In a blow to Gitanjali Gems promoter Mehul Choksi, the Delhi High Court today withdrew the interim protection from arrest and other coercive action granted to him in a cheating case while the Enforcement Directorate justified the seizure of his company's jewellery stock in a money laundering case saying it was part of the proceeds of crime.
In separate proceedings before two benches of the high court, both the Delhi Police and ED said that Choksi, the uncle of billionaire Nirav Modi, had not joined investigation in their respective cases against him.
Taking note of the submission by Delhi Police, Justice Mukta Gupta withdrew the interim protection granted to Choksi on April 26 last year and listed the matter for further hearing on November 26.
In the money laundering case heard by a bench of Justices S Muralidhar and I S Mehta, the ED filed an affidavit contending that the proceeds of crime generated through criminal activities arising out of offences under the Prevention of Money Laundering Act (PMLA) were "layered and integrated in the veil of huge bullion/jewellery business of Mehul Choksi in order to project the same as untainted property, which includes the business of Gitanjali Gems".
The bench listed the money laundering matter for further hearing on July 31, by when the firm's counsel Vijay Aggarwal has to file a rejoinder to the ED affidavit.
Both Choksi and Modi had left the country in January this year.
The affidavit was filed by ED counsel Amit Mahajan and Nitesh Rana in a plea by Choksi's firm challenging the alleged illegal seizure of documents and articles in a money laundering case in connection with the over Rs 11,000 crore Punjab National Bank (PNB) fraud case.
In its affidavit, the ED said, "The jewellery stock of the petitioner (Gitanjali Gems) has been seized with the reason to believe, recorded in writing on the basis of information/ documents in possession, that the petitioner company, being under the direct control of prime accused Mehul Choksi, is very much involved in the process of money laundering."
"Prima facie the case involves a circuitous web of transactions and has international ramifications on the face of record."
When ED summoned him to join the probe and explain the issues, he preferred to completely sidestep the legal system of the country and has decamped to foreign shores, refusing to join the investigation. The plea in which "Choksi has indirectly approached the court through M/s Gitanjali Gems Ltd needs to be dismissed."
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