Action taken on the complaint filed with ED regarding money laundering by a company and its connections with underworld were denied u/s 24 - CIC: there is a case of allegations of corruption hence action taken and the status of complaint to be provided

Action taken on the complaint filed by the appellant against a company with the ED regarding money laundering and also the connections of the promoters of the company with Underworld Elements was denied u/s 24 - CIC: there is a case of allegations of corruption hence action taken and the status of complaint to be provided

ORDER

This matter earlier came up for hearing on 22.02.2012 when the Commission issued following order: “Shri Sandeep Varghese, the appellant had filed an application dated 1.3.2011, under the provisions of RTI Act, seeking information on the status of a complaint dated 28.3.2011 filed by him against M/s Jay Poly Chem Pvt. Ltd., and against its directors regarding money laundering activities. Through his RTI application which consists of 12 queries, he wanted to know from EDHqrs. The action taken till date on his complaint. The PIO, Deputy Director, Directorate of Enforcement, New Delhi, vide his reply dated 15.3.2011 invited the attention of the appellant to the provisions of section 24 of the RTI Act, 2005 according to which “nothing contained in this Act shall apply to the intelligence and security organizations specified in the Second Schedule.” The Directorate of Enforcement being one such Organisation. Therefore, the appellant was informed, the information sought by him could not be provided in view of exemption granted under section 24 of the RTI Act, 2005. Aggrieved with the decision, appellant filed an appeal before FAA. The FAA, vide his order dated 18.4.2011 upheld the decision of the CPIO. In his 2nd appeal filed before the Commission the appellant submits that he had filed various complaints against M/s Jay Poly Chem Pvt. Ltd. with the Directorate of Enforcement regarding money laundering of large sums of money by the company and also the connections of the promoters of Jay Polychem Pvt. Ltd. with Underworld Elements. He alleges corruption in the respondent department in as much as he has named various officials for their alleged collusion with the promoters of the company. The appellant alleges that respondent have avoided disclosing information with regard to his specific queries by quoting section 24 of the RTI Act. He therefore requests the Commission to direct the PIO to supply him the status report regarding his complaint dated 28.3.2010 against the directors of Jay Poly Chem Pvt. Ltd. and to direct the respondent to furnish the details of action taken against ED officials whose names have been furnished by the appellant. Having considered the submissions of the parties, the Commission observes that the organizations listed in the Second Schedule are exempted from the application of the RTI Act, however with the proviso that information pertaining to allegations of corruption and human rights violation shall not be excluded. The respondent CPIO and FAA have claimed exemption from providing information under section 24 of the RTI Act, while the appellant in his RTI application had categorically made allegation of corruption. In order to enable the Commission to come to a conclusion whether the information sought is covered under the proviso according to which information pertaining to allegations of corruption are not excluded under subsection 24(1) Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government: Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government: Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: of the RTI Act, the respondents are hereby directed to submit a written submission in support of their contention that information sought by the appellant does not attract the aforesaid proviso to section 24(1) Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government: Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government: Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: of RTI Act. The written submission shall be forwarded within 15 days of receipt of this order to Shri D.C. Singh, Deputy Register, C.I.C. (Fax No.01126186535) or submit by hand, who will submit it to the Commission for further orders.

2. Thereafter on receipt of the written submission from the Respondents, the matter was again listed for 08.11.2013 when the Respondents were present through Shri Gurinder Singh, Deputy Director and Shri Anup S. Rauthar, Asst. Director. The Appellant was present through his counsel, Shri Manoj V. George. 3. The operative part of the written submission filed by the Respondents reads as follows:  “…That the Appellant in his appeal before the Hon’ble CIC has made bald and vague allegations against a person whom the Appellant alleges to be corrupt and was said to be working in Jalandhar Office of this Directorate. The designation and his full name has not been mentioned. That the allegation mentioned in the appeal are vague in nature and no specific allegation of corruption or human rights violation has been made out in the appeal except the bald allegations. Under the legal framework of the Prevention of Money Laundering Act, 2002 (PMLA), the Enforcement Directorate cannot initiate investigation for money laundering unless a crime is registered by a Law Enforcement Agency and such office is included in the Scheduled to the PMLA. Filing of a complaint about money laundering by any individual would not ipso facto cause initiation of money laundering investigation by the Directorate……….. ………That the allegation relating to corruption in the instant appeal are absolutely vague and devoid of any substance. Hence the plea of the Appellant does not fall within the purview of exceptions enumerated under Section 24 of the RTI Act…………”

4. During the hearing, the counsel for the Appellant submits that the Appellant, who is an ex-employee of the Company, namely, M/s Jay Poly Cham Pvt. Ltd., had filed complaint dated 28.03.2010 against said company before the Directorate of Enforcement regarding money laundering activities. He also asserts that along with the said complaint a bunch of documents (around 200 to 300 pages) was given as supporting documents. There were several other complaints which the Appellant also filed against the said company as also against the officials of the Enforcement Directorate for their corrupt activities. Since no action was taken by the Enforcement Directorate on the said complaints, the Appellant filed the instant RTI application seeking the action taken/outcome of the said complaint. According to the counsel, the allegations of corruption were specifically made against one Mr. Gandhi (among others), who is an official of the Enforcement Directorate, which the Respondents have ignored. The counsel submit on behalf of the Appellant that all what the Appellant wants to know is the present status and action taken on the complaint dated 28.03.2010 filed by him with the Enforcement Directorate against M/s Jay Poly Chem Pvt. Ltd. regarding money laundering and other illegal activities, as also the action taken and the status of the complaints against the officials of the Enforcement Directorate including Mr. Gandhi regarding their involvement in corrupt practices.

5. The Respondents inform that an enquiry is being conducted against said company, namely, M/s Jay Poly Cham Pvt. Ltd., for violation of FEMA based on some information received from the Customs Department. However, no enquiry/investigation is being conducted against said company regarding money laundering in the absence of FIR. According to him, it is for the law enforcement agency e.g. police to register an FIR in such cases. The Directorate of Enforcement cannot initiate investigation for money laundering unless the FIR is registered by law enforcement agency in such cases. He mentions that the matter related to ‘money laundering’ falls under the category of criminal case, while violation of FEMA is a civil case. The Respondents, however, on being asked, are not able to explain whether any departmental enquiry is being conducted against the official of the Enforcement Directorate on the basis of the complaints filed by the Appellant, especially about one Mr. Gandhi.

6. On consideration of the submissions above and on perusal of records, the Commission is of the view that there is a prima facie case of allegations of corruption in the present matter which warrants the disclosure of information as specified by the Appellant’s counsel hereinabove i.e. action taken and the status of complaint dated 28.03.2010 filed by the Appellant with the Enforcement Directorate against M/s Jay Poly Chem Pvt. Ltd. regarding money laundering and complaints about other illegal activities, as also the action taken and the status of the complaints against the officials of the Enforcement Directorate including Mr. Gandhi regarding corruption. The CPIO is therefore directed to provide this information to the Appellant within 2 weeks of receipt of this order.

7. Appeal is allowed.

(Sushma Singh)

Information Commissioner

Citation: Shri Sandeep Verghese v. Directorate of Enforcement in Case No. CIC/SS/A/2011/001780