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TMI Blog2017 (1) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... 31288 of 2016, Mrs. Nalini Chidambaram, Senior Advocate for Mr. R. Parthiban Mr. R. Krishnamoorthy, Senior Advocate for Mr. R. Parthiban Mr. R. Parthiban For the Respondents : Mr. Anand GroverMrs. G. Hema, Central Government ORDER By consent of counsel on either side, the writ petitions are taken up for final disposal. 2. The only point raised and argued in all these writ petitions is as regards the maintainability of the writ petitions before this Court. A preliminary objection has been raised by the respondents as regards the maintainability of these writ petitions by contending that the issue involved in these writ petitions relate to 2G Spectrum Case and therefore, this Court has no jurisdiction to entertain these writ petitions. It is further contended on behalf of the respondents that cases pertaining to 2G Spectrum are being monitored by the Honourable Supreme Court of India and no writ petition should be filed in any of the High Courts in the Country. Therefore, the respondents pleaded that these writ petitions can only be dealt with or adjudicated by the Honourable Supreme Court and this Court has no jurisdiction to exercise the power conferred under Arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gated by agencies such as Police, Customs, SEBI, NCB and CBI etc., under the respective Act. In this case, the Central Bureau of Investigation (CBI) is the authority which conducted an enquiry into the grant of FIPB approval. However, CBI is yet to file any report on completion of investigation before any Magistrate under Section 173 of Criminal Procedure Code. According to the petitioner, in the absence of a report by the CBI in the grant of FIPB approval and in the absence of a report under Section 13 of Cr.P.C. the Enforcement Directorate will have no jurisdiction to investigate into circumstances leading to the grant of FIPB approval and consequently into the payment of ₹ 26,00,444/- by AVTL to ASCPL. 4. According to the petitioner, the question of placing reliance on the order dated 10.02.2011 by the Honourable Supreme Court to the facts of this case has no application and it will not be a bar for entertaining this writ petition before this Court. According to the petitioner, this Court is empowered to entertain this writ petition under Article 226 of the Constitution of India. There is no charge sheet filed by the CBI pertaining to the grant of FIPB approval which al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanan Rajesh, who are directors of the petitioner company. In all these writ petitions, the petitioners have raised similar grounds as stated in WP No. 40240 of 2015 and the arguments adopted in WP No. 40240 of 2015 and WP Nos. 32272 to 32275 of 2016 are identical and common. 6. WP No. 31288 of 2016 has been filed by Mr. Karti P. Chidambaram seeking to quash the summons dated 19.08.2016 issued to him by the respondents under the provisions of PMLA. The main contention of the petitioner in this writ petition is that the summons lack jurisdiction on the part of the Enforcement Directorate directing him to appear in person on 31.08.2016 in connection with file number ECIR/05/DZ/2012 and to produce certain records. According to the petitioner, in response to the summons dated 19.08.2016, he has sent a legal notice dated 29.08.2016 seeking to furnish certain information as to whether the offences for which the summons have been sent to him relates to a scheduled offence and what are the proceeds of the crime and how the petitioner is involved in such activity connected with the proceeds of the crime. Since there was no response to the legal notice, the petitioner earlier filed WP No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mauritius. There is no scheduled offence made out by the respondents in connectin with FIPB approval. There has been no complaint or charge sheet filed by the CBI in respect of FIPB approval. Therefore, there is not even any prima facie evidence of the commission of any scheduled offence being made in relation to the FIPB approval and consequently, the question of Enforcement Directorate carrying out any investigation into the alleged proceeds of crime generated through the commission of a scheduled offence will not arise. There can be no proceedings under the PMLA in the absence of a charge sheet alleging the commission of underlying scheduled offence. In this context, reliance was placed on the decision in the case of Mahanivesh Oils and Foods Pvt Ltd., vs. Directorate of Enforcement, reported in 2016 SCC Online Delhi 475 wherein it was held that in cases under PMLA, where the commission of a scheduled offence is not established, there can be no question of the enforcement directorate exercising powers of investigation available only to the prosecuting agency. 8. In support of his contentions, the petitioner in WP No. 31288 of 2016 relied on the affidavit filed by Shri. P. Chi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court to hear this writ petition. 