TaxTMI 
TaxTMI 
2018 (4) TMI 1410
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....y coercive steps or action or proceeding against the petitioner under any provision of the Prevention of Money Laundering Act, 2002 in connection with the professional fees received by the petitioner by cheques from (M/s.Saradha Realty India Ltd) on behalf of her client, after deduction of tax and which fees has been subjected to maximum rate of income tax at the hands of the petitioner. 3. Pleadings of the petitioner: The petitioner is a Senior Advocate having an active practice in the Supreme Court of India, High Court of Madras and other High Courts. The petitioner was the Standing Counsel for the Income Tax Department for 17 years. She had appeared in almost all the High Courts across the country. The petitioner has extensive practice and is practicing for almost 45 years uninterruptedly. The petitioner had been an assessee under the Income Tax for many years. In the course of her professional work in or about August, 2009, the petitioner was engaged by one Ms.Manoranjana Sinh as a Senior Counsel instructed by Mr.Krishna Kumar, Advocate on record, New Delhi to appear in CP No.46(ND) of 2009 before the Company law Board, Delhi. Further, Ms.Manoranjana Sinh also engaged the pet....
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....eement, inter alia, contained the following clause. Clause 5.2. of the June, 2010 agreement reads as follows:- "5) Rights and Obligations of Buyer: Investor (M/s.Bengal Media Pvt Ltd) hereby commits that it will professionally and legally assist Manoranjana in her personal litigation with Positive and other cases as the Investor wants to ensure 100% effective involvement of Manoranjana for the success of the business of the company. 9. As part of the agreement between Ms.Manoranjana Sinh and Mr.Sudipto Sen, wherein Mr.Sudipto Sen agreed to fund the legal expenses of Ms.Manoranjana Sinh in contesting the cases against her husband, it was mutually agreed between Ms.Manoranjana Sinh and Mr.Sudipto Sen that the professional fees of the petitioner, who was already appeared on behalf of Ms.Manoranjana Sinh before the Company Law Board, New Delhi and Delhi High Cour, would be paid by Mr.Sudipto Sen/his company. Accordingly, Mr.Sudipto Sen, through his real estate company, M/s.Saradha Realty India Ltd paid, from time to time, the professional fees of the petitioner on behalf of Ms.Manoranjana Sinh amounting to Rs. 1 crore over a period of two accounting years. Every payment was made ....
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....al advice to Mr.Sudipto Sen on any of his businesses except for the opinion given to her client Ms.Manoranjana Sinh based on the due diligence report of Mr.Mahadevan. The professional services rendered by the petitioner were only vis-a-vis Ms.Manoranjana Sinh and her TV related businesses. Ms.Manoranjana Sinh in her statement to the press dated 25.4.2013 and in an email stated as follows:- "Since my lawyer was Mrs.Nalini Chidambaram since long, I asked her to draft the agreement between Saradha and us. Ms.Chidambaram is my standing counsel and has worked as a legal advisor in her professional capacity. As per our agreement, her payment was made by Mr.Sen since in our agreement it was mentioned that all expenses towards legal fees and other litigation would be paid by him." 13. Meanwhile, it transpired that Mr.Studipto Sen started defaulting in payment of principal and interest to his depositors. Hence, it is learnt that the CBI registered a case against Mr.Studipto Sen for the offence of cheating under the IPC which is a scheduled offence within the meaning of the Prevention of Money Laundering Act, 2002. In the course of its investigation, the CBI took a statement from the peti....
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....tive in person along with documents. He submitted that no agreements had been entered between the petitioner or M/s.NC Associates with Mr.Sudipto Sen or his entities. Further, the authorised representative submitted the details of professional services rendered by the petitioner to Ms.Manoranjana Sinh/her entities. It was further stated that no services rendered by the petitioner to Mr.Sudipto Sen/his entities. The details of payments received by the petitioner from Ms.Manoranjana Sinh and from Mr.Sudipto Sen/his entities, who had agreed to pay the fees of the petitioner on behalf of Ms.Manoranjana Sinh, were also submitted. 17. The petitioner further states that another order dated 4.3.2016 was issued to the petitioner by CBI under Section 91 Cr.P.C to produce certain documents either by the petitioner or through a responsible person. The documents were produced by the authorised representative of the petitioner on 14.3.2016. It is reliably learnt and believed to be true that CBI had filed the Final Report before the Designated Court in Kolkata in connection with the FIR registered against Mr.Sudipto Sen. The petitioner has not been named either as an accused or as a witness in t....
