Hyderabad: Telangana high court has upheld the Enforcement Directorate’s (ED) power to issue summons under Section 50 of the Prevention of Money Laundering Act (PMLA), rejecting a plea by a city-based couple to quash the notices. The court also refused to grant them protection from coercive action.Justice J Sreenivas Rao passed the order recently on a petition filed by Paruchuri Kumar, alias Kanuganti Suresh Kumar, and his wife Pokala Pallavi, alias Paruchuri Pallavi/Kanuganti Pallavi, both engaged in the construction business.The court held that the ED had the authority and jurisdiction to summon the petitioners and found no illegality or jurisdictional error in the notices issued to them.Observing that the CBI case registered in 2021 involved allegations of forgery, cheating, and offences under the Prevention of Corruption Act, the court noted that these constituted scheduled offences under the PMLA, enabling the ED to initiate proceedings. It further observed that the petitioners had failed to place any material before the court to establish that the agency lacked jurisdiction or competence to proceed.Relying on Supreme Court judgements, the court said Section 50 of the PMLA empowers the ED to summon any person to give evidence or produce records. Persons so summoned are legally bound to appear and state the truth, it noted, adding that courts should exercise restraint and rarely interfere at the summons stage.The court also held that the petitioners’ pending one-time settlement application with the State Bank of India, or their willingness to repay the amount, would not curtail the ED’s proceedings. It observed that “settlement would not automatically end cases involving fraud or forgery.”Declining to issue a blanket order restraining coercive action, the court observed that such relief would effectively amount to anticipatory bail, which must be sought before the appropriate forum.Counsel for the petitioners argued that multiple proceedings arising from the same set of allegations amounted to an abuse of process. He referred to a 2019 case, in which proceedings against Pallavi remain stayed, and also cited the pending CBI case, substantial repayments already made, the one-time settlement application and the petitioners’ willingness to cooperate with the investigation.Opposing the plea, standing counsel Dominic Fernandes submitted that the petitioners had failed to appear before the agency despite being summoned and approached the court only later. “Examination of bank records showed loan proceeds were moved to the petitioners’ personal accounts and layered through entities promoted by them. Moreover, pendency of the quash petition and CBI case was no ground to stop a distinct PMLA inquiry,” argued Dominic.
