The Madras High Court on Friday gave time till November 24 to the Enforcement Directorate (ED) to file its counter affidavit to a petition filed by businessman J. Sekar alias Sekar Reddy to quash a case against him before a lower court here under the Prevention of Money Laundering Act of 2002.
Directing the Central government Standing Counsel G. Hema and N. Ramesh, representing the ED, to file counter affidavit, Justice M.S. Ramesh said a decision on staying the proceedings pending before the Principal Sessions Court here could be taken only after the filing of the counter affidavit.
In his affidavit, Mr. Reddy stated that Income Tax (IT) officials had raided his properties in Vellore and Chennai on December 8 last year and subjected him to an inquiry for about five days. Thereafter, the Central Bureau of Investigation (CBI) registered a case against him on charges of converting old currency notes into new ₹2,000 notes with the connivance of some bank officials.
Claiming that the case was booked on the basis of a report submitted by the I-T department on December 19, the petitioner said that he was arrested and remanded to judicial custody on December 21. Though the CBI filed a petition for his custodial interrogation and he, in turn, sought bail, a Special Court for CBI cases dismissed both the petitions on December 30.
“In order to circumvent the said order and to fill up the lacunae and secure police custody, the CBI filed another First Information Report (FIR) on December 30 for the offences under Sections 120B (criminal conspiracy) read with 409 (criminal breach of trust by public servant), 420 (cheating) and the provisions of Prevention of Corruption Act of 1988.
More FIRs
“It is pertinent to mention that the second FIR has been filed for the same transaction and similar offences and verbatim similar to that of the first FIR registered on December 19,” the petitioner said and claimed that a third FIR also came to be registered by the CBI for the same transaction and similar offences.
He pointed out that the High Court had already reserved its orders on petitions filed by him to quash the first two FIRs and a petition for quashing the third FIR was pending adjudication. In the meantime, the ED had also registered a case on December 19 under the same legal provisions under which the CBI had booked him.
Sleuths from the directorate obtained permission from the Principal Sessions Court here on February 24 for interrogating the petitioner in prison for five days, but ended up interrogating him only for three days. They neither arrested him nor sought extension of time for further interrogation.
However, after the petitioner was enlarged on bail by the special court for CBI cases on March 17, he was arrested by the ED on March 20 and remanded to judicial custody. “The fact that the ED did not choose to arrest the petitioner for almost 90 days and waited till he was released on bail in the other case proves that the proceedings are motivated,” he alleged.
Source of the cash
Explaining the source of money recovered from him by I-T officials, he said that SRS Mining Company, of which he was the Managing Partner, owned 425 lorries and 180 excavators, and letting those vehicles on hire generated a substantial amount of money in cash as revenue based on trips made by them round the clock.
“The transactions are done in cash and accounted at the end of the financial year. In fact, for the last few years, he and his firm have been reporting a turnover of more than several hundred crores [of rupees] and have been paying a huge sum towards service tax and income tax. The above would prove that the petitioner has not been involved in any sort of illegal activity,” he claimed.
Mr. Reddy also contended that neither the CBI nor the IT officials had been able to prove that the currency notes seized from him were of the same serial numbers in order to prove the charge of having exchanged old currency notes for new notes with the connivance of bank officials.
“There are no serialised notes at all confirming that the seized money was lawful business income of the petitioner,” he asserted.
