Reddy’s silence puts CBI in a fix

CBI refused to name any bank or person who have helped them exchange demonetized currencies for new currency notes till their police custody ended on Thursday. Highly placed sources told DTNext that no material has emerged from the interrogation of the accused as they refused to divulge the details. Parasmal Lodha, the hawala kingpin has also told the interrogators that his connection with Sekar Reddy was mostly for darshans in Tirupathi. He also refused to divulge the details of money transaction between him and Sekar Reddy. 

The Anti-Corruption Branch of CBI is now facing a Himalayan task to take their case to a logical conclusion as most of the notes seized from the accused by Income Tax did not have continued serial numbers. According to sources, the cash bundles did have some bundles in continuous serial numbers but tracing the bank that handled those currency notes would be difficult. 

“When money is distributed from the Reserve bank of India (RBI) to the cash chests of various banks, RBI keep a record of the serial numbers and banks that took those numbers. 

However, when the banks distribute the amount, on some occasions to a different bank and also to their own branches, they do not keep a track of the serial numbers,” an RBI official told DTNext. An order instructing banks to keep a record of serial numbers vis a vis bank branches while distributing currency notes from cash chest was issued only recently, much after the announcement of demonetization. 

“It would be difficult to trace the serial numbers of notes distributed to different bank branches that happened prior to this order. So Central Bureau of Investigation will have to work really hard to trace the origin of the currency notes that were recovered from Sekar Reddy and gang,” the official added.

The Madras High Court has issued notice to the CBI on a plea moved by mining baron Sekar Reddy seeking to quash the second FIR registered against him for possession Rs 8 crore cash in Rs 2,000 denomination.

Justice S Baskaran who heard Sekar Reddy’s plea ordered notice to the CBI and posted the case for further hearing to January 23. Incidentally, all the four others arrested with him - Srinivasalu, Premkumar, Ramachandran and Rathinam - have moved similar petitions seeking to quash the second FIR, which has named them as well. 

Sekar Reddy in his plea had contended that there could be no two FIRs based on the same source of information and the same set of facts. The plea also noted that the CBI had split the case into two to suit its convenience to enable obtaining his custody. It was pointed out that the CBI had accepted the dismissal of its petition seeking custody in the first FIR and failed to challenge it. But subsequently on suppressing the fact before the CBI court it had sought custody based on a second FIR that was registered with the only purpose of taking his custody and others. It may be noted that Sekar Reddy was initially arrested by the CBI for the seizure of Rs 24 crore worth of new notes. 

Subsequently, it registered two more cases in connection with two instances of cash seizures by the Income Tax department in which new Rs 2,000 notes worth Rs 8 crore and Rs 1.63 crore were seized. Also, in the last two cases the CBI had registered Sekar Reddy for criminal conspiracy, cheating and corruption.

Meanwhile, the Principal Sessions Court in Chennai has granted five days Enforcement Directorate custody of Parasmal Lodha, who had allegedly helped Sekar Reddy convert demonetised notes in large quantity.