Moin Qureshi Case: Delhi High Court Upholds PMLA Proceedings Initiated Against Businessman Sathish Babu Sana

The Delhi High Court on Friday upheld the money laundering proceedings initiated against Businessman Sathish Babu Sana in relation to the PMLA case involving meat exporter Moin Qureshi and other persons.

A division bench comprising of Justice Suresh Kumar Kait and Justice Neena Bansal Krishna dismissed the appeal moved by Sana challenging the summons issued to him on July 19 and 25, 2019.

Sana claimed that the summons issued to him on July 18, 2019, from the Directorate of Enforcement (ED) under Section 50 of PMLA cited him as a witness. He contended that when he appeared before the competent authority on July 26, 2019, as per subsequent summons, he was informed that he was under arrest.

The appeal challenged the constitutionality of Section 50(2) of the PMLA and a direction that the provision shall not apply to any person who has been arrayed and shown as a witness in a complaint.

The ED filed the case on the basis of an FIR by the Central Bureau of Investigation (CBI). ED alleged that Moin Akhtar Qureshi had amassed huge sums of money from public servants, including Sana,

who projected the payment of Rs.50 lakhs and Rs.1.5 Crores in the nature of share capital and business expenses. As per the probe agency, the amount was proceeds of crime.

The bench also dismissed similar pleas filed by co-accused person Pradeep Koneru. ED alleged that Koneru acted as a middleman and gave money to Moin Akhtar Qureshi for “proceeds of crime”.

Rejecting the appeals, the bench observed that Sana and Koneru were arrayed as witnesses by CBI to a case under scheduled offences. However, it said, that during the process of investigation, the money laundering case was registered where they were arrayed as accused.

“The ratio of law laid down by the Hon‟ble Supreme Court in Vijay Madanlal (Supra), clearly spells out that it may happen in cases that a person who is witness in offences related to scheduled offences, during his interrogation, may put-forth some material which would indicate his involvement in the commission of offence under PMLA,” the court said.

The court said that the summoning orders challenged by Sana and Koneru were just and proper to unearth the roots of the money trail.

“Having regard to the Supreme Court‟s decision in Vijay Madanlal Choudhary (Supra) and the fact that the petitioners are involved in the case of money laundering, we find that proceedings under PMLA have been rightly initiated against them,” it said.

However, the bench said that the interim protection granted to Sana and Koneru shall continue for two weeks.

Title: SATHISH BABU SANA v. DIRECTORATE OF ENFORCEMENT & ANR. and other connected matters

Citation: 2024 LiveLaw (Del) 798

Click here to read order