The Supreme Court on Thursday stayed a Mumbai court's order granting bail to businessman Mr Hasan Ali Khan, accused of money laundering and tax evasion, and authorised the Enforcement Directorate to detain him in its custody for four days for interrogation.
Significantly, the apex court said it was “deeply disturbed” at the manner in which Mr M.L. Tahaliyani – who is the Mumbai Principal Judge, and in charge of the Special Court under the Prevention of Money Laundering Act (PMLA) – had granted bail to Mr Khan. The ED had moved the apex court challenging the Mumbai court's order.
The apex court Bench, comprising Mr Justice B. Sudershan Reddy and Mr Justice S.S. Nijjar, said, “We are satisfied that the material made available on record prima facie discloses the commission of offence by the respondent (Mr Khan), punishable under the provisions of PMLA. The order passed by the learned Principal Judge creates an extra-ordinary situation if allowed to stand even for a moment may ultimately result in frustration of the very investigation”.
“An extra-ordinary situation requires an equally effective and extra-ordinary solution. It is for that reason we propose to interfere with the order even at this stage. Having regard to the extra ordinary circumstances and complexity of the issues involved and the magnitude of the case, we consider it appropriate to authorise the detention of the respondent/accused (Mr Khan) for his custodial interrogation,” the apex court said.
The Solicitor General, Mr Gopal Subramanium, representing the ED, forcefully argued for Mr Khan's custodial interrogation and for the stay of the Mumbai court's order granting bail to Mr Khan. If there is any delay in this regard, it will seriously affect the case against black money and money laundering, he said.
He claimed that the Mumbai judge had passed an unusual order granting bail to Mr Khan, despite Mr Khan and his counsel not making any plea for it and even when the PMLA provisions talk about stringent conditions in case a bail is granted under rare circumstances.
Mr Subramamium alleged that despite ED's plea, the Mumbai judge disclosed in open court certain confidential information, including some bank account numbers, against Mr Khan. At the remand application stage itself, the trial court judge commented on the evidentiary value of the case, he said.
Mr Subramanium contended that the ED had incriminating evidence against Mr Khan showing that he has deposited huge amount of black money in several banks overseas. Citing certain communication from Swiss official sources, the Solicitor General said Mr Khan had withdrawn all the money from a Swiss bank account.
No country will consider the ED's Letter Rogatory if such orders, as the one given by the Mumbai court, are passed, Mr Subramanium said.
Om March 11, the Mumbai court had dismissed the ED's application for custodial interrogation of Khan on the grounds that it did not have sufficient evidence to justify its plea for Mr Khan's remand. The Mumbai court also noted that the ED could not prove any “scheduled offence” against Mr Khan.
The court also observed that some of the “confidential” evidence provided by the ED was available in “Wikipedia”, a free encyclopaedia.
The Income-Tax Department had slapped a notice of tax demand of Rs 70,000 crore against Mr Khan. After being hauled up by the apex court for its failure to ensure custodial interrogation, the ED had arrested Mr Khan on March 7.