Bombay High Court
RASHMI SALUJAversusSTATE OF MAHARASHTRA AND ANR
- Decided
- Disposal
- Dismissed
Holding
The FIR, ECIR and the attachment of ESOP shares are lawful under the PMLA and cannot be quashed; the writ petitions are dismissed.
Summary
Dr. Rashmi Saluja, former Executive Chairman of Religare Enterprises Ltd., challenged the registration of FIR No.355/2024 and the ECIR/MBZO‑I/27/2024 issued by the Directorate of Enforcement under the Prevention of Money‑Laundering Act (PMLA). She argued that the FIR was barred by special statutes such as the Companies Act and SEBI Act, that the ED had no jurisdiction to attach her ESOP shares, and that the proceedings were mala‑fide. The High Court examined the statutory framework, held that the FIR and ECIR were validly registered, that the ED’s attachment of the ESOPs was permissible under the PMLA, and that the allegations disclosed a cognizable offence of money‑laundering. Consequently, the Court dismissed both writ petitions, finding no ground to quash the FIR or the attachment order.
Issues considered
- The legality of registering FIR No.355/2024 against the petitioner under the PMLA despite claims of jurisdictional and special‑law bar.
- Whether the ECIR/MBZO‑I/27/2024 is amenable to challenge under Article 226 of the Constitution.
- The validity of the provisional attachment of the petitioner’s ESOP shares under the PMLA.
- Whether the special statutes (Companies Act, SEBI Act) oust the PMLA in this context.
Legislation cited
- Code of Criminal Procedure — s. 190
- Companies Act, 2013 — s. 190, 212(1), 212(2), 212(6), 436, 447
- Food Safety and Standards Act, 2006 — s. 59, 89
- Indian Penal Code, 1860 — s. 120-B, 144, 182, 420, 511
- Information Technology Act, 2000 — s. 2(1)(t), 67, 81
- Prevention of Money Laundering Act, 2002 — s. 17(1A), 2(1)(u), 3, 65, 66
- Securities and Exchange Board of India Act, 1992 — s. 32
Subjects
- Money Laundering
- PMLA
- FIR quash
- ECIR
- Directorate of Enforcement
- Corporate fraud
- ESOP attachment
- Special law vs general law
- Writ petition
- Criminal procedure
Judgment
WP.2538 & 2254-2025.doc
JVS/Panchal
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO. 2538 OF 2025
Dr. Rashmi Saluja } Petitioner
versus
State of Maharashtra & Anr. } Respondents
WITH
WRIT PETITION NO. 2254 OF 2025
Dr. Rashmi Saluja } Petitioner
versus
Directorate of Enforcement } Respondent
Mr. Amit Anand Tiwari, Senior Advocate (through VC) with
Mr. Avinash Tripathi, Mr. Sankalp A. Sharma, Mr. Ameya
Vaidya, Advocates for the Petitioner in both petitions.
Mr. Zohaib Hussain (through VC) with Ms. Pranjal Tripathi
and Mr. Anil D. Yadav, Advocates for Directorate of
Enforcement.
Mr. S. V. Gavand, APP for State in WP/2538/2025.
CORAM: SHREE CHANDRASHEKHAR, CJ. &
GAUTAM A. ANKHAD, J.
Reserved on: 11th December 2025
Pronounced on: 23rd January 2026
JUDGMENT
Per, Shree Chandrashekhar, CJ.:
These writ petitions have been filed by Dr. Rashmi Saluja who
was the Executive Chairman and Key Managerial Person of Religare
Enterprises Limited (in short, REL). She is aggrieved by the
registration of a First Information Report (in short, FIR) on
6th September 2024 vide FIR No.355 of 2024. This FIR is under
challenge in Criminal Writ Petition No. 2538 of 2025. As a sequitur
to this, the petitioner is seeking quashing of ECIR/MBZO-I/27/
1
WP.2538 & 2254-2025.doc
2024 registered by the Directorate of Enforcement (in short, ED)
under the Prevention of Money Laundering Act, 2002 (in short,
PMLA) in Criminal Writ Petition No. 2254 of 2025.
2. A crime was registered at the Matunga Police Station on
11th November 2023 on the basis of a complaint filed by Vaibhav
Jalinder Gawali. In this First Information Report vide FIR No.483 of
2023, the complainant who is a public shareholder of the REL
stated that the former directors of the REL, namely, Malvinder
Mohan Singh and Shivender Mohan Singh connived with Burman
family and M/s. J. M. Financial to take full control of the REL by
increasing their shareholdings upto 51%. He made allegations
against the former directors of the REL and directors of M/s. M.B.