9. According to the petitioner, the power under Article 226 of the Constitution of India is enormous and when the fundamental rights of the persons affected, this Court has jurisdiction to entertain and alievate the grievance of the petitioner. Already, CBI has issued notice to Advantage Strategic Consulting Private Limited relating to receipt of ₹ 26,00,444, but has not registered any complaint or charge sheet for a predicate offence. It is also stated that the respondents have failed to show any connection between the alleged underlying scheduled offence and the proceeds of crime generated therefrom on the one hand and the petitioner. Acccording to the petitioner, there is no mention as to how the petitioner is connected with the commission of offence even assuming it is an offence related to 2G spectrum case. The petitioner is neither a Director nor a shareholder of M/s. Advantage Strategic Consulting Private Limited. Therefore, according to the petitioner, it is strange that an FIPB approval granted during March 2006 could be connected to the aforesaid order of transfer and re-transfer of shares during March/October 2011. In fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the first respondent. The notice dated 16.05.2016 has been sent to all the financial institutions under the caption investigations under the provisions of the PMLA . By the said communication dated 16.05.2016, the second respondent has enclosed a list of 26 companies (which includes the 9 petitioners in this writ petition) with their PAN numbers which are under investigation of a law enforcement agency. According to the petitioners, the communication states that information on the bank account details as well as details of CTRs and STRs, if filed by the financial institutions, is required on top priority. If already STRs/CTRs have been filed by the financial institutions in respect of the 26 entitles, the same may be informed immediately along with their batch ids to the Consultant at the e-mail id given therein. 12. According to the petitioners, a perusal of the names of the 26 companies indicate that they are companies where Mr. Karti Chidambaram has direct interest or companies owned by the relatives and friends of Mr. Karti Chidambaram. The petitioner companies are directly connected with Mr. Karti P. Chidambaram who is the son of former Finance Minister of India and pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir fundamental rights guaranteed under Article 14 of The Constitution of India to enable them to carry on their legitimate business. According to the petitioners, the second respondent is a consultant of the first respondent. The second respondent, who has issued the letter dated 16.05.2016 is not a statutory authority empowered under the PMLA to issue any advisory of this nature. Only an officer of the enforcement directorate has got power to issue advisories of this nature. In such circumstances, according to the petitioners, the impugned communication has been issued without anthority of law and it lacks jurisdiction. In such circumstances, the petitioners seek for quashing the communication which is impugned in these writ petitions. WP No. 36736 of 2016:- 14. This writ petition has been filed by M/s. Advantage Strategic Consulting Private Limited for a Mandamus directing the respondents to return the small plastic folder containing Indian Overseas Bank Deposit Receipts No. 35160 dated 08.03.2014; 351999 dated 08.03.2014, 351598 dated 08.03.2014 and 351597 dated 08.03.2014 in the name of the petitioner which was seized by the second respondent from the residence of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e very same demand for return of the documents, but there was no response. The petitioner was therefore constrained to file an application dated 30.09.2016 before the respondents under Section 37 (3) read with Section 132 (8), 8A and 10 of the Income Tax Act seeking return of the plastic folder containing the original Indian Overseas Bank Deposit Receipts seized on 01.12.2015. As there was no response to such application the petitioner has come up before this Court wiht this writ petition for a Mandamus as mentioned above. 16. In all these writ petitions, the respondents/Directorate of Enforcement has filed affidavits opposing the averments contained in the writ petitions. The affidavits filed in these cases are almost identical and similar. In one such affidavits filed in WP No. 31288 of 2016, it is stated by the respondents that the writ petitions are not maintainable and therefore they have raised a preliminary objection as regards maintainability of these writ petitions before this Court. According to the respondents, the investigations done by the department relates to 2G spectrum scam case and the Aircel-maxis case. Therefore, only the Honourable Supreme Court has jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration of the FIR against Aircel-marxis recorded in the orders dated 07.11.2012, 19.11.2012, 17.04.2013, 01.05.2014. Therefore, according to the respondents, the continuous filing of status reports on the investigation of the 2G spectrum cases before the Honourable Supreme Court establishes that the Honourable Supreme Court is seized of the cases and no other Court, including this Court, has no jurisdiction over such investigation carried on by the respondent. 