https://www.cnbctv18.com/india/jaypee-infratech-homebuyers-money-laundering-case-md-manoj-gaur-named-in-all-firs-ed-tells-court-pmla-arrest-19759731.htm

The Patiala House Court on Thursday, November 13, sent Jaypee Infratech MD Manoj Gaur to five days in police custody in the homebuyers' money laundering case.

The Enforcement Directorate (ED) had arrested Gaur in the morning of November 13 alleging funds misappropriation, and presented him before the Patiala House Court in the evening seeking a seven-day police custody.

Arrest justified under PMLA, says ED

Gaur has been named as an accused in all the first information reports (FIRs) filed against the Jaypee Group related to the homebuyers' money laundering case, the Enforcement Directorate told the court after his arrest.

The central agency said Gaur diverted the homebuyer funds from Jaypee Associates and Jaypee Infratech to other entities of the group, adding that the funds were also utilised for personal expenditure.

The ED told the court that for real estate housing projects, the company had collected over ₹33,000 crore from buyers purchasing homes — out of which over ₹13,000 crore was not used for residential construction projects.

The agency clarified to the court that the arrest has been made under the Prevention of Money Laundering Act (PMLA) as the charges against Gaur served all the grounds for his arrest.

Gaur's arrest come at a time when the bidding process of the company's insolvency procedure is underway. The window is open for bids till November 20 and is expected to be extended, CNBC-TV18 had reported earlier. The Vedanta and Adani groups have submitted two of the highest bids.

Gaur's counsel questions arrest

Manoj Gaur's counsel questioned Gaur's arrest by ED, calling it a "witch hunt."

"Just because ED has the power to arrest does not mean that it is grounds for the arrest (as well)," the lawyer said in the MD's defence. "Investigation began in 2018, why is ED waking up now for the arrest? If he was not cooperating why arrest after delay of so many years?" he questioned.

Gaur appeared before the agency in May, September, October, and November despite poor health, he added.

'Entire debt resolved'

The advocate further stated that Jaypee Infratech Limited (JIL) went to insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) and the "entire debt has been resolved" with all the financial debt standing extinguished under the IBC.

He argued that the JIL accounts were controlled and managed by the lenders during the insolvency proceedings and the company did not have any control of the finances. The counsel said that Jaypee Associates also received the amount it owed after the intervention of the Supreme Court.

"Only after Supreme Court directions, money owed by Jaypee Infratech to Jaypee Associates was returned," he said.