By SM.19 Aug, 2018
NEW DELHI: In a major setback to Enforcement Directorate (ED), a PMLA appellate tribunal has set aside the attachments of flats owned by Biocon CMD Kiran Mazumdar-Shaw and NRI Vivek Mathias in Kingfisher Towers in Bengaluru, which were attached by the agency relating to its probe against fugitive liquor baron Vijay Mallya.
The tribunal has also pulled up ED for not complying with its mandatory statutory duties under the Prevention of Money Laundering Act and not giving an opportunity to Shaw and Mathias with Vijay Mallya, Kingfisher Airlines or United Breweries and that there is no evidence on record to show money laundering in the purchase of flats.
Shaw heads one of the premier biopharmaceutical companies, while Mathias, who lives in Monaco, is engaged in the business of banking and hedge funds.
Shaw had purchased a flat in Vijay Mallya"s housing project, Kingfisher Towers, in 2012, for which she paid Rs 26.12 crore, all from her personal account and through proper banking channels. Similarly, Mathias purchased two flats worth Rs 49.84 crore in the tower the same year for which he made payments through legal channels. After the crackdown on Vijay Mallya by agencies, ED attached several movable and immovable properties worth Rs 8,000 crore, including several flats worth over Rs 500 crore in the Kingfisher Towers.
Setting aside the attachments, chairperson of PMLA appellate tribunal Delhi, Justice Manmohan Singh, said in his order, "There is no material on record to show that the appellant (Shaw) has any link, nexus or association or relation with Unied Breweries and Prestige Estate Project Pvt Ltd (which were jointly developing the project)."
The tribunal added that, "It is also not the case of ED that the consideration paid by her is a tainted amount or it belonged to Vijay Mallya, as admittedly all the amount was paid through banking channel". Advocate Arshdeep Singh, who appeared for Shaw and Mathias said, "This is a landmark decision for bona fide purchasers who get stuck in ED attachments. The Tribunal has recognised the rights of such purchasers who have paid clean money prior to even commission of offences. This will also help in deprecating the practice of ED in attaching properties which are not involved in money laundering."
The tribunal said that ED failed to provide the provisional attachment orders to Shaw and Mathias for "reasons best known to it". It said that since ED was in possession of all the documents regarding purchase of flats, the said flats could not have been attached as "proceeds of crime".