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TMI Blog2024 (11) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... undantly 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 file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Counsel (through VC), Mr. Anupam Sharma, Mr. Vivek Gurani, Mr. Kartik Sabharwal, Mr Vivek Gaurav, Ms. Abhipriya Rai, Mr. Sanwir Singh, Advs. JUDGMENT DINESH KUMAR SHARMA,J : S. No Particulars Page Nos. A. Brief facts 2-8 B. Submissions of Petitioner 8-12 C. Submissions of Respondent 12-16 D. Finding and Analysis 16-25 BRIEF FACTS 1. The present petition has been filed under Section 482 Cr.P.C. seeking quashing of the Miscellaneous Application No. 249/2019 dated 13.12.2019 filed under Section 4, 10 and 12 of the Fugitive Economic Offenders Act before the Court of Ld. Special Judge, Rouse Avenue Court Complex, Delhi, the summoning order dated 24.12.2019 and all proceedings emanating therefrom. 2. The petitioner submitted that the material on record does not meet the essential ingredients for declaring the petitioner herein as a Fugitive Economic Offender, and thus the proceedings are not maintainable. The petitioner has argued that the Fugitive Economic Offenders Act, 2018, can apply only in cases where a Non-Bailable Warrant is issued against the accused person, and where the value involved in such Scheduled Offence is one hundred crores rupees or more. The petitioner contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Furthermore, the petitioner asserts that there is not even an iota of evidence in the entire impugned Miscellaneous Application indicating that the petitioner owns any of the assets referred to therein, nor is there any document showing the ownership of any of the assets attributed to the petitioner. 6. The petitioner has alleged that there is blatant arbitrariness and a lack of application of mind behind instituting the present impugned application. The petitioner has asserted that the agency has failed to consider that the alleged proceeds of crime (i.e., the alleged foreign assets of the petitioner) mentioned in the impugned Miscellaneous Application existed prior to the commencement of the Black Money Act. It has been submitted that the proceeds of crime must be generated from the commission of the Scheduled Offence and cannot predate it in any event. The petitioner claims to be facing consistent harassment from the agency, as the properties of the petitioner were seized under the PMLA via the First Provisional Attachment Order No. 3/2017 dated 01.06.2017. While adjudicating on this order, the Adjudicating Authority categorically held that there are no cross-border implication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the behest of the Income Tax Department on 27.06.2016 and by the Directorate of Enforcement on 14.02.2017 against the petitioner. Despite this, the petitioner allegedly managed to escape the country and is currently residing in the United Kingdom to avoid actions initiated by various investigating authorities. The respondent also submitted that the petitioner is residing in the UK illegally, as his passport was impounded by the competent authorities in India under the Passports Act, 1967, on 21.03.2018. 10. The respondent contended that the petitioner has shown utter contempt for the law and has not cooperated with the investigation. It is further submitted that the petitioner has been declared a proclaimed person and a Red Notice has also reportedly been issued against the petitioner by Interpol, and FIR No. 173 of 2016 has been registered under Sections 3/5 of the Official Secrets Act and Sections 409, 379, and 120B of the Indian Penal Code against the petitioner. In light of this background, the respondent submitted that the petitioner is not entitled to the discretionary remedy under Section 482 Cr. P.C. Reliance has been placed upon Wave Hospitality Private Limited vs. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015, falls under the schedule of the Fugitive Economic Offenders Act, 2018. 14. The respondent has further submitted that the Directorate of Enforcement is the nodal agency for the enforcement of the Fugitive Economic Offenders Act. The Income Tax Department requested the answering respondent to have the petitioner declared a Fugitive Economic Offender. The respondent submitted that under Section 11 of the Fugitive Economic Offenders Act, if the individual to whom notice has been issued under Sub-Section 1 of Section 10 appears in person at the place and time specified in the notice, the Court may terminate the proceedings under this Act. The respondent has further denied all the averments made by the petitioner. 15. This Court, by order dated February 24, 2020, directed the petitioner to file a response before the Learned Trial Court within a period of seven days. However, it was directed that no coercive action be taken until the next date of hearing. It was expressly made clear that the pendency of the present proceedings would not be an embargo on the proceedings being conducted by the Learned Trial Court. SUBMISSIONS OF THE PETITONER 16. Sh. Dayan Krishnan, learned senior cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutes a jurisdictional fact essential for the Court to assume jurisdiction in the matter. Reliance was placed on Arun Kumar and Others vs. Union of India and Others (2007) 1 SCC 732 and Carona Ltd. vs. Parvathy Swaminathan Sons (2007) 8 SCC 559. 19. In Arun Kumar (Supra), the Apex Court held that tax laws could not be applied retrospectively unless expressly stated emphasizing that ambiguities in tax statutes should favor the taxpayer. The Apex Court underlined that legislative intent must be clear when imposing new tax liabilities to avoid unexpected burdens on taxpayers. In Parvathy Swaminathan Sons (Supra), the Court addressed the principle of lifting the corporate veil, ruling that it should only occur in cases of fraud or misuse of corporate structure. In case of absence of evidence of improper conduct, the corporate entity's structure would be respected, reinforcing the boundaries of corporate identity protection. 