Delhi High Court: Gautam Khaitan's Appeal on VVIP Helicopter Case Rejected

In a recent decision, the High Court of Delhi rejected an appeal by Gautam Khaitan, who was challenging the temporary holding of his properties connected to the VVIP helicopter deal with Agusta Westland. The court supported the decision, emphasizing that the holding was legal under the Prevention of Money Laundering Act (PMLA).

Background of the Case

The case involves buying 12 VVIP helicopters from Agusta Westland. There were claims that the buying process involved corruption, with illegal payments made to secure the contract. Gautam Khaitan, who was working as a legal adviser, was accused of helping with these transactions.

Allegations and Investigations

The investigation claimed that Agusta Westland made illegal payments through Italian nationals, which were passed on to Indian middlemen, including Khaitan. The Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) filed cases under different sections of the Indian Penal Code and the PMLA.

"The illegal payments were allegedly passed through companies linked to Khaitan, including IDS Infotech Ltd. and Aeromatrix Info Solution Ltd."

Temporary Holding Order

The ED conducted searches and issued a Temporary Holding Order (THO) on Khaitan’s properties, suspecting them to be money made from crime. The holding was challenged, but the Single Judge supported the order, saying it was a precautionary step.

Court's Decision on Appeal

The appeal questioned the validity of the THO without formal charges. However, the court noted that changes made to the PMLA in 2013 allowed for such holdings even without charges, as long as there was a reason to believe the assets were linked to money laundering.

"The change to Section 5 of the PMLA allows officers to hold properties if they believe the money from crime might be hidden or moved."

Arguments and Rulings

Khaitan's lawyer argued that the lack of formal charges made the THO invalid. The court disagreed, citing changes in the law that allow holdings to prevent hiding or moving assets. The court also found enough evidence to justify the holding, dismissing claims of unfairness.

Summary of the Verdict

The decision by Justices Anil Kshetarpal and Harish Vaidyanathan Shankar concluded that the temporary holding was justified and necessary to protect the legal process under the PMLA. The appeal was rejected, supporting the lower court's decision.