Mumbai: A special court under the Prevention of Money Laundering Act (PMLA) in Mumbai has taken cognisance of a money laundering complaint filed by the Enforcement Directorate (ED) against former Religare Enterprises Ltd (REL) executive chairperson Dr Rashmi Saluja and four others, including senior advocate Pratap Venugopal, a former retainer for REL and former independent director of Care Health Insurance Ltd (CHIL).The ED, in its prosecution complaint, has alleged that Venugopal acted in collusion with Saluja and former REL executive Nishant Singhal to obtain legal opinions aimed at overcoming objections raised by the Insurance Regulatory and Development Authority of India (IRDAI) to the grant of employee stock option plans (ESOPs) to Saluja.“…accused No.5 in active collusion with accused Nos.1 and 2 orchestrated the procurement of legal opinions without any mandate, authorisation or resolution from the Board of Directors of CHIL with a clear motive of overturning the directions of IRDAI with respect to grant of ESOPs to accused No.1 and, as part of a quid pro quo arrangement, accused No.1 orchestrated the appointment of accused No.5 to the Board of CHIL, wherein he made monetary gains of Rs 60 lakh,” the ED alleged before the court.According to the agency, legal opinions from former bureaucrat J. Hari Narayan and senior advocate Arvind Datar were procured without any board mandate or authorisation from CHIL. The ED further alleged that Hari Narayan’s opinion was shared with Datar without obtaining consent from either the author or CHIL, and that drafts of Datar’s opinion were accessed and edited by Saluja and her associates, thereby compromising the independence of the opinion.Venugopal, however, has strongly denied the allegations, arguing before the court that the claims against him are “preposterous, mala fide and misconceived”.According to his submissions, he was appointed as an additional non-executive and independent director of CHIL in September 2022, served for over two years and resigned in January 2025.“The allegations against accused No.5 are contrived, devoid of merit, perverse and unsupported by any material on record. Obtaining a legal opinion and acting upon it does not constitute an offence,” his counsel submitted.Venugopal’s defence argued that he acted in good faith and within the scope of his professional responsibilities when he facilitated legal opinions from two eminent experts. The defence maintained that he was specifically instructed by CHIL’s Chief Legal and Compliance Officer, acting through REL’s Group Legal Head, to obtain independent legal opinions after IRDAI declined approval for the ESOP proposal.According to the submissions, Venugopal coordinated the preparation of the statement of facts in consultation with REL and CHIL officials, forwarded documents to Hari Narayan and Datar, and merely facilitated the opinion process. The defence pointed out that the Nomination and Remuneration Committee (NRC) minutes of June 2, 2022 recorded that CHIL had obtained two legal opinions and subsequently placed the matter before the board, which considered them in its August 2, 2022 meeting.“All the actions of accused No.5 were undertaken strictly on the instructions and with the full knowledge of REL and CHIL officials. The accused merely facilitated the obtaining of independent legal opinions from reputed experts in the ordinary course of professional practice,” the submissions stated.The defence further argued that receipt of professional fees by an advocate for legal advice cannot amount to an offence or be treated as incriminating conduct.The ED has also alleged that Venugopal’s appointment to CHIL’s board was part of a quid pro quo arrangement and that he earned about Rs 60 lakh between FY23 and FY25 as sitting fees while serving as an additional non-executive and independent director.Venugopal disputed this allegation as well, contending that his appointment as an independent director came months after the legal opinions were obtained and that the sitting fees he received were identical to those paid to other non-executive directors. His counsel further argued that the Bar Council of India Rules expressly permit advocates to serve as company directors and receive sitting fees.After hearing both sides, Additional Sessions Judge R.B. Rote held that a detailed examination of the defence was not warranted at the cognisance stage. The court observed that the ED’s complaint contained specific allegations regarding Venugopal’s role and subsequent appointment to CHIL’s board and that the prosecution’s case was supported by witness statements and documentary evidence collected during the investigation.The court also noted that the Bombay High Court had earlier declined to quash the predicate FIR and the ED’s Enforcement Case Information Report (ECIR), observing that prima facie material existed against the accused. It further recorded that shares linked to the ESOPs had been provisionally attached and that earlier judicial forums had found sufficient material to permit the investigation to continue.Holding that there were sufficient grounds to proceed, the court issued process against all five accused for the offence of money laundering under Section 3, punishable under Section 4 of the PMLA, and directed them to appear before the court on June 11.“The economic offence involving huge loss of public funds, affecting the economy of the country and posing a serious threat to the financial stability and health of the country, cannot be lightly viewed. At this premature stage, the complaint cannot be dismissed,” the court observed.The court added that at the pre-cognisance stage, a mini-trial is not contemplated and that the material on record prima facie disclosed sufficient grounds for proceeding against the accused.