20. Learned senior counsel also submitted that the Directorate of Enforcement s satisfaction was entirely and exclusively based on the letter dated 09.07.2019. Learned senior counsel argued that independent reasons to believe must be established based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Economic Offenders Act is summary in nature, without requiring both parties to lead evidence, and therefore, the Court must exercise caution before passing a summoning order. SUBMISSIONS OF THE RESPODNENT 24. Sh. Zoheb Hossain, learned special counsel for the ED submits that at the outset, the petition filed is defective as the petitioner has not disclosed his present address of London in the memo of parties or in the affidavit or in the vakalatnama. It has further been submitted that even in the affidavit filed with the support of the present petition is contrary to the Delhi High Court Rules, 2018 in Volume-4 Chapter-12 titled as Oaths and Affirmations and Affidavits as there is no identification of the deposing the petitioner. It has been submitted that in terms of Rule 11, the deponent has not been identified. It has further been submitted that in term of Rule 9 of Volume 4 Chapter-12, Delhi High Court Rules, 2018, the petitioner has not provided the place of his residence. Learned counsel further submitted that therefore the petitioner has approached this Court with unclean hands. It has further been submitted that LOC dated 27.06.2016 has already been issued by the Immigrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sain, learned special counsel submitted that the object and purpose of the Black Money Act is to deal with the problem of undisclosed foreign income and assets in possession of tax on the said income and assets. The attention has also been invited to Section 2 (c) of the Black Money Act which provides that where any asset has been acquired or made prior to commencement of this Act and no declaration in respect of such asset is made under Chapter-6 (section 59 to Section 72) such Acts shall be deemed to have been acquired on the made in the year in which the notice under Section 10 of the Black Money Act which is issued by the Assessing Officer. 29. In rejoinder, learned senior counsel argued that the judgments cited by the respondent are irrelevant and inapplicable to the present case. It was further submitted that this Court s decision in the instant petition would primarily concern two issues: (1) Whether the respondent independently formed reasons to believe, under Section 4 of the Fugitive Economic Offenders Act, 2018, based on material in their possession, and that the petitioner met the requirements under Section 2 (1) (f) read with Section 2 (1) (m) of the Act; and (2) wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as under; (f) fugitive economic offender means any individual against whom a warrant for arrest in relation to a Scheduled Offence has been issued by any Court in India, who (i) has left India so as to avoid criminal prosecution; or (ii) being abroad, refuses to return to India to face criminal prosecution 34. Section 2 (1) (m) defined the Scheduled Offence which reads as under; (m) Scheduled Offence means an offence specified in the Schedule, if the total value involved in such offence or offences is one hundred crore rupees or more; 35. It is pertinent to mention here that Entry 30 of the Schedule provides Section 15 of Black Money Act as Scheduled Offence . 36. Chapter -2 of Fugitive Economic Offender Act, 2018 deals with the declaration of the fugitive economic offenders and confiscation of Properties. Section 4 reads as under; 4. Application for declaration of fugitive economic offender and procedure therefore (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offender back to India; (v) a list of properties or value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought; (vi) a list of properties or benami property owned by the individual believed to be a fugitive economic offender in India or abroad for which confiscation is sought; (vii) a copy of a confiscation order issued by the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988, if any; (viii) a list of persons who may have an interest in any of the properties listed under clauses (v) and (vi). (2) The index and material prepared under sub-rule (1) shall be signed on each page and forwarded to the Special Court in a sealed envelope, indicating a reference number and date of despatch. (3) The Director or the authorised officer, as the case may be, shall maintain registers and other records such as acknowledgement slip register and dak register and shall ensure that necessary entries are made in the register immediately as soon as a copy of the application along with the materials are forwarded to the Special Court. 38. Section-4 sub-Section (2) provides that the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided in the Prosecution Complaint dated 22.12.2018 filed by the Income Tax Department. The contents of the same may be end as a part and parcel of the instant Application and the .. e. That the said Accused has left the country under suspicious circumstances and evading the process of law in India by staying outside the jurisdiction of Indian Court so as not to face criminal prosecution. A Look Out Circular was issued at the instance of the Directorate of Enforcement on 14.02.2017 against the said Accused. Further, a Red Corner Notice (RGN) dated 16.10.2017 had been issued against the said Accused in another case FIR No. 173/2016 being investigated by Crime Branch, New Delhi and he has been declared a Proclaimed Person. A copy of the Order dated 31.07.2018 of the Hon'ble High Court of Delhi in Criminal Revision Petition 223/2018 is annexed as Annexure A-7. Also, the Passport of the said Accused was impounded by the Regional Passport Office, vide its order dated 21.03.2018. The said Order is annexed as Annexure A-8. The Accused however evaded the process of law and despite the instant developments being well in his knowledge, has chosen to deliberately not return to the country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he legal framework and principles guiding the judge's discretion, the procedural aspects involved in issuing summons, and the relevant precedents that outline the limits and boundaries of such jurisdiction. 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. 44. 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. 45. 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 Cou ..... 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