Rheema Khan had approached the Prevention of Money Laundering Act (PMLA) court last month seeking quashing of proceedings, initiated by Enforcement Directorate, after she did not reply to its summons.
"The court has rejected her application," said an officer of the central agency.
The officer said that proceedings against her will now continue.
"We will initiate the proceeding of fine under the PMLA and also under section 174 (non-attendance in obedience to an order from public servant) of the IPC," officer said.
Earlier, Rheema's lawyer I A Bagaria had argued that she had not been implicated in the case and therefore she need not remain present before the ED.
Bagaria told PTI that the court's decision will be challenged before higher courts.
According to the Enforcement Directorate, Khan and Kolkata-based Kashinath Tapuriah had laundered billions of dollars in foreign banks, of which a large chunk was obtained by Khan through the sale of weapons to international arms dealer, Adnan Khashoggi.
Khan is facing the charge of stashing away billions of dollars in foreign banks with the help of Tapuriah.
(Published 08 September 2011, 15:59 IST)