Delhi High Court upholds money laundering proceedings against businessmen Sathish Babu and Pradeep Koneru

New Delhi: The Delhi High Court on Friday upheld the money laundering proceedings initiated against businessmen Sathish Babu Sana and Pradeep Koneru in relation to a Prevention of Money Laundering Act (PMLA) case allegedly involving meat exporter Moin Akhtar Qureshi.

The high court also refused to quash summons issued to them by the Enforcement Directorate (ED) in the money laundering case and said their summoning was “just and proper to unearth the roots of the money trail”.

The court, which had in 2019 stayed the summons issued to the two businessmen, said the interim protection granted to them shall continue for two weeks.

“Having regard to the Supreme Court’s decision in Vijay Madanlal Choudhary and the fact that the petitioners are involved in the case of money laundering, we find that proceedings under PMLA have been rightly initiated against them. The petitioners have challenged their summoning, which in our opinion is just and proper to unearth the roots of the money trail.

“Finding no merit in the averments raised by the petitioners, these petitions and pending applications are accordingly dismissed,” a bench of justices Suresh Kumar Kait and Neena Bansal Krishna said.

Sana challenged the summons issued to him by the ED on July 19, 2019 and July 25, 2019, saying earlier he was cited as a witness but later his status changed to an accused.

Koneru also challenged the constitutionality of Section 50(2) (power of authorities regarding summons, production of documents and to give evidence) of the PMLA and sought a declaration that this provision was not applicable to a person who has been arrayed as a witness in the complaint.

Besides seeking quashing of summons issued to him, Koneru also prayed for quashing of proceedings in the PMLA case.

The high court noted that during the course of investigation by the ED, Sana and Koneru in their respective statements recorded under Section 50 of the PMLA, admitted having paid crores of rupees to Qureshi through his employee Aditya Sharma for obtaining illegal favour from the government servants after using his influence.

“Aditya Sharma was also confronted with the facts and evidence on record, who confirmed the monetary transactions received by him. The same were also found in tandem with the contents of BBM (Blackberry messenger) messages retrieved by forensics lab, CERT-In. These amounts were found to be sent for hawala transactions through Delhi based hawala operators which reflected in the BBM messages of Aditya Sharma and Ex CBI Director AP Singh,” the court said.

It noted the investigation has revealed the alleged involvement of Sana in acquisition of proceeds of crime by Qureshi and that he had paid huge amounts to him to influence the public servants.

“Sana and Koneru have, thus, prima facie committed offence of money laundering as defined in Section 3 of the PMLA, 2002 by directly or indirectly indulging in, knowingly assisting, knowingly a party and actually involved in all or any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property,” the high court said.

It noted that admittedly the petitioners were arrayed as witnesses in the case registered by the CBI, however, during the process of investigation, another case was registered under the provisions of the PMLA in which they have been made accused.

“This court in a catena of decisions has already held that proceedings under the scheduled offences and PMLA are separate and distinct and have no binding upon each other,” it said.

The ED filed the case on the basis of an FIR by the Central Bureau of Investigation (CBI). The ED alleged that Qureshi had amassed huge sums of money from public servants, including Sana who projected the payment of Rs 50 lakh and Rs 1.5 crore in the nature of share capital and business expenses. According to the ED, the amount was the proceeds of crime.