Big Relief for Embassy Group Chief as Karnataka High Court Halts ED Action

Karnataka

High Court has stayed the proceedings initiated by the Enforcement Directorate (ED) granting interim relief to Jitendra Mohandas Virwani, Chairman of the Embassy Group. The bench of Justice Mohammad Nawaz passed the order while hearing a petition challenging the ECIR along with the summons issued pursuant to it.During the proceedings, the court was apprised of the fact that the ECIR was registered on the basis of the FIR registered at Hoskote police station.The FIR was registered for offences of cheating, criminal breach of trust and conspiracy along with other offences under Indian Penal Code. Later, the police, after probe, filed a B-final report effectively closing the FIR.

The petition moved before the Karnataka High Court prayed for quashing a series of summons issued by the Enforcement Directorate against Virwani under sections 50(2) and 50(3) of the Prevention of Money Laundering Act (PMLA).It was contended before the High Court that the summons issued to him are arbitrary, and are unsustainable in law thus making them liable to be quashed. The petition also prayed for return of all the documents and properties which were seized during the searches carried out pursuant to the registration of the ECIR.The counsel appearing for Virwani contended that since the FIR registering the predicate offence case had been closed then the ECIR does not survive and continuation of ED proceedings would be without jurisdiction and arbitrary.

It was also argued that the disinclination of the complainant to further pursue the complaint reinforces the absence of factual basis for the registration of the FIR, and closure of the predicate offence case would potentially nullify the subsequent ECIR registered by ED.The court taking note of the argument advanced, at the preliminary stage, stayed the proceedings arising from the ECIR till the next date of hearing and sought a response on the plea from all the respondents including the State of Karnataka.