Mumbai (Maharashtra) [India], June 2 (ANI): A Special Court under the Prevention of Money Laundering Act (PMLA) in Mumbai has taken cognisance of the Enforcement Directorate's prosecution complaint against former Religare Enterprises Ltd (REL) Executive Chairperson Rashmi Saluja, former independent director of Care Health Insurance Ltd. (CHIL) Pratap Venugopal, and three others, holding that there are sufficient prima facie grounds to proceed against them for the offence of money laundering.

Additional Sessions Judge R B Rote, designated as a Special Court under the PMLA, observed that the prosecution complaint, statements recorded during the investigation and other material placed on record disclosed sufficient grounds for proceeding against the accused under Section 3, punishable under Section 4 of the PMLA. The court accordingly issued summons to all five accused and directed them to appear on June 11.

The ED's case arises from an FIR registered by Matunga Police Station alleging offences of criminal conspiracy and cheating.

According to the prosecution complaint, the investigation revealed allegations that a complaint against members of the Burman family was filed at the behest of certain REL officials and that financial benefits were allegedly offered to facilitate the filing of that complaint.

The ED has further alleged that proceeds of crime were generated in connection with Employee Stock Ownership Plans (ESOPs) granted by CHIL to Rashmi Saluja and other executives.

The court noted that the ED has alleged unlawful gains of approximately 179.54 crore in relation to the grant and vesting of the ESOPs. The agency has also stated that certain shares allegedly constituting proceeds of crime were provisionally attached under the provisions of the PMLA.

With regard to Pratap Venugopal, the prosecution complaint alleges that he acted in concert with other accused persons in relation to the procurement of legal opinions concerning the ESOP issue and was subsequently appointed as an Additional Non-Executive and Independent Director on the Board of CHIL.

According to the ED, the appointment was allegedly part of a quid pro quo arrangement and resulted in monetary gains to him in the form of sitting fees.

Venugopal opposed the taking of cognisance, contending that he merely facilitated legal opinions in his professional capacity as an advocate and that obtaining legal advice could not constitute an offence. He also denied allegations of any quid pro quo arrangement and maintained that the sitting fees were lawfully received in his capacity as an independent director.

Rashmi Saluja and the other accused similarly challenged the maintainability of the complaint, disputed the existence of proceeds of crime, and raised objections relating to jurisdiction and the validity of the underlying FIR.

However, the Special Court observed that many of these contentions had already been raised before the Bombay High Court in proceedings challenging the FIR and the ECIR. The Court noted that both petitions were dismissed by the High Court, which held that the registration of the FIR and the ECIR was not illegal and observed that prima facie material existed in the matter.

The Special Court further recorded that a challenge to the High Court's decision was subsequently dismissed by the Supreme Court.

The special court observed that the prosecution complaint contained specific allegations relating to an alleged conspiracy to falsely implicate members of the Burman family and that the role attributed to each accused had been specifically set out in the complaint. In relation to Pratap Venugopal, the Court noted that the allegations against him, as recorded in the prosecution complaint, were not confined to the procurement of legal opinions and also related to his subsequent appointment to the CHIL Board.

Holding that a mini-trial is not contemplated at the stage of cognisance, the court observed that the defence raised by the accused could be considered at the appropriate stage of the proceedings. The court further observed that economic offences involving substantial public funds have serious implications and that the complaint could not be dismissed at the threshold when prima facie material had been placed on record.

The court ultimately issued process against Rashmi Saluja, Nishant Singhal, Nitin Aggarwal, Vaibhav Gawli and Pratap Venugopal for the offence under Section 3 punishable under Section 4 of the PMLA. (ANI)