Fin Mart Pvt. Ltd., M/s. Puran Associate Pvt. Ltd., M/s. VIC
Enterprises Pvt. Ltd. and M/s. Milky Investment and Trading
Company in which Mohit Burman, Vivekchand Burman, Monica
Burman, Abhaykumar Agarawal, Anandchand Burman, Mini
Burman etc. were directors. It is stated that several Corporate
entities held by the Burman group defrauded the shareholders of
REL causing unlawful losses to them and attempted to gain control
of the REL. The accused persons in a systematic conspiracy with
fraudulent intention hatched a plan to write-off recoverable claims
by the REL and engineered the Open Offer for acquisition of
9,00,42,541 fully paid-up equity shares which was equivalent to
26% of the Expanded Voter Share Capital of the REL. He referred to
the FIR No.50 of 2019 dated 27th March 2019 which was lodged
with the Delhi Police on the allegations of the commission of offence
under sections 409, 420 and 34 of the Indian Penal Code against
Shivender Mohan Singh, Malvinder Mohan Singh and others who
were the directors and promoters of the REL. This is the allegation
2
WP.2538 & 2254-2025.doc
against them in that First Information Report that various
unsecured loans to the tune of Rs.2397 crores were given by them
to the shell companies associated with them which willfully
defaulted on repayment of the loan amount. He further stated that
a draft Open Offer Letter dated 11 th October 2023 was issued by the
Acquiring companies making false, fraudulent and dishonest
representations and, that, the projections made by the Acquiring
Companies in the Open Offer Letter were patently illegal and
dishonest.
3. It was on the basis of the materials collected in course of the
investigation in the FIR No. 483 of 2023 and the information
supplied to the ED that ECIR/MBZO-I/24/2024 was registered by
the ED and a search and seizure operation was conducted by the
ED at the petitioner’s premises and an order under section 17(1A)
of the PMLA was issued for freezing the Employee Stock Ownership
(in short, "ESOP") shares in the Demat account of the petitioner.
The inquiry conducted by the ED in this ECIR revealed that the FIR
No.483 of 2023 was lodged at the behest of the petitioner. The
petitioner provided Rs.2 lakh in cash to the complainant who
purchased 500 shares of the REL and thus became its shareholder
and lodged the First Information Report. The ED supplied these
informations to the police and a First Information Report vide FIR
No.355 of 2024 was lodged against the petitioner.
4. The petitioner states that the REL is a listed company
registered with the Reserve Bank of India and it has diverse service
groups across the financial services, housing finance, retail broking
and health insurance. She is a doctor and an entrepreneur and
having administrative experience of more than 25 years. She served
as a Chairperson-cum-Managing Director of the Religare Finvest
3
WP.2538 & 2254-2025.doc
Ltd. (in short, RFL) and as a non-Executive Chairperson of the Care
Health Insurance Ltd. (in short, CHIL) and Religare Broking Limited
(in short, RBL) which are subsidiaries of the REL. The (CHIL) is a
subsidiary of the REL which is a core investment company.
According to the petitioner, the REL and its subsidiary companies
suffered large-scale fraudulent siphoning of funds prior to 2018 and
therefore a strong and independent Board of Directors was
constituted which appointed a new professional management. She
further states that it was detected in course of the inquiries to
ascertain reasons for the drastically poor financial condition of the
REL that there were wilful defaults by the entities which were
related or controlled or associated with the erstwhile promoters and
there were investigations by the SFIO and SEBI. The petitioner
claims that she played a vital role in reviving the regulatory and
financial compliance by the Religare Group and the RFL which had
a negative net worth and was on the verge of bankruptcy and
successfully negotiated one-time settlement with the banks and
other creditors and the REL and its subsidiaries have now reported
profits and secured investments from the leading business houses.
5. The petitioner states that the Religare Health Insurance
Employees Stock Option Scheme which governs the terms and
conditions for the ESOPs was revised in the year 2014. In terms
thereof, on 31st October 2021, an approval for allotment of the
ESOPs to her was granted by the Nomination and Remuneration
Committee (in short, NRC) of the CHIL based on the valuation by
M/s. Finshore Management Services Ltd. which is a merchant
banker classified by the SEBI. The Board of CHIL comprised 12
non-Executive Directors, representatives of the Corporate entities
and Union Bank which accorded the approval for grant of the
4
WP.2538 & 2254-2025.doc
ESOPs in her favor of which was, later on, approved by the
shareholders at the Extra-Ordinary General Meeting of the CHIL.
However, the Insurance Regulatory and Development Authority of
India (in short, IRDAI) declined the request for grant of the ESOPs
to her on account of a bar under Guidelines on Remuneration of
Directors and Key Managerial Persons of Insurers, 2016. The
petitioner further claims that, based on the legal opinion, the Board
of CHIL validly approved modification to the resolution dated 1 st
November 2021 for grant of 2,72,11,327 ESOPs @ Rs.45.32 per
share to her. In the “Brief Note” which was tendered in the Court,
the petitioner states that the rights issue by the CHIL raised over
Rs.250 crores and investment to the tune of Rs.190 crores was
made by the REL. She was allotted 75,69,685 CHIL shares from the
vested ESOPs and she made payments from her personal account.
