2018 (3) TMI 1067 - HC - FEMA

Working of Special Investigation Team ( SIT ) questioned - As submitted SIT especially the Directorate of Enforcement ( ED ) is acting in contravention and beyond the orders of this Court which was supposed to investigate the dispute of M/s International Customer Related Management Services Pvt. Ltd. (for short, ICRMS ) and rather it has plunged into third party disputes - Held that - In the light of unison shown by the learned counsel representing various parties that the officer from CBI would be heading the SIT to look into the investigations, facilitate collecting of evidence, recording of the statements and similar functions to enable the SIT to collect and compile the evidence. Thus, the very purpose of passing orders (Annexure P1) by this Court by virtue of which different constituents formed part of the SIT for a specialized investigation into every angle of running of the affairs of ICRMS. During the course of hearing, Mr. Roopesh Kumar, Assistant Director from the Directorate of Enforcement has made statement undertaking that their agency would not order attachment of the bank accounts of ICRMS, affairs of which are under investigation by the SIT. As during the course of proceedings that the various constituents of the SIT, somehow or the other, are not working in unison and in tandem with each other and are trying to carry on individually which is quite contrary to and in violation of the directions of this Court contained in order (Annexure P1) dated 16.09.2015 thus, necessitates issuance of directions to the constituents of the SIT to follow investigations and carry on the same strictly in accordance with all the orders of this Court enumerated above and to ensure that all these agencies so formed part of the SIT, act cohesively in unison towards attaining the purpose and goal of the orders of this Court, else there is every likelihood if these agencies are allowed to carry on individually would certainly defeat the very intent and purpose for which the SIT has been constituted. These constituents are directed not to go beyond the directions of this Court issued from time to time . Thus, it necessitates and flows from it that the SIT and its constituents in the light of orders (Annexure P1) shall ensure by all means that their investigations do not go haywire and rather than following and pursuing the policy of pick-and-choose, the goals for which it has been constituted are achieved by all means and shall not in any manner plunge into third party dispute of the petitioner with others and further that the SIT shall not use any coercive means against the petitioner, his family members or relatives regarding their own personal businesses/avocations and would strictly adhere to their assignment and task.

Summary

Issues involved:
1. Jurisdiction of Special Investigation Team (SIT) in investigating disputes beyond the scope of court orders.
2. Allegations of misconduct and harassment by Directorate of Enforcement (ED) against a petitioner.
3. Denial of allegations by Central Bureau of Investigation (CBI) and Serious Fraud Investigation Office (SFIO).
4. Proper functioning and coordination among the constituents of the SIT as per court orders.

Analysis:
1. The petitioner sought directions for the SIT, specifically the ED, to adhere to court orders and investigate the M/s International Customer Related Management Services Pvt. Ltd. (ICRMS) dispute. The ED denied transgressing limits and collected evidence related to misuse of funds from ICRMS, refuting allegations made by the petitioner. The court emphasized that the SIT should focus on the assigned task and not interfere in third-party disputes, ensuring investigations align with court directives.

2. Respondent agencies, including CBI and SFIO, denied petitioner's allegations and claimed to be following due process. The SFIO focused on investigating ICRMS affairs as per Companies Act, seeking dismissal of the petition. The court noted the denial of allegations and emphasized proper investigation procedures and adherence to legal provisions by all agencies involved.

3. The court highlighted the structure of the SIT, with officers from CBI heading the team to facilitate evidence collection and investigation. It issued directions to ensure cohesive functioning among SIT constituents, emphasizing the importance of following court orders and avoiding individual actions that may hinder the investigation process. The court stressed the need for agencies to work together harmoniously to achieve the intended purpose of the SIT's formation.

4. In conclusion, the court directed all SIT constituents to strictly adhere to court orders and investigate within the assigned scope. It emphasized the importance of coordination among agencies, prohibiting the use of coercive means against the petitioner or their associates. The court underscored the necessity for the SIT to focus on resolving the assigned investigations without deviating from the specified tasks, ensuring the smooth running of ICRMS affairs and achieving the objectives set by the court orders.