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.... second respondent under Section 50 (2) and (3) of the Act. Unlike in the two earlier summonses when the petitioner was given the option to appear in person or through authorised representative, in the instant summons, the petitioner was directed to appear in person at the Kolkata Office on 2.9.2016, a Friday. The purpose of the summons is stated as Explanation of submitted Documents. The third respondent leaked the issuance of summons to the Press and the Times of India published the news on 25.8.2016. The petitioner through her authorised representative, wrote to the second respondent by letter dated 29.8.2016, once again explaining all the submitted documents and also drew the attention of the second respondent to Section 160 Cr.P.C under which no woman may be called for questioning except at her place of residence. It is relevant to state that the petitioner resides in Chennai and in the summons dated 17.8.2016, the petitioner was summoned to appear before the second respondent in Kolkata. It was submitted that the summons directing the petitioner to appear in Kolkata in violation of Section 160 Cr.P.C., since the said Section also applied to officials of the Enforcement Direct....
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....resentative had relied on a Delhi High Court's judgment on Section 160 Cr.P.C, which is final and binding on the respondents. It is necessary to point out that the third respondent had leaked the rejection of the representation sent on behalf of the petitioner invoking Section 160 Cr.P.C to the Media even before the petitioner received the letter dated 7.9.2016, rejecting the representation dated 17.8.2016 along with the summons to appear in person on 23.9.2016. The schedule to the summons dated 17.8.2016 had asked the petitioner to explain the submitted documents. Till the summons dated 17.8.2016, the petitioner was always asked to produce the documents and explain the submitted documents either in person or through authorised representative and the authorised representative had always appeared before the second respondent and produced all the documents and explained them. In response to the summons dated 4.3.2016, he had explained the submitted documents. Again in response to the summons dated 17.8.2016, the authorised representative had explained the submitted documents in writing by his letter dated 29.8.2016. He even offered to appear in Kolkata once again to explain the s....
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....d, the respondents are continuing to harass the petitioner with ulterior motives and malice, in fact, and malice in law by issuing repeated summonses. 28. The learned Senior Counsel Mr.Satish Parasaran, appearing on behalf of the writ petitioner, contended that the protections granted under Section 160 Cr.P.C., to be extended to the writ petitioner. When the required documents, as sought for by the respondents, were already submitted by the authorised representative of the writ petitioner there is no reason to issue further summons for the personal appearance of the writ petitioner. 29. Pleadings of the respondents: Saradha Group of Companies, represented through its Director Shri Sudipto Sen, was a Chit Fund Company, collecting deposits from public at large in the States of West Bengal, Assam and Orissa. However, its business spread across 14 States of India. The modus operandi of business of this Company was to cheat the public at large during the years 2008-2009 to 2013-2014, by making a false promise of very lucrative returns against their investments. The quantum of total money collected by this group of company is about Rs. 2,459/- crores out of which nearly Rs. 1,983/- cr....
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.... no relation with Saradha Group of Companies. No agreement was entered between Mrs.Nalini Chidambaram or M/s.NC Associates with Smt.Manoranjana Sinh or her entities or Sudipto Sen or his entities. No service was rendered by Mrs.Nalini Chidambaram, Senior Advocate to Shri Sudipto Sen or Saradha Group of Companies. Mrs.Nalini Chidambaram was instructed to appear in C.P. No.46 (ND) of 2009 before the Company Law Board, Delhi and C.S. (O.S.) No.290 of 2009 before the Delhi High Court by Ms.Manoranjana Sinh with Mr.Krishna Kumar, Advocate, who was the counsel on record. 31. Ms.Manoranjana Sinh paid a sum of Rs. 1 lakh by cheque to Smt.Nalini Chidambaram as retainer and informed that she does not have funds to pay fees of Mrs.Nalini Chidambaram and assured Mrs.Chidambaram that she would pay the fees of Mrs.Chidambaram as and when she mobilised the funds. Shri Sudipto Sen was introduced to Ms.Manoranjana Sinh by a mutual friend and after discussion between the parties, Mr.Sudipto Sen decided to invest in the company M/s.GNN India Pvt Ltd., owned by Ms.Manoranjana Sinh running a private Satellite TV Channel from Guwahati. Based on the negotiations held between the parties, an MOU was sign....