However, the IRDAI passed an order dated 23 rd July 2024 against
the CHIL and directed that the ESOPs granted in favor of the
petitioner was to be canceled. It is stated that the order passed by
the Securities Appellate Tribunal (in short, SAT) on 9 th August 2024
staying the order of the IRDAI was conveniently ignored and the ED
shared selective materials with the Joint Commissioner of Police
(Crime) through letter dated 27 th August 2024. The strategic
corporate decision of the REL based on the financial conditions was
duly authorized, the shares issued to the REL in lieu of investments
made by it in CHIL appreciated in value and no loss to the REL or
its shareholders has been reported. Moreover, she has purchased
the ESOPs from her personal funds and did not derive any benefit
from the REL investments in the CHIL. The complainant, namely,
Mr. Vaibhav Jalinder Gawali in the FIR No.483 of 2023 did not
allege any misconduct on the part of the petitioner, she was not
5
WP.2538 & 2254-2025.doc
even named by him and she had no role in the mis-management of
the company by its erstwhile promoters and investors. The source
materials and the allegations by the complainant can at best
disclose the commission of an offence under section 182 of the
Indian Penal Code and the ingredients of cheating and criminal
conspiracy are completely missing. The learned senior counsel for
the petitioner submitted that such background facts clearly reflect
a pre-meditated action by the ED and altogether a “new case” has
been built-in beyond the source materials.
6. In the affidavit-in-reply, it is stated that Vaibhav Jalinder
Gawali made a complaint at Matunga Police Station at the instance
of the petitioner and made false allegations against the Burman
family. To support its case, the ED has stated that in the
statements recorded under section 50 of the PMLA some of the
witnesses who are independent directors in the REL and CHIL or
directors in M/s. J.M.Financial Ltd. and Burman group have
supported the allegations of the commission of predicate offence by
the petitioner. This is a specific allegation against the petitioner
that it was her own proposal in her capacity as a non-Executive
Chairperson of the CHIL and as an Executive Chairperson of the
REL that was accepted by the NRC and the Board of CHIL.
7. Mr. Amit Anand Tiwari,the learned senior counsel contended
that a First Information Report against the petitioner cannot be
registered on the basis of an allegation of fraud or that she
committed breach and acted in violation of the provisions under the
Companies Act and the SEBI Act or the Regulations framed
thereunder. The explanation to section 447 of the Companies Act
defines the offence of fraud and incurs a harsher punishment or
even grant of bail prescribes strict conditions. A complaint alleging
6
WP.2538 & 2254-2025.doc
violations under the Companies Act can be entertained provided it
is made by the Registrar of Companies or a shareholder or a
member of the company or a person authorized by the Central
government. It is submitted that the reason behind authorizing the
inquiry or investigation by the specified person is that the alleged or
probable violations would require a specific and specialized action.
Therefore, there is a specific bar in law operating against the power
of the Court to take cognizance in the matters relating to special
laws and any violation or breach of the provisions under the
Companies Act or SEBI Act has to be dealt with as per the
procedure laid down thereunder and not otherwise. In view thereof,
the violations under the Companies Act and, in particular, section
447 must be dealt with under the procedure prescribed thereunder
and not by lodging an FIR against the petitioner.
8. Mr. Amit Anand Tiwari, the learned senior counsel for the
petitioner further submitted that if there is a necessity to
investigate into the affairs of a company by the SFIO then the
Central government assigns the investigation under section 212(1)
of the Companies Act to the SFIO and no other investigating agency
shall investigate any offence thereto. Section 212(2) further provides
that if any investigation has been initiated by any other agency that
shall not proceed further and all relevant documents and records in
respect of the offences under the Companies Act under
investigation shall stand transferred to the SFIO. The Investigating
Officer (SFIO) shall investigate into the affairs of the company
having the powers of an Inspector under section 217. Furthermore,
section 212(6) of the Companies Act provides that the offence
covered under section 447 shall be cognizable and no Special Court
shall take cognizance of any offence except on a complaint in
7
WP.2538 & 2254-2025.doc
writing made by either the SFIO or any authorised officer of the
Central government, notwithstanding anything contained in the
Code of Criminal Procedure. Section 436 of the Companies Act
deals with the offences triable by a Special Court irrespective of
what is provided under the Code of Criminal Procedure. Section
436(1) provides that all the offences specified in section 435(1) shall
be triable by the Special Court notwithstanding anything contained
in the Code of Criminal Procedure. The learned senior counsel
further contended that the special law shall take precedence and
prevail over the general laws if there is any kind of conflict between
the special law and the general laws. The learned senior counsel
referred to “Jeevan Kumar Raut”1 to fortify his submission that the
FIR No. 355 of 2024 and all proceedings arising therefrom are liable
to be quashed in view of the well settled principle of law that the
proceedings under the general statute shall not be valid if the
imputations against the accused person and the offending act or
omissions are covered under a special statute.
9. On the other hand, Mr. Zohaib Hussain, the learned counsel
for the ED submitted that the petitioner suppressed a vital fact in
the present proceedings and did not inform this Court that this writ
petition was filed by her within a week after she withdrew Writ
Petition (Civil) No. 5287 of 2025 on the ground that she intends to
pursue the statutory remedy of appeal to challenge the provisional
attachment order. The learned counsel referred to the decisions in
“Jai Singh2”, “Arunima Baruah3”, the decisions of Delhi High Court
in “Abhay Sapru4” and Jammu & Kashmir High Court in “Tanzeem
1. “Jeevan Kumar Raut v. Central Bureau of Investigation” (2009) 7 SCC 526.
2.“Jai Singh v. Union of India” (1977) 1 SCC 1.
