ED Files Prosecution Complaint in Srinagar PMLA Case Involving Former PHED Chief Engineer and Others.

Headnote:

The Directorate of Enforcement (ED), Srinagar Zonal Office, filed a Prosecution Complaint under the Prevention of Money Laundering Act, 2002 (PMLA) before the Special Court (PMLA), Srinagar, against Ghulam Mohammad Bhat, then Chief Engineer, Public Health Engineering Department (PHED), Kashmir, and four others for misappropriation of government funds during procurement of spare parts for water filtration plants. The Court has issued pre-cognizance notice to all accused persons. ED’s investigation revealed that the accused officials, in conspiracy with a private contractor, M/s Baba Enterprises, diverted government funds and laundered proceeds through the acquisition of immovable properties worth ₹1.56 crore in Srinagar.

Background:

1. The case originated from an FIR registered by the Anti-Corruption Bureau (ACB), Srinagar, against Ghulam Mohammad Bhat and others for alleged misappropriation of public funds.
2. The investigation established that officials of the PHED colluded with M/s Baba Enterprises to manipulate tendering and procurement procedures for the supply of spare parts for water filtration plants.
3. Tenders were awarded without due process, violating financial rules and procurement norms:
4. No separate tender was issued for additional procurement worth ₹2.30 crore.
5. Security deposits of only ₹1 lakh were taken against the required ₹7 lakh.
6. Delivery periods were irregularly extended from 30 days to 90 days.
7. M/s Baba Enterprises received ₹3.54 crore from PHED but paid only ₹1.55 crore to the original supplier (M/s Industrial Devices (India) Pvt. Ltd., New Delhi), diverting the remaining ₹1.56 crore for personal enrichment.

Findings of ED:

The diverted amount of ₹1.56 crore was used for purchasing immovable properties in Srinagar, including:

18 marlas of land in Barinambal, and 27.5 marlas of land in Hyderpora, Srinagar.

These assets were found to be Proceeds of Crime (POC) under Section 2(1)(u) of PMLA, having been acquired through funds misappropriated from the government.

Consequently, the ED attached immovable properties worth ₹1.56 crore under Section 5 of PMLA.

Accused Persons:

1. Ghulam Mohammad Bhat – Then Chief Engineer, PHED, Kashmir
2. Rajnish Bal – Procurement Committee Member
3. Mohammad Amin Wani – Procurement Committee Member
4. Nisar Ahmad Bhat – Procurement Committee Member
5. Imran Baba – Partner, M/s Baba Enterprises

Legal Provisions Involved:

1. Sections 3 & 4, Prevention of Money Laundering Act, 2002 – Offence of money laundering and punishment.
2. Section 2(1)(u), PMLA – Definition of “Proceeds of Crime.”
3. Section 5, PMLA – Attachment of property involved in money laundering.

Court Proceedings:

1. The Prosecution Complaint was filed before the Special Court (PMLA), Srinagar, which has now issued pre-cognizance notices to all accused.

Status:

Further investigation by the Enforcement Directorate is ongoing to trace additional proceeds and identify other potential beneficiaries of the misappropriated funds.

Case: Directorate of Enforcement (Srinagar Zonal Office) v. Ghulam Mohammad Bhat & Ors.

Court: Hon’ble Special Court (PMLA), Srinagar