Victim of political “persecution”: Punjab MLA Sukhpal Khaira challenges ED case against him

On 9 March, the Special Task Force of the Enforcement Directorate raided the Chandigarh residence of Punjab MLA Sukhpal Khaira. Ravi Kumar / Hindustan Times
08 April, 2021

On 9 March 2021, the Special Task Force of the Enforcement Directorate in Delhi conducted raids at the Chandigarh residence of Sukhpal Singh Khaira, a former member of the legislative assembly from the Aam Aadmi Party. Khaira has previously served as the leader of opposition in the Punjab state assembly. The timing of the raids raise questions about the motivation behind them. Summons were issued and searches conducted at a time when Khaira was speaking publicly in support of the ongoing farmers’ protests against three controversial farm laws. Khaira also spoke out vocally about probing the death of Navreet Singh, a farmer who died during a tractor rally against the farm laws on 26 January. Additionally, Khaira has been unearthing cases of Sikh youth who he said have been falsely accused under the Unlawful Activities Prevention Act. Khaira is presently the founder and president of the Punjab Ekta Party and an MLA representing the Bholath constituency.

On 21 January, the ED lodged a case against Khaira under provisions of the Prevention of Money Laundering Act, or PMLA. The act authorises searches at the premises of those suspected of money-laundering from the “proceeds of the crime.” On the day of the raids, the ED issued a press release that the “searches are underway” and have “unearthed incriminating documents and digital devices.” However, Khaira said that the press release had been circulated among journalists around 11:30 am, shortly after the searches commenced at 7:30 am. It raises questions about how the ED could have concluded the outcome of the searches in such a short span of time and while they were underway.  According to Khaira, the raids, which ended around 7 pm, were premeditated and politically motivated. “Even before the searches were complete or I could present my side of the story, this press release with such a big allegation was floated,” Khaira told me. The ED also conducted raids at the residence of his son-in-law and his associates. It seized mobile phones and other digital devices from the family.

Speaking on the condition of anonymity, senior officials in the ED told me that the raids on Khaira and his family are the first that the STF has conducted in Punjab. In light of this, it is pertinent to examine the context in which the STF was created. In 2019, the STF was conceived as a part of the ED to track international financing fuelling the drug menace, especially in the three border regions of Punjab, Jammu and Kashmir and Rajasthan. According to a 2019 report published in The Tribune, the STF was created “to speedily probe money laundering cases emerging from illegal narcotics trade.” The report added that the force will “look into past and probable cases of illegal narcotics trade, drug crime syndicates … that have national and international links, and such instances will be dealt under the Prevention of Money Laundering Act.”

However, ED officials told me that since its inception in 2019, the STF has not conducted any other raids or searches on anyone in Punjab. According to Khaira, this raises further questions about the motivation behind the raids. He said that in the time period for which he was under the scanner—2008 to 2020—there have been numerous cases of multi-crore drug deals with international connections, in which the names of several policemen and politicians have surfaced, but they have not been raided. In an affidavit in the Punjab and Haryana High Court, the ED pointed to a discrepancy of over three crores in Khaira’s financial transactions. According to Khaira, the STF raiding him for an alleged unaccounted income of a few crores, especially given the context in which it was created, is a sign that the investigation against him is politically motivated. “This figure amounts to a few lakhs per year,” Khaira said, referring to the discrepancy the ED pointed to. “Money laundering is not in lakhs annually, it’s in hundreds and thousands of crores.”

On 12 March, the ED issued summons to Khaira to appear before it on 17 March. The same day, Khaira filed a petition in the Punjab and Haryana High Court seeking the quashing of the investigation and case against him, and the setting aside of the ED summons. He claimed that he is a victim of “grave persecution and harassment being meted out to him for purely political considerations.” He added that summons are a violation of his fundamental rights.

