The Enforcement Directorate (ED) on Wednesday approached the Bombay High Court challenging the order of a special Prevention of Money Laundering Act (PMLA) court that had recently ordered the release of two promoters of a firm who were booked for alleged money-laundering last year.
In one of the first such decisions following the Supreme Court’s order upholding the PMLA, a special court in Mumbai on Monday, as an interim relief, had ordered the release of two men booked for alleged money-laundering, noting that proceedings under PMLA cannot continue if there is no scheduled offence.
Representing ED, special counsel Hiten Venegaonkar on Wednesday mentioned the Central agency’s plea before a single-judge bench of the HC and said that the special court order was passed without a hearing from the agency.
Babulal Varma and Kamalkishor Gupta were arrested in January 2021 in an alleged money-laundering case against a firm called Omkar Realtors and Developers Private Limited.
Hearing the ED’s plea seeking cancellation of interim release, Justice Bharati H Dangre said that the HC will not intervene till the trial court is seized of the matter and decides on the same. In response to the ED lawyer, Justice Dangre said, “Argue what is to be argued before the trial court. The High Court will intervene after the trial court is done. Till the trial court is seized of the matter, let it continue hearing. There are experienced people sitting on the dais there. I do not want to get influenced by observations (by a special judge) made at an interim stage.”
“The order of the SC says whenever a predicate offence goes, PMLA also goes. It is an arguable point, but the very fact that the special judge holds he is powerless is wrong. The special judge has now said he will hear the main application which challenges remand on a day-to-day basis. There has to be some message sent to the trial court,” Venegaonkar urged the HC.
Ordering the release of Gupta and Varma, the special court, in one of the first such decisions after the top court’s order which upheld the PMLA, had said that it will hear the ED and the lawyer for the two accused at length in due course. Pending its final decision on the matter, the special court directed the interim release of the duo to avoid their “illegal detention” till then.
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The court had directed the release of Varma and Gupta on a personal bond of Rs 5 lakh and said that it was ready to hear the matter daily considering ED’s urgency to hear the plea.
The Supreme Court, in its order on PMLA last month, observed that if a person is absolved by a court in the scheduled offence filed against them, no separate action for money-laundering against such a person can take place.
Later in the day, Justice Dangre allowed ED to file a writ petition challenging the special court order. Thereafter, the same was mentioned before a bench of Justice Prakash D Naik, which listed the same for hearing on Thursday.