3.“Arunima Baruah v. Union of India” (2007) 6 SCC 120.
4.“Abhay Sapru & Anr. v. State Delhi & Anr.” Writ Petition (Criminal) No.2754 of 2023.
8
WP.2538 & 2254-2025.doc
Khursheed Zargar”5 to support his submissions. It is submitted that
the ECIR is not created under any statutory provision and a writ
petition under Article 226 simpliciter and/or read with Article 227
of the Constitution of India shall not lie to question the ECIR which
is an internal document created by the department for initiating an
investigation under the PMLA. The learned counsel contended that
section 32 of the SEBI Act, which provides that the applicability of
other laws is not barred, is a complete answer to the argument
raised on behalf of the petitioner that no FIR can be lodged for
violation of the provisions thereunder. The learned counsel for the
ED further submitted that the arguments based on violation of the
special statutes contemplate an implied repeal of the PMLA and
Indian Penal Code and would result in an unfathomable position
where the petitioner would enjoy complete immunity from her
prosecution under the PMLA or the Indian Penal Code. The learned
counsel referred to the decision in “Venkateshan S6” and contended
that the violations under the SEBI Act and the provisions under the
PMLA or the Indian Penal Code can be separately inquired into and
investigated. The learned counsel seeks to draw support from the
decision in “Ishwarlal Girdharilal Parekh7” wherein the Hon’ble
Supreme Court held that if the act of the accused resulted in
inducing the Income Tax Officer to make wrong assessment order,
the order of assessment would fall within the meaning of “valuable
security” under explanation to section 420 of the Indian Penal
Code.
10. In our opinion, the legal conundrum regarding primacy to the
5. “Tanzeem Khursheed Zargar v. J & K Special Tribunal & Ors.” Writ Petition (C)
No.1197 of 2022.
6.“Union of India v. Venkateshan S” (2002) 5 SCC 285.
7.“Ishwarlal Girdharilal Parekh v. State of Maharashtra” 1968 SCC OnLine SC 47.
9
WP.2538 & 2254-2025.doc
special statute is not very difficult to resolve. The decision thereto
shall depend on a purposeful reading of the statement of reasons
and object, dictionary clauses and incorporation of exclusionary
clauses, if any, in the statute. Simply put, a judgment has to be
read in its entirety with the context in mind as to what was set out
in the judgment. It is well settled that a judgment is required to be
read and understood in the context of the facts and statutory
provisions referred thereunder. The ratio decidendi in a judgment
cannot be inferred just by reading selectively a portion of the
judgment. In “Ambika Quarry Works"8, the Hon’ble Supreme Court
observed that a decision has to be understood in the background of
the facts of that case. The decision in “Sharat Babu”9 has to be read
in the context of the statutory provisions under the Information
Technology Act, 2000 (in short, “IT Act”). The expression “electronic
record” is defined under section 2(1)(t) of the IT Act. Section 67
provides for the punishment for publishing or transmitting obscene
material in “electronic form” and section 67-B gives the punishment
for publishing or transmitting the material depicting children in
sexually explicit act in “electronic form”. Most importantly, section
81 of the IT Act lays down that the provisions thereunder shall have
the effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force. In paragraph
no.28 of the reported judgment, the Hon’ble Supreme Court
observed that the words “electronic form” are deliberately used in
the IT Act. Observing that the provisions under sections 67, 67-A
and 67-B constitute a complete Code insofar as the offences under
the IT Act are covered, the Hon’ble Supreme Court held that any
person who is said to have committed the offence of publishing or
8. "Ambika Quarry Works v. State of Gujarat & Ors" (1987) 1 SCC 213.
9. “Sharat Babu Digumarti v. Government of NCT of Delhi” (2017) 2 SCC 18.
10
WP.2538 & 2254-2025.doc
transmitting obscene materials in general and the materials
depicting children in sexually explicit act etc. in “electronic form" is
exclusively punishable under section 67 of the IT Act and not under
section 292 of the Indian Penal Code. The decision in “Ram Nath”10
deals with the offence of food adulteration and sale of noxious food
and the overriding effect of the Food Safety and Standards Act,
2006 (in short, “FSSA”). The Hon’ble Supreme Court held that after
coming into force of the FSSA simultaneous prosecution for the
offences punishable under sections 272 and 273 of the Indian Penal
Code was not permissible. The Hon’ble Supreme Court held that
section 59 of the FSSA which provides punishment for unsafe food
shall override the provisions under sections 272 and 273 of the
Indian Penal Code having regard to the effect of section 89 of the
FSSA which gives overriding effect to the provisions under the FSSA
over all other food-related laws. The decisions in “Sharat Babu” and
“Ram Nath” are rendered in the light of the statutory provisions
thereunder and do not lay support to the submission made on
behalf of the petitioner that the FIR No.355 of 2024 is illegal and
the police has no jurisdiction to investigate the offences alleged
against her. The other judgments referred by the learned senior
counsel for the petitioner are also quite distinguishable. We
therefore do not propose to deal with all of them separately. There
is an allegation of conspiracy to falsely implicate the Burman family
and this is not a standalone offence alleged against her. After the
investigation, a charge-sheet was laid on 18 th August 2025 and by
an order dated 18th August 2025 the cognizance of the offence has
been taken by the Court concerned.
