The Enforcement Directorate’s (ED) inability to prove that Pune businessman, Hasan Ali Khan, had earned black money using the fake passports he has been accused of procuring has landed it in a spot.
The sessions court on Wednesday rebuked the ED for invoking the Prevention of Money Laundering Act (PMLA) against Khan for getting a forged passport, but not being able to prove that Khan made the crores he has stashed in Swiss bank accounts using these passports.
The court remanded Khan in the ED’s custody for one more day and asked the agency to come prepared on Thursday.
“You want to interrogate him for what offence [sic],” ML Tahilyani, the principal judge at sessions court, asked ED officials while refusing to link the fake passport case with Khan’s earnings allegedly stashed abroad.
“Did he make his earning from these passports?” Tahliyani asked when the public prosecutor tried to tell the court that there was an offence registered against him for cheating and forgery in obtaining a fake passport at Patna.
The court asked the prosecution to prove that a crime listed in the Act as scheduled had taken place and led to Khan earning the black money, which was shown as untainted earnings. “Prove at least one of these points before making a case for custody,” Tahilyani told the ED.
The Hindustan Times had on Sunday reported that the ED had not arrested Khan in the last four years because it has a very weak case against him under the money laundering Act. The ED had booked Khan under the Foreign Exchange Management Act (FEMA) soon after the income tax (I-T) department conducted searches on him in January 2007 and found a laptop allegedly showing $8 billion (equivalent to Rs36,000 crore in January 2007 when the case first came to light), in Khan’s Swiss bank account.
However, with the FEMA being a toothless Act, the ED had no power to arrest him.
The agency initially failed to book Khan under the money laundering Act because it could not prove that the black money he was holding were earned from a scheduled offence. This is the main criterion for applying the PMLA. The Act lists certain scheduled offences and a person earning black money using any of these offences can be booked under the Act.
The ED applied the Act on Khan only in 2009 after the Mumbai police booked him for cheating and passport forgery, both scheduled offences under the PMLA.
The police had charged Khan in February 2008 for possessing multiple passports.
Earlier in the day, the sessions court ruled that it was empowered to hear the remand application for Khan.