JAMMU & KASHMIR HIGH COURT QUASHES PMLA CHARGES AGAINST DR. FAROOQ ABDULLAH IN CRICKET ASSOCIATION SCAM
Category: Criminal Law
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It came to light when it was disclosed that ₹113 crore which was received from the board of control for cricket in India between 2005 and 2012 was allegedly embezzled by JKCA officials including the then president Farooq Abdullah and other office bearers.
The JKCA had an independent president until it was dissolved in 2016 Farooq Abdullah, a former Chief Minister of Jammu and Kashmir served as the president of the JKCA between the year 2002 and 2015. The office bearers including him was accused of embezzling funds, but instead of channeling them to what they had been assigned, they were used personally and through unauthorized cash withdrawals which never featured on the association records.
The scam was revealed after junior JKCA employees raised alarm over major irregularities in the financial transactions of the association. The Central Bureau of Investigation (CBI) was assigned to the case, and a chargesheet was filed in 2018 on charges of financial misappropriate and corruption involving several officials of JKCA. CBI soon registered a case of corruption and the Enforcement Directorate followed it up for money laundering and hence the assets of Farooq Abdullah amounting over ₹12 crore were attached.
KEY ASPECTS
Nature of the Allegations:
The Jammu & Kashmir Cricket Association (JKCA) scandal is related to probably fraudulent embezzlement of more than ₹ 113 crores of the state’s funds that were supposed to be utilised for developing cricket in Jammu & Kashmir from 2005 to 2012. These funds that was expected to be used in the development of infrastructure for the JKCA were reportedly withdrawn by the BCCI and channeled to other personal accounts distant from the JKCA and some of these accounts belonged to the JKCA officials. The fact was that large inconsistencies in the financial statement of the association evoke the interest of the CBI which later forced charges on some officials of the JKCA including Farooq Abdullah who was the then president of the association.
Role of Farooq Abdullah:
Farooq Abdullah, presently one of the prominent political leaders of India and the former Chief Minister of the Jammu & Kashmir state, was the president of the JKCA at the time when the irregularities are said to have taken place. Among the allegations levied against Abdullah it was alleged that he approved means through which funds that should be used in development of cricket could be siphoned. The ED said Abdullah positioned BCCI, along with other office bearers and directors, to siphon BCCI funds to personal accounts and to make unaccounted money withdrawals from the JKCA accounts. However, the ED was evidently engaged in these activities, the ED testified that Abdullah never brought this matter at the association to put a stop to the misuse.
Enforcement Directorate (ED) Investigation:
After the CBI filed a chargesheet in October 2018, the ED opened a cheating case under the PMLA and conducted searches and investigations for money laundering. The ED’s chargesheet filed in Sycophant year and supported in June 2022, accused Abdullah and several other JKCA officials of money laundering the siphoned cash. The ED also seized properties of Abdullah worth about ₹12 crore which the agency said was the proceeds of the amount laundered. Therefore, Abdullah refuted those assertions, saying that the properties were either inherited or acquired prior to the offenses, which are being accused of.
High Court Ruling:
On August 15, 2024 the High Court of Jammu & Kashmir and High Court of Ladakh dismissed the chargesheet filed by the ED in the case against Farooq Abdullah and other co-accused. Praising the judgment, the court noted that it offered a proper understanding of the PMLA, which states that for a money laundering case to stand, there must be this ‘scheduled offence’ first to back it. Delivering the judgment, Justice Sanjeev Kumar then pointed out that the ED’s case was moored on assumptions and not on any direct evidence linking Abdullah to a scheduled offence under the PMLA. But the court did not preclude further action being taken in future in the matter by the ED for a reinvestigation and filing of one or more additional complaints if necessary depending on whether or not the Chief Judicial Magistrate at Srinagar frames charges for offences set out in the PMLA schedule.
CONCLUSION.
In disposing of the charges, the High Court set back the ED’s case but at the same time kept the door open for more legal proceedings if more evidence were to be sought. The defense of Abhishek Bhal Holy Cross Church, Ajmer, is an important lesson for all those involved in prosecuting financial crimes and especially emphasises the requirement of solid evidence to prove money laundering charges under the PMLA.
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WRITTEN BY: ABHISHEK AIYAPPA
GUIDED BY: ADVOCATE ANIK
