Supreme Court Refuses To Interfere With Bail Denial To Ex-Haryana Congress MLA In Mahira Group Housing Scam

The Supreme Court on Friday refused to interfere with a Punjab and Haryana High Court order denying regular bail to former Haryana Congress MLA Dharam Singh Chhoker in the Enforcement Directorate's money laundering case over the alleged Mahira Group affordable housing scam.

The ED has alleged that Chhoker and others siphoned off around ₹616 crore collected from nearly 1,500 homebuyers in Mahira Group's affordable housing projects in Gurugram by diverting project funds.

The ECIR was initially registered on the basis of an FIR alleging cheating, forgery and criminal conspiracy. During the investigation, the ED also took multiple related FIRs on record.

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana heard the parties and declined to interfere with the High Court's order.

Appearing for Chhoker, Senior Advocate Dr. Abhishek Manu Singhvi urged the Court to grant bail, submitting that the 62 year old had remained in custody for over a year and that the case warranted consideration on settled principles governing personal liberty.

He argued that Chhoker was not named in the principal scheduled offence forming the basis of the ECIR, that one of the predicate FIRs had found him innocent, while other FIRs were either withdrawn or involved civil disputes.

Singhvi further submitted that the alleged proceeds of crime already stood attached and that the trial, involving thousands of documents and scores of witnesses, was unlikely to conclude anytime soon.

"This man is 62 years old, is in jail for one and a quarter years. On normative principles of bail, please consider."

Referring to the investigation, Singhvi argued that "the petitioner has no role to play and is found innocent" in one of the FIRs relied upon by the ED. He also contended that continued incarceration served no purpose when the assets had already been attached and the prosecution complaint had already been filed.

On the stalled housing projects, Singhvi placed before the Court a proposal to complete the projects through funding by an RBI-registered NBFC, submitting that substantial unsold inventory was available to finance construction. He urged the Court to permit completion of the projects for the benefit of homebuyers, stating:

"I can't do more. I cannot run away with this. I will finish building it... Your Lordships may put me to all conditions, but I beseech Your Lordships to consider the liberty of the individual.", he submitted. 

Opposing the plea, ASG Anil Kaushik appearing for the Enforcement Directorate submitted that Chhoker had consistently evaded the investigation. He argued that 96 summons had been issued during the investigation, non-bailable warrants had followed, and Chhoker was ultimately declared a proclaimed offender before being apprehended.

The ED further disputed the allegations regarding the circumstances of his arrest, submitting:

"He was arrested from Shangri-La Hotel. He tried to escape, he fell down, he got the injury."

The agency also opposed the proposal to complete the projects, contending that Chhoker was effectively seeking release of attached assets representing the alleged proceeds of crime. It argued that attachment did not prevent construction if the promoters were willing to use legitimate funds.

"Attachment does not create a bar that you cannot construct, but you can construct from your own money because that money which was supposed to be utilised for construction of these houses has been diverted and utilised by you for your own purposes.", the ASG said. 

After hearing the parties, the Bench declined to interfere with the High Court's order refusing bail.

Background

The case arose from an ED probe into the Mahira Group affordable housing project in Gurugram, alleging that Dharam Singh Chhoker and others siphoned off about ₹616 crore collected from nearly 1,500 homebuyers through diversion of project funds and forged documents.

The ECIR was registered on the basis of multiple FIRs alleging cheating, forgery and criminal conspiracy.

Dismissing Chhoker's regular bail plea, the Punjab and Haryana High Court held that the material prima facie showed his involvement in the alleged money laundering, noting that he had repeatedly ignored ED summons, evaded arrest and was a flight risk. The Court further held that the delay in trial could not be attributed to the ED, that the petitioner failed to satisfy the twin conditions under Section 45 PMLA, and accordingly refused bail.