IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.M. SUNDRESH, N. ANAND VENKATESH, JJ.
Nalini Chidambaram, Chennai - Appellant
Versus
The Directorate of Enforcement, Represented by its Director, Government of India, New Delhi & Others - Respondents
W.A. Nos. 1168 & 1169 of 2018 & C.M.P Nos. 9408 to 9410 & 10312 to 10314 of 2018
Decided On : 10-07-2018
Constitution of India, 1950 – Article 19(1)(g) and 246(3) - Indian Penal Code, 1860 - Section 193 and 228 - Code of Criminal Procedure, 1973 - Section 157 , 306 to 308 ,160 and 161 - Prevention of Money-Laundering Act, 2002 - Sections 50(2) and 3 - Indian Evidence Act, 1872 - Sections 126 and 129 - Registration Act, 1908 - Section 6 - Finance Act, 1994 - Section 65 - Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 - Income Tax Act, 1961 - Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 - Section 7 and 139-AA - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 35- Bombay Sales Tax Act, 1959 - Section 38-C - Kerala Sales Tax Act 1963 - Section 26-B - Advocates Act - Section 30 - Agreement - Equity shares - Challenged -Appellant was engaged by one through her counsel to act as a Senior Lawyer on two occasions before Company Law Board and Delhi High Court - A Memorandum of Understanding (MOU) was signed between M/s GNN Pvt. Ltd., a media company owned by Media Pvt. Ltd., owned by Mr. - Relevant Clause 15 is furnished - Company shall issue fresh shares to Investor which is valued at Rs.30 crore - Promoters shall transfer a portion of shares from their 5,74,000 Equity shares for which Investor shall pay an additional Rs.12.5 crores directly to Promotors such that after about to transactions the investor and the promotor shall hold 50% each in total share capital of company - Capital gains tax is any payable on such transfer will be borne by Promotors in favour of Investors shall take place anytime – Held, A legal profession stands apart on its own - In discharge of a professional duty, there is no difference between a man and woman - Summons were issued to appellant in her discharge and capacity as a professional and not otherwise - It is clear from reading of, certainly, fair construction principle as discussed supra would apply - Court is unable to see any demon in summons issued at this stage - There is no need to speculate - Similarly, scope and applicability of Sections 126 to 129 of Indian Evidence Act, 1872, is not required to be gone into at this stage as otherwise Court will be entering into a realm of speculation - Court also find that appellant is not entitled to invoke - Contention of the learned Senior Counsel appearing for appellant that the averments not being controverted - There is a deemed acceptance, in Court considered view cannot be countenanced - When there is no material to substantiate averments, there is no need to deny them - Appellant has not produced sufficient materials, even prima facie so as to enable Court either to hold existence to likelihood of bias or malice either in fact or law - In fine, both appeals stand dismissed.
M.M. Sundresh, J.
1. A Senior Lawyer of repute rendering professional service across the country is the appellant. Challenge is made to the summons issued under Sections 50(2) and 3 of the Prevention of Money-Laundering Act, 2002 seeking umbrage under Section 160 of the Code of Criminal Procedure, 1973, among other grounds. Incidentally she has also sought for other prayers. On the dismissal of the writ petitions, the present writ appeals are before us.
2. Since the core facts required for the disposal of the writ appeals are undisputed, narration at length by the learned single Judge does not require to be reiterated except to the extent required. Thus, the primary facts are taken as such from the recording made in the orders under challenge.
3. Heard Shri K.T.S. Tulsi, learned Senior Counsel for Ms. C.Uma and Mr. N.R.R. Arun Natarajan, learned counsel appearing for the appellant and Shri G. Rajagopal, learned Additional Solicitor General for the respondents.
4. The appellant was engaged by one Ms. Manoranjana Sinh through her counsel to act as a Senior Lawyer on two occasions before the Company Law Board and the Delhi High Court. A Memorandum of Understanding (MOU) was signed between M/s GNN Pvt. Ltd., a media company owned by Ms. Manoranjana Sinh and M/s Bengal Media Pvt. Ltd., owned by Mr. Sudipto Sen on 09.06.2010. The relevant Clause 15 is furnished hereunder.
“15. Bengal media will assist Mrs. Manoranjana in the ongoing litigation with Mr. Matang Sinh by coordinating with her lawyers.”
5. It was followed by another Agreement signed by one Ms. Manoranjana Sinh on behalf of GNN Pvt. Ltd., and Mr. Sudipto Sen on behalf of M/s Bengal Media Pvt. Ltd., in which, clause 5.2 is apposite.
“5.2. The company shall issue fresh shares to the Investor which is valued at Rs.30 crore. The Promoters shall transfer a portion of the shares from their 5,74,000 Equity shares for which the Investor shall pay an additional Rs.12.5 crores directly to the Promotors such that after the about to transactions the investor and the promotor shall hold 50% each in the total share capital of the company. The capital gains tax is any payable on such transfer will be borne by the Promotors in favour of the Investors shall take place anytime after 4.12.2010.”
6. The appellant is stated to have been paid Rs.1 crore by Mr. Sudipto Sen through his company. It was done after deducting TDS. The appellant disclosed the income in her return of income and accordingly paid the tax.
7. Mr. Sudipto Sen failed to honour his commitment to the depositors, a case was registered by the Central Bureau of Investigation. The appellant was asked to produce certain documents. In the supplementary charge sheet filed, the appellant was not even arrayed as a witness. The Investigation Agency also found the factum of payment made to the appellant for the professional service rendered.
8. In the proceedings initiated under the Prevention of Money Laundering Act, 2002, summons were issued from 03.02.2016 onwards by the second respondent to the appellant. The appellant engaged her authorised representative to appear and produce the documents. Having found that there are discrepancies between the statement of Ms. Manoranjana Sinh and the appellant, she was directed to appear in person through the impugned summons. This is sought to be challenged on the premise that the protective discrimination, which is otherwise available to a woman under Section 160 of the Code of Criminal Procedure, 1973, will have to be extended to the appellant. While alleging mala fides, a contention has been raised on the privilege available to a Lawyer qua a professional service to a client.
9. Submissions of the Appellant :
Shri K.T.S. Tulsi, learned Senior Counsel appearing for the appellant made the following submissions.
After the investigation done by the Central Bureau of Investigation (CBI) which found nothing incriminatory against the appellant, the summons issued would amount to malice. When once the
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