19. It is also brought to the notice of this Court that on 29.08.2014, CBI has filed charge sheet against Mr. Dayanidhi Maran before the Special Court having jurisdiction over the case. This case relates to the investigation carried on relating to grant of FIPB approval in relation to the take over of Aircel Limited by Maxis Bhd., through Global Communication Services Holdings Limited, the approval of which was given by the then Finance Minister. On 20.04.2015 and 09.09.2015, further status reports were filed before the Honourable Supreme Court relating to the on-going investigation in the 2G case. Further, the learned Special Judge hearing the 2G Spectrum Case, in its order dated 17.09.2016, upheld its jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antage Strategic Consulting Pvt Ltd., 22. According to the respondents, the provisions of Section 65 of PMLA provides that the provisions of Criminal Procedure Code shall apply in so far as they are not inconsistent with the provisions of PMLA. Therefore, the CBI as well as the enforcement Directorate are empowered to file supplementary charge sheet pursuant to the outcome of their on-going investigation. It is contended that such investigation is still going on as could be evident from the minutes of the meeting dated 11.11.2016 and 14.10.2016 of the Coordination Committee of CBI, Income Tax Department and Directorate of Enforcement to take stock of the investigation conducted into the Aircel-Maxis case about the FIPB clearance. 23. It is stated that the communication dated 16.05.2016, which is challenged in WP No. 35844 of 2016 was issued to banks and not to petitioner companies. The letter was issued in exercise of powers under Section 12A of PMLA read with the guidelines issued in the notification No.5/2005 dated 01.07.2005. Such letters were sent on behalf of FIU on the basis of request made by the Directorate of Enforcement under the provisions of PMLA. Since those lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investgigation will not bind them in any manner to file the present writ petitions before this Court and only to avoid the petitioners to ventilate their grievance before this Court by invoking the inherent jurisdiction conferred under Article 226 of The Constitution of India, it is alleged that the investigation carried on against the petitioners is relatable to 2G Spectrum case. The petitioners are in no way connected with the charge sheet filed by the CBI as against Mr. Dayanidhi Maran on 29.08.2014 before the Special Court. Pending CBI investigation relating to FIPB approval, there is no predicate or scheduled offence or there was no proceeds of crime involved as against the petitioners. There is nothing on record to show that the petitioners are being investigated in connection with 2G Spectrum case. Further, the names of the petitiners is not shown as accused for any predicate offence pertaining to 2G Spectrum Scam or Aircel-Maxis case. No where it has been stated why the petitioners are being investigated, especially when CBI has not named the petitioners as accused in any predicate offence pertaining to the 2G Spectrum or to the Aircel-maxis transaction. Therefore, the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of both sides pertains to maintainability of the writ petitions before this Court. Mr. Gopal Subramaniam, learned Senior counsel appearing for the petitioners would contend that the respondents will have jurisdiction to carry out investigation under PMLA or FEMA only if a predicate or schedule offence is made out against the petitioners. In the absence of the same, the respondents has no jurisdiction either to commence or carry out the investigation. According to the learned Senior counsel, the respondents would mainly contend that the investigation carried on by the department, which is the subject matter of these writ petitions, relate to and arise out of first information reports registered during the year 2006. The investigation mainly relates to the FIPB approval granted by then Finance Minister of the Country. According to the learned Senior counsel, in the garb of investigation, the officials attached to the enforcement directorate, only to harass the petitioners and their family members and to compel them to subject to their investigation, has issued summons of this nature. Therefore, according to the learned senior counsel for the petitioners, the respondents, without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the writ petitions for being disposed of on merits. 28. On the contrary, Mr. Anand Grover, learned Special Public Prosecutor appearing for the respondents would vehemently contend that since the investigation carried on by the respondents pertains to and arise out of the 2G spectrum case, progress of which is being monitored by the Honourable Supreme Court, no Courts inthe Country has jurisdiction any case arising out of and in connectin with such investigation carried on by the enforcement directorate. By placing strong reliance on the order dated 10.02.2011 of the Honourable Supreme Court wherein it was directed that no Court shall pass any order which in any manner impedes the investigation being carried out by the CBI and Directorate of Enforcement, the learned Special Public Prosecutor opposed the writ petitions and contend that this Court has no jurisdiction to entertain these writ petitions and the jurisdiction of this Court is ousted. It is further vehemently contended that investigation into the FIPB approval is still going on. Such investigation has been commenced to investigate the irregularities in the 2G spectrum scam. Even though charge sheet has been filed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the suspected payment of ₹ 26,00,444/- by the parent company of Aircel Limited, namely ATVL on 11.04.2006 to a company namely M/s. Advantage Strategic Consulting Pvt Ltd., (ASCPL) under the head of payment of consultancy services. 