11. Mr. Amit Anand Tiwari, the learned senior counsel criticized
the registration of FIR No.355 of 2024 on the ground that the ED
10. “Ram Nath v. State of U. P.” (2024) 3 SCC 502.
11
WP.2538 & 2254-2025.doc
cannot be a complainant. He submitted that section 66 of the PMLA
has a different purpose and the ED which is required thereunder to
share the materials collected by it with the other government
agencies could not have lodged the First Information Report. More
specifically, section 66(2) of the PMLA creates a bar and
incorporates an exception to the general rule that the Court
machinery under the criminal laws can be put in motion by any
person. On the question of place of occurrence and registration of
the crime at Matunga Police Station, it is submitted that the
decision in respect of the ESOPs and the investment by the REL
were taken at Delhi and Gurgaon. The decision taken by the Board
of CHIL at Delhi and NCR and the conspiracy at Delhi for lodging
an FIR against the Burman family to obstruct the take over of the
REL are relevant factors to decide the place of occurrence which
were ignored and the FIR No.355 of 2024 was registered against the
petitioner at Matunga Police Station only on the ground that
Vaibhav Jalinder Gawali is a resident of Matunga, Mumbai. There is
in place a defined statutory and regulatory regime under the
Companies Act, Companies (Share Capital and Debentures) Rules
and SEBI (SBEB and Sweat Equity) Regulations and the ESOPs
were granted in favor of the petitioner on the basis of the opinion of
the reputed legal experts and were approved by the NRC and the
Board of CHIL. The learned senior counsel further submitted that
the allegations in the FIR are based on the flawed assumptions and
the established practice for grant of the ESOPs was purposely
ignored. The petitioner had no role to play in the entire exercise and
there is no material to indicate that she offered any inducement.
Moreover, the decision taken by the Board and the NRC cannot be
said to be fraudulent in exercise of their statutory duties and the
12
WP.2538 & 2254-2025.doc
petitioner was not involved in her personal capacity in making the
representations to the Regulatory Authority regarding shareholders’
fitness propriety. The imputations against the petitioner are
baseless and putting the whole blame on the petitioner
demonstrates the mala-fide actions on the part of the ED.
12. In our opinion, there is no substance in the contention that
the Matunga Police Station has no jurisdiction to register the FIR
No.355 of 2024. The registration of the FIR No.355 of 2024 is not
barred by any law. The involvement of the petitioner in the crime
was detected in course of the investigation in ECIR/ MBZO-I/
24/2024. There is no illegality in registration of the FIR No.355 of
2024 on the basis of the information supplied by the ED. It shall
not make any difference and the registration of the FIR No.355 of
2024 would not become illegal whether the officer in-charge of the
police station mentions the ED as informant or simply writes
“source information”. A crime can be registered and tried in any
Court if the act or omission on the part of the accused person is
spilled over the jurisdiction of two Courts. Vaibhav Jalinder Gawali
is a permanent resident of Matunga. He purchased 500 shares of
the REL through Dhani App @ Rs.239 per share on 13 th October
2023 and invested Rs.1,20,930/- in the said Company. He stated
that he gathered information from the public domain and financial
marketing news channel that the assets and properties of the REL
were misused and misappropriated through financial
mismanagement and large-scale diversion of public funds. This is
the case of the prosecution that the petitioner conspired with Nitin
Aggarwal and Nishant Singhal and others to implicate the Burman
family in a false criminal case with a view to stop them from taking
control of the REL. This is also found that the petitioner derived
13
WP.2538 & 2254-2025.doc
illegal financial benefits in the form of ESOPs of the CHIL and
committed the offence of cheating. The Investigating Officer
collected materials against the accused persons and filed a charge-
sheet on conclusion of the investigation in FIR No.355 of 2024. The
learned counsel for the ED rightly submitted that there is no legal
bar in lodging a second FIR where the allegations are distinct and
reveal different conspiracy and the scope of inquiry is entirely
different. A petition seeking quashing of an FIR or the charge-sheet
must be examined on the basis of the allegations of commission of a
cognizable offence. There cannot be a roving inquiry into the matter
and the merits of such allegations cannot be examined in a writ
proceeding. The probative or evidentiary value of the materials
collected in course of the investigation cannot be examined by the
writ Court except in cases where it is demonstrable that the
allegations assuming to be true and on its face value do not
constitute a cognizable offence or the allegations disclose a purely
civil dispute or the criminal proceeding is found manifestly attended
with mala fide, malicious or instituted with an ulterior motive.
13. The allegation of arbitrary and illegal exercise of its powers by
the ED must be supported by the extraneous considerations or,
that, the ED exercised its powers for unauthorized purposes. Such
allegations must be supported and demonstrated either by admitted
or proved facts. According to the learned senior counsel for the
petitioner, the complainant made contradictory statements and the
ED targeted the petitioner with selective materials. This submission
is essentially based on vague assertions and raises a question of
fact into which the writ Court shall not embark upon a fishing
inquiry. The foundation built by the petitioner on mala fide action
by the ED is based on selective reading of the statement of the
14
WP.2538 & 2254-2025.doc
complainant and the attempt by the learned senior counsel for the
petitioner to demonstrate that the complainant made different
statements at different stages cannot be scrutinized at this stage.
