Bombay HC Quashes Closure Report In ₹175-Crore Topsgrup Scam Case, Sends Matter Back To Magistrate For Fresh Review

Mumbai: The Bombay High Court has quashed the “C-Summary” closure report filed by the Economic Offences Wing (EOW) of the Mumbai Police in the ₹175-crore Topsgrup security contract case. The court said the magistrate accepted the report “without application of mind” and merely because the original complainant had no objection.

On June 11, Justice Madhav Jamdar allowed two petitions — one by the Enforcement Directorate (ED) and another by Ramesh Iyer, a former employee of Topsgrup who had filed the original complaint.

The judge said the magistrate failed to independently examine the evidence and documents before accepting the closure report. “A bare perusal of the impugned order shows that the learned Additional Chief Metropolitan Magistrate accepted the ‘C-Summary’ only because the first informant had no objection,” the court noted. “The magistrate was duty-bound to examine the facts, the report and the accompanying documents before either accepting or rejecting it.”

In 2020, the ED had registered its complaint on the basis of a case registered by the Mumbai police's Economic Offences Wing (EOW). A former employee of Topsgrup Ramesh Iyer, who had alleged that the company cheated the Mumbai Metropolitan Region Development Authority (MMRDA) of Rs 175 crore.

In early 2023, the EOW filed a “C-Summary” report, claiming the case was a result of misunderstanding and no offence was made out. Iyer later told the magistrate that he no longer wanted to pursue the case. Based on this, the magistrate accepted the report in September 2022 and transferred the matter to the Special PMLA scourt.

However, ED’s counsel Hiten Venegaonkar argued that under the Prevention of Money Laundering Act (PMLA), a money laundering case can be committed to the special court only after a magistrate has taken cognisance of the main (scheduled) offence.

Justice Jamdar agreed. He said the stage for sending the case to the PMLA court arises only after proper application of mind by the magistrate on whether there is enough material to proceed.

The HC has now sent the matter back to the magistrate for fresh consideration and directed that it be dealt with quickly. The court clarified it had not commented on the merits of the case and that all sides are free to argue their case before the magistrate.

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