The Telangana High Court (HC) the search, seizure and seizing of cash, and jewellery by the Enforcement Department without reason are contrary to Section 17 of the Prevention of Money Laundering Act (PMLA), 2002.
M/s. Musaddilal Gems and Jewels (India) Private Limited,the petitioners are challenged the search and seizure conducted on 17.10.2022 and consequential panchanamas contrary to Section 17 of the Prevention of Money Laundering Act (‘PMLA’).
It was submitted that the Central Bureau of Investigation (CBI), Hyderabad registered a case against one Mr Sukesh Gupthaand the officials of MMTC for defrauding M/s MMTC Limited in purchase bullion under buyer’s creditscheme and also filed a charge sheet.
Neither the petitioner nor its directors are related to the alleged offences registered against Mr Sukesh Guptha and others. The respondents assumed that there was a connection between the petitioners and the above offences and conducted a search at the premises ofthe petitioner company and have not found any relevantdocuments and also have not seized any cash, gold or jewellery.
The respondents failedto provide the details of the date and time for the recording of the ‘reasons to believe as per Section17 (1) of PMLA, 2002 and also failed to provide the contents of the reasons further the respondentsalso failed to provide the dispatch details of the postal acknowledgement through which the reasons were communicated and failed to meet the mandatory provisions of Secton-17 of PML Act.
A Single member bench comprising Justice K Sarath observed that the Additional Director of the Enforcement Directorate without recording the ‘reasons to believe” issued a search warrant/authorisation to his subordinates and the Deputy Director of the Enforcement recorded the reasons to believe without any date and time, which contrary to the requirements under Section 17 (1) of PML Act.
While allowing the petition, the Court set aside the impugned order and the respondents are directed to release all the jewellery, cash and other articles seized.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
