In a significant legal development, the Delhi High Court has ordered a stay on the Enforcement Directorate’s (ED) investigation against Pawan Munjal, the Executive Chairman of Hero MotoCorp. This decision comes in the wake of allegations involving the illegal transfer of foreign currency equivalent to ₹54 crore out of India by Munjal and others.
Justice Saurabh Banerjee of the Delhi High Court granted the stay on the money laundering probe, citing the court’s earlier decision on November 3 to halt proceedings by the Directorate of Revenue Intelligence (DRI), which formed the foundation for the ED’s case.
“Accordingly, there shall be a stay of proceedings under the ECIR (Enforcement Case Information Report),”
stated the High Court. It was clarified that this stay pertains solely to the proceedings against Pawan Munjal, allowing the ED to continue its actions against other accused individuals.
Represented by senior Advocates Mukul Rohatgi, Sandeep Sethi, and Dayanan Krishnan, Munjal argued that the ED’s investigation could not proceed due to the existing stay on the DRI proceedings. Rohatgi contended,
“The cause of action is the (DRI) complaint. The show cause resulted in exoneration. In that case, the court stayed the proceedings… then this ECIR summons should be stayed. The result in this case will depend on the first matter.”
Munjal has also petitioned the High Court to quash the ECIR registered by the ED in July 2023 and has requested access to the ECIR’s records. In August, ED officials conducted searches at Munjal’s residential and business premises as part of their investigation. On November 10, the ED attached three properties valued at ₹24.95 crore under the Prevention of Money Laundering Act (PMLA), alleging that Munjal had circumvented RBI’s Liberalised Remittance Scheme limits by obtaining foreign exchange/foreign currency in the names of other individuals and then using it for personal expenses abroad.
The DRI had previously filed a prosecution complaint against Munjal, a third-party service provider company called SEMPL, and several individuals, accusing them of attempting to export and illicitly exporting prohibited items, namely foreign currency. They were charged under various sections of the Customs Act, 1962. Following the DRI’s case, the ED also booked Munjal and others under the Prevention of Money Laundering Act (PMLA), proceedings which have now been stayed by the High Court as far as they concern Munjal.
This development marks a crucial juncture in the ongoing legal battle involving one of India’s most prominent business figures, with the High Court’s decision potentially having significant implications for the case’s future trajectory.
