2022 (12) TMI 605 - HC - Money Laundering

Court instructs Enforcement Directorate to consider allegations in petition against ponzi scheme respondents, concludes matter

Sanjib Kumar Dey and Ors. Versus Directorate Of Enforcement, New Delhi And Ors.

The court directed the Enforcement Directorate (ED) to consider the allegations raised in a petition against them and private respondents involved in ... Ponzi schemes - Various persons conspired and connived with Karvy and its promoters to dupe the Petitioners - It has been estimated that the cumulative amount invested in these schemes totals Rs. 800 crores. - The Petitioners then preferred complaints before the Enforcement Directorate (ED) requesting action in accordance with law against the accused. However, till date, the Petitioners are not aware of any action taken against the private Respondents as a result of the complaint filed on 6th September, 2022 Mr. Ahluwalia, ld. CGSC appearing for the ED submits that the ED has launched a money laundering investigation against M/s Karvy Stock Brocking Ltd. and various other connected entities. Significant developments have taken place in these investigations and the matter is under examination. According to the ED, the Petitioners’ complaint has already been taken on record. Considering the nature of allegations and the stand taken by the parties, it is directed that the contents of the present writ petition along with the annexures and documents shall be transmitted to ED. Since the ED has already stated that the Petitioners’ complaint is under examination, let the allegations made in this writ petition be also considered and proper action be taken in accordance with law. Issues:Petition filed against Enforcement Directorate and private respondents for alleged involvement in ponzi schemes; Allegations of conspiracy and fraud; Inaction by Enforcement Directorate; Direction sought for investigation by Enforcement Directorate.Analysis:The petition filed by 63 petitioners from various parts of the country raised allegations against the Enforcement Directorate (ED) and 63 private respondents, including companies and their directors, for their involvement in ponzi schemes. The petitioners claimed that approximately 1000 individuals invested around Rs. 800 crores in these schemes. Some petitioners had filed criminal complaints leading to FIRs against the private respondents. Despite approaching the Supreme Court, the petitioners withdrew their petitions to seek relief under Article 226 of the Constitution. The petitioners then approached the ED for action against the accused, but no visible progress was made as of the filing date of the petition.The ED, represented by Mr. Ahluwalia, informed the court that they had initiated a money laundering investigation against Karvy Stock Broking Ltd. and related entities, with significant developments underway. The ED assured that the petitioners' complaint was on record and under examination. The petitioners' counsel argued that the private respondents colluded with Karvy to deceive them, urging the investigation to extend beyond Karvy to all other respondents named in the petition.In light of the allegations and submissions from both sides, the court directed the transmission of the petition's contents, annexures, and documents to the ED for consideration. Given the ongoing examination of the petitioners' complaint by the ED, the court instructed the ED to include the allegations from the writ petition in their investigation and take appropriate lawful action. Consequently, the court disposed of the petition, stating that no further orders were necessary, and instructed the ED to proceed as per the law, thereby concluding the matter and disposing of all pending applications.