The credibility of a complainant can be put to test when he comes
in the witness box. At this stage, any opinion formed against him by
the Court shall be against natural justice and the complainant
would stand castigated without an opportunity to offer his
explanation for making two statements. There may arise a situation
where the complainant may offer an explanation in his cross-
examination when the previous statements made by him in the
course of investigation are brought to his notice. The allegation of
mala fide requires full particulars and requisite materials on record
and the mala fide of the informant is rendered of secondary
importance where the materials collected by the police passes
through the judicial scrutiny and the Special Court takes
cognizance of the offence. The criminal prosecution if otherwise
justified is not vitiated on account of mala fides or vendetta. The
position held by the petitioner was of a high responsibility,
imputations against her are grave in nature and this Court should,
therefore, be loath in drawing any inference from the incomplete
facts brought on record. In “M. Sankarnarayanan”11, the Hon’ble
Supreme Court observed that an inference of mala fide must not be
based on a factual matrix which is in the realm of insinuation,
surmises or conjecture. An inference of mala fide must be drawn
after taking into account the attending circumstances. The
presumption under law is in favor of the bona fide action and mere
allegation is not enough to prove mala fide.
14. Mr. Amit Anand Tiwari, the learned senior counsel for the
11. “M. Sankarnarayanan, IAS v. State of Karnataka & Ors.” (1993) 1 SCC 54.
15
WP.2538 & 2254-2025.doc
petitioner contended that the order taking cognizance dated
18th August 2025 is cryptic and does not disclose any application of
mind by the Court. The expression “cognizance” is not defined in
the Code of Criminal Procedure. This expression has not been
defined also in the Bharatiya Nagarik Suraksha Sanhita, 2023. In
broad sense, the expression “taking cognizance” refers to taking
notice of the commission of an offence. This is the stage of taking
cognizance which indicates that the Court has taken judicial notice
of the materials brought before it and decided to initiate the judicial
proceedings against the offender. There is no requirement in law
that the Magistrate must explicitly state the reasons for taking
cognizance of the offence or for issuing summons to the accused
person. There are prima-facie materials on record to connect the
petitioner with commission of the crime.
15. There is no fetters on the powers of the Magistrate to take
cognizance of any offence upon receiving a complaint of fact which
constitutes such offence or upon a police report of such facts, or
upon information received from any person other than police
officer. Section 190 of the Code of Criminal Procedure provides that
the Magistrate may take cognizance of offence even upon his own
knowledge that such offence has been committed. This is not
correct to say that the Magistrate taking cognizance of the offence is
required to write a detailed order. A challenge to the order taking
cognizance cannot be examined without looking at the materials
collected during the investigation. This is so necessary because any
interference with the order taking cognizance on technical grounds
would further delay the trial and such an approach by the High
Court shall not further the cause of justice. A criminal Court or the
High Court exercising powers of the appellate Court shall refrain
from remanding the matter for a fresh adjudication where the
16
WP.2538 & 2254-2025.doc
appellate Court itself can come to a conclusion and record the
finding on the basis of the materials available on record. An order of
remand to the trial Court should, therefore, be in very exceptional
kind of cases and not made routinely by interfering with the order
under challenge on technicality.
16. In "Pramila Devi & Ors."12 the Court concerned formed an
opinion that a prima-facie case was made out upon perusal of “the
case diary and case record”. The Hon’ble Supreme Court held that
the Court concerned had applied its mind while taking cognizance
of the offence. In paragraph nos.15 to 17 of the reported judgment,
the Hon’ble Supreme Court has briefly indicated as under :-
"15. Coming to the first issue, we have no hesitation to record that the
approach of the High Court was totally erroneous. Perusal of the Order
taking cognizance dated 13.06.2019 discloses that the Additional
Judicial Commissioner has stated that the ‘case diary and case record’
have been perused, which disclosed a prima facie case made out under
Sections 498(A), 406 and 420 of the IPC and Section 3 (1)(g) of the
SC/ST Act against the accused including appellants. Further, we find
the approach of the Additional Judicial Commissioner correct inasmuch
as while taking cognizance, it firstly applied its mind to the materials
before it to form an opinion as to whether any offence has been
committed and thereafter went into the aspect of identifying the persons
who appeared to have committed the offence. Accordingly, the process
moves to the next stage; of issuance of summons or warrant, as the
case may be, against such persons."
16. In the present case, we find that the Additional Judicial
Commissioner has taken cognizance while recording a finding that -
from a perusal of the case diary and case record, a prima facie case
was made out against the accused, including the Appellants. In
Bhushan Kumar v. State (NCT of Delhi), (2012) 5 SCC 424, this Court
held that an order of the Magistrate taking cognizance cannot be
faulted only because it was not a reasoned order; relevant paragraphs
being as under:
‘14. Time and again it has been stated by this Court that the
summoning order under Section 204 of the Code requires no explicit
reasons to be stated because it is imperative that the Magistrate must
have taken notice of the accusations and applied his mind to the
12. "Pramila Devi & Ors. v. State of Jharkhand & Anr." 2025 SCC OnLine SC 886.
