Delhi High Court dismisses writ petition challenging registration of ECIR, directs petitioner to Kolkata High Court

The Delhi High Court declined jurisdiction and dismissed the writ petition challenging the registration of ECIR No.07/2012/KOL/PMLA, the original complaint No.78/2017, the show cause notice dated 21.06.2017, and the provisional attachment order dated 23.05.2017. The court directed the petitioner to seek relief from the Kolkata High Court, emphasizing forum convenience due to the Kolkata-based predicate offence and attached properties. The Adjudicating Authority was restrained from making a final decision for 15 days to enable the petitioner to pursue remedies in the appropriate forum.

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Issues Involved:
1. Registration of ECIR No.07/2012/KOL/PMLA.
2. Original complaint No.78/2017.
3. Show cause notice dated 21.06.2017.
4. Provisional attachment order dated 23.05.2017.

Detailed Analysis:

1. Registration of ECIR No.07/2012/KOL/PMLA:
The petitioner challenged the registration of ECIR No.07/2012/KOL/PMLA dated 18.04.2012, which initiated a detailed investigation under Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA). The ECIR was based on an FIR No.RC0102011A0035 dated 30.12.2011, filed by the CBI, Anti Corruption Branch, alleging that the petitioner caused a wrongful loss to the Railways amounting to Rs. 355 crores through a conspiracy involving false declarations under a dual freight policy.

2. Original Complaint No.78/2017:
The original complaint No.78/2017 dated 13.06.2017 was filed by the Joint Director of the Enforcement Directorate under Section 5(5) of the PMLA before the Adjudicating Authority. This complaint sought confirmation of the provisional attachment of properties valued at Rs. 9,07,94,663/-, suspected to be proceeds of crime.

3. Show Cause Notice Dated 21.06.2017:
The petitioner limited their challenge to the issuance of the show cause notice dated 21.06.2017 under Section 8(1) of the PMLA, arguing it was unnecessary and premature. The notice required the petitioner to explain the source of income for the attached properties and show cause why the properties should not be declared involved in money laundering and confiscated by the Central Government.

4. Provisional Attachment Order Dated 23.05.2017:
The provisional attachment order dated 23.05.2017 attached immovable and movable assets valued at Rs. 9,07,94,663/-, suspected to be derived from criminal activities. The petitioner argued that the attachment was premature, given the ongoing adjudication of the validity of the dual freight policy by the Supreme Court and the lack of effective quantification of losses by the Railway administration.

Jurisdiction and Forum Convenience:
The primary issue was the jurisdiction of the Delhi High Court to entertain the writ petition. The respondent argued that the appropriate forum was the Kolkata High Court, given that the predicate offence, ECIR, and attached properties were all based in Kolkata. The court noted that while a small fraction of the cause of action arose in Delhi due to the location of the Adjudicating Authority, the principle of forum convenience favored Kolkata High Court.

Court's Decision:
The Delhi High Court decided not to entertain the writ petition on the grounds of jurisdiction and forum convenience. The petitioner was advised to approach the Kolkata High Court. The Adjudicating Authority was directed not to pass any final order for 15 days to allow the petitioner to seek appropriate relief.

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