You Can’t Game The System

Delhi Excessive Court docket slammed advocate Gulshan Babbar for submitting a number of petitions over the identical challenge, hiding details, and losing judicial time. Court docket imposed Rs 25K per plea as penalty.

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NEW DELHI: The case Gulshan Babbar v. State of NCT of Delhi & Ors. concerned a number of petitions by an advocate alleging monetary fraud by the IREO Group and looking for court-monitored investigations.

The Delhi Excessive Court docket dismissed the petitions, holding that the petitioner had no direct stake, falsely claimed to be a homebuyer, and misused the authorized course of, whereas enforcement companies have been already investigating the matter.

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Background of the Case

The case arose when Advocate Gulshan Babbar filed a number of writ petitions beneath Article 226 earlier than the Delhi Excessive Court docket alleging large monetary fraud, cash laundering, and misappropriation of homebuyers’ funds by the IREO Group of Corporations and its administrators.

He claimed that Rs. 600 crores collected from homebuyers have been illegally diverted to offshore accounts by means of shell firms.

The petitioner additionally alleged inaction by companies just like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and Critical Fraud Investigation Workplace (SFIO), and sought a court-monitored probe.

Nevertheless, it was later revealed that the petitioner was not an investor or homebuyer and had filed a number of overlapping petitions with out disclosing their pendency, elevating questions on his intent and credibility.

Allegations imposed by the Petitioner:

• Misrepresentation and fraud in actual property tasks.
• Unlawful diversion of public cash by means of Mauritius-based shell entities.
• Failure by ED to connect Rs. 4,246 crores of alleged proceeds of crime; solely Rs. 1,317 crores hooked up.
• Petitioner falsely claimed to be a homebuyer to realize locus standi.

Arguments by Events

Petitioner:

The petitioner argued that IREO Group of Corporations, by means of its administrators Mr. Lalit Goyal and Ms. Sapna Goyal, had engaged in large-scale monetary fraud by siphoning off greater than Rs. 600 crores collected from homebuyers and buyers. These funds have been allegedly routed by means of shell firms and diverted to abroad accounts in Mauritius, constituting “proceeds of crime” beneath the Prevention of Cash Laundering Act, 2002 (PMLA).

Regardless of submitting detailed complaints to the Enforcement Directorate (ED), CBI, and different authorities, the petitioner claimed no substantive motion had been taken. He submitted that the ED had hooked up solely Rs. 1,317 crores price of property, though it had recognized proceeds of crime amounting to Rs. 4,246 crores.

Citing the dimensions and seriousness of the alleged crime, and the purported inaction by the ED, the petitioner sought court-monitored investigation and quick freezing of the Rs. 600 crores within the Escrow Account to forestall additional alienation of property.

The petitioner claimed that though he was not a direct investor, he had the fitting to strategy the courtroom in public curiosity, particularly because the case concerned defrauding hundreds of homebuyers and public monetary establishments. He cited A.R. Antulay v. R.S. Nayak (1984) 2 SCC 500, to argue that any individual may provoke authorized motion to uphold the rule of regulation.

Respondent:

• Enforcement Directorate (ED)

The ED argued {that a} detailed investigation was already underway. An ECIR (Enforcement Case Info Report) No. GNZO/10/2021 was registered in June 2021 towards IREO and its administrators. It had resulted in arrests and the submitting of each authentic and supplementary prosecution complaints, and attachment of properties price Rs. 1,376 crores beneath Part 5 of the PMLA.

The ED contended that the petitioner had no locus stan as he was neither an investor nor an aggrieved get together. His petitions weren’t filed in accordance with the Delhi Excessive Court docket (PIL) Guidelines, and therefore couldn’t be handled as public curiosity litigation.

The ED clarified that whereas the alleged Rs. 600 crore diversion was recognized to them, no predicate offence (scheduled offence beneath PMLA) had been registered by banks or any authority, thereby limiting ED’s jurisdiction to behave on it.

It was identified that the petitioner filed a number of writ petitions with out disclosing prior ones, made false declarations, and tried to intrude with an ongoing investigation monitored by the Particular Court docket (PMLA), Panchkula.

• Respondent No. 7 – Mr. Lalit Goyal (Director of IREO)

Senior Counsel Viraj R. Datar, representing Mr. Lalit Goyal, argued that the petitioner abused the method of regulation by submitting successive petitions with comparable prayers and intentionally suppressing materials details from the courtroom.

The respondent emphasised that the petitioner falsely declared himself to be a homebuyer to realize standing earlier than the courtroom, and later admitted that he had by no means invested in IREO. He additionally misquoted or distorted courtroom orders in prior associated issues to mislead the bench.

It was additionally argued that the petitions weren’t filed as real PILs, and the petitioner was primarily an outsider attempting to misuse courtroom proceedings for motives unrelated to justice or public curiosity.

Discovering of the Court docket

The Delhi Excessive Court docket, in its judgment, dismissed the writ petitions filed by Advocate Gulshan Babbar, concluding that the petitioner lacked locus standi as he was neither a homebuyer nor instantly affected by the alleged company fraud.

The Court docket noticed that the petitioner had approached the Court docket with unclean arms, having made false declarations about being an allottee and suppressing the truth that a number of comparable petitions have been already pending. The Court docket famous:

“The Petitioner doesn’t fall inside the class of individual aggrieved in order to be entitled to invoke the extraordinary writ jurisdiction…”

It additional emphasised that judicial intervention in ongoing investigations is outstanding, and located no motive to intrude the place ED had already taken substantial steps, together with submitting prosecution complaints and attaching Rs. 1,376 crores price of property.

The Court docket depends on the judgment of Supreme Court docket in case Dukhishyam Benupani v. Arun Kumar Bajoria, and said:

“It’s not the operate of the courtroom to observe investigation processes as long as such investigation doesn’t transgress any provision of regulation.”

On the petitioner’s misuse of the authorized course of, the Court docket strongly remarked:

“The Petitioner has made false declarations opposite to file, exhibiting no worry for violating the method of Courts with an intent to mislead the Court docket.”

Accordingly, the Court docket held that the petitions have been not maintainable, did not qualify as real PILs, and amounted to abuse of course of, warranting outright dismissal.

Case Title: GULSHAN BABBAR ADVOCATE versus STATE OF NCT OF DELHI & ORS.

READ JUDGMENT HERE

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