In relief to IT firm Tech Mahindra, the Supreme Court on Monday directed a trial court to defer framing of charges against it by four months in a money-laundering case initiated by the Enforcement Directorate (ED) in the Satyam scam.
Tech Mahindra had sought a stay on the the Andhra Pradesh High Court’s order that allowed the Special Court to continue with the process of framing charges against it and asked it to appear before the trial court and participate in framing of charges.
A bench headed by Justice TS Thakur, while asking the High Court to decide the appeal filed by the joint director of the ED “expeditiously preferably within four months”, also directed the special court to defer framing charges till the disposal of the case from the HC.
Part of the $16-billion Mahindra group, Tech Mahindra had purchased Satyam in a government-backed auction in 2009 after the Satyam founder admitted to one of India’s biggest accounting frauds.
Additional Solicitor general Maninder Singh, who assisted the court, told the judges that since framing of charges could lead to international debarring of Tech Mahindra, the apex court could ask the HC to decide the matter first and defer the framing of charges till then.
He also argued that Rs 822 crore of Satyam’s money was still with Tech Mahindra as “crime proceeds”. The ASG further said that Tech Mahindra had taken over Satyam knowingly and had also taken over its liabilities, including civil and criminal.
Senior counsel Kapil Sibal, representing Tech Mahindra, argued that to make out an offence of money laundering under the Prevention of Money Laundering Act (PMLA) the accused must have knowlegde of the proceeds of the crime.
“The ED in its complaint doesnot allege that Tech Mahindra had any knowlegde about the proceeds of the crime…
Merely being in possession of proceeds of crime does not constitute an offence of money laundering,” the petition stated.
The special court last month convicted Raju and others to seven years’ rigorous imprisonment for the financial fraud at erstwhile Satyam Computer Services.
The ED had registered a case against 213 accused, including the main company. Tech Mahindra was made first accused along with Raju amd his associates in the complaint on the basis that it was in possession of funds (kept in fixed deposits) which according to ED represented the proceeds of crime.