Musaddilal Jewellers knocks on Telangana HC door, challenges ED raids, gold seizure

M/s Musaddilal Gems and Jewels (India) Private Limited, represented by its directors Shashank Gupta, Rudraksh Gupta and Vandana Gupta, have approached the Telangana High Court, challenging the search and seizure conducted on October 17, and the subsequent ‘panchanama’ on October 18 by the deputy director, Directorate of Enforcement, confiscating gold and jewelery worth over Rs  53.98 crore and  Rs 1.75 crore in cash. The petitioners described the ED action as unlawful, arbitrary and violative of the requirements of the PMLA Act.

According to the petitioner, Musaddilal Germs and Jewels is a private limited company formed on April 12, 2013, in accordance with the requirements of the Companies Act, 1956. “The company is in the jewellery purchasing and selling business. Since 2021, the firm has had credit arrangements with Kotak Mahindra Bank Limited. That the firm has secured a temporary trading licence from the Greater Hyderabad Municipal Corporation to buy and sell gold and jewellery. That the petitioner is also registered for Goods and Services Tax,” they said.

The petitioners further claimed that they were not accused in any case or had anything to do with any of the scheduled offences, nor were the assets part of any profits of crime. “Aside from jewellery and cash, the papers recovered are worth more than Rs  100 crore. Apart from the other immovable properties, the jewellery is a stock-in-trade of the firm and part of the secured assets of the financial institutions. As a result, performing a search and seizure and thereby taking any assets is ex facie unconstitutional, lacking power and jurisdiction, violating the requirements of the PMLA Act and established legal principles,” the petitioners said.

The petitioners urged the court in their petition to declare the ED’s action as illegal, arbitrary, without authority, and contrary to the settled principles of law, and to set aside the same by directing the respondents to release all the assets.

Centre named respondent in plea

In their petition, they named the secretary of the Union Ministry of Finance, the director and deputy director of the ED as respondents.