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HC rejects Virbhadra's wife, ors plea against PMLA clause

Press Trust of India  |  New Delhi 

The High today upheld the validity of a money laundering provision while rejecting 19 pleas, including that of former Virbhadra Singh's wife Pratibha Singh, challenging its constitutional validity.

The clause empowers the ED to provisionally attach the properties bought from proceeds of crime.

Besides Virbhadra's wife, others who had challenged the provision include their daughter Aprajita Singh, sand mining baron and former Tirupathi Devasthanams (TTD) J Sekar Reddy and his business associates S Ramachandran and K Rethinam.

While upholding the Prevention of Money Laundering Act (PMLA) provision, the however said the agency will have to communicate the 'reasons to believe' at every stage to the person to whom an attachment notice was being issued under it.

A bench of Justices S Muralidhar and I S Mehta also said that if there was any violation of the legal requirements, the order of provisional attachment of assets would be rendered "illegal".

The verdict came in 19 petitions in two separate money laundering cases allegedly involving Virbhadra Singh's wife, daughter and Reddy respectively.

The accused had challenged the constitutional validity of section 5(1) second proviso, which deals with the power of an not below the rank of to provisionally attach a person's property suspected to be brought from proceeds of crime, if he has "reasons to believe" that not doing so could frustrate the proceedings.

The court, in a 48-page judgement, said "the second proviso to Section 5(1) is not violative of Article 14 of the Constitution and the challenge in that regard in these petitions is hereby negatived."

It also said the noticee is entitled access to materials on record that constitutes the basis for 'reasons to believe', subject to redaction, for reasons to be recorded in writing.

The said the maintainability of the petitions will be decided by a of the high

The various accused in two separate cases have challenged the ED's FIR against them and provisional attachment orders regarding their assets.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 16:50 IST