9911796707
TMI Blog2016 (11) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... of a reporting entity to comply with specific instructions or to send reports at such intervals as may be prescribed on the measures it is taking and to impose monetary penalty on any of the employees of a “reporting entity”. In exercise of such power, in my view the respondent is within its right to issue impugned show cause notices to the petitioners. At this stage, need not say anything further for the fear of affecting the proceedings before the respondent. X X X X Extracts X X X X X X X X Extracts X X X X ..... do not mention the exact role or specific involvement of the petitioners with regard to the contravention/violation; (v) that PMLA is a draconian legislation and issuance even of a show cause notice thereunder has bearing on the dignity and reputation of the noticee; (vi) moreover, since the notices do not disclose the jurisdiction of the respondent to issue notice to the petitioners, the petitioners ought not to be compelled to respond thereto; and, (vii) reliance in the petition itself is placed on Gorkha Security Services Vs. Govt. (NCT of Delhi) (2014) 9 SCC 105 and CCE Vs. Champdany Industries Ltd. (2009) 9 SCC 466. 3. The petition came up first before this Court on 11th January, 2016 when being of the view on the basis of: (I) Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e machinery of law into motion and has no serious consequence because the noticee is heard before an order is made that the petition was not maintainable, the senior counsel for the petitioners and the learned ASG appearing for the respondent on advance notice were heard extensively on the admissibility of the petition and order reserved. 4. The senior counsel for the petitioners contended: (i) that the order dated 4th November, 2015 supra of the respondent is against NSEL only and has in this regard drawn attention to para 8 of the said order to demonstrate that the show cause notice preceding that order was issued to NSEL only and to para 6 of the order finding NSEL only to be guilty and to para 27 of the order imposing fine on NSEL onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parity drawn with Section 142 of the NI Act is wrong; (b) that even a whole time director can be a Non-Executive Director; (c) invited attention to Rule 7 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and argued that it is the duty of all officers and employees of a "reporting entity" within the meaning of PMLA and as NSEL is, to observe the procedure and the manner of furnishing information; (d) that the impugned show cause notices have been issued in compliance of the principles of natural justice although there was no need thereof; (e) that the doctrine of indoor management is applicable; (f) drew attention to Sections 12 requiring "reporting entity" to maintain records, 2(n) defining intermediary and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Malhotra Vs. Apparel Export Promotion Council (2012) 1 SCC 520, Pepsico India Holdings Pvt. Ltd. Vs. Food Inspector (2011) 1 SCC 176, Central Bank of India Vs. Asian Global (2010) 11 SCC 203, M.A.A. Annamalai Vs. State of Karnataka (2010) 8 SCC 524, National Small Industries Corp. Ltd. Vs. Harmeet Singh Paintel (2010) 3 SCC 330, Ramraj Singh Vs. State of M.P. (2009) 6 SCC 729, N.K. Wahi Vs. Shekhar Singh (2007) 9 SCC 481 and S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla (2005) 8 SCC 89 on the aspects of liability of Non-Executive Directors. 7. The senior counsel for the petitioners, after the orders were reserved, has also filed an index of judgments with copies of: (A) Anil Bhargava Vs. State (2008) ILR 2 Delhi 792 to contend that differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners that the respondent had no authority or jurisdiction to issue the impugned show cause notices. Similarly, the petitioners have otherwise not shown any other patent illegality in the show cause notices. The other arguments urged are such which can be urged by the petitioners in response to the impugned show cause notices and unless the respondent, after considering the said reply of the petitioners decides to take action against the petitioners, the petitioners would have no cause of action or grievance. If the arguments as urged by the senior counsel for the petitioners were to be accepted, it would nullify what has been held consistently by the Courts, of non-maintainability of writ petitions against show cause notices. 10. Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
