HC keeps in abeyance trial court’s stay on PMLA case against M3M director, others

The Punjab and Haryana High Court has placed under abeyance the operation of a Special Judge’s order, which had halted proceedings in a PMLA case against M3M group director Roop Kumar Bansal and other accused.

Fixing the case for further hearing on July 30, Justice Manjari Nehru Kaul asserted: “Meanwhile, operation of impugned order shall remain in abeyance till the next date of hearing”. The direction came on a petition filed by the  Enforcement Directorate for setting aside the order dated February 11 passed by Panchkula PMLA Special Judge.

Appearing before the Bench through video conferencing, ED special counsel Zoheb Hussain submitted that the Special Judge erroneously stayed proceedings in prosecution complaint dated June 15, 2021, vide the impugned order solely on the ground that an FIR registered by EOW, Delhi, on March 12, 2024, “being a scheduled offence” was still under investigation and charge sheet had not been filed.

The special counsel contended that the trial court acted beyond its jurisdiction under the Prevention of Money Laundering Act and the CrPC as “neither statute provides for the power to stay criminal proceedings”. Further, the counsel contended that there is no provision akin to Section 151 CPC that could confer inherent powers or such relief. As such, the impugned order was dehors the statutory scheme

It was further submitted that an explanation to a provision of PMLA clearly authorized continuation of prosecution for money laundering irrespective of the status of the scheduled offence.

The ED pointed out that the FIR –– one of 32 predicate FIRs –– was under active investigation. It had neither been quashed nor stayed, “thereby rendering the finding of the trial court that the investigation was still underway as patently erroneous and contrary to a Supreme Court judgment, which mandates that the proceedings under the PMLA can be impacted only upon discharge, acquittal, or quashing of the scheduled offence—none of which have occurred qua the FIR in question”.

It was further argued that staying proceedings under the PMLA pending investigation of predicate offences frustrated the very object of the Act, which was intended for expeditious prosecution of financial crimes. It has also been pointed out that a similar prayer made earlier before the Special Judge had been declined on as many as two occasions.