Delhi HC stays DRI proceedings against Hero Group chairman Pawan Munjal

The Delhi High Court has stayed the proceedings relating to foreign currency registered against Hero Motocorp Chairman Pawan Kant Munjal by the Directorate of Revenue Intelligence (DRI). The high court, in an interim order of November 3, noted that Munjal has been exonerated by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the same set of facts and this was not disclosed before the trial court and that the petitioner has been able to make out a case for interim protection.

“Considering the contentions raised by the senior counsel appearing for the petitioner, especially the fact that the summoning order has been passed without giving any reasons for the same, this court is of the opinion that prima facie, the matter requires consideration,” Justice Saurabh Banerjee said.

The high court stayed the operation of July 1, 2023 order passed by an additional chief metropolitan magistrate here and all proceedings emanating therefrom pending before the ACMM qua (with respect to) the petitioner till February 21, 2024, the next date of hearing.

The DRI had filed a prosecution complaint last year on charges of allegedly “carrying, attempting to export and illicit export of prohibited items, that is, foreign currency” against P K Munjal, a third party service provider company called SEMPL and individuals identified as Amit Bali, Hemant Dahiya, K R Raman and some others.

The interim order was passed by the high court on November 3 on a petition by Munjal seeking to quash the complaint pending before ACMM and the July order passed by the trial court.

The high court issued notice to DRI on the main petition and granted three weeks to file a reply. Senior advocate Mukul Rohatgi, representing the petitioner, sought to stay the trial court’s summoning order passed in the complaint alleging that the offences were committed under the Customs Act, saying that it has been passed in a mechanical manner without observing any reasons. The counsel said the trial court passed the order without appreciating the facts that the DRI concealed the March 28, 2022 judgment passed by CESTAT whereby the petitioner was exonerated on the same set of facts which form part of the present complaint that is a verbatim reproduction of the show-cause notice of July 2019.

The high court said perusal of the records reveal that the October 6, 2022 complaint is identical to the July 17, 2019 show-cause notice and the documents relied on are substantially identical.

“It is also not disputed that the order dated March 28, 2022 passed by the CESTAT in … was not disclosed before the ACMM- 01, Patiala House Courts, New Delhi…,” it said.

Regarding the non-disclosure of the March last year order, the DRI counsel submitted that since it was not a party to the proceedings before the CESTAT, there was no occasion for either being aware or withholding any information qua that order.

The Enforcement Directorate had also registered a case under various sections of the Prevention of Money Laundering Act (PMLA). The case mainly stems from the charge sheet of the DRI, an investigation arm of the Central Board of Indirect Taxes and Customs (CBIC), filed before a Delhi Court under section 135 of the Customs Act (evasion of duty or prohibitions).

The ED said Salt Experience and Management Pvt Ltd (SEMPL) allegedly “illegally exported foreign currency equivalent to about Rs 54 crore to various countries during the period 2014-2015 to 2018-2019 which was ultimately used for personal expenses of P K Munjal”.

SEMPL, it alleged, got issued foreign exchange to the tune of about Rs 14 crore in the name of its officials/ employees such as Hemant Dahiya, Mudit Aggarwal, Amit Makker, Gautam Kumar, Vikram Bajaj and Ketan Kakkar over and above the annual permissible limit of USD 2,50,000 in various financial years.

SEMPL has also drawn foreign exchange/ travel forex cards in huge amounts in the name of other employees who didn’t even travel abroad, it claimed.