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.... (3) of PML Act, 2002, on 4.3.2016 to appear in person or through authorised representative on 1.4.2016. Mrs.Nalini Chidambaram authorised Shri N.R.R.Arun Natarajan, Advocate to appear on her behalf. Accordingly, statement of Shri N.R.R.Arun Natarajan, the authorised representative of Mrs.Nalini Chidambaram was recorded on 1.4.2016, wherein, he reiterated the facts already submitted vide his above mentioned letters. During the course of statement, several new facts came out and certain contradictions emerged in the information provided on behalf of Mrs.Nalini Chidambaram and the statement given by Ms.Manoranjana Sinh. In particular, Ms.Manoranjana Sinh had stated that she had no idea that Smt.Nalini Chidambaram was paid by Shri Sudipto Sen on her behalf. Therefore, it was felt necessary to summon Smt.Nalini Chidambaram in person. 35. In view of the above factors, summons dated 17.8.2016 was issued to Mrs.Nalini Chidambaram for her appearance at Kolkata on 2.9.2016 to explain the document submitted. In reply, vide letter dated 29.8.2016, Shri N.R.R.Arun Natarajan, the authorised representative of Mrs.Nalini Chidambaram reiterated that the payments received by Mrs.Nalini Chidambaram....
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....evidence as per the principles of natural justice. But instead of co-operating with and appearing before the summoning authority, the present writ petition is filed questioning the issuance of summons under Article 226 of the Constitution of India, which is not maintainable in law and liable to be dismissed in limine. 38. It is further contended that the documents submitted by the authorised representative of Mrs.Nalini Chidambaram before the Assistant Director, Enforcement Directorate in WP No.32848 of 2016 do not contain any agreement by Mrs.Nalini Chidambaram with Shri Sudipto Sen for making payments on behalf of Ms.Manoranjana Sinh. The documents do not show any rates to be charged and any bills raised by Mrs.Nalini Chidambaram for which she claims to have received the amount totalling to Rs. 1,24,90,000/- as professional fees and charges for drafting the agreements. Thus, it is necessary to question Mrs.Nalini Chidambaram to seek clarification on the above which could not be explained by her authorised representative. Under these circumstances, summons under Section 50(2) and (3) were issued for her appearance in person. 39. In respect of the activities of Ms.Manoranjana Sin....
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....s sought for. 43. Calling a person to adduce evidence is within the four corners of provisions of Section 50(2) and (3) of "PMLA". Besides, the deeming fiction contained under sub-section (4) of Section 50 of the Act, makes such statement as admissible piece of evidence and statutory presumption as contained under Section 80 of the Indian Evidence Act, shall get attracted rendering such statement as truthful and voluntary. Under Section 63 of the Act, law provides imposition of penalty as well as launching of criminal prosecution under Section 174 of IPC for non-compliance of the summons issued under the Act. 44. It is pertinent to mention that the provisions of Cr.P.C., 1973 are not applicable to Section 50(2) and (3) of "PMLA". Non-compliance of Section 50(2) and (3) of "PMLA" entails imposition of penalty under Section 63 of the Act. Besides, in terms of Section 174 of IPC, prosecution can be initiated against the defaulter for non-compliance of summons. Therefore, the allegations are absolutely misplaced and incorrect. 45. It is further contended in the affidavt of the Assistant Director, Enforcement Directorate that the investigation against a lawyer in respect of his/her f....
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....not seek for the personal appearance of the writ petitioner. The exemption granted under the Statute is absolute. Such concessions granted in the Criminal Procedure Code cannot be violated by the respondents. If at all, the respondents intend to get some clarification, then it is left open to them to approach the writ petitioner in a place where she resides. The intention of Section 160 of the Code of Criminal Procedure is to grant exemption and such an intention expressly made in the Code, cannot be interpreted otherwise. 47. At the outset, the learned Senior Counsel is of an opinion that if at all such an exemption to be diluted on account of the developments occurred in our Nation, the same is to be done only through the Parliament, this Court is bound by the exemption granted in the Code of Criminal Procedure. The learned Senior Counsel is of an opinion that the impugned summon states that the writ petitioner should appear on Friday. This creates a doubt in the mind of the writ petitioner and this apart, the respondents have fixed the date of investigation on Friday, there is a possibility of arrest and therefore, the writ petitioner is constrained to move the present writ pet....
