TaxTMI 
TaxTMI 
2022 (5) TMI 988
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....otteries Regulation Rules, by order dated 20.01.2018 by the Chief Judicial Magistrate, Ernakulam in C.C. No. 218/2015 and the same was confirmed by the order dated 26.02.2020 in R.P. No. 26 of 2018 and R.P.No. 27 of 2018 passed by the VI Additional Sessions Judge, Ernakulam and pass such further or other orders as this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice. b) to issue a writ of prohibition or any other writ, order or Direction prohibiting the Respondents 2 and 3 from summoning/taking any proceedings against the Petitioner under Section 50 (2) and (3) of the Prevention of Money Laundering Act, 2002 and by issuing any other summons under Section 50(2) and (3) of the Prevention of Money Laundering Act, 2002 and attach the properties of the Petitioner/his relatives or companies floated by the Petitioner under Section 5 of the Prevention of Money Laundering Act, 2002 and pass such further or other orders as this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice. c) to issue a writ of certiorari, calling for the records of the 3rd respondent in ECIR/4/KCZO/2014 (AZ), dated 0....
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....t under the Rules. M/s. Megha Distributor was registered as a promoter under the Kerala Tax on Paper Lotteries Rules, 2005 and they were liable to pay tax on lotteries in the State of Kerala as per Kerala Tax on Paper Lotteries Act. M/s. Megha Distributor was the Kerala stockist of Sikkim lotteries. The petitioner entered into a partnership agreement on 14.12.2017 with Mr. Martin and formed a partnership firm by name M/s. M.J. Associates. An agreement was entered into between M/s. Megha Distributor and M/s. M.J. Associates by which M/s. M.J. Associates was appointed as the sole stockist of the lottery tickets in Kerala. M/s. M.J. Associates was only purchasing lottery tickets from M/s. Megha Distributor which was the registered promoter and they in-turn were selling lottery tickets through 73 stockists in Kerala. The flow chart in the writ petition indicates that the Sikkim Government, the organising State had appointed M/s. Martin Lottery Agencies as the distributor who in-turn entered into an agreement with M/s. Megha Distributor, the promoter in Kerala; between M/s. Megha Distributor and M/s. M.J.Associates, an agreement was executed on 15.12.2007 by which M/s. M.J. Associates w....
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....oney-Laundering Act, for short 'PML Act' before the adjudicating authority. However, Ext.P5 certificate issued by the Directorate of Sikkim Lotteries indicates that the performance of M/s. Future Gaming Hotels and Services India Private Limited as the sole distributor, was satisfactory and no amount is due to the Government upto 12.07.2015. In the writ petitions filed before the Madras High Court, the petitioner could obtain interim orders. Thereafter, petitioner moved an application for discharge before the Chief Judicial Magistrate's Court, Ernakulam. By Ext. P8 order dated 20.01.2018, the court ruled that offence under Section 4(d) and 4(f) of the LR Act and Rule 4(5) of LR Rules are not attracted and he is liable to face trial only for offence under Section 9 read with 7(3) of the LR Act and Rule 3(5) of the LR Rules and Section 120B of the IPC. At this juncture, he has been served with summons under Section 50(2) and (3) of the PML Act. Challenging the same, he filed W.P. No. 13589/2018 before the Madras High Court and by Ext.P9 order dated 07.06.2018, the Madras High Court directed the respondents to defer the hearing in the matter. Meanwhile, revision was filed against Ext.....
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....ed to entertain the writ petition on the ground of jurisdiction also. The petitioner has challenged the provisional order of attachment issued under Section 5(1) of the PML Act. The Director or Deputy Director is empowered to issue provisional attachment orders for a period of 180 days pending adjudication before the adjudicating authority. Section 8(1) of the PML Act enables the adjudicating authority to decide the question. Aggrieved person can prefer appeal before the Appellate Tribunal under Section 26 of the PML Act; again Section 42 of the PML Act provides for preferring appeal to the High Court. In the circumstances, such a writ petition is not maintainable at all. 9. The petitioner filed a reply affidavit reiterating the contentions and also producing Exts. P19 and P20 documents. At the time when the matter came up for admission, before admitting the writ petition, this Court stayed the adjudication, pending disposal of the writ petition, allowing the attachment to continue. 10. I heard Sri. S. Sreekumar, learned Senior Counsel assisted by Adv. Sri. N.R.R. Arun Natarajan for the petitioner and Sri. Suvin R. Menon, the learned Central Government Counsel very elaborately. T....
