PMLA tribunal quashes ED action against Misa Bharti

The Prevention of Money Laundering Act (PMLA) appellate tribunal has quashed the attachment of a farmhouse belonging to Rashtriya Janata Dal leader and former Bihar chief minister Lalu Prasad’s daughter Misa Bharti and her husband Shailesh Kumar in Delhi’s Bijwasan area.

The 12 bigha (17,450 square feet) farmhouse, held in the name of Mishail Packers and Printers Pvt Ltd, in which Bharti was a director until 2017, was attached by the ED on September 4, 2017 on grounds that Rs 1.2 crore of laundered money had been used by the company for its purchase in 2007-08.

The ED had in December 2017 filed a charge sheet claiming that Bharti, Shailesh Kumar, brothers Surendra Jain and Virendra Jain and a chartered accountant, Rajesh Agrawa,l had been were engaged in money laundering and proceeds of crime were used to buy the farmhouse for a total of Rs 1.33 crore.

Out of the Rs 1.33 crore, Rs 1.20 crore was the laundered money, as alleged by the ED. Out of this Rs 1.20 crore, Rs 90 lakh was paid in cash. Accommodation entries, according to the ED, are someone accommodating illegal money through a shell company or in the form of cash.

Chairman of the PMLA appellate tribunal, Justice Manmohan Singh, said in his September 17 order: “The property was attached in haste, possession is taken in haste [without any compliance with mandatory provisions]. Thus, as far as the attachment of property [farmhouse] is concerned, the attachment stands quashed”.

“ED has only alleged use of unaccounted money and has failed to identify any related scheduled offence, let alone any proceeds emanating there from, in relation to Mishail Packers or the farmhouse,” he ruled.

The judge, however, asked Mishail Packers to deposit Rs 90 lakh with the ED in view of the allegations about accommodation entries. An ED official said on the condition of anonymity that the judge had asked for Rs 90 lakh deposit as the investigation is still on, but now that the farmhouse’s attachment stands released, it means Bharti and Shailesh Kumar can use their property without any hindrance.

Justice Singh, who is due to retire on September 22, also questioned ED’s money laundering probe against Bharti and Shailesh Kumar, saying it was a case of accommodation entries which the income-tax department had already dealt with.

Asserting that the I-T department had conducted an inquiry and found that investments in Mishail were genuine, the tribunal observed: “The aforesaid investment has been held genuine by the income tax department after duly verifying the balance sheet and other accounts and financials of both investors and investee – i.e. Shalini Holdings Ltd and Mishail Packers for FY 2008-09”.

Senior Advocate Amit Sibal, who appeared on behalf of Bharti’s company, said, “The tribunal has set aside the attachment stating that it was done without application of mind. It was opposed by the ED tooth and nail and they tried to delay this order for months as they knew that it was a frivolous attachment.”

The Enforcement Directorate didn’t respond to queries from HT seeking comment.