17
WP.2538 & 2254-2025.doc
allegations made in the police report and the materials filed
therewith.
15. In Kanti Bhadra Shah v. State of W.B. [(2000) 1 SCC 722 : 2000
SCC (Cri) 303] the following passage will be apposite in this
context : (SCC p. 726, para 12)
“12. If there is no legal requirement that the trial court should
write an order showing the reasons for framing a charge, why
should the already burdened trial courts be further burdened with
such an extra work. The time has reached to adopt all possible
measures to expedite the court procedures and to chalk out
measures to avert all roadblocks causing avoidable delays. If a
Magistrate is to write detailed orders at different stages merely
because the counsel would address arguments at all stages, the
snail-paced progress of proceedings in trial courts would further
be slowed down. We are coming across interlocutory orders of
Magistrates and Sessions Judges running into several pages. We
can appreciate if such a detailed order has been passed for
culminating the proceedings before them. But it is quite
unnecessary to write detailed orders at other stages, such as
issuing process, remanding the accused to custody, framing of
charges, passing over to next stages in the trial.”
(emphasis supplied)
16. In Nagawwa v. Veeranna Shivalingappa Konjalgi [(1976) 3 SCC
736 : 1976 SCC (Cri) 507] this Court held that it is not the province of
the Magistrate to enter into a detailed discussion on the merits or
demerits of the case. It was further held that in deciding whether a
process should be issued, the Magistrate can take into consideration
improbabilities appearing on the face of the complaint or in the evidence
led by the complainant in support of the allegations. The Magistrate has
been given an undoubted discretion in the matter and the discretion has
to be judicially exercised by him. It was further held that : (SCC p. 741,
para 5)
“5. … Once the Magistrate has exercised his discretion it is not
for the High Court, or even this Court, to substitute its own
discretion for that of the Magistrate or to examine the case on
merits with a view to find out whether or not the allegations in
the complaint, if proved, would ultimately end in conviction of
the accused.”
17. In Chief Controller of Imports & Exports v. Roshanlal Agarwal [(2003) 4
SCC 139 : 2003 SCC (Cri) 788] this Court, in para 9, held as under : (SCC
pp. 145-46)
“9. In determining the question whether any process is to be issued or
not, what the Magistrate has to be satisfied is whether there is sufficient
ground for proceeding and not whether there is sufficient ground for
conviction. Whether the evidence is adequate for supporting the
conviction, can be determined only at the trial and not at the stage of
18
WP.2538 & 2254-2025.doc
inquiry. At the stage of issuing the process to the accused, the Magistrate
is not required to record reasons. This question was considered recently
in U.P. Pollution Control Board v. Mohan Meakins Ltd. [(2000) 3 SCC
745] and after noticing the law laid down in Kanti Bhadra Shah v. State
of W.B. [(2000) 1 SCC 722 : 2000 SCC (Cri) 303] it was held as
follows: (U.P. Pollution case [(2000) 3 SCC 745], SCC p. 749, para 6)
‘6. The legislature has stressed the need to record reasons in
certain situations such as dismissal of a complaint without
issuing process. There is no such legal requirement imposed
on a Magistrate for passing detailed order while issuing
summons. The process issued to the accused cannot be
quashed merely on the ground that the Magistrate had not
passed a speaking order."
17. There is no error in the order dated 18 th August 2025 taking
cognizance of the offence under sections 420, 120-B, 511 and 144
of the Indian Penal Code passed by the Metropolitan Magistrate.
18. The PMLA has been enacted to prevent money-laundering and
to provide for confiscation of the property derived from or involved
in money-laundering and for the matters connected therewith or
incidental thereto. The PMLA is a piece of special legislation which
contains a non-obstante clause under section 65. The applicability
of the provisions under the Code of Criminal Procedure which are
incorporated under sections 44 to 46 of the PMLA clearly
establishes that the PMLA shall have precedence over other laws
relating to crime and the general laws shall be applied when there
is no inconsistency between the two statutes. There are procedural
safeguards and the authorized officers have duty to ensure fairness,
objectivity and accountability. The authorities appointed under
Chapter V of the PMLA perform a dual role of conducting an inquiry
and collecting the evidence to facilitate adjudication proceedings.
The materials so collected are used to bolster the case against the
accused person by filing a complaint under the PMLA before the
Special Court. In “V. Senthil”13, the Hon’ble Supreme Court held
13. “V. Senthil v. State” (2024) 3 SCC 51.
19
WP.2538 & 2254-2025.doc
that the PMLA is an amalgam of several facets of the regulatory as
well as penal legislation which are essential to address the scourge
of money-laundering. The economic offences involving huge loss of
public funds are affecting the economy of the country and poses
serious threat to the financial stability and health of the country.