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....er Rs. 34.90 lakhs were paid by Saradha Group to Smt.Nalini Chidambaram towards drafting the agreement. Investigation disclosed that Saradha Group also paid for the hotel bills and air tickets of Smt.Manoranjan Sinh on a number of occasions. 51. Relying on the said findings of the Central Bureau of Investigation(CBI) in the charge sheet, the petitioner in person made a submission that no involvement of the petitioner has been ascertained even during the CBI enquiry and therefore, the respondents in these writ petitions cannot further probe into the matter. The respondents ought to have dropped all further proceedings in view of the findings of the CBI. It is confirmed during the investigation that the petitioner had received the said amount of Rupees one crore and thirty nine lakhs(Rs.1 crore and 39 lakhs only) towards the legal fees and for that, the petitioner had submitted all required documents and therefore, the respondents cannot be allowed to proceed further. The statement given by Mr.Sudipto Sen/accused, who was in custody at the time of deposing, cannot be taken as an admissible evidence for the purpose of involving the writ petitioner in the case. The statement given in ....
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.... Cr.P.C. is required to be followed while investigating the offence under "PMLA". 53. The Gujarat High Court at Ahmedabad in the case of Foziya Samir Godil vs. Union of India [Special Criminal Application (Direction) No.1725 of 2014 with Special Criminal Application No.1748 of 2014 decided on 9.5.2014], wherein in paragraph-42, held as under:- 42. However, so far as petitioner-Foziya Samir Godil is concerned, being a woman, it is rightly contended by the learned counsel for the petitioners that she is entitled to benefits of all the procedures applicable to the woman under the relevant law and to that extent, the respondents at the threshold shall have to comply with the provisions of law. 54. Relying on the said Gujarat High Court judgment, it is submitted that the Hon'ble Supreme Court of India in the case of Kusum Ingots and Alloys Ltd vs. Union of India and Another [(2004) 6 SCC 254], held that the court must have the requisite territorial jurisdiction. An order passed on writ petition questioning the constitutionality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause (2) of Article 226 of the Constitution of India, will ....
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....f the Code. It only relates to the extent of application of the Code in the matter of territorial and other jurisdiction but does not nullify the effect of Section 4(2) of the Code. It has further been observed that the provision of the Code would be applicable to the extent in the absence of any contrary provision in the special Act or any other special provision excluding the jurisdiction or applicability of the Code. That reading of Section 2 of the Code r/w Section 26(B) which governs any criminal proceeding as regards the course of which an offence is to be tried and as to the procedure to be followed renders the provision of the Code applicable in the field not covered by the provision of FERA or Customs Act. Admittedly, Apex Court in Deepak Mahajan's case (Supra) was not dealing with the proviso of Section 160 Cr.P.C. but was dealing with the applicability of Section 167 of the Code to a case to be filed under FERA. It is not denied that Section 160 and Section 167 of the Code fall under the same Chapter i.e. Chapter XII under the title information to the police and their power to investigate. It was while dealing with and interpreting Section 167 Cr. P.C. under Chapter ....
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....ay down, when the object of the prosecution is to compel contrite compliance with Section 161 Cr.P.C abandoning all contumacy and this is achieved by the undertaking, when the pragmatic issues involved are so complex that effective barricades against police pressure to secure self-incrimination need more steps as indicated in our judgment, we hold that persistence in the prosecution is seeming homage to the rule of law and quashing the prosecution secures the ends of justice the right thing to do is to quash the prosecution as it stands at present. We regret that this dimension of the problem has escaped the Executive's attention for reasons best left unexplored. 59. The said judgment is also irrelevant in respect of the facts and circumstances of the writ petitioner. In para 76, the Hon'ble Supreme Court of India made certain observations in general in respect of Section 161 of Cr.P.C and there cannot be any comparison in respect of the specialized investigations to be conducted under the provisions of the Money-Laundering Act, which came into force with effect from the year 2003. Thus, those judgments characterizes certain general circumstances cannot be fitting with the....