On 24 March, in its response before the Punjab and Haryana High Court, the ED said that it had summoned Khaira to explain discrepancies related to “unexplained cash” and “property details.” In an 81-page affidavit, the ED further noted, “Bank accounts and income tax returns of Shri Sukhpal Singh Khaira and his family members were also examined and found  that as per the details declared to Income Tax Department for the period of 2008-09 to 2019-20, Shri Sukhpal Singh Khaira’s aggregate income was Rs 99,07,231/- approx, however, the total deposits in his five bank accounts tallied to Rs 4.86 crores, out of which Rs 0.843/- Cr,”—crore—“has been deposited in cash. Therefore, the deposits made by Shri Khaira in his bank accounts are not commensurate with the income declared before the Income Tax department.” The ED added that “documents containing cash transactions in Indian currency, in Foreign currency” were seized during the searches. It noted that “Cash transactions … of amount Rs 4.50 crore approx were found,” and “suspicious transactions in foreign currency equivalent to US$ 1.19 lakhs approx were found.”

However, Khaira said that all his bank accounts are legitimate accounts and denied the allegations of any illegal activity. He said that there were no unaccounted for cash transactions. “I have no ill-gotten wealth or assets,” he said “All I have is my agricultural land and this house in Chandigarh, Sector 5.” Khaira said that the ED had raised questions about funds transferred from the account of his son-in-law, Inderveer Singh Johal, to his and his son’s accounts. “My son-in-law is the grandson of late Darbara Singh,”—the former chief minister of Punjab—“who hailed from a very prosperous family of Jalandhar,” Khaira said. “He and my son Mehtab Singh Khaira started a business in partnership and my son being the legal advisor was getting Rs 1 lakh per month.” He continued that as part of the business, his son-in-law deposited Rs 64 lakhs to his son’s account. “It was an account-to-account transfer and was transparent,” Khaira said. Khaira added that he had taken bank loans against his agricultural land and his Chandigarh home from the Regional Capital Bank in 2010, the Union Bank of India in 2016, and HDFC bank in 2019, amounting to a total of Rs 3 crores. He claimed that he did not have enough money to pay the return installments. “I defaulted during one of the payments when my son-in-law bailed me out by sending Rs 10-12 lakhs to my account and I paid the same amount the same day to the Regional Capital Bank.”  

Khaira added that the ED search team also took away the diaries bearing details of the expenditure on his daughter Simmer Khaira’s wedding in February 2016. Khaira’s petition argued, “No incriminating material was found from the petitioner’s residence, however, petitioner and his family’s cell phones were forcibly taken away/seized by the ED. Searches were also carried out at the Petitioner’s married daughter’s residence in Delhi, who is at an advance stage of pregnancy.”

The petition added that the “mode, manner and approach of the ED” in carrying out the searches and seizures was an “absolute subversion of law for extraneous, vexatious & malafide considerations.” The petition continued, “The undisputed facts would show that the entire exercise undertaken by the respondents is aimed at browbeating and harassing the petitioner for certain political considerations and if such adventurism as indulged into … in the instant case is allowed to go unchecked, it would result in spelling of death knell to the fundamental rights of not only the petitioner but also his ilk.”

The ED’s case against Khaira is further based on a police probe into a 2015 drug smuggling racket. As The Tribune reported, the ED cannot independently file a criminal complaint under the PMLA, and has to base its case on a “predicate offence,” or an earlier offence, booked by another law enforcement agency under the Indian Penal Code or other laws. However, in 2017, the Supreme Court had stayed proceedings against Khaira in that case. Khaira argued that the ED could not reopen the case. “Initiating proceedings against me or my family in the same case in which I have got a stay is a contempt of court,” Khaira said.

In the 9 March press release, on the day of the searches, the ED said that the raids were connected to a “Fazilka Drugs Smuggling” case, referring to Fazilka district in Punjab. It stated that 1800 grams of heroin were seized from “a gang of international drugs smugglers in 2015.” It added, “The drugs were smuggled through the Indo-Pak border. … Sukhpal Singh Khaira was actively aiding and supporting the gang of international smugglers and enjoying the proceeds of crime.”

Khaira was not named in the initial first information report registered in the case in 2015. On 31 October 2017, a trial court in Fazilka convicted nine accused persons in the case, including a man named Gurdev Singh, a resident of the Bholath Constituency. The same day, on the application of the Punjab police, the Fazilka court also issued summons to Khaira to appear before it as an additional accused in the drugs case. The Punjab Police argued that Khaira was connected to Gurdev. 

