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 the new currencies, besides a 127-kg gold bar, from properties owned by him and his associates in December last year.
The Madras High Court today issued notice to 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 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 the 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 has come up today, issued notice to the Assistant Director, Enforcement Directorate (ED), here returnable by two weeks.
Counsel for Reddy 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 the CBI based on the information of Income Tax Department and said that the complaint filed by the ED is without jurisdiction, premature and ultra virus 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 charge sheet for the allegations of conversion of the old currency notes into the new denomination notes and the ED has produced almost the FIR of CBI verbatim. 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 IT 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.