2024 (11) TMI 541 - HC - Income Tax

Miscellaneous Application filed u/s 4, 10 and 12 of the Fugitive Economic Offenders Act before the Court of Ld. Special Judge, Rouse Avenue Court Complex, Delhi - Assessment under the Black Money Act - petitioner in the present case has challenged the summoning order and has sought the quashing of the miscellaneous application. Before proceeding any further, it is crucial to examine the scope of the jurisdiction exercised by the learned Special Judge at the time of issuing the summons - HELD THAT - It is essential to ensure that the summoning order complies with the established legal standards and does not infringe upon the rights of the petitioner. The complainant has specifically and categorically stated that the accused is the owner of the properties listed in Annexure A to Annexure A3, which were acquired by him and are involved in the commission of the scheduled offence. The complainant has further asserted that, based on the available material, it is abundantly clear that the proceeds of crime in the present case exceed Rs. 100 crores as of date, and that Non-Bailable Warrants have been issued against the accused. Therefore, the petitioner falls within the scope of Section 2 (1) (f) of the Act. A combined reading of Section 4 and Section 10 leads to the conclusion that, if an application under Section 4 has been filed in accordance with The Declaration of Fugitive Economic Offenders (Forms and Manner of Filing the Application) Rules, 2018, the Special Court is required to issue a notice to any individual alleged to be a fugitive economic offender. The jurisdiction exercised under this Act is distinct from the summoning of an accused for other criminal offences. The Fugitive Economic Offenders Act, 2018 is a special statute enacted for a specific purpose, and the legislature, in its wisdom, has provided that upon filing a complaint application in accordance with the aforementioned Rules, the Special Court shall issue a notice. The argument regarding duly filed is liable to be rejected, as the concept of duly filed must be understood in accordance with the above-said Rules. The petitioner s argument that the complaint has been filed solely on the basis of the Income Tax authorities' letter dated 09.07.2019 is also liable to be rejected. The complainant, in its complaint, has provided detailed information regarding the properties and has submitted supporting documents in its possession. The reason to believe has also been recorded in writing. In these circumstances, none of the petitioner s arguments can be accepted. The present petition is liable to be outrightly rejected, as the respondent/agency has pointed out that the petitioner has not disclosed his address in the United Kingdom. A person who invokes the jurisdiction of the Court must come with clean hands, as stated by the respondent in the affidavit; the petitioner is also required to disclose his current address. The exercise of jurisdiction u/s 482 of the Cr.P.C. is intended to prevent the abuse of the process of law and to secure the ends of justice. These are extraordinary reliefs, which can only be granted to individuals who approach the Court with clean hands. In the present case, the petitioner is absconding and seeks to invoke the Court's discretionary power without disclosing his current whereabouts. Petitioner could have appeared before the learned Special Judge as provided under Section 11 of the FOE Act and could have filed the reply. However, instead of that the petitioner has invoked the jurisdiction of this Court by filing the petition under Section 482 Cr. PC. It may again be repeated event at the cost of brevity that discretionary jurisdiction can be invoked only in the sparing circumstances. It has also kept in mind that the petitioner seems to be fighting a proxy war as he has chosen not to give his address and complete particulars in the petition. The present petition involves peculiar facts and circumstances, and this Court is of the considered view that it is inappropriate to interfere in the matter and exercise extraordinary jurisdiction. It is also relevant to note that Section 11 of the Act provides that, if a notice has been issued u/s 10 (1), the individual may appear in person, and the Special Court may terminate the proceedings.

Summary

Issues Involved:

1. Whether the petitioner meets the criteria for being declared a Fugitive Economic Offender under the Fugitive Economic Offenders Act, 2018.
2. Whether the application under Section 4 of the Fugitive Economic Offenders Act was "duly filed."
3. Whether the Special Court correctly issued the summoning order based on the application.
4. Whether the petitioner approached the court with clean hands, given the lack of disclosure of his current address.

Issue-wise Detailed Analysis:

1. Criteria for Declaration as a Fugitive Economic Offender:

The petitioner challenged the proceedings under the Fugitive Economic Offenders Act, 2018, arguing that the material on record does not satisfy the essential elements required to declare him a Fugitive Economic Offender. The petitioner contended that the Act applies only when a Non-Bailable Warrant is issued, and the value involved in the Scheduled Offence exceeds Rs. 100 crores. The petitioner argued that there is no conclusive evidence from the Income Tax Department confirming that the proceeds of crime exceed Rs. 100 crores. The respondent countered that the petitioner has been evading the process of law, with a Non-Bailable Warrant and a Red Notice issued against him. The court found that the petitioner fits the definition under Section 2(1)(f) of the Act, as he has left India to avoid prosecution and the proceeds of crime exceed the threshold amount.

2. Application Under Section 4 of the Act:

The petitioner argued that the application filed by the Directorate of Enforcement did not meet the requirements under Section 4 of the Act, which mandates that the officer must have "reasons to believe" based on material in possession. The petitioner claimed that the application relied solely on a letter from the Income Tax Department, lacking independent satisfaction. The respondent maintained that all procedural requirements were met, and the application was duly filed. The court noted that the application was accompanied by a statement of reasons to believe, as required by the Act, and thus, the application was "duly filed."

3. Issuance of Summoning Order:

The petitioner challenged the summoning order, asserting it was issued without proper judicial application of mind. The petitioner argued that the order lacked reasoning and did not show prima facie satisfaction of the requirements under the Act. The respondent argued that the Special Court correctly issued the notice, as the application was in accordance with the Rules. The court held that the jurisdiction exercised under the Act is distinct, and upon filing a complaint in accordance with the Rules, the Special Court is mandated to issue a notice. The argument regarding "duly filed" was rejected, affirming the Special Court's action.

4. Disclosure of Current Address:

The respondent raised a preliminary objection regarding the petitioner's failure to disclose his current address in the United Kingdom, suggesting a lack of clean hands. The petitioner did not provide his address in the affidavit, which the respondent argued was contrary to the Delhi High Court Rules. The court emphasized that a petitioner must approach with clean hands to invoke the court's jurisdiction under Section 482 Cr.P.C., which is intended to prevent abuse of the process of law. The court found that the petitioner, being absconding, failed to disclose his whereabouts, undermining his plea for extraordinary relief.

Conclusion:

The court dismissed the petition, finding that the petitioner did not meet the criteria for invoking the court's discretionary power under Section 482 Cr.P.C. The application under the Fugitive Economic Offenders Act was found to be "duly filed," and the Special Court's issuance of the summoning order was upheld. The petitioner's non-disclosure of his address further weakened his case, leading to the dismissal of the petition and all pending applications.