New Delhi: The Supreme Court Friday ordered the release of Bhushan Steel Ltd’s former Managing Director Neeraj Singal on bail, who was arrested by the Enforcement Directorate (ED) in connection with a money laundering case linked to an alleged bank fraud of Rs 46,000 crore.
A bench presided over by Justice Sanjiv Khanna was hearing a special leave petition filed by Singal against the decision of the Delhi High Court dismissing his bail plea and upholding the validity of his arrest by the federal anti-money laundering agency.
Taking into consideration the fact that conclusion of the trial is unlikely shortly and Singhal has suffered a long incarceration pre-trial, the Bench, also comprising Sanjay Kumar, directed Signal to be released on bail on such terms and conditions as may be set by the trial court.
The apex court added that the former MD of Bhushan Steel will have to surrender his passport and will not leave India without the permission of the court.
In January this year, the Delhi HC dismissed Singal’s plea challenging his arrest June 9, 2023, stating that at that time, oral communication of the grounds of arrest was considered proper compliance with Section 19(1) of the Prevention of Money Laundering Act (PMLA).
A bench of Justice Vikas Mahajan of the High Court took into account the Supreme Court’s ruling in Pankaj Bansal vs. Union of India, delivered October 3, 2023, which mandated providing written grounds for arrest, but only with prospective effect.
It said that at the time of Singal’s arrest, the law, as per the Moin Akhtar Qureshi case, did not require written grounds, adding that Singal’s arrest predated the Pankaj Bansal ruling and was thus in compliance with the existing legal provisions.
The subsequent Supreme Court ruling in Ram Kishor Arora vs. Union of India clarified that non-furnishing of written grounds until the Pankaj Bansal judgement would not be deemed illegal.
The ED initiated the investigation based on a prosecution complaint filed by the Serious Fraud Investigation Office (SFIO) against Bhushan Steel Limited, invoking scheduled offences under the Prevention of Money Laundering Act (PMLA) 2002.
The investigation revealed that Bhushan Steel and its Managing Director, Neeraj Singal, formed shell companies to rotate funds, causing wrongful loss to the State Bank of India and Punjab National Bank.
The ED alleged that the promoters, directors, and officials of Bhushan Steel engaged in fraudulent activities, including forging documents and making false representations to banks.
Funds were misappropriated through fabricated Letters of Credit in favour of JSW Steel Limited and Hindustan Zinc Limited.
