Sekar seeks quashing of money laundering case

By PTI Published on Nov 11, 2017 10:50 AM IST

Chennai: The Madras High Court has issued notice to the Enforcement Directorate on a petition from mining baron J Sekar Reddy, seeking to quash the case under the Prevention of Money Laundering Act, 2002, against him pending before a lower court here.

Reddy is at present out on bail in connection with the seizure of Rs 99 crore in demonetised bank notes and another Rs 34 crore in new currencies, besides a 127-kg gold bar, from properties owned by him and his associates in December last year.

Justice M S Ramesh, before whom the petition came up yesterday, issued notice to the assistant director, Enforcement Directorate (ED), here returnable in two weeks.

Reddy's counsel submitted that the case had been filed by ED relying on the investigation done by other agencies. He contended no offence is made out against him, and the case is vitiated, illegal and void.

The counsel further contended that the entire basis of the complaint is the FIR registered by CBI based on information from the Income Tax Department and said that the complaint filed by the ED is without jurisdiction, premature and ultra vires of the provisions of Prevention of Money Laundering Act.

He submitted that the CBI is yet to either identify the involvement of the bank officials or prima facie make out an offence or file a chargesheet for the allegations of conversion of the old currency notes into the new denomination notes and the ED has produced almost verbatim the CBI FIR.

He submitted that he had not indulged in conversion of old currency notes into new currency notes, even otherwise it is not an offence declared under any law. To arrive at a prima facie conclusion that the petitioner had indulged in conversion of old currency notes to new ones with the help of the bank, the only major evidence would be the serialised notes seized from him, the counsel said.

However, in the present case despite several verification of the seized currency by the CBI as well as the Income-Tax Department, there were no serialised notes at all, confirming that the seized money was lawful business income of the petitioner. In the statement to the I-T Department, Reddy had accounted for the cash held by him and, therefore, to say that he had converted unaccounted cash into new currency with the help of public servants is a complete falsity, he contended, and sought to quash the proceedings.