The Delhi High Court on Friday dismissed a petition by real estate company Supertech’s chairman and owner R K Arora challenging his arrest by the Enforcement Directorate in a money laundering case.
Justice Dinesh Kumar Sharma rejected Arora’s claim that he was arrested “arbitrarily and illegally” on June 27 without being informed about the grounds of arrest, noting the agency complied with the relevant provisions of law.
“In the present case, the grounds of arrest were duly given and notified to the petitioner and he endorsed the same in writing under his signature. The core issue is of being ‘informed’ and ‘as soon as’. It if has been duly notified and brought to the notice at the time of arrest and further disclosed in detail in the remand application, it amounts be be duly informed and served,” the court said in its order.
“The petition along with pending applications stands dismissed,” the court said.
On June 27, the ED had arrested Arora on money-laundering charges, following a third round of questioning at its office here.
The money-laundering case against the Supertech group, its directors and promoters stems from a clutch of FIRs registered by the Delhi, Haryana and Uttar Pradesh police.
Arora argued before the high court that ED acted in violation of the Prevention of Money Laundering Act (PMLA) and his fundamental right under Article 22(1) of the Constitution of India as he was arrested without being informed/communicated/served the grounds of arrest. He claimed he was also denied the right to consult and be defended by a legal practitioner of his choice.
The court said there was no violation of the petitioner’s fundamental rights and “there is nothing on the record to suggest that petitioner has been denied right to consult and be defended by legal practitioner”.
“There is nothing on record to suggest that ‘reason to believe’ as required under Section 19(1) of the PMLA was not recorded in writing and, therefore, it cannot be held that petitioner was arrested illegally. The petitioner here failed to show that the arrest of the petitioner is in violation of Section 19 of the PMLA,” it added.
Arora said his arrest has jeopardised the interest of almost 17,000 home buyers as well as a Settlement-cum-Resolution Plan approved by the National Company Law Appellate Tribunal which was also given the go-ahead by the Supreme Court.
The court said the petitioner cannot be released on interim bail in the present proceedings and “it would be impractical” to send him to Mumbai in custody for attending the meetings with the financial creditors.
Even for releasing the petitioner on interim bail, the rigours of PMLA have to be satisfied, the court said, adding if he so desires, the jail superintendent may arrange a meeting through video conferencing from the jail itself in accordance with the law.
On August 24, the ED had filed a charge sheet against Arora, now in judicial custody, his company, and eight others in a money laundering case, accusing them of hatching a criminal conspiracy to cheat home buyers.
They were accused of defrauding at least 670 home buyers of Rs 164 crore.
The nearly 100-page prosecution complaint, ED’s equivalent of charge sheet, was filed before Special Judge Devender Kumar Jangala, claiming there was sufficient evidence to prosecute Arora for laundering money.
The agency informed the trial court that the matter arose from 26 FIRs registered by the Economic Offences Wing (EOW) of Delhi, Haryana and Uttar Pradesh police against Supertech Ltd. and its group companies for alleged criminal conspiracy, cheating, criminal breach of trust and forgery.
According to the charge sheet, the company and its directors hatched a “criminal conspiracy” to cheat people by collecting funds from prospective home buyers as advance against flats booked in their real estate projects.
The company allegedly did not adhere to the agreed obligation of providing possession of the flats on time and “defrauded” the general public, the agency said, adding the funds were collected by Supertech Limited and other group companies.
The company also took project-specific term loans from banks and financial institutions for the purpose of construction of housing projects, the ED said.
However, these funds were “misappropriated and diverted” for buying land in the name of other group companies which were pledged as collateral to borrow funds from banks and financial institutions, it added.
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The Supertech group also defaulted on payments to banks and financial institutions, and currently around Rs 1,500 crore of such loans have become non-performing assets (NPA), the agency said.
Supertech Ltd, which was formed in 1988, has so far delivered around 80,000 apartments, mainly in the Delhi-NCR region. The company is currently developing around 25 projects across the National Capital Region (NCR). It is yet to give possession to more than 20,000 customers.
The company has been plagued by crisis since last year when in August its nearly 100-metre-tall twin towers – Apex and Ceyane – located on Noida Expressway, were demolished following an order of the Supreme Court which found they were constructed within the Emerald Court premises in violation of norms.
Arora had then said the company incurred a loss of about Rs 500 crore, including construction and interest costs, because of the demolition.
