The Delhi High Court has stayed a trial court order directing framing of charges against Sujata Hotels in a money laundering case connected to the alleged IRCTC scam case.

Justice Sachin Datta stayed the order passed by the trial court on September 10 qua the hotel till the next date of hearing on December 03.

The Court issued notice on the plea filed by M/S Sujata Hotels Private Limited challenging the order directing framing of charges against it under Section 4 read with Section 3 of the Prevention of Money Laundering Act, 2002.

The prosecution's case concerns the award of contracts by IRCTC to the hotel for operating BNR Hotels at Ranchi and Puri.

It has been alleged that the hotel was involved in manipulation of the tender process and transfer of some land at an undervalued price to a company called M/s DMCPL, a company associated with the alleged beneficiaries as part of an unlawful arrangement.

The counsel appearing for the hotel pointed out that Section 70(1) of the PMLA, 2002 proceeds upon a contravention committed by a company and addresses the liability of the company and persons in charge of and responsible for its business.

It was argued that a company necessarily acts through individuals, and the acts of its directors may, therefore, be attributable to it where the material establishes such a connection.

It was contended that director's personal acts or liability cannot be automatically transferred to the company merely because they hold that office.

It was submitted that the acts attributable to the company and their connection with an activity falling within the scope of Section 3 of the PMLA must be specifically identified.

The counsel said submitted that the impugned order neither identified the specific material directly connecting the company with any offending activity nor explain why the director's personal land transactions are attributable to the company.

As it was argued 11 that describing the company's culpability as co- extensive with that of the directors did not supply the missing condition, the Court noted:

“Prima facie, the issue as to whether the acts of the directors can be attributed to the company in the peculiar factual conspectus requires further consideration in the context of the above submissions.”

It accordingly sought response of the ED and directed that the same shall refer to the precise material which supports the involvement of the company in the concerned activity falling within the sweep of Section 3 of the PMLA, 2002.

“Considering the circumstances, till the next date of hearing, the operation of the impugned order and further proceedings pursuant to it in Ct. Case No. 22/2019 shall be stayed insofar as they concern the petitioner herein,” the Court said.

Vide the impugned order, the Court had also framed PMLA charges against former Bihar Chief Minister and Rashtriya Janata Dal (RJD) chief Lalu Prasad Yadav, his son Tejashwi Yadav and wife Rabri Devi and others.

The accused in the case are M/S Lara Projects LLP, Rabri Devi, Tejashwi Yadav, Lalu Prasad Yadav, Sarla Gupta, Prem Chand Gupta, Gaurav Gupta, Nath Mal Kakrania, Rahul Yadav, Vijay Tripathi, Deoki Nandan Tulshyan, M/S Sujata Hotels, Vinay Kochhar, Vijay Kochhar, Rajiv Kumar Relan and M/S Abhishek Finance Private Limited.