Coal scam: Delhi Court discharges Manoj Jayaswal, others in money laundering case

New Delhi [India], March 19 : The Special Court of Delhi, appointed by the Supreme Court for the trial of coal block allocation matters, discharged businessman Manoj Kumar Jayaswal and all other accused in a case of money laundering of more than 300 crore rupees on Tuesday.
The special judge, Arun Bhardwaj, passed the order on Tuesday and decided to discharge all the accused in the case. He said that, as in this case there is no material to support the allegation of the offence of money laundering against any of the accused, all three accused are discharged.
"There would be no offence of money laundering in the absence of any charge for cheating in securing the allocation of coal blocks," said the special judge.
The fact that no proceeds of crime were generated just from conspiracy u/s 120B r/w 420 of the IPC also went against the complainant in this case. The complainant could not rely upon criminal activity under Section 406 of the IPC as the offence did not have cross-border ramifications.
"Since there was no cheating in seeking allocation of a coal block in favour of Jayaswal Neco Industries Limited, therefore independent of the observations of the Delhi High Court in the case of Prakash Industries-I and Prakash Industries-II that the allocation letter is not property/proceeds of crime, there would be no offence of money laundering in the absence of any charge for cheating in securing allocation of coal block," said the court.
In its complaint, the Enforcement Directorate (ED) stated that in the predicate offence case, CBI had filed the chargesheet on December 5, 2016, against Manoj Kumar Jayaswal, Ramesh Kumar Jayaswal and Jayaswal Neco Industries Ltd, earlier known as Jayaswal Neco Ltd, alleging that Manoj Kumar.
Jayaswal, the then Managing Director of Jayaswal Neco Ltd, and the said company conspired with each other to get a coal block allocated fraudulently and dishonestly from the Ministry of Coal and for misappropriation of valuable natural resources by using coal fines rejected in its CPP in violation of prescribed conditions.
The complaint alleges that Manoj Jayaswal, the then Managing Director of the company, in a company application letter dated July 25, 1998, dishonestly and fraudulently misrepresented the fact that the company has been allocated 1300 acres of land at Siltara Growth, Raipur.
However, on the date of making the application, the company was allocated 1031.27185 acres of land only.
The complaint further alleged that coal worth over 300 crores was excavated and portions of it were utilised in the power plant even though the coal block had been allocated on the application made under the signature of Manoj Kumar Jayaswal for use of coal in the sponge iron plant of the company M/s Jayaswal NECO Ltd for which offence U/s 120-B r/w 420 IPC r/w 406 IPC was registered against him by the CBI.
The company was also successful in raking in over 100 crore rupees by way of subscription of shares, even though, subsequent to the cancellation of the coal block allocated to the company by the Supreme Court on September 24, 2014, the share price of the company fell from Rs 14.35 to Rs 11.80. The ED had provisionally attached the plant and machinery of the company to the extent of Rs 206 crore.
Advocate Vijay Agarwal and Nagesh Behl, appearing for the accused in this case, argued that the ED's case of money laundering can begin only after the scheduled offence ends and therefore the offence of money laundering will only be subsequent to the scheduled offence, but the ED made Manoj Jayaswal an accused for signing the application for which activity belonged in the realm of the scheduled offence.
Senior advocate appearing for the ED argued in rebuttal that the proceeds of crime are derived as a result of criminal activity relating to the scheduled offence and not from the Scheduled offence itself, to which advocate Agarwal replied that as per the Indian Penal Code, an act includes a series of acts and criminal activity therefore cannot be seen in isolation.
Advocate Vijay Agarwal further argued that his client could not be held vicariously liable u/s 70 PMLA for being the joint managing director of the company in 2002, whereas coal was extracted from the block only in 2006.
He also argued that the ED cannot seek to re-adjudicate the scheduled offence but has to adhere to the charges framed in the scheduled offence, and in the present case, even though the ED has based its entire case on the coal block having been acquired through misrepresentation, there was no charge framed to that effect.
Instead, the charge framed was an attempt to cheat and the attempt being an incomplete offence cannot yield any proceeds. He further argued that the other charge was framed under Section 406, which is not a scheduled offence, and in the absence of a scheduled offence, there can be no proceeds of crime.
This is the second case of money laundering in coal scam cases in which all the accused have been discharged. In the other case, Manoj Kumar Jayaswal was also the accused.
In that case, pertaining to the company M/s Abhijeet Infrastructure Ltd, the allegation was that thousands of crores of rupees were obtained as loans from the bank and from shareholders after the coal block was acquired by the company by making misrepresentations and then the amounts were laundered.
Manoj Kumar Jayaswal has been made an accused in 6 cases of coal scams filed by the CBI and in almost an equal number of cases filed by the ED.