Money laundering: HC stays tribunal order on property deal

The Madras High Court today stayed a tribunal's order allowing use of a property by a leading textile chain after hearing a plea of the Enforcement Directorate that its purchase allegedly involved money laundering.
A division bench comprising justices R Mahadevan and M Govindaraj stayed the order of the Delhi-based Appellate Tribunal for cases under Prevention of Money Laundering Act (PMLA) allowing ED plea seeking stay.
The tribunal had allowed Pothystextiles to deposit 50 per cent of the purchase value of a property it had bought to the ED and use it.
The matter relates to a property purchased by Pothys in Kancheepuram measuring about 12,945 sq ft for constructing a textile show room.

The property was bought from Dhanalakshmi Sridhar for a sale consideration of Rs 5,30,74,500. She is the daughter of one Sridhar Dhanapal who is facing various criminal charges including offences under Prevention of Money Laundering Act.
However, the property was attached by the PMLA authorities and the provisional attachment order was upheld by the Adjudicating authority at New Delhi.

Pothys petitioned the PMLA Appellate Tribunal seeking stay on the "Notice of Physical Possession," issued by the ED authorities dated January 11, 2017.
They submitted that they were innocent and if possession of property was taken by authorities, they may have to face losses and lose their reputation as well.

After hearing the plea, the Tribunal directed Pothy's to pay 50 per cent of the purchase value to the account of ED and use the property.
This order of the tribunal was challenged by the ED in the Madras High Court.
ED contended that the tribunal failed to consider that textile firm instead of making payment to the seller Dhanalakshmi Sridhar, had remitted it in the account of Kumari, wife of Sridhar who is facing cases. The couple are Dubai residents, it was pointed out.
Since Kumari was not the actual seller in the said deal, it clearly proved that the transaction involved money laundering, the ED submitted and sought the High Court to set-aside the Tribunal's order.