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2013 Supreme(Del) 1496
High Court of Delhi
N.V. RAMANA & MANMOHAN, JJ.
Sayed Mohd. Masood
Versus
Union of India & Another
W.P.(Crl.) Nos. 1546 of 2013
Decided On : 11-11-2013
For the Petitioner:V.P. Singh, S.S. Gandhi, Senior Advocates with N.S. Vasisth, Vishal Singh, Arpan Sharma, Advocates.
For the Respondents:Rajeeve Mehra, ASG with Neeraj Chaudhari, Aditya Malhotra for UOI, Advocates.
The main legal point established in the judgment is the application of legal principles of cause of action, forum conveniens, and the nexus of facts required to establish territorial jurisdiction under Article 226 of the Constitution in relation to the PMLA.
Headnote:
PMLA - Territorial Jurisdiction - Sections 2(u), 3, 4, 5, 8, 24 & 45 of the PMLA - The judgment discusses the territorial jurisdiction of the High Courts under Article 226 of the Constitution in relation to the Prevention of Money Laundering Act, 2002 (PMLA). It highlights the legal principles of cause of action, forum conveniens, and the nexus of facts required to establish territorial jurisdiction. The court concludes that the material cause of action had arisen in Mumbai, and therefore, the Bombay High Court is better equipped to deal with the case.
Fact of the Case:
The petitioner filed a writ petition seeking to quash certain provisions of the PMLA and the proceedings initiated against the petitioner under the PMLA. The respondent raised a preliminary objection regarding the jurisdiction of the court to entertain the petition, arguing that the cause of action had arisen in Mumbai.
Finding of the Court:
The court found that the material cause of action had arisen in Mumbai, and therefore, the Bombay High Court is better equipped to deal with the case. It refused to entertain the petition due to lack of territorial jurisdiction.
Issues: The main issue was whether the High Court had territorial jurisdiction to entertain the petition in relation to the PMLA and the proceedings initiated against the petitioner.
Ratio Decidendi: The court applied the legal principles of cause of action, forum conveniens, and the nexus of facts required to establish territorial jurisdiction. It concluded that the material cause of action had arisen in Mumbai, and therefore, the Bombay High Court is better equipped to deal with the case.
Final Decision: The court dismissed the petition due to lack of territorial jurisdiction, with liberty to the petitioner to file proceedings in an appropriate court having territorial jurisdiction.
Manmohan, J.
Crl.M.A. No.14336/2013 (exemption) in W.P.(CRL.) 1546/2013 Allowed, subject to just exceptions.
W.P.(CRL.) 1546/2013 & Crl.M.A. No.14335/2013
1. Present writ petition has been filed by the petitioner seeking the following reliefs:-
"(i) Issue a writ of certiorari and/or any other writ, order or direction of similar nature declaring and quashing the provisions of Section 2(u), 3, 4, 5, 8, 24 & 45 of the PMLA as being ultra vires the Constitution.
(ii) Issue a writ of certiorari and/or any other writ, order or direction quashing the entire proceedings, prosecutions and adjudications under ECIR/65/MZO/2009 initiated against the Petitioner under PMLA Act and further quash all actions and prosecution initiated against the Petitioner emanating from dishonour of cheque cases;
(iii) Pass any other or further order which this Hon'ble Court may deem fit and proper in the interest of justice." (emphasis supplied)
2. At the outset, respondent No.1-UOI had raised a preliminary objection with respect to the jurisdiction of this Court to entertain the present petition on the ground that no cause of action had accrued within the territorial jurisdiction of this Court.
3. For this reason, we have confined ourselves to only those facts which are relevant for deciding the question of territorial jurisdiction, eschewing other facts and details.
4. The relevant facts as can be culled out from the present petition and the documents annexed are that petitioner was the Chairman and Director of M/s. City Limouzines (India) Ltd. and also of at least ten other City Group of companies. In 2002, M/s. City Limouzines (India) Ltd. launched an investment scheme by the name of 'Go-Vehicle on rental basis and earning by sitting at home' whereby investments were invited from general public assuring high returns. Similar schemes were also floated by the other companies belonging to the City Group.
5. An Enforcement Case Information Report (for short 'ECIR') No.65/MZO/2009 dated 30th October, 2009 was registered by the Enforcement Directorate, Mumbai Zonal Office, based on preliminary investigation carried out in three FIRs being, FIR No.201/2009 dated 27th September, 2009 by Cuffe Parade Police Station, Mumbai, FIR No.347/2009 dated 26th September, 2009 by Amboli Police Station, Mumbai and FIR No.401/2009 dated 08th October, 2009 by Vakola Police Station, Mumbai. All these FIRs had been registered under Sections 420 and 120B of Indian Penal Code, 1860 (for short 'IPC') against M/s. City Limouzines (India) Ltd. and its Directors including the petitioner for cheating investors who had subscribed to various schemes floated by it.
6. On 11th February, 2013, the prosecution filed a complaint, being Special Case No.01 of 2013 under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'PMLA, 2002') before the Court of Principal Judge, City Civil and Sessions Court for Greater Bombay at Mumbai, Designated Court for the PMLA, 2002 (hereinafter referred to as 'Special Court, Mumbai'). The prosecution in the above-mentioned complaint had amongst others alleged that the companies floated by the petitioner had collected monies from approximately 25,000 investors and had cheated them to the tune of Rs.500 crores and had further illegally transferred monies abroad.
7. Mr. V.P. Singh, learned senior counsel for the petitioner submitted that this Court had jurisdiction to entertain the present petition for the reason that substantial cause of action had arisen in Delhi. He pointed out that vide summons dated 14th December, 2012, the petitioner was asked to appear in person in the office of Directorate of Enforcement, Delhi Zonal Office, 10-A, Jam Nagar House, Akbar Road, New Delhi. He further drew attention of this Court to the fact that even the arrest order had been issued from the same Delhi office pursuant to which the petitioner was actually arrested in Delhi.
8. Mr. Singh also submitted