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..... In the absence of a complaint, the writ petitioner cannot refer all these provisions for the purpose of quashing the summons, which were issued under the provisions of the Act and the authorities competent are empowered to call any person for the purpose of clarifications and for verification of documents. It is the duty of all the citizens concerned to cooperate for such investigations conducted under the provisions of the Act and the very object of the Act is to prevent such evil offences of Money-Laundering. The investigation under the PMLAneed not be compared nor akin to that of Police investigation. The statements made by the persons, are binding under the provisions and, these documents and records and clarifications sought for are only for the purpose of ascertaining the truth behind the alleged offences of Money-Laundering, if any made out. Thus, she cannot advance an argument by comparing the procedures and methods adopted during the Police investigation. The proceeds of crime are to be secured and thereafter, a complaint is to be registered, if the offences contemplated under the PMLAis established. 63. The learned Additional Solicitor General of India, further, urged ....
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....s for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrates Court. 66. Section (50)(2) empowers the authorities to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under the Act. Thus, the writ petitioner cannot go beyond the scope of these provisions and emphasize this Court by stating that the respondents lack jurisdiction or she has already been ....
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....35], in paragraph 108, held as under:- 108. No doubt, there was no love lost between Shri Bhajan Lal and Dharam Pal. Based on this strained relationship, it has been then emphatically urged by Mr K. Parasaran that the entire allegations made in the complaint due to political vendetta are not only scurrilous and scandalous but also tainted with mala fides, vitiating the entire proceedings. As it has been repeatedly pointed out earlier the entire matter is only at a premature stage and the investigation is not yet proceeded with except some preliminary effort taken on the date of the registration of the case, that is on November 21, 1987. The evidence has to be gathered after a thorough investigation and placed before the court on the basis of which alone the court can come to a conclusion one way or the other on the plea of mala fides. If the allegations are bereft of truth and made maliciously, we are sure, the investigation will say so. At this stage, when there are only allegations and recriminations but no evidence, this court cannot anticipate the result of the investigation and render a finding on the question of mala fides on the materials at present available. Therefore, w....
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....ding to the intent and purpose of the Act. The reasons for introducing Money Laundering Act is that the money laundering causes serious threat not only to the financial systems of the country, but also their integrity and sovereignty and the object of the Act is to prevent money laundering and provide for confiscation of property, derived from income involved in money laundering or materials connected or incidental thereto. Therefore, the points urged by the petitioner are unsustainable. Even in the impugned summons, it has been indicated that every proceeding under Section 50(2) and (3) of the Money Laundering Act shall be deemed to be judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code and if a person fail to give evidence as mentioned in the schedule, he shall be liable to penal proceedings under the Act. 10. Any statement obtained from the petitioner does not infringe the constitutional guarantee of protection against self-incrimination under Article 20(3) of the Constitution of India, as held so by the Hon'ble Supreme Court of India in C.Sampath Kumar v. Enforcement Officer [(1997) 8 SCC 358]. It cannot be said that the respondent lack....
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....tion and summoning a person to appear in person under PMLA? 5) Whether the writ petitioner is entitled for any other relief based on any distinct circumstances or as an exceptional case? 72. The Prevention of Money Laundering Act, 2002 was introduced as its statement of objects and reasons mentioned, to make money laundering an offence and to attach property involved under money laundering, so that serious threat to the financial system of India is adequately dealt with. It is worth setting out the statement of objects and reasons of the Act in full. 73. STATEMENT OF OBJECTS AND REASONS OF PMLA: It is being realised, world over, that money laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. Some of the initiatives taken by the international community to obviate such threats are outlined below: (a) the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, to which India is a party, calls for prevention of laundering of proceeds of drug crimes and other connected activities and confiscation of proceeds derived from such offence. (b) the Basle Statement of Princip....
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.... should be omitted; (c) knowingly be inserted in clause 3(b) relating to the definition of money-laundering; (d) the banking companies, financial institutions and intermediaries should be required to furnish information of transactions to the Director instead of Commissioner of Income-tax (e) the banking companies should also be brought within the ambit of clause II relating to obligations of financial institutions and intermediaries; (f) a definite time limit of 24 hours should be provided for producing a person about to be searched or arrested person before the Gazetted Officer or Magistrate; (g) the words unless otherwise proved to the satisfaction of the authority concerned may be inserted in clause 22 relating to presumption on interconnected transactions; (h) vacancy in the office of the Chairperson of an Appellate Tribunal, by reason of his death, resignation or otherwise, the senior most member shall act as the Chairperson till the date on which a new Chairperson appointed in accordance with the provisions of this Act to fill the vacancy, enters upon his office; (i) the appellant before the Appellate Tribunal may be authorised to engage any authorised representative as defi....
