A Delhi court has sets aside a previous order to close a cheating case against Gautam Gambhir and has requested the Enforcement Directorate (ED) to investigate. The court noted that cheating is classified as a scheduled offense under the Prevention of Money Laundering Act (PMLA), potentially warranting further examination by the ED.
New Delhi: A Delhi Court set aside a magistrate court’s order that had discharged Indian cricket team coach Gautam Gambhir in a cheating case brought by homebuyers.
The buyers filed the case against three real estate companies Rudra Buildwell Realty, HR Infracity, and UM Architectures and Contractors over undelivered flats in the “Serra Bella” housing project, promoted and advertised in 2011.
Gambhir, serving as an additional director of Rudra and brand ambassador for the project, was deemed by Special Judge Vishal Gogne on October 29 to warrant further investigation.
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The judge noted the magistrate court’s discharge order showed an “inadequate expression of mind in assessing allegations against Gambhir, then a Member of Parliament (MP).
Raising questions about whether any investor funds were directed to him in his role with Rudra, The Court observed,
“Gambhir was the only one who in fact did have any direct interface with the investors, in his capacity as brand ambassador,”
The Court remarked,
“Though the said accused came to be discharged, the impugned order made no reference to the huge amount of Rs. 6 crores paid by him to Rudra and the sum of Rs. 4,85,00,000 received back by him from the company. The charge sheet did not clarify whether the amounts paid back to him by Rudra had any nexus or were sourced from funds received from the investors in the project in question.”
The Court also noted that Gambhir’s financial dealings with the company appeared to go beyond his role as a brand ambassador, as he served as an additional director of Rudra from June 2011 to October 2013.
It observed,
“Yet, the impugned order generalised the findings against the named accused (Gautam Gambhir) by combining the findings against him with observations of the court regarding other accused (not named in the complaint),”
Significantly, the judge pointed out that, as cheating is classified as a scheduled offense under the Prevention of Money Laundering Act (PMLA), the case may warrant investigation by the Enforcement Directorate (ED).
The Court was reviewing three revision petitions concerning a decision made by the Additional Chief Metropolitan Magistrate (ACMM) at Rouse Avenue on December 10, 2020.
This case originated when homebuyers, having booked flats and made payments, noticed that construction on their project had stalled. They later discovered that the project lacked proper approval and that the Allahabad High Court had, in 2014, prohibited any business dealings or activities on that land.
As a result, a cheating case filed against the accused. However, in 2020, the trial court determined that there was a prima facie case only against three individuals and two companies, while discharging the remaining defendants, including Gambhir.
The trial court identified a prima facie case against the three individuals and the companies Rudra Buildwell Realty and HR Infracity. Nonetheless, five other defendants, including Gambhir, were discharged.
In response, the homebuyers submitted revision petitions contesting the trial court’s ruling.
The special judge found that the trial court had overlooked discussing specific evidence presented in the chargesheet regarding the five accused directed to be charged, as well as the five who were discharged.
The Court held, describing the trial court’s ruling as a non-speaking order,
“The combined findings of the Ld. Trial Court regarding all accused who were discharged, therefore suffer from material infirmity in law on account of the lack of nuanced discussion qua each of them,”
The Court noted that,
“Mere reproduction of the allegations made by the prosecution and stringing together assertions from the chargesheet does not evoke the mind of the judge. The order is expected to assign reasons for the finding it seeks to render.”
It added that the trial court’s decision did not clarify the amounts received by each company or specify the prosecution’s allegations against each of the first three accused.
Additionally, the Court highlighted inadequacies in the police investigation, stating that these shortcomings warranted further investigation ordered by the trial court.
The Court observed,
“The said non-speaking order may have been occasioned by the glaring inadequacies in investigation highlighted in this order. The trial court ought to have taken recourse to its powers to direct further investigation prior to framing of charge on account of sparse investigation,”
Accordingly, the discharge order was set aside, and the case remanded to the trial court to issue a detailed, fresh discharge order. This new order must specify allegations against each accused, correlate each with the relevant offense, and detail the supporting material from the chargesheet.
Adding that the prosecution should provide submissions to aid the trial court, special judge, directed,
“The trial court shall render specific findings qua each accused within the level of scrutiny required at the stage of charge,”
The Court further advised that before a new hearing on charges, the trial court should consider ordering further investigation to ensure well-founded findings.
Along with setting aside the discharge order, the judge noted that, as cheating is classified as a scheduled offense under the Prevention of Money Laundering Act (PMLA), the case may require investigation by the Enforcement Directorate (ED).
The judge observed,
“The allegedly cheated amount of Rs. 3.5 crores, mentioned as the booking amount received from the investors, if it was indeed derived as a result of criminal activity of any of the accused persons (whether charged or discharged) may be required to be probed as proceeds of crime.”
Any accused involved in actions related to these possible “proceeds of crime,” such as “concealment, possession, or acquisition,” might need to be investigated for “money laundering.”
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The Court therefore directed the ED to examine the allegations from a money laundering perspective and to submit a status report by November 11.
However, it clarified that the ED was not being instructed to file a new case but to independently assess the allegations in relation to potential money laundering.
The Court further noted,
“Since this court shall be functus officio upon disposal of the present revision petitions and the trial court is not the special court for matters related to the PMLA either, the said status report shall be filed by the ED through the prescribed filing mechanism, for matters under the PMLA pertaining to MPs/MLAs, before the ld. Principal District and Sessions Judge, RADC, New Delhi.”