Khaira challenged the Fazilka trial court order in the Punjab and Haryana High Court, arguing that he could not be made an accused after a judgment in the case had already been pronounced. The high court dismissed his challenge. He then appealed before the Supreme Court, which granted him some relief. It stayed the trial court proceedings in December 2017, and subsequently referred the issue to a larger bench. The matter has since been pending.

In its March 2021 affidavit, the ED recalled the Punjab Police’s probe. “Investigation by Punjab Police further revealed that Shri Gurdev Singh, who has been convicted by trial court … used to provide funds and vehicles to Shri Sukhpal Singh Khaira for his election campaign and made other logistic arrangements from the proceeds of crime generated from smuggling and dealing of Heroin, thereby implying that Proceeds of Crime were used to finance elections of Shri Sukhpal Singh Khaira and in return Shri Sukhpal Singh Khaira provided protection to Shri Gurdev Singh (and others) in the smuggling of narcotic drugs,” the ED’s affidavit said. It continued, “During the investigation by Punjab Police … other accused have revealed that Gurdev Singh had assured them if any problem arises during smuggling of heroin then Sukhpal Singh Khaira will definitely help them out from such situation.”

The ED also mentioned that between 27 February and 8 March 2015, Gurdev was on the run in connection with the FIR. During this time, the ED said, he was “in continuous contact” with Khaira, Joga Singh, Khaira’s personal security officer, and Manish, Khaira’s personal assistant, through his UK-based sister Charanjit Kaur.

Khaira denied assisting Gurdev in any capacity in the drugs smuggling racket. He pointed out that Gurdev had no such cases against him until 2015. He added and that he had not been in contact with Gurdev since his arrest in 2015. Referring to the Punjab assembly elections, he continued, “The next elections were in 2017. How can Gurdev help me in elections from jail?”

In his March 2021 petition before the Punjab and Haryana high court, Kharia said that Gurdev was merely a political acquaintance and a supporter belonging to his constituency whom he did not know much about. “The petitioner does not have any personal relation with him,” the petition stated. “There are several thousand supporters and political acquaintances of the petitioner like Gurdev Singh, regarding whom the petitioner may not have any knowledge of their personal affairs.” 

The petition emphasised that Khaira was “neither named in the FIR nor any overt or covert act was attributed to him.” It continued, “Pertinently, soon after the registration of the FIR and apprehension of Gurdev Singh, a deliberate and malicious vilification campaign was orchestrated by certain vested interests of the then ruling regime by spreading rumors that Gurdev Singh was a close associate of the petitioner.” Khaira further stated in the petition that he had learnt that the “Investigating Agency had gathered some call records,” of him and Joga, his PSO, with Gurdev, and “it is on this basis that deliberate attempts were being made,” to tarnish his image. He continued that “being a public figure and a known popular leader of the area,” he had “interaction with several thousands such acquaintances in his constituency and, therefore, it could not have been countenanced that merely because there may be some call exchanges,” that he may have been “in collusion with Gurdev Singh.”

Sanjay Kumar Mishra, the chief of the ED, did not respond to questions. The next hearing on Khaira’s case in the Punjab and Haryana High court is scheduled for 20 April. In his petition, Khaira further elaborated on why he believes he has become “a target in the eyes of the central government.” He noted that he has been “actively participating” in the ongoing farmers’ protests, and has been “very vocal about condemning” the farm laws. He added that he has “been fearlessly bringing up various incidents of human rights violations, wherein, the police authorities in uniform have been brutally assaulting farmers who are peacefully protesting the three farm laws.” Referring to the death of Navreet, Khaira pointed out that he “took up this issue aggressively demanding judicial probe by a sitting High Court Judge.” Eyewitnesses at the spot said that the Delhi Police shot Navreet. His family supports this accusation. However, the Delhi police maintain that he died by accident. Khaira continued, “The issue turned out to be a major embarrassment for the central government.”