learned Special Court, after perusal of all the documents, including the arrest memo, grounds of arrest, reasons to believe and material for formation of such belief, has granted five days’ ED custody, with a direction, to produce the accused persons before the Special Court on

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4^th September, 2023, on which date, they were produced before the Special Court and were remanded to judicial custody.

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13.4. It is the further case of the ED that investigation is on-going and is at crucial stage, which requires gathering of additional evidence, examination of voluminous records and recording of statements of several persons associated with the applicant and other accused persons related to the case.

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13.5. The prayer, so made by the applicant, has further been opposed, on the ground that the offences, under the PMLA, are different offences, as such, constitute class apart and need to be dealt with different approach, in the matter of bail.

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13.6. According to the ED, the offence, under investigation, requires detailed investigation to unearth the material and in such circumstances, if bail is granted, it would defeat the case of the prosecution. The twin conditions, as per Section 45 of the PMLA, are also stated to be not satisfied, in this case.

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13.7. Elaborating their stand, it is the case of the ED that CBI registered FIR No. RC0962019S0002, dated 7^th May, 2019, under Sections 409, 419, 465, 466 and 471 IPC, against the unknown persons. As per the allegations of the said case, there were complicity of individuals from State Government Education Department, Bank Officials and private institutions. Misappropriation in the disbursement of scholarship funds, in large scale, has also been alleged. The offences, under Sections 419 and 471 IPC, are also stated to be scheduled offences, mentioned in the schedule, appended to PMLA and as such, inquiry was initiated.

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13.8. The applicant is stated to be the Vice Chairman of KC Group of Institutions at Pandoga, Una and Nawashehar, Punjab. According to the ED, during the course of investigation, it has been revealed that KC Group of Institutions, Pandoga and Nawashehar, in connivance with the officials of Directorate of Higher Education, Himachal Pradesh and Bank officials, have fraudulently availed the scholarship, under the Post Matric Scheme, for SC/ST/OBC of Himachal Pradesh.

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13.9. According to the ED, the applicant has verified and claimed the scholarship under Post Matric Scheme, for the students, belonging to SC/ST/OBC, who were not enrolled in any course, with KC Group of Institutions Pandoga and who had left the institute without completing their studies. In order to grab more and more scholarship, false details of students were uploaded on scholarship portal, by changing the course of study in subsequent years, by changing the caste category of students and by showing the students as hosteler, instead of day scholars. Such false details were verified by the staff of KC Group of Institutions Pandoga and scholarship was claimed from the Directorate of Higher Education.

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13.10. The applicant is alleged to have supervised the entire work related to admission and claim of scholarship, under Post Matric Scheme, for SC/ST/OBC students of Himachal Pradesh of KC Group of Institutions, Pandoga and Nawashehar. According to the ED, the applicant was joint account holder in bank accounts, alongwith his father Prem Pal Gandhi, in which, illegally obtained scholarship

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amount got transferred from the bank accounts of the students.

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13.11. It is the further allegation of the ED that the applicant, so far has obtained proceeds of crime to the tune of ₹ 4.42 crore, through KC Group of Institutions, Pandoga.

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13.12. Apart from this, it has been apprehended that the applicant may influence the witnesses, who, are his exemployees and also hamper the investigation to trace remaining proceeds of crime.

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On the basis of above facts, a prayer has been made to dismiss the application.

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First of all, coming to the arguments of the learned Senior Counsel, appearing for the applicant, that non-supply of the copy of the ‘reasons to believe’ is violative of Section 19 of the PMLA Act, the applicant, himself has pleaded in para-12 of the bail application, that he has filed CWP No. 1790 of 2024, by virtue of which, he has challenged his arrest orders, as well as, remand orders.

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When, the arrest of the applicant has been challenged and the matter is sub judice before the Court, then, adjudication upon this issue, by this Court, is nothing, but, over-reaching the jurisdiction of the writ Court.

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Hence, the applicant cannot take advantage of the judgment of the Hon’ble Supreme Court in Arvind Kejriwal versus Directorate of Enforcement, reported in 2024 SCC OnLine SC 1703.

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The applicant has earlier also sought the similar relief, by filing CrMP (M) No. 2636 of 2023, which was dismissed, by this Court, vide order, dated 12^th January, 2024, whereby, this Court has specifically held that it cannot be said that the mandatory provisions of Section 19 of the PMLA have not been complied with, by the ED, in this case.

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So far as the plea of the applicant, regarding delay in trial, is concerned, at this stage, it cannot be said that there is any delay in trial. As such, the applicant cannot take benefit of the decisions of the Hon’ble Supreme Court, in SLP (Crl.) No. 3205 of 2024, titled as Ramkripal

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Meena vs. Directorate of Enforcement; SLP (Crl) No. 1164411645 of 2023, titled as Benoy Babu vs. Directorate of Enforcement; Raman Bhuraria vs. Directorate of Enforcement, reported in 2023 SCC OnLine Del 657; Criminal Appeal arising out of SLP (Crl) No. 8167 of 2023, titled as Manish Sisodia vs. CBI; Criminal Appeal arising out of SLP (Crl) No. 8781 of 2024, titled as Manish Sisodia vs. Directorate of Enforcement; and SLP (Crl) No. 5416 of 2024, titled as Prem Prakash vs. UOI through the Directorate of Enforcement. In those cases, the Hon’ble Supreme Court has accepted the prayer for bail, on the basis of the peculiar facts and circumstances of the said cases.

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The applicant has also placed on record the zimni orders, passed by the learned Special Judge, Shimla, according to which, the charges have not been framed. However, it cannot be said that there is inordinate delay, as, before, putting the charge, the Special Judge is duty bound to comply with the mandatory provisions of BNSS. Perusal of order, dated 22^nd July, 2024, passed by the learned Special Judge, Shimla, shows that the case was adjourned for checking of copies.

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Considering all these facts, it cannot be said that the twin conditions, as enumerated in Section 45 of the PMLA, are existing in favour of the applicant, at this stage.

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In view of the above discussion, in the considered opinion of this Court, the applicant is not able to make out a case for grant of bail, at this stage. Consequently, the bail application is dismissed.

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Any of the observations, made hereinabove, shall not be taken as an expression of opinion, on the merits of the case, as, these observations, are confined,

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only, to the disposal of the present bail application.

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( Virender Singh ) Judge

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November 08, 2024 ( rajni )

Hitesh Gandhi v. Ed

Case brief

What is this about?

What the court decided

Hitesh Gandhi v. Ed

Case brief

What is this about?

What the court decided

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