16. It is revealed further during the course of investigation under PMLA that the profile of ASCPL reveals, inter alia, that it was incorporated on 12.07.2005 in Chennai. At the time of incorporation, 10,000 shares were issued, which were held by Ms. Padma Viswanathan and Sh. Ravi Viswanathan. This company was brought under the control of the individual and two companies namely Ausbridge Holdings and Investments Pvt Ltd., (Ausbridge) and Kriya FMCG Distributors Pvt Ltd., (KFDPL) subsequently. In the year 2009, Sh. CBN Reddy and KFDPL Ltd., were allotted 19% shares and in the year 2011 Ausbridge was allotted 66.67% shares. It is further submitted that application to FIPB was filed on 30.01.2006 by Aircel Limited and the company Ausbridge was incorporated on 07.01.2006. 17. It is revealed further during the course of investigation under PMLA that ASCPL issued 2 lakh equity shares to Ausbridge in 2011 on payment of ₹ 5 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to file further supplementary complaint (s) under PMLA on the basis of the outcome of ongoing investigation in and outside India. 30. By placing reliance on the above averments contained in the complaint, the learned Special Public Prosecutor would contend that after filing of the charge sheet, the investigation is still going on. In the charge sheet, it could be evident that the department has sought the leave of the Court to file Supplementary charge sheet under PMLA on the basis of the outcome of the on going investigation. Pursuant to the filing of such complaint, the department is carrying out investigation and on the strength of the leave and/or permission granted by the Special Court to proceed further with the investigation as per law. 31. The learned Special Public Prosecutor would contend that in the earlier round of litigation before this Court, which involved attachment proceedings under PMLA in relatin to the Aircel Maxis investigation, by order dated 10.06.2015, this Court dismissed WP No. 12464 of 2015 filed by Kal Communication Pvt Ltd., holding that this Court has no jurisdiction to entertian the writ petition. In the above said order, this Court has noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further investigation in the Aircel-Maxis Case about FIPB clearance issue etc., is still in progress. The ED Officer also mentioned that investigation under PMLA in Aircel-Maxis case is in progress. CBI has requested the Income Tax official to pursue the matter with CIT, Chennai for providing the required documents which are sought by CBI in the Aircel-Maxis Case. 33. Similarly, in the minutes of the meeting held on 11.11.2016, reference was made to the fact that investigation into the Aircel-Maxis case is still in progress. 34. The learned Senior counsel for the petitioners raised an objection for production of the copies of the minutes of the meeting by the learned Special Public Prosecutor on the ground that they were produced before this Court at the fag end of the arguments. Further, it was stated that the minutes of the meeting was not signed by a competent officer of the Enforcement Directorate but only by the Assistant Director of Income Tax. Further, an objection was raised that it is not an authenticated copy produced before this Court. 35. The learned Public Prosecutor only submitted that only to show that the investigation is in progress and to disprove the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to continue the investigation and to file a supplementary charge sheet as contemplated under Section 173 (8). Such a course of action adopted by the enforcement directorate cannot be restrained by this Court by entertaining these writ petitions especially when the entire case is monitored by the Supreme Court. 37. In the order dated 16.12.2010 in CPIL vs. Union of India (2011) 1 SCC 560, the Supreme Court directed that periodic progress reports based on investigations conducted by CBI and enforcement directorate has to be produced before it during the next hearing on 10.02.2011. On 10.02.2011 the Supreme Court in CPIL vs. Union of India passed an order holding that no Court shall pass any order which may, in any manner, impede the investigation being carried on either by the CBI or the Directorate of Enforcement. Such an order was reiterated by the Honourable Supreme Court in the subsequent order passed on 11.04.2011 in the case of CPIL vs. Union of India (2012) 3 SCC 117 holding that any prayer for either staying or impeding the trial could only be made to it. Further, in the order dated 24.02.2014 passed by the Honourable Supreme Court in ETHL vs. Registrar General, Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arranted and they need not undergo the ordeal of subjecting themselves with such an investigation. Such a submission cannot be countenanced. Whether a prima facie case has been made out for investigation or whether the investigation pertains to 2G spectrum or not cannot be decided by this Court in these writ petitions, at this stage. As the investigation carried on by the respondents is being monitored by the Honourable Supreme Court and the Honourable Supreme Court is seized of with such investigation, this Court cannot entertain these writ petitions. No doubt, this Court has got power under Article 226 of the Constitution of India to alievate the grievance of the public at large when it is complained that their fundamental rights are infringed. However, as far as this case is concerned, when the jurisdiction of this Court has been ousted by an express order passed by the Honourable Supreme Court, this Court cannot pass any orders in these writ petitions thereby directly or indirectly impeding the investigation carried on by the respondents. 