Bombay HC Refuses To Quash FIR, ECIR Against Ex-Religare Chairperson Rashmi Saluja In ESOP Money Laundering Case

Mumbai, Jan 28: The Bombay High Court has refused to quash a First Information Report (FIR) and Enforcement Case Information Report (ECIR) registered against Dr Rashmi Saluja, former executive chairperson of Religare Enterprises Ltd (REL), in connection with alleged cheating, criminal conspiracy and money laundering linked to Employee Stock Ownership Plan (ESOP) allotments in Care Health Insurance Ltd (CHIL).

Court finds incriminating material

Dismissing the writ petitions, a bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad held that it found “no substance” in Saluja’s challenge and said there was an “abundance of incriminating material” collected by the Enforcement Directorate (ED) to justify prosecution.

FIR based on ED inputs

In September 2024, an FIR was registered at Matunga police station based on information shared by the ED during its probe under the Prevention of Money Laundering Act (PMLA).

The FIR was filed by shareholder Vaibhav Gawli, accusing the firm’s former directors and the Burman family, who are shareholders in Religare Enterprises. The ED alleges that this complaint was false and part of a scheme, directed by Saluja and other private individuals, to block a change in REL’s ownership to the Burmans.

Alleged conspiracy and illegal gains

According to the ED, the FIR was also part of a broader conspiracy to obscure illegal gains from stock options in Care Health Insurance Ltd. The complaint allegedly aimed to divert attention from these illegal activities.

The court noted the ED’s allegations that Saluja derived unlawful gains of about Rs 179 crore by acquiring ESOPs in CHIL at a lower price, while REL allegedly invested Rs 192 crore in CHIL’s rights issue at a higher price. These ESOPs were treated as “proceeds of crime” and provisionally attached.

Jurisdiction and legal arguments rejected

The High Court rejected Saluja’s argument that Matunga police lacked jurisdiction, observing that “the registration of the FIR is not barred by any law” and that a crime can be registered where acts or omissions extend across jurisdictions.

The bench also rejected the contention that alleged violations under the Companies Act or SEBI laws could not lead to an FIR. It held that proceedings under special statutes do not bar investigation under the Indian Penal Code or the PMLA. The court said the PMLA, being a special legislation with a non-obstante clause, would prevail where applicable.

Mala fide claims dismissed

On allegations of mala fide action by the ED, the court said such claims were based on “vague assertions” and could not be examined in writ jurisdiction. “The criminal prosecution, if otherwise justified, is not vitiated on account of mala fides or vendetta,” it observed, adding that the credibility of witnesses can only be tested during trial.

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Trial to proceed

Upholding the magistrate’s order taking cognisance of offences, the High Court noted, “There are prima facie materials on record to connect the petitioner with commission of the crime.”

Holding that the allegations disclosed cognisable offences requiring trial, the court dismissed the petitions.

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