Supreme Court Refuses To Interfere With Bombay HC Order Quashing ED Case Against Shapoorji Pallonji

The Supreme Court has recently refused to interfere with the Bombay High Court's judgment quashing the Enforcement Directorate's ECIR and complaint against Shapoorji Pallonji & Co. Pvt Ltd. (SPCL).

The case pertains to ₹111.50 crore advanced by SPCL to the Nilesh Thakur group before June 1, 2009 when the relevant offence under the Prevention of Corruption Act was not a scheduled offence under the Prevention of Money Laundering Act (PMLA).

A bench of Justices Dipankar Datta and Sheel Nagu declined to interfere with the Bombay High Court's decision quashing the ECIR and complaint against SPCL.

"We are not inclined to interfere with the impugned judgment(s) and order(s) of the High Court; hence, the special leave petitions are dismissed.", the Court said.

The dispute arose from loans aggregating ₹111.50 crore advanced by Shapoorji Pallonji & Company between 2006 and 2009 to companies of the Nilesh Thakur Group. The ED alleged that the funds constituted proceeds of crime linked to an alleged corruption case involving Nilesh Thakur's brother, Nitesh Thakur, a public servant.

The Bombay High Court however, held that the transactions had taken place before June 1, 2009, when the relevant offence under Section 13 of the Prevention of Corruption Act became a scheduled offence under the PMLA and found no material connecting SPCL with the alleged criminal activity

Rejecting the ED's allegations, the High Court observed that the agency had failed to produce any evidence connecting SPCL with the alleged offence. The Court said:

"There is no evidence, on record to that effect. Only being brothers or the fact that, a persons brother is a public servant would not be enough to doubt and/or find fault with the transaction between SPCL and Nilesh Thakur or presume that all transactions of Nilesh Thakur are nothing but fronts of Nitesh Thakur. We find that the entire action is based on the said untenable fact. Basing the entire prosecution on the said fact, would amount to drawing an untenable inference and be a classic case of basing a prosecution on surmises and conjecture."

The High Court further held that the ED had failed to establish any nexus between the funds advanced by SPCL and the alleged corruption, rendering the attachment orders unsustainable.

For Petitioner: S.V. Raju, A.S.G., Zoheb Hussain, Sr. Advocate, Annnam Venkatesh, Adv, Sairica Raju, Adv, Animesh Upadhyay, Adv, Arvind Kumar Sharma, AOR

For Respondent: Gaurav Agrawal, Sr. Advocate, Ravi Tyagi, Adv, Manish Bhatt, Adv, Sushant Dua, Adv, Jaitley and Bakshi LLP, AOR