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....proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. 78. Section 4. Punishment for money-laundering. Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years, the words which may extend to ten years had been substituted. 79. Section 5. Attachment of property involved in money-laundering. (1) Where the Director or any other officer not belowthe rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely t....
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....le property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under subsection (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 80. CHAPTER IV OBLIGATIONS OF BANKING COMPANIES, FINANCIAL INSTITUTIONS AND INTERMEDIARIES Section 12. Reporting entity to maintain records. (1) Every reporting entity shall (a) maintain a record of all transactions, including information relating to transactions covered under clause (b), in such manner as to enable it to reconstruct individual transactions; (b) furnish to the Director within such time as may be prescribed, information relating to such transactions, whether attempted or executed, the nature and value of which may be prescribed; (c) verify the identity of its clients in such manner and subject to such conditions, as may be prescribed; (d) identify the beneficial owner, if any, of such of its clients, as may be prescribed; (e) maintain record of documents evidencing identity of its clients and beneficial owners as ....
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....ery proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assistant Director or a Deputy Director shall not (a) impound any records without recording his reasons for so doing; or (b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Director. 83. Section 51. Jurisdiction of authorities.(1) The authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned, as the case may be, to such authorities by or under this Act or the rules framed thereunder in accordance with such directions as the Central Government may issue for the exercise of powers and performance of the functions by all or any of the authorities. (2) In issuing the directions or orders referre....
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.... the competent authorities under the "PMLA" is of an opinion that personal appearance is required for the purpose of seeking certain specific clarifications, then the scope of the Act is wide and the authorities competent are empowered to issue summons for the personal appearance of a person to participate in the investigation process. 92. The "PMLA", being a Special Act, has provided certain mandatory provisions in order to ensure the effective investigation of the offence of money laundering. The statement of objects and reasons enumerated in the aforementioned paragraphs unambiguously portrays that such an attendance of the persons are required for personal investigation, so also the authorities competent under the "PMLA" is empowered to do so. Therefore, during the course of investigation, if the authorities are of an opinion that certain personal clarifications are required by person against whom summons are issued, then they are empowered to secure such personal appearance of such persons. In extraordinary cases, where the authorities of an opinion that such personal appearance is not strictly required, then they are at liberty to waive the personal appearance. However, in t....
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....hus, the factual circumstances are also to be looked into in such cases. The very intention of the Legislation with reference to Section 160 of the Code of Criminal Procedure Code is that the aged persons, women or mentally or physically retarded disabled, cannot be compelled to travel for a long distance for the purpose of investigation. In such cases alone, the authorities can take a decision to investigate or interrogate such persons in their place of residences. 96. In all the cases of aged person, women, if the authorities have to come over to the residences of the witnesses for the purpose of obtaining statement, this Court is afraid that the very ingredients in Section 160 of the Code of Criminal Procedure is not only abused and will become impracticable. Our great Nation, being a vast country, wherein large number of crimes relating to money laundering and other offences are being committed, it may not be possible for the Enforcement Directorate to travel all over the country, in each and every case for the purpose of recording the statement from the witnesses, and it is not the intention of the Legislation. 97. Such provisions granting certain special concessions are to ....
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....t enforce these so as to make each person's situation fair and just by the same standard that is to say, treat every equally. 101. Difference between liberal and constructive interpretation is that liberal interpretation is used to advance the object for which the Statute was enacted irrespective of the changes that happen in the society or without having regard to the compatibility in the existing legal system while, constructive interpretation is adopted to give the Statute the best possible colour keeping in mind the changes that occur. Constructive Interpretation is the most suitable and appropriate kind of interpretation that is beneficial to the society at large. Liberal Interpretation is used only for remedial Statutes, while constructive interpretation can by and large be used for any Statute to make it more fit and proper in the current legal system. 102. Under these circumstances, this Court is of an opinion that based on the gender, the exemption cannot be sought for in a routine manner. Undoubtedly, Section 160 Cr.P.C., provides an exemption to women from participating in the investigating process, and cannot be called to participate in the investigation process i....
