ED Summons cannot be quashed Merely as Documents required for Probe not Specified under PMLA: Delhi HC [Read Order]
ED summons cannot be quashed merely as documents required for probe not specified under PMLA, rules Delhi HC
Delhi High Court – Delhi HC – ED – Enforcement Directorate – Prevention of Money Laundering Act – PMLA – Taxscan
Delhi High Court – Delhi HC – ED – Enforcement Directorate – Prevention of Money Laundering Act – PMLA – Taxscan
In a major ruling, the Delhi High Court observed that the Enforcement Directorate ( ED ) summons cannot be quashed merely as documents required for the probe is not specified.
The Petitioner is aggrieved by the continuance of ED investigation under Section 120B read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 against M/s Technovaa Plastic Industries Private Limited ( Company ) and others, wherein petitioner is named as accused No.3.
Search and seizure under Section 17 of Prevention of Money Laundering Act, 2002 ( PMLA ) is also stated to have been conducted by the respondent at the residential premises of the petitioner situated at Bengaluru. Further, summons was issued for appearance of petitioner in person or through AR on 01.03.2024. However, on appearance of designated officer of petitioner, the insistence is stated to have been made for appearance of the petitioner.
Senior Advocate on behalf of the petitioner submitted that the aforesaid EY Audit has been declared unreliable by the National Company Law Tribunal Ahmedabad on multiple grounds and as such any proceedings arising thereon, in the investigation undertaken by ED deserves to be quashed. It was further urged that there is nothing on record before any forum to suggest the existence of any “proceeds of crime” in any manner and as such there cannot be any question of committing the offence of money laundering under the PMLA.
The counsel for the respondent/ED submitted that the petitioner cannot be insulated from any coercive action at the initial stage itself and no protective orders can be passed in favour of the petitioner ignoring the mandate of Section 45 of PMLA, 2002.
It was further submitted that proceedings initiated by Enforcement Directorate ( ED ) is an independent investigation into money laundering allegations based upon the ECIR and the benefit cannot be granted at this stage merely on account of order dated 09.02.2021 passed by NCLT or the orders granting anticipatory bail to the petitioner in FIR registered by CBI.
A Single Bench of Justice Anoop Kumar Mendiratta observed that “The summons issued by ED cannot be quashed merely because the relevant documents required for purpose of investigation or confrontation to the petitioner, have not been specified in the summons. It needs to be kept in perspective that under the scheme of PMLA, 2002 upon identification of existence of property being proceeds of crime, the Competent Authority is to inquire into relevant aspects in relation to such property and take necessary measures in this regard as per provisions of PMLA, 2002.”
To Read the full text of the Order CLICK HERE
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