A day after the Bombay City Civil and Sessions Court reprimanded the Enforcement Directorate for not presenting a proper case to seek custody of Hasan Ali Khan under the Prevention of Money Laundering Act (PMLA), the agency submitted a sealed envelope, claiming “clinching proof of certain transactions” made by the Pune-based businessman.
The agency has sought 14-day custody of Mr. Khan. The court will decide on the remand application on Friday. Until then, he will spend another day in ED custody.
The ED told the court on Thursday that Mr. Khan's crime had serious anti-national implications, and it needed his custody under the PMLA urgently because it had to submit a report to the Supreme Court on March 18.
But Principal Judge M.L. Tahaliyani persisted with his question. “What you will submit to the Supreme Court eight days later is not my concern. You have to be able to put up sufficient material against him while making a case. What is the scheduled offence against him?”
To this, ED counsel Rajeev Awasthi said: “There is enough material to show his grave involvement. We are not convicting him. We want to confront him with the documents. While he was not in custody, he did not cooperate.”
Counsel said that out of the 29 times Mr. Khan was interrogated, “his statement has been recorded 18 times under the PMLA,” but he did not cooperate with the ED.
“Our investigation is progressing in a positive direction. We have found a large number of names which have to be pieced together after interrogating him,” Mr. Awasthi said.
Counsel said Mr. Khan's alleged crime had serious cross-border implications. The court asked him what offence had been committed outside India. “You show me what offence was committed, the money involved in which has been transferred to Swiss Bank,” Mr. Tahaliyani said.
Time sought for probe
Mr. Awasthi said he would not be able to file a charge sheet against the accused and the investigation was on. “Please give us time to investigate.”
The court then asked the ED to only name the offence without giving details.
The ED said it had been investigating the case against Mr. Khan since 2006 under the Foreign Exchange Management Act (FEMA). At this, the court rapped the agency saying if it was investigating the case, whether under the FEMA or the PMLA, it should be able to show the scheduled offence against the accused.
“Prima facie, you have to exhibit that there is property derived from the crime,” the court said.
“What scheduled offence has been committed in India or outside?”
Mr. Awasthi said Mr. Khan “has failed to show the legitimacy of the source of money parked outside India.”
Asked whether deriving money from an unknown source would attract the PMLA, the ED replied in the affirmative.
The ED said transfer of $7 lakh from Sarasin Bank to the Barclays Bank account of SK Financial Services, United Kingdom, was established.
The agency submitted a notarised document which, it claimed, contained “the linkages of Khan with Adnan Khashoggi [an international arms dealer] and other information regarding his financial transactions.”
Mr. Khan denied that the signature on the notarised document was his. But the ED said it had corroborative evidence of the document.
I.P. Bagaria, Mr. Khan's counsel, asked whether prima facie there was any offence against the accused under the PMLA. “Pending matters in the Supreme Court are not the sole criterion for granting remand.”
He said that the ED had not sought Mr. Khan's custody in 2009 during interrogation in the passport case. “They only sought to investigate him. Today what offence has been connected [that he should be remanded in custody]?”
Later, Mr. Awasthi said the envelope contained 16 established documents, which would show that the money transfer from Mr. Khan's account was “for questionable activities.”
“The investigations are at a serious stage. We have submitted corroborated evidence to the court,” he told the media outside.