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....ct any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. 106. It is enumerated that in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred. Therefore, when there is a Special Act in force in respect of the offence of money laundering, then certain general procedures contemplated under the Criminal Procedure Code need not be applied in that particular case. 107. The Special Act in the present case, namely, the "PMLA", has got its own objects and purpose. The nature of offences under the "PMLA" is distinct and the course and the method of investigation to be adopted may be slightly different from that of the regular offences. Prudent and intelligent way of investigations may be required for the purpose of culling out the truth in respect of the offence of money laundering under the provisions of the "PMLA". Certain specialised way of understanding the nature of the transactions are also to be taken note of. Indian Parliament keeping in mi....
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.... clarifications in relation to certain monetary transactions and the documents submitted. The reasons for securing the personal appearance are also enumerated in the counter-affidavit. On a perusal of the whole counter-affidavit filed on behalf of the respondents, this Court is of an opinion that, when the Investigating Officer is of an opinion that personal clarifications are required in respect of written statements and the documents filed, then the Court would not enter into the arena of such clarifications to be obtained from the person in order to ensure free and fair investigations. 112. Section 71 of the "PMLA" deals with the Act to have overriding effect. Section 71 enumerates that the provisions of this Act shall have the effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Thus, the provisions of the "PMLA", and the procedures contemplated for the purpose of investigation or prosecution are also to be followed under the provisions of the "PMLA". 113. In respect of the writ petitioner, the investigation is in progress with reference to the allegations which attracts the provisions under the "PMLA". Thus, the proce....
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....e provisions of the "PMLA" will prevail over as the same is the Special Act enacted for the purpose of dealing with the offences of money laundering. When there is a specific provision for personal appearance, then the only course would be to assist the competent authorities for the purpose of conducting the investigation in the manner prescribed under the Act. 116. The learned Senior Counsel, appearing on behalf of the writ petitioner, states that the writ petitioner, being a woman, cannot be compelled for personal appearance and the women in this country are vulnerable and therefore, the authorities cannot insist a woman for personal appearance in order to proceed with the investigation. 117. In the present case on hand, even in the affidavit filed in support of the writ petition, the writ petitioner Mrs.Nalini Chidambaram, in paragraph 2, categorically stated that she is a Senior Advocate, having an active practice in the Supreme Court of India, High Court of Madras and other Courts. The writ petitioner was the Standing Counsel for the Income Tax Department for 17 years. She appeared in almost all the High Courts in India. The writ petitioner has an extensive practice and is p....
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....nd therefore, such apprehensions can never be entertained in a writ petition, wherein the very issuance of summon is questioned. The writ petition is not only premature and the writ petitioner has not made out any cause of action for the purpose of entertaining the present writ petition and the writ petitions are liable to be dismissed in limine as not maintainable. 122. This Court would like to cite the judgment of the Three Judges Bench rendered in the case of Poolpandi etc. vs. Superintendent, Central Excise and Others etc. ect. [AIR 1992 SC 1795], His Lordship L.M.Sharma, J., speaking for the Bench held in paragraph as under:- 11. We do not find any force in the arguments of Mr Salve and Mr Lalit that if a person is called away from his own house and questioned in the atmosphere of the Customs office without the assistance of his lawyer or his friends his constitutional right under Article 21 is violated. The argument proceeds thus : if the person who is used to certain comforts and convenience is asked to come by himself to the Department for answering questions it amounts to mental torture. We are unable to agree. It is true that large majority of persons connected with il....
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....l Procedure, 1973. 124. The general exemptions are granted under the Code of Criminal Procedure in order to ensure that certain genuine cases wherein such personal appearances of such classified persons are not possible, then the provision may be invoked. Such general provisions are not made in order to defeat the very purpose and the object of the course of investigations. Such proviso clauses are provided granting certain exemptions to a particular class or category of persons in order to ensure that the fundamental rights ensured under the Constitution to the citizens of this great Nation are protected under Article 21, which ensures not only life but also a decent life. When the Supreme Court has elaborated the scope and meaning of Article 21, so as to ensure a decent life to the citizen, then the same is to be preserved in all respects. Whether the circumstances, arises, when the authorities competent should be prevented from exercising an excessive power than it is required for the purpose of protecting the fundamental rights enshrined under Article 21 of the Constitution of India. However, under the guise of protection granted under Article 21 of the Constitution, the cours....
