PNB fraud: HC seeks ED's response on plea by Mehul Choksi's company

New Delhi: The Delhi High Court on Friday sought the Enforcement Directorate's response on a plea by diamantaire Mehul Choksi's firm Gitanjali Gems in a money laundering case in connection with the over Rs 11,000 crore PNB fraud case.

Justices S Muralidhar and IS Mehta issued notice to the ED, which was represented by advocate Amit Mahajan, on the plea challenging the alleged illegal seizure of documents and articles by the probe agency.

The court said it will hear the matter along with a similar pending plea of billionaire Nirav Modi's firm Firestar Diamond on April 11.

Advocate Sanjay Abott, appearing for Gitanjali Gems, sought direction to quash the ED's move of seizing the firm's moveable properties.

The firm has sought direction the ED to supply it copies of the search warrant of February 22, ECIR registered by it pursuant to which searches were made in its premises and the entire documentation and details of places where the assets have been kept for safe keeping. Modi, his uncle Choksi and others are being investigated by multiple probe agencies after the scam came to light in January following a complaint by the PNB that they had allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank.

The ED has registered the money laundering case against Modi, his firms and others on the basis of a CBI FIR.

The plea said only proceeds of crime can be seized and not any property and alleged that the ED has exercised its powers arbitrarily as stock purchased out of legitimate source is not a crime.

It claimed that the "ED has exceeded its powers by taking away the movable property of the firm without any such authorisation".

The petition alleged that the search and seizure conducted by the ED was in violation of statutory mandate prescribed under the PMLA and CrPC.

It has also challenged the constitutionality of various provisions of the PMLA including Section 17 which gives powers of search and seizure and Section 20 relating to retention of property.

It said that order be passed regarding framing the guidelines for the conduct of search and seizures by the ED, similar to the manner CBI has formulated a CBI Manual to ensure its fair and transparent functioning.