Naresh Goyal's arrest as per law, custody due to non-cooperation, ED tells HC

The Enforcement Directorate on Friday told the Bombay high court the arrest of Jet Airways founder Naresh Goyal was done legally after following the procedure of law and that his custody was required as he was evasive and not cooperating with the probe.

The agency filed its affidavit in response to Goyal's habeas corpus (produce the person) petition in which he claimed he was illegally arrested by the ED in the case.

Goyal in his plea claimed his arrest was illegal as it was done without following provisions of the Prevention of Money Laundering Act.

He also challenged orders of the special court that had remanded him to ED's custody first and thereafter to judicial custody.

The agency in its affidavit said the petition filed by Goyal was totally "false, frivolous, vexatious, bad in law and filed with an ulterior motive". It added the plea was merely an instrument to evade and escape legal custody.

"The petitioner (Goyal) was highly uncooperative, recalcitrant, evasive and suspicious in his statements and conducts and, therefore, the arrest was made in order to proceed the investigation and trace the trail of proceeds of crime," the ED affidavit said.

The agency said Goyal was the mastermind and prime accused in undertaking the transactions and incorporating shell companies for channelizing the proceeds of crime.

The ED in its affidavit said money from the accounts of Jet Airways (India) Ltd was used for personal expenses by Goyal and his family members.

The ED claimed Goyal was the promoter and chairman of Jet Airways (India) Ltd and during his tenure the company had taken multiple loans from various banks, which remained outstanding over the years.

"Goyal along with his associates, through various entities, had diverted and siphoned off proceeds of crime to the tune of Rs 538 crore. Proceeds of crime was also used for his personal expenses such as salaries of staff, phone expenses and vehicle expenses which were paid by the company," the affidavit said.

The agency further alleged Goyal had siphoned off proceeds of crime to various companies and trusts created by him in tax haven countries like Jersey and British Virgin Islands.

It claimed Goyal was issued summons on several occasions but he was evading them. This non-cooperation had slowed the pace of the probe, the ED said in the affidavit.

The agency said all procedures mandated as per law were taken before arresting Goyal, adding his custody was necessary for the purpose of investigation and to unearth the proceeds of crime.

It further said Goyal was influential, intelligent and resourceful and would tamper with evidence if released.

The ED also refuted claims made by Goyal that he was detained by the agency's officers in Delhi and then brought to Mumbai.

On Friday, when the plea came up for hearing before a division bench of Justices Revati Mohite-Dere and Gauri Godse, ED's counsel Hiten Venegaonkar raised objection on maintainability grounds saying the plea was not affirmed by either Goyal or any family member.

Goyal's counsel Amit Desai sought permission from the court to amend the plea to include the affirmation. The court permitted it and posted the plea for hearing on October 12.

Goyal is currently in judicial custody in Arthur Road jail here in a money laundering case linked to an alleged fraud of Rs 538 crore at the Canara Bank.

He was arrested by the ED on September 1 and produced before the special court which remanded him to ED custody till September 14.

On September 14, he was remanded to judicial custody for 2 weeks.

Goyal's plea claimed his arrest was arbitrary, unwarranted and done without the ED following proper procedure. He sought to be released immediately.

The money laundering case stems from an FIR of the Central Bureau of Investigation against Jet Airways, Goyal, his wife Anita and some former company executives of the now grounded private airline in connection with an alleged Rs 538-crore fraud case at the Canara Bank.

The FIR was registered on the bank's complaint which alleged that it sanctioned credit limits and loans to Jet Airways (India) Ltd to the tune of Rs 848.86 crore of which Rs 538.62 crore was outstanding.