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IN THE HIGH COURT OF JUDICATURE AT MADRAS
T. RAJA, K. KUMARESH BABU, JJ.
B. Shanmugam & Others - Appellant
Versus
Karthik Dasari, Deputy Director, Directorate of Enforcement Ministry of Finance through its Deputy Director, Chennai - Respondent
W.P. Nos. 12159, 18209 & 18213 of 2022
Decided On : 01-09-2022
Jurisdictional Fact - Quashing of Proceedings - Stay of Proceedings - Prevention of Money-laundering Act
Fact of the Case:
The petitioners sought quashing of proceedings initiated under the Prevention of Money-laundering Act based on summonses issued to them. The issues raised were common in all the writ petitions and were heard together. The proceedings in C.C.No.25 of 2021 were quashed, and the proceedings in C.C.No.19 of 2020 and C.C.No.24 of 2021 were stayed by the court. The respondent Department initiated proceedings based on three First Information Reports, which culminated in the proceedings in C.C.No.24 of 2021, C.C.No.19 of 2020, and C.C.No.25 of 2021. The petitioners argued that there were no jurisdictional facts to initiate the proceedings under the Prevention of Money-laundering Act.
Finding of the Court:
The court found that the existence of jurisdictional fact is a condition precedent for the exercise of power by a Court of limited jurisdiction. The court held that the grant of stay of any particular proceedings would amount to eclipsing the proceedings initiated. The court concluded that the impugned proceedings/summons did not have any legal sanctity and that the respondent Department should await the result of such proceedings before continuing any further under the Prevention of Money-laundering Act.
Issues: The main issues were the existence of jurisdictional facts to initiate the proceedings under the Prevention of Money-laundering Act and the effect of the stay orders on the proceedings initiated by the respondent Department.
Ratio Decidendi: The court held that the existence of jurisdictional fact is a condition precedent for the exercise of power by a Court of limited jurisdiction. The court also concluded that the grant of stay of any particular proceedings would amount to eclipsing the proceedings initiated. The court refrained the respondent from proceeding any further pursuant to the impugned proceedings until the disposal of the Criminal Revision Case No.224 of 2021, Criminal Original Petition No.15122 of 2021, and the SLP (Crl) Diary No.9957 of 2022.
Final Decision: The writ petitions were allowed, and the respondent was refrained from proceeding any further pursuant to the impugned proceedings until the disposal of the Criminal Revision Case No.224 of 2021, Criminal Original Petition No.15122 of 2021, and the SLP (Crl) Diary No.9957 of 2022. The court closed W.M.P.Nos.11607, 13488, 17546, 17547, 17552, 17553 of 2022 without any order as to costs.
JUDGMENT
(Prayer: W.P.No.12159 of 2022 is filed under Article 226 of The Constitution of India, praying for issuance of a Writ of Certiorari, to call for the entire records in connection with the ECIR/MDSZO/21/2021 issued by the respondent and quash the same as illegal, unconstitutional, non est in the eye of law.
W.P.No.18209 of 2022 is filed under Article 226 of The Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, to call for the entire records in connection with the summon No.PMLA/ SUMMON/CEZO2/2022/125 issued by the respondent dated 29.04.2022 in F.No.ECIR/MDSZO/21/2021 and quash the same as illegal, unconstitutional, non est in the eye of law and consequently declare the investigation in ECIR/MDSZO/21/2021 as illegal and unconstitutional.
W.P.No.18213 of 2022 is filed under Article 226 of The Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, calling for the entire records in connection with the summon No.PMLA/ SUMMON/CEZO2/2022/126 issued by the respondent dated 29.04.2022 in F.No.ECIR/MDSZO/21/2021 and quash the same as illegal, unconstitutional, non est in the eye of law and consequently declare the investigation in ECIR/MDSZO/21/2021 as illegal and unconstitutional.)
Common Order
T. Raja, J. & K. Kumaresh Babu, J.
1.(i) Mr.B.Shanmugam, the petitioner in Writ Petition No.12159 of 2022 has approached this Court under Article 226 of the Constitution of India seeking for issuance of a Writ of Certiorari, to call for the entire records in connection with the ECIR/MDSZO/21/2021 issued by the respondent and quash the same as illegal, unconstitutional, non est in the eye of law.
(ii) Mr.R.V.Ashok Kumar, the petitioner in Writ Petition No.18209 of 2022 has approached this Court under Article 226 of the Constitution of India seeking for issuance of a Writ of Certiorarified Mandamus, calling for the entire records in connection with the summon No.PMLA/ SUMMON/CEZO2/2022/125 issued by the respondent dated 29.04.2022 in F.No.ECIR/MDSZO/21/2021 and quash the same as illegal, unconstitutional, non est in the eye of law and consequently declare the investigation in ECIR/MDSZO/21/2021 as illegal and unconstitutional.
(iii) Mr.V.Senthil Balaji, the petitioner in Writ Petition No.18213 of 2022 has approached this Court under Article 226 of the Constitution of India seeking for issuance of a Writ of Certiorarified Mandamus, calling for the entire records in connection with the summon No.PMLA/ SUMMON/CEZO2/2022/126 issued by the respondent dated 29.04.2022 in F.No.ECIR/MDSZO/21/2021 and quash the same as illegal, unconstitutional, non est in the eye of law and consequently declare the investigation in ECIR/MDSZO/21/2021 as illegal and unconstitutional. Since the issues raised are common in all the writ petitions, they were heard together and are disposed of by this common order.
2. Mr.Sriram Panchu, learned Senior Counsel appearing for the petitioner in Writ Petition No.12159 of 2022 pleaded that Mr.B.Shanmugam has been in the field of Desktop Publishing (DTP from 1991 in the name and style of “Soft Point Inc” and providing services of manpower towards the recruitment in private, Government and non-Governmental organizations for the jobless youths, on goodwill and on minimum consultation charges. In the year 2014, when the Department of Transport of the State of Tamil Nadu announced the recruitment process, the petitioner informed one Rajkumar and other people about the vacancies existed then and the requisite qualification to participate in the selection process. Based on the said information, Mr.Rajkumar introduced Mr.Arulmani, the de-facto complainant in FIR No.344 of 2018. Again Mr.Arulmani introduced about 13 people for the valid services to be provided by the petitioner, for which the petitioner collected consultation charges from the said Arulmani, the defacto complainant. When the candidates who had participated in the selection process were unable to get the j
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