Delhi High Court Upholds ED's Action Against Real Estate Firm, Imposes Rs 1.25 Lakh Fine on Petitioner
New Delhi: In a significant ruling, the Delhi High Court has dismissed a petition and imposed a fine of Rs 1.25 lakh on the petitioner, Gulshan Babbar, for concealing facts and making false allegations against the Enforcement Directorate (ED). The case revolves around alleged financial irregularities by a real estate company, IREO Residences, involving Rs 1,317 crore linked to bank loans and land parcels in Gurugram, Haryana.
Justice Manmeet Pritam Singh Arora, in his judgment, came down heavily on the petitioner for his lack of transparency and the deliberate misrepresentation of facts. The court accepted the ED’s detailed explanation of the actions taken against the real estate firm and its officials.
The ED had identified total proceeds of crime amounting to Rs 1,376 crore and had secured these through attachment. In response to the petitioner’s allegations that the ED had failed to act against the company for the alleged diversion of bank loan money, the investigative agency clarified that the loan transaction of Rs 600 crore and its alleged illegal diversion, though known to them, were not part of the PMLA case because the lender banks had not filed any criminal complaint.
The court firmly rejected the petitioner’s claim that the total proceeds of crime were Rs 4,246.22 crore, stating that this assertion was not substantiated. Justice Arora emphasized, “The conduct of the petitioner in failing to disclose the filing and pendency of the earlier writ petitions, the deliberate misrepresentation of the contents of the orders passed by this court, and the false assertion with respect to being a financial investor in the IREO Projects show that the petitioner has approached this court with unclean hands.”
The High Court imposed a cost of Rs 25,000 for each of the five petitions on the petitioner, totaling Rs 1,25,000, for knowingly concealing the pendency of other petitions, making a false declaration of non-filing, and misrepresenting the contents of previous orders. The court directed that this amount be deposited with the Delhi High Court Legal Services Committee (DHCLSC) within two weeks.
The petition filed by Babbar sought directions to statutory authorities, including the ED, to investigate the alleged siphoning of funds by the real estate company, its group companies, and its directors, Lalit Goyal and Sapna Goyal. Babbar contended that while the ED identified Rs 4,246 crore as proceeds of crime, it only attached properties worth Rs 1,317 crore, deliberately excluding high-value assets such as 149 acres of prime land in Delhi, Gurugram properties, and overseas investments. He alleged investigative bias and collusion, seeking a direction to the ED to register a case under the Prevention of Money Laundering Act (PMLA) and pass a Provisional Attachment Order (PAO) under Section 5(1) of the Act, prohibiting the private respondents and other accused from alienating proceeds of crime.
This ruling by the Delhi High Court underscores the importance of transparency and honesty in legal proceedings and reinforces the ED’s role in investigating financial crimes.
