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ED's Summons and Investigation Under the PMLA Cannot be Quashed Merely Due to Procedural Objections or Prior NCLT Findings

High Court rules that the ED's summons and investigation under the PMLA could not be quashed merely due to procedural objections or prior NCLT findings.


The Delhi High Court Bench of Justice Anoop Kumar Mendiratta observed that the ED's summons and investigation under the PMLA could not be quashed merely due to procedural objections or prior NCLT findings, as the petitioner had not been exonerated of the alleged offences, and thus, no grounds for interim relief were justified.


The petitioner filed a writ petition under Article 226 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973, seeking various reliefs, including quashing an ECIR, stopping the ED investigation, and preventing coercive action. The petitioner contended that the ED's investigation stemmed from a CBI case alleging fraud by Technovaa Plastic Industries Private Limited, where the petitioner was an accused. The petitioner argued that a forensic audit by Ernst & Young (EY) was unreliable, as determined by the NCLT, and that there was no evidence of proceeds of crime to justify a money laundering investigation.


The ED opposed the interim relief, arguing that the investigation was lawful, citing powers under the PMLA and relevant legal provisions. The ED emphasized that the petitioner's protection from coercive action was unwarranted at the investigation stage and referenced various legal precedents to support their stance.


The High Court ruled that the ED's summons and investigation could not be quashed solely because the details of documents required for investigation were unspecified. It noted that the ED was within its rights to conduct inquiries under the PMLA and that the petitioner had not yet been cleared of the alleged offences. The court did not grant interim relief, stating that no grounds were made for such at this stage, and clarified that no conclusions on the merits of the case were drawn. The application was disposed of and the matter listed for further hearing.

 

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