New Delhi: In a fresh setback to investigations by the Enforcement Directorate (ED) into undeclared income, the Bombay high court (HC) on Friday granted bail to Pune-based businessman Hasan Ali Khan in the absence of evidence against him.
The agency had arrested Khan in March on charges of money laundering.
“There are no ingredients of proceeds of crime in the case made out by the Enforcement Directorate against Hasan Ali. He deserves to be released on bail,” justice A.M. Thipsay observed in his order.
Earlier, the court had asked ED to determine whether Khan’s money was income from criminal activity. “There cannot be a presumption on this,” the court had said.
Khan, 53, has been asked to appear daily before the agency and stay either in Mumbai or Pune.
He is accused of stashing nearly $8 billion (Rs 36,320 crore today) in Swiss bank accounts, besides having links to international arms dealer Adnan Khashoggi. He also faces charges of tax evasion and violation of the Foreign Exchange Management Act.
Khan’s income was assessed by the income-tax (I-T) department at Rs 37,273 crore in the 2006-07 fiscal year. His income in the seven years till March 2007 was assessed by the I-T department at Rs 1.1 trillion, whereas in fiscal 2004 his income was assessed at just Rs 6.48 lakh.
ED, which filed the chargesheet against him on 6 May, has now decided to challenge the court order. “We will approach the apex court soon,” said a senior ED official in New Delhi.
Additional solicitor general Darius Khambata, appearing for ED, asked the court to stay the bail order for a week to enable the agency to appeal against the judgement in the Supreme Court.
Justice Thipsay turned down the plea. “There is no apprehension that he (Khan) would abscond or tamper with evidence. Hence there is no necessity to stay the bail order.”
Khan’s lawyer I.A Bagaria argued that he had been falsely implicated in the case. He contended that Khan had no links with international arms dealer Khashoggi and does not have accounts in foreign banks.
“Khan collapsed inside the court compound after hearing that the Bombay high court had granted him liberty. He was rushed to St George’s hospital in south Mumbai,” Bagaria said.
“He is suffering from jaundice and his sugar level had come down drastically.”
The development came two days after the Bombay high court exempted Khan’s wife from appearing before a special Prevention of Money Laundering Act court that has initiated criminal proceedings against her at ED’s request.
This is not the first time that ED has faced a judicial rebuff in the case. After Khan’s arrest in March, a Mumbai sessions court criticized the agency for not undertaking a proper investigation and granted Khan bail. The apex court then suspended his bail.
After the central agencies failed to make any headway in cases related to black money, the apex court in April appointed a high-powered committee comprising officials of the economic, investigative and financial departments to examine the issue of illicit funds in foreign banks.
In July, the apex court formed a new special investigative team out of the high-powered committee to investigate instances of black money in overseas accounts and appointed two of its former judges, B.P. Jeevan Reddy and M.B. Shah, as chairman and vice- chairman, respectively