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....h of Madras High Court such a writ petition is barred by principles of issue estoppel and cause of action estoppel. According to him, the finding of the Madras High Court that in the light of the existence of efficacious alternative remedies available to the petitioner under the PML Act, the petitioner cannot insist the High Court to conduct a roving enquiry. The decision of the Madras High Court has become final and the petitioner has not taken care to challenge its correctness before the Apex Court. According to him, the decisions relied on by the learned Senior Counsel for the petitioner are not applicable to the facts of the case. Moreover, the question whether offence under the PML Act will lie independently against the petitioner dehors predicate offence is a matter being considered by the Apex Court. There are contra views taken by other High Courts. The decision in Arun Kumar Mishra, quoted supra, stands stayed by the Apex Court. Therefore, he pressed for dismissing the writ petition. According to him, it has been filed on experimental basis, that the petitioner and his co-accused want to drag the proceedings one way or the other. 14. There is no dispute on the factual mat....
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....at a Government press or any other high security press included in the panel of Reserve Bank of India or The Indian Banks' Association, Mumbai; during 1.4.2010 to 31.08.2010 Section 4(5) of the Lotteries (Regulation) Rule that the distributors or selling agents shall return the unsold tickets to the Organising States with full accounts along with the challans of the money deposited in the Public Ledger Account or in the Consolidated Fund of the Organising State through the sale of tickets and thereby committed offence punishable Section 7(3) of Lotteries (Regulation) Act, 1998." 16. The petitioner had moved C.M.P. No. 2201/2016 in C.C. No. 218/2015 under Section 239 of the Cr.P.C. seeking discharge. After hearing counsel on both sides and perusing the documents, by Ext.P8 order dated 20.01.2018, the learned Chief Judicial Magistrate found that offence under Sections 4(d) and 4(f) of the LR Act and Rule 4(5) of the LR Rules will not lie against the petitioner. The court also made clear that the petitioner will have to face the ordeal of trial with respect to the remaining part of the charge. Challenging the correctness, legality and propriety of the order, the petitioner as wel....
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....cerned authority under the PMLA; secondly, only a small fraction of cause of action had arisen before this Court and the larger and substantial part of cause of action had arisen only in the State of Kerala, where the FIRs have been registered and the trial is pending before the Special Court at Kerala. Therefore, this Court is not the appropriate Court to entertain the present Writ Petitions. Hence, on these two grounds, the present Writ Petitions are liable to be dismissed." 18. By separate order dated 08.02.2021, the writ petition filed by the petitioner was also dismissed as not maintainable. In the short order, the Division Bench of the Madras High Court held that 'in view of the order passed by a Division Bench in John Kennedy and Others v. Joint Director (Ext.P11), this writ petition is dismissed as not maintainable. Liberty is given to the petitioner to work out his remedy in the manner known to law before the appropriate forum.' Thereafter, the petitioner approached this Court with the above stated Writ Petition. 19. I have already set out the major contentions urged by the learned counsel on both sides. The petitioner wanted to say that by virtue of the order o....
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....ccused on 13.06.2010, those offences were brought into the purview of the PML Act by way of amendment. After the amendment, for more than one year, the petitioner was admittedly part of the partnership business which had run the lottery business. The specific case of the CBI is that the first accused Santiago Martin, the proprietor of Future Gaming Solutions India Private Limited had sold tickets to the third accused, M/s. Future Gaming Solutions India Private Limited (formerly Martin Lottery Agencies,) during the period from 31.12.2007 to 04.04.2010; M/s. Future Gaming Solutions India Private Limited owned by the first accused in-turn sold tickets to M/s. Megha Distributor who in-turn sold tickets to M/s. M.J. Associates in which petitioner and the said Martin were partners and M/s. M.J. Associates had sold tickets to 73 stockists in Kerala. During the period of 2009, the above firms had allegedly received Rs. 1,723 crores as sale proceeds in respect of sale of Sikkim lottery, but the Government of Sikkim was paid only Rs. 59 crores. Similarly, it is alleged that during the period from 19.10.2009 to 31.03.2010, they had received Rs.1,801 crores by sale proceeds of lotteries, but ....
