New Delhi: A special court in Delhi has ordered the formal framing of money laundering charges against Rashtriya Janata Dal (RJD) chief Lalu Prasad Yadav, his wife and former Bihar Chief Minister Rabri Devi, his son Tejashwi Yadav, and six others in connection with the IRCTC hotel lease case.
Special Judge (PC Act) Vishal Gogne of the Rouse Avenue Courts held that a strong suspicion exists regarding the abuse of public office and the generation of proceeds of crime enjoyed by members of the Yadav family. The court directed charges to be framed under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) against nine accused entities and individuals, fixing October 3 for the formal reading of charges. Simultaneously, the court discharged seven co-accused after finding inadequate grounds to establish initial suspicion against them.
The money laundering proceedings prosecuted by the Enforcement Directorate (ED) stem from an underlying predicate offence investigated by the Central Bureau of Investigation (CBI). According to the investigating agencies, during Lalu Prasad Yadav’s tenure as Union Railway Minister between 2004 and 2009, public officials misused their positions to manipulate the tender process for leasing two legacy Bengal Nagpur Railway (BNR) hotels located in Ranchi and Puri.
The operation and maintenance contracts were awarded to M/s Sujata Hotels Pvt. Ltd., owned by directors Vinay Kochhar and Vijay Kochhar. In an alleged quid pro quo arrangement, prime commercial land in Patna was transferred at undervalued rates to M/s Delight Marketing Company Pvt. Ltd., an entity linked to Lalu Prasad's close associates Prem Chand Gupta and Sarla Gupta.
Investigating agencies further alleged that control of the Patna property was subsequently transferred to Rabri Devi and Tejashwi Yadav through the acquisition of company shares at nominal prices. The holding company was later renamed Lara Projects LLP. The ED claimed the acquisition funds had dubious origins and were laundered through a network of 151 group companies linked to Prem Chand Gupta, alongside non-banking financial entities. The court noted that the Yadav family continued to possess and enjoy this commercial plot in Patna, establishing a prima facie link to the proceeds of crime.
In his observations, Special Judge Gogne stated that establishing exacting standards of criminal intent or mens rea is unnecessary at the preliminary charge-framing stage, as the court need only determine whether a strong suspicion exists based on the record. The court rejected arguments advanced by the defence alleging political vendetta, observing that the trajectory and timing of the investigation do not support such an inference. Highlighting the statutory duty of special courts to uncover masked transactions trading public assets for personal gain, the judge quoted poet Rabindranath Tagore, remarking that when power removes moral checks from its path, its slippery path of ease becomes its path of doom.
Money laundering charges were ordered against Lalu Prasad Yadav, Rabri Devi, Tejashwi Yadav, Lara Projects LLP, Prem Chand Gupta, Sarla Gupta, M/s Sujata Hotels Pvt. Ltd., Vinay Kochhar, and Vijay Kochhar. Conversely, seven co-accused including Lalu Prasad's son-in-law Rahul Yadav, Gaurav Gupta, Nath Mal Kankarnia, Vijay Tripathi, D.N. Tulshyan, Rajiv Relan, and M/s Abhishek Finance Private Limited were discharged.
The defence counsel denied all allegations and affirmed that the charges will be contested during trial.
Case title: Directorate of Enforcement v. M/s. Lara Project L.L.P. & Ors.
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