CHANDIGARH: In a significant ruling, the Special PMLA court in Gurgaon denied requests from Arvind Walia, an imprisoned director of Ramprastha Promoters and Developers Private Ltd, to conduct online meetings or manage professional responsibilities from jail. Walia is currently held in Gurugram jail after his arrest by the Enforcement Directorate (ED).
Walia and fellow director Sandeep Yadav were taken into custody on July 21 last year, accused of defrauding over 2,000 homebuyers by collecting approximately ₹1,100 crore across various real estate projects, failing to deliver possession for over 14 years.
Through his lawyer, Walia submitted applications to Judge Vani Gopal Sharma, seeking the court’s permission for remote participation in company meetings and the ability to sign necessary documents. However, the court rejected these requests on Tuesday, as revealed in the orders accessed by TOI.
The court refused to allow Walia to conduct company operations from jail and denied his plea for the ED to issue a No Objection Certificate for the renewal of building licenses with the Town and Country Planning Department of Haryana. Although the ED’s response was limited, the court firmly rejected Walia’s applications.
Walia previously argued that his incarceration was hindering his ability to participate in the corporate governance of the companies where he serves as director or shareholder. His defense presented specifics from the Companies Act to support his claims, stressing the necessity of his involvement for the benefit of homebuyers and pressing the court to direct the ED to issue an NOC related to the Town and Country Planning Department.
The Special PMLA court made notable remarks while dismissing Walia’s requests: “Judicial custody restricts personal freedom and entails a suspension of regular civil and professional activities. Incarceration is not solely physical confinement; it serves to maintain discipline and prevent interference with the legal process.” The court highlighted the potential risks of allowing a detained individual to manage business functions, indicating it would create an inappropriate overlap between incarceration and regular business operations.
The Companies Act, 2013, includes provisions for resolving situations in which directors cannot fulfill their roles, such as delegation or appointing alternate directors. The court emphasized that commercial challenges cannot outweigh the legal implications of judicial custody.
Furthermore, the absence of an objection from the ED does not mandate the court to grant Walia’s requests. The court noted that it must consider jail discipline, public interest, and the risk of misuse of privileges when making such decisions, warning that granting such permissions would set an undesirable precedent.
Regarding the request for directions to the ED, the court remarked that no documentation was submitted to indicate the ED had advised or restrained the DTCP from processing the applicant company’s submissions. The ongoing investigation under the PMLA does not legally prevent statutory bodies from fulfilling their responsibilities. Thus, ordering the ED to provide a “No Objection Certificate” without legal basis would compel them to act beyond their authority, making it impermissible. Consequently, the court dismissed the application.