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....proceedings. 25. As rightly pointed out by the learned Standing Counsel for the respondents, the decision in Arun Kumar Mishra, quoted supra, and other decisions relied on by the learned Senior Counsel for the petitioner are of no avail. In those decisions, the courts have quashed the proceedings in respect of all the predicate offences so that the position as to whether proceedings under the PML Act will stand alone was considered and upheld the contention of the petitioners that so long as the courts had found that predicate offences will not lie, proceedings under the PML Act alone will not stand. According to the learned Standing Counsel, this matter has already been taken up with the Supreme Court and an order of stay has been granted. But according to the learned counsel for the petitioner, in the light of the decision of this Court in Abdul Rahiman v. District Collector, Malappuram and Others [ILR 2009 (4) Kerala 513] the fact that the Supreme Court has granted an order of stay cannot lose the binding precedent. All the same, it must be pointed out that the decisions in Arun Kumar Mishra, Sushil Kumar Katiyar, Rajiv Chanana etc., quoted supra, have turned on its own facts, ....
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....tion to refuse interference in a Writ Petition unless there are good grounds therefore. But it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of imposed limitation, a rule of policy and a discretion rather than a rule of law and the court may, therefore, in exceptional cases, grant reliefs. 29. Further, as held by the Apex Court in Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others [(2003) 2 SCC 107], the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its jurisdiction in at least three contingencies: (i) where writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice, or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. This principle has been reiterated by the Supreme Court in Assistant Commissioner of State Tax v. Commercial Steel Ltd. (MANU/SC/0801/2021) where it has been held that....
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.....06.2009 which does not have retrospective operation so that the very Ext.P2 ECIR is bad; when Ext.P2 goes, Exts.P3 and P4 are also bound to go. As stated earlier, whether the petitioner has been proceeded against under the Lotteries Act or whether the proceeds of the crime had generated from the offence under Section 120B or Section 420 of the IPC are questions of fact. Even though the amendment does not have retrospective operation, at least till 13.06.2010 the petitioner had been part of the lottery business in his capacity as the partner of M/s.M.J. Associates from 31.12.2007 to 13.06.2010. There are reasons to believe that the petitioner had indulged in the acts of committing scheduled offences after the inclusion of these offences after the amendment on 01.06.2009. The specific case of the respondents is that all the accused persons are party to the conspiracy, offences under Sections 420 and 120B IPC are alleged against all. An offence under Section 120B IPC, in the nature of the allegations, is a continuing offence. Merely for the reason that he had withdrawn from the business on 13.06.2010, it cannot be thought that he is not in possession of the proceeds of crime which we....
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....ction arose within that jurisdiction, but a larger and substantial part of cause of action had arisen within the State of Kerala where most of the occurrence alleged to have been committed by the petitioner had taken place. Thus the court thought that it is not appropriate to entertain the Writ Petition. It is evident that all the properties which are the proceeds of crime situate within Tamil Nadu, within the territorial jurisdiction of the Madras High Court. But cause of action for the commission of crime which led to the filing of final report had arisen in State of Kerala. The Court was thus refusing to exercise its discretionary jurisdiction by invoking the doctrine of "forum conveniens". Therefore, the decision in Municipal Corporation of Greater Mumbai, quoted supra, is not applicable to the facts of the case. 36. There is also considerable force in the submission that the petitioner has not approached this Court with clean hands. On initiation of proceedings under Exts.P2 to P4, he had hurriedly approached the Madras High Court and obtained interim orders in 2015. The Writ Petition was dismissed on 08.02.2021. Immediately thereafter he approached this Court without realisi....