40. The learned Special Public Prosecutor appearing for the respondents brought to the notice of this Court the order dated 17.04.2013 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . While carrying out investigation, it is well open to the respondents to seek for any documents and the reliability or necessity of such documents cannot be questioned by the petitioners in these writ petitions, at this stage. 42. Yet another argument putforward by Mr. Gopal Subramaniam, learned Senior counsel for the petitioners is that there is no predicate offence made out against the petitioners. Even in the original complaint filed before the Special Court, by the Enforcement Directorate, the offences alleged to have been committed by the accused were under Section 120 (b) of IPC and the provisions of the Prevention of Corruption Act. In such view of the matter, the present investigation carried on by the respondents against the petitioners will not come under the purview of 2G spectrum case. In this context, useful reference can be made to the order dated 01.07.2013 passed by the Honourable Supreme Court in WP (C) No. 57 of 2012 in which the order dated 21.12.2011 passed by the Special Judge, CBI, New Delhi has been challenged. In the order dated 01.07.2013, the Honourable Supreme Court clearly held that 2G Spectrum Case is triable by the Special Judge against the persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only one among the various 2G related cases. In such circumstances, the submissions of the learned Special Public Prosecutor that supplementary charge sheet will be filed based on the outcome of the investigation has to be accepted and consequently the submission of the leanred Senior counsel for the petitioners that in the complaint only the alleged offence punishable under Section 120 (b) of IPC and the provisions of the Prevention of Corruption Act alone has been mentioned and therefore this Court has jurisdiction to entertain these writ petitins cannot be countenanced. 44. At this juncture, it is also relevant to look into the definition given to the term investigation under Section 2 (na) of PMLA as the one which includes all the proceedings under this Act conducted by the Director by an authority authorised by the Central Government under this Act for the collection of evidence. It is therefore evident that the investigation carried on by the enforcement directorate is related to 2G Spectrum case and the original complaint has been filed by the investigation agency for a predicate offence. It is also seen from the charge sheet filed by the CBI in RC 22 (A)/2011-DLI (Air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Special Court to the enforcement directorate to carry out further investigation in this case. In any event, whether CBI has found or reported any scheduled offence in the grant of FIPB approval or not cannot be decided by this Court when such an issue is seized of by the Honourable Supreme Court. Therefore, at this stage, this Court cannot deal with the averments contained in the affidavit dated 29.11.2016 filed by the then Finance Minister. 47. In so far as the Petitioners in WP Nos. 35844 and 35845 of 2016 are concerned, it is their contention that the notices dated 16.05.2016 issued to them are unsigned notices and they were sent to various financial institutions asking for details of bank accounts maintained by them and it has nothing to do with the investigation being carried on by the respondents. The details sought for by the respondent is only to fish out evidence and to conduct a rowing enquiry which affects the fundamental rights guaranteed to them besides it affects the privacy of an individual. Further, the notices have been issued by a private party - consultant, which is legally not sustainable. It is further stated that none of the companies, to which the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 without following the procedure established by law. On perusal of the rival contentions urged on behalf of both sides, it is clear that what is challenged in these two writ petitions is only a notice sent by the third respondent on behalf of the first respondent. According to the respondents, the communication dated 16.05.2016 has not been addressed to the petitioners at all or they are not intended to be also. In any event, when a notice has been issued by a statutory authority calling for certain particulars, the relevant authorities are bound to produce the details sought for. More so, such details are sought for during the course of investigation conducted by the respondents under the provisions of PMLA. While so, when the notices have been issued by the respondents as part of their on-going investigation in 2G Spectrum case, as per the order passed by the Honourable Supreme Court, this Court has no jurisdiction to entertain these writ petitions. 50. The investigation presently carried on by the respondents is seized of by the Honourable Supreme Court and the progress of such investigation is being periodically monitored by it. The Special Court constituted to deal with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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