2017 (1) TMI 461 - HC - FEMA

Writ Petitions Dismissed for Lack of Maintainability, Enforcement Directorate's Summons Deemed Non-Harassment

M/s. Advantage Strategic Consulting Pvt. Ltd. Versus Union of India, Director of Enforcement, The Joint Director Directorate of Enforcement, The Assistant Director, Directorate of Enforcement

The High Court dismissed the writ petitions, ruling them not maintainable due to the investigation being monitored by the Supreme Court. The Court upheld ... Maintainability of the writ petitions before this Court - whether issue involved in these writ petitions relate to 2G Spectrum Case and therefore, this Court has no jurisdiction to entertain these writ petitions? - Held that:- Since the investigation carried on by the respondents is being monitored by the Honourable Supreme Court, it is too early for this Court to take up these writ petitions for adjudication on merits. Consequently, the preliminary objection raised on behalf of the respondents is sustained. The writ petitions are dismissed as they are not maintainable before this Court. Issues Involved:1. Maintainability of the writ petitions before the High Court.2. Jurisdiction of the Enforcement Directorate under PMLA and FEMA.3. Validity of the summons issued by the Enforcement Directorate.4. Allegations of political motivation and harassment.5. Connection of the investigation with the 2G Spectrum case.Issue-wise Analysis:1. Maintainability of the writ petitions before the High Court:The primary issue raised in all the writ petitions is the maintainability before the High Court. The respondents argued that the High Court lacks jurisdiction as the cases pertain to the 2G Spectrum Case, which is being monitored by the Supreme Court. The respondents contended that only the Supreme Court has jurisdiction over such matters, and no writ petition should be filed in any High Court. The Court concluded that it cannot entertain the writ petitions as the investigation is being monitored by the Supreme Court, thus ousting the High Court's jurisdiction.2. Jurisdiction of the Enforcement Directorate under PMLA and FEMA:The petitioners argued that the Enforcement Directorate (ED) lacks jurisdiction to investigate under PMLA unless a predicate offence is established. They contended that the alleged transaction of Rs. 26,00,444/- does not fall under PMLA as it is below the threshold of Rs. 30 lakhs. The Court noted that the ED's investigation is ongoing and that it has the authority to investigate under PMLA and FEMA based on the leave granted by the Special Court. The investigation is related to the FIPB approval in the Aircel Maxis case, which is part of the 2G Spectrum scam.3. Validity of the summons issued by the Enforcement Directorate:The petitioners challenged the summons issued by the ED, arguing that they were issued without jurisdiction and were intended to harass them. The Court held that the ED has the right to issue summons to ascertain facts and that the petitioners cannot challenge the necessity or relevance of the documents sought at this stage. The Court also recorded the ED's assurance that the summons were not intended to harass the petitioners.4. Allegations of political motivation and harassment:The petitioners alleged that the investigation was politically motivated to discredit and harm the reputation of a former Finance Minister and his family. The Court did not delve into these allegations, focusing instead on the jurisdictional issue and the ongoing investigation monitored by the Supreme Court. The Court emphasized that it cannot pass any orders that would impede the investigation.5. Connection of the investigation with the 2G Spectrum case:The respondents argued that the investigation is related to the 2G Spectrum case, which is being monitored by the Supreme Court. They presented evidence, including minutes of meetings and status reports, to show that the investigation is ongoing and connected to the 2G Spectrum scam. The Court accepted this argument, noting that the Supreme Court's orders have ousted the High Court's jurisdiction over such matters.Conclusion:The High Court dismissed the writ petitions, holding that they are not maintainable as the investigation is being monitored by the Supreme Court. The Court sustained the preliminary objection raised by the respondents and emphasized that it cannot pass any orders that would impede the ongoing investigation. The Court also recorded the ED's assurance that the summons were not intended to harass the petitioners.