TaxTMI 
TaxTMI 
2021 (12) TMI 42
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...., on 23rd August, 2021 along with the documents mentioned in the schedule annexed to the summons. 2.The facts leading to the writ petitions is that, on reliable source information that T.Subramanaian had acquired and in possession of movable and immovable properties and pecuniary resources in his name and his wife's name [Rajeswari] disproportionate to his known source of income, the Deputy Superintendent of Police, Directorate of Vigilance and Anti-Corruption, Madurai, registered a case under Sections 13(2) r/w 13(1)(b) of Prevention of Corruption Act and Section 109 of IPC against the writ petitioners herein in Crime No.5 of 2021 on 16.04.2021. The said case is under investigation. 3.Meanwhile, the Enforcement Directorate on registration of complaint in the predicate offence disclosing prima facie case for money-laundering, had registered case in F.No.ECIR/MDSZO/16/2021 against the writ petitioners and had issued summons to them to appear and produce documents for the purpose of investigation. 4.The said summon dated 30.07.2021 is challenged in these writ petitions on the ground that, (a) The authorities of Enforcement Directorate acquire jurisdiction to com....
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....on 50 of the PMLA to enquire into any case involving money-laundering is well within the jurisdiction of the Enforcement Directorate. The summons issued under Section 50 of the PMLA for production of records in their possession is misconstrued as a summon issued under Section 5 of the PMLA for provisional attachment. Culmination of filing charge sheet in the predicate offence is not a precondition to invoke the provisions of the PMLA. The contention of the writ petitioners that issuance of summon before filing of final report in the predicate offence lack jurisdiction is incorrect. The second proviso to Section 5 (1) (b) of the PMLA empowers the Enforcement Directorate to act and attach any property on formation of reason to believe that the said property is proceeds of crime. Filing of final report under Section 173 of Cr.P.C. before the Magistrate is not required while the power is exercised invoking the second proviso of Section 5(1)(b) of the PMLA. Further, after the amendment to the PMLA by insertion of Explanation to Section 44(1) of the PMLA any little ambiguity in the legislation is given quietus by removal of doubts that the offence under the PMLA during investigation, enq....
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....ental thereto. This Act came into force on 01.07.2005. This Act underwent amendments in the years 2009 and 2013 to remove the difficulties and doubts. Second proviso was inserted to Section 5(1) in the year 2015. The Sections which are relevant for the instant case were subjected to amendment earlier and as on the date of issuance of the impugned summons till now, the provisions read as below:- ''5.Attachment of property involved in moneylaundering. - (1) Where the Director, or any other officer not below the 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) ..... (b) ..... Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or Court for taking cognizance of the scheduled offenc....
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.... (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a reporting entity and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power 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 this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.'' 13.The fallacy in the petitioners' case can be put under two heads. First, the summons issued is not under Section 5 of the PMLA to provisionally attach the alleged proceeds of crime. It is a summon iss....
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....crime under Section 13 of the Prevention of Corruption Act, has thought fit to summon the persons involved in the scheduled offence to ensure whether there is any act of money-laundering involved. For the said purpose, the summons under Section 50 (2) and (3) of the PMLA has been issued. In such circumstances, the petitioners are expected to produce documents sought by the authorities and satisfy them that they are not involved in any act of money- laundering. Instead, under false pretext that the properties are likely to be provisionally attached before filing of final report in the predicate offence, the writ petitions are filed. 16.Having held that the summons issued by the respondent is well within their competency and jurisdiction, the only other point remains for consideration and intervention in these cases is the instruction in the impugned summon, that the recipient not to depart until permitted by the Assistant Director to do so. This instruction is not found in Form-V appended to Prevention of Money-Laundering (forms, search and seizure or freezing and the manner of forwarding the reasons and materials to the Adjudicating Authority, impounding and custody of records a....