19. The offence of money-laundering is attracted where the Court
finds prima facie evidence that the accused person indulged himself
in any manner whatsoever with the proceeds of crime and it is not
necessary that on such date the criminal activity was notified as a
scheduled offence. Section 2(1)(u) of the PMLA defines the
expression “proceeds of crime” to mean any property derived or
obtained, directly or indirectly, as a result of criminal activity
relating to a scheduled offence, including its value. The offence of
money-laundering as defined under section 3 of the PMLA requires
the involvement of the accused persons in any process or activity
connected with the proceeds of crime derived or obtained as a
result of the criminal activity relating to or in relation to a
scheduled offence. The definition of money-laundering encompasses
every possible manner of involvement of the person with the
proceeds of crime derived or obtained as a result of that crime. The
expression “criminal activity” covers all activities of an accused
person concerning the predicate offence and the use of the
expression “every attempt” in section 3 signifies its wide scope and
ambit.
20. In course of the investigation in ECIR/MBZO-I/24/2024, the
statements of Vaibhav Jalinder Gawali, Nikhil Panjwani, Mohit
Burman, Hamid Ahmed, Asha Nair, S. L. Mohan and Anuj Gulati
were recorded under section 50 of the PMLA. In their statements,
these witnesses stated about the dispute with the Burman group
20
WP.2538 & 2254-2025.doc
and a possible control of REL by Burman group. In the money
laundering investigation in ECIR/MBZO-I/27/ 2024 registered on
the basis of the FIR No.355 of 2024, the ED makes allegation of
unlawful gain by the petitioner to the tune of Rs.179.54 crores by
acquiring the ESOPs at a much lower price and diversion of Rs.192
crores of the REL to subscribe the rights issue of CHIL at much
higher price. The Demat accounts held by the petitioner, Mr.
Nishant Singhal, Mr. Nitin Aggarwal and his wife Mrs. Prachi
Aggarwal have been attached as the proceeds of crime. The ED has
recorded the statement of the petitioner, Nitin Aggarwal, Nishant
Singhal and Chirag Jain in course of the search conducted on
21st August 2024. The ED collected sufficient materials and has
submitted the Prosecution Complaint against the petitioner.
21. As Executive Chairperson, the petitioner received a total
number of 2,27,11,327 ESOPs. The petitioner held 75,69,685
ESOPs in Demat with ICICI Securities and Nitin Aggarwal
transferred about half of 10,61,614 ESOPs to his wife and the
balance was retained in Demat with Religare Broking. The proposal
was moved by the petitioner in her capacity as non-Executive
Chairperson of the CHIL and as Executive Chairperson of REL. In
relation thereto, there is adverse finding by the IRDA, advice by the
SEBI to the REL and show cause notice by the SEBI for non-
compliance with its advice. The ESOP shares are treated as
proceeds of crime and a provisional attachment order was issued on
23rd September 2024. The said order has been confirmed by the
adjudicating Authority vide order dated 3 rd March 2025. In Writ
Petition (Criminal) No.2638 of 2024, the petitioner made multiple
prayers before the Delhi High Court challenging the search
operation and unfreezing of the ESOPs. She filed another petition
21
WP.2538 & 2254-2025.doc
vide Writ Petition (Civil) No.5287 of 2025 wherein she laid a
challenge to ECIR/MBZO-I/24/2024 and all proceedings emanating
therefrom. She also made a specific challenge to the provisional
attachment order dated 23rd September 2024 but the said writ
petition was withdrawn by her to avail of statutory appellate
remedy. In “Vijay Madanlal Choudhary”, the Hon’ble Supreme Court
held that the offence of money-laundering is attracted if the
accused person indulges in or assists or became a party to the
process or activity connected with the proceeds of crime. Section 23
of the IPC defines the term “wrongful gain” to mean any gain by
unlawful means of the property to which the person gaining is not
legally entitled. The ESOP shares allotted to and held by the
petitioner is a valuable security and the petitioner stands to gain by
unlawful means by acquiring such valuable security. The
Prosecution Complaint refers to the letter dated 10 th May 2022 by
IRDAI rejecting the proposed grant of ESOPs to the petitioner.
Notwithstanding that, a second grant of the ESOPs to the petitioner
was approved on the ground that the IRDA approval was not
necessary in her capacity as an employee of the REL. The ED
alleges that there was no further valuation of the shares and the
ESOPs were valued at Rs.45.32 per share which was the valuation
in December 2021. The proposal to raise Rs.300 crores through the
rights issue @ Rs.110 per share was made by the petitioner on
behalf of the REL and the price was decided by the CHIL in which
REL held 64% stakes and it was controlled by the petitioner. It is
alleged that Rs.192 crores out of Rs.250 crores were invested by the
REL where the petitioner and Nitin Aggarwal were key decision
makers. The funds of REL were diverted to subscribe to the rights
issue of CHIL @ Rs.110/- per share whereas the ESOPs of the same
22
WP.2538 & 2254-2025.doc
company were given to the petitioner and others at substantially
low price of Rs.45.32 per share. Quite apparently, there is
abundance of incriminating materials collected by the ED to file a
Prosecution Complaint against the petitioner.
22. Having regard to the aforesaid discussions, we do not find any
substance in these writ petitions which are, accordingly, dismissed.
[GAUTAM A. ANKHAD, J.] [CHIEF JUSTICE]
Digitally signed
by PRAVIN
DASHARATH
PRAVIN PANDIT
DASHARATH
Date:
PANDIT 2026.01.27
09:50:35
+0530
23
Checking your session…