There's a definite ring of authernticity to this method.
Boiling the meat in turmeric first is designed to kill off any surface bacteria before the meat is cooked on.
The water would aways be discarded as tainted, it definately wouldn't be used as stock in further cooking.
I've read that it's common practice on the Sub-Continent, where meat perhaps isn't processed and handled as hygenically as in the UK
Gary