Recovery of bank dues can't end Vijay Mallya's PMLA case: ED

Mumbai: The Enforcement Directorate (ED) told the Bombay High Court that the recovery of bank dues and restoration of assets worth ₹14,131.60 crore to the State Bank of India (SBI)-led consortium does not bring to an end the money laundering proceedings against businessman Vijay Mallya.

In an affidavit filed before the court recently, the agency submitted that the recovery of bank dues does not, by itself, extinguish proceedings under the Prevention of Money Laundering Act (PMLA), as the proceedings arise from allegations of scheduled offences and money laundering and operate independently of civil recovery proceedings.

The ED said in its reply, a copy of which was seen by ET, that "the restoration of assets under Section 8(8) of the PMLA is a statutory mechanism for restitution to a claimant having a legitimate interest in the property and does not, by itself, determine the existence of the scheduled offence or the offence of money laundering". "The subsequent restoration/ recovery of assets, therefore cannot be construed as extinguishing or rendering infructuous the pending proceedings under the PMLA," it said.


The agency said the amount recovered by banks and the liability determined in recovery proceedings may be relevant for quantifying outstanding dues but cannot determine whether the ingredients of the scheduled offences or money laundering have been made out.

It further said that "the criminal prosecution launched pursuant to the investigation under the PMLA is therefore not rendered infructuous merely because the claimant banks have subsequently recovered substantial amounts from the assets resorted to them".