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....1 SCC 248] has substantially infused the concept of due process in our constitutional jurisprudence whenever the court has to deal with a question affecting life and liberty of citizens or even a person. Krishna Iyer, J. giving a concurring opinion in Maneka Gandhi [(1978) 1 SCC 248] elaborated, in his inimitable style, the transition from the phase of the rule of law to due process of law. The relevant statement of law given by the learned Judge is quoted below: (SCC p. 337, para 81) "81. ... 'Procedure established by law', with its lethal potentiality, will reduce life and liberty to a precarious plaything if we do not ex necessitate import into those weighty words an adjectival rule of law, civilised in its soul, fair in its heart and fixing those imperatives of procedural protection absent which the processual tail will wag the substantive head. Can the sacred essence of the human right to secure which the struggle for liberation, with 'do or die' patriotism, was launched be sapped by formalistic and pharisaic prescriptions, regardless of essential standards? An enacted apparition is a constitutional, illusion. Processual justice is writ patently on Article 21....
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....that if the law provided the Bishop of Rochester "be boiled in oil" it would be valid under Article 21. But after the decision in Maneka Gandhi [(1978) 1 SCC 248] which marks a watershed in the development of constitutional law in our country, this Court, for the first time, took the view that Article 21 affords protection not only against the executive action but also against the legislation which deprives a person of his life and personal liberty unless the law for deprivation is reasonable, just and fair. And it was held that the concept of reasonableness runs like a golden thread through the entire fabric of the Constitution and it is not enough for the law to provide some semblance of a procedure. The procedure for depriving a person of his life and personal liberty must be eminently just, reasonable and fair and if challenged before the court it is for the court to determine whether such procedure is reasonable, just and fair and if the court finds that it is not so, the court will strike down the same. 63. Therefore, "law" as interpreted under Article 21 by this Court is more than mere "lex". It implies a due process, both procedurally and substantively." 127. This Court ....
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....notwithstanding anything inconsistent therewith contained in any other law for the time being in force. "PMLA" has an overriding effect and the provisions of CrPC would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of "PMLA" will have to be complied with even in respect of an application for bail made under Section 439 CrPC. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money-laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant. 128. It is unambiguously made clear that the provisions of the "PMLA" shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. "PMLA" has overriding effect and the provisions of the Code of Criminal procedure would apply only if they are not inconsistent with the provisions of the PMLA. The case of Gautam Kundu (supra) also subsequently referred in the case of Nikesh Tarachand Shah (supra) so that the conditions stipulated in Section....
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....g is affecting the economic growth of our great Nation. The magnitude of the alleged money laundering in the present case is running to several thousand crores and therefore, certainly it is required for the persons like the writ petitioner, who is of hight in status, has to co-operate and participate in the investigation process and, so that the entire scenario leading to various facts can be ascertained by the authorities for the purpose of effective prosecution of cases before the Competent Court of Law. 131. This Court is aware of the fact that in certain circumstances, the women in this country are vulnerable. However, we are a fast growing developing Nation, wherein women empowerment is provided in all walks of life and we are consistently promoting such an empowerment of women in this great Nation. Undoubtedly, now the women are standing on par with the men in all walks of life. Women in this great Nation are performing their talents on par with their counterpart men in various fields, including in Defence Services, i.e., Air-Force, Navy and Army. When the women Flying Officers of the Indian Air-Force are able to perform on par with their male colleagues, then this Court is....
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....forcement Directorate through her authorised Agent. 134. This Court is of an opinion that the writ petitioner based on mere apprehension, cannot be permitted to move this writ petition that the respondents are having certain personal motive. Absolutely, there is no materials on record to show that there are personal motive against the writ petitioner. The personal motives or the mala fide intention are to be substantiated with sufficient materials. A mere statement made in an affidavit that the authorities are having certain personal motive or mala fide intention can never be accepted for the purpose of granting the relief in a writ petition, more specifically, in the nature of a case like on hand. However, the writ petitioner has not substantiated the allegations of mala fides, except by stating that the writ petitioner was directed to appear before the Investigating Authorities on a Friday, so that they are having an idea to arrest the writ petitioner. Such apprehensions can never be entertained in a writ petition under the given circumstances. 135. If there are sufficient materials to proceed against the writ petitioner and if the Investigating Authorities are having enough ma....