Money Trail In Gold Smuggling Case: Kerala HC Reserves Order On Maintainability Of Plea Filed By CM's PS CM Raveendran Against ED Summons

A Single Bench of Justice VG Arun said that he will consider the arguments set forth by both the parties and pass an order accordingly.

During the course of hearing, the Judge had remarked that he may be "stepping beyond" his jurisdiction in assuming that Raveendran will be detained for an unreasonable amount of time by the agency.

This was after the State counsel, Senior Advocate SV Raju pointed out that there was no material to indicate that the State will harass the Petitioner.

Background

In his plea, Raveendran claimed that the agency had failed to 'judiciously exercise' its power under Section 50 of the Prevention of Money Laundering Act (PMLA) inasmuch it failed to consider his medical condition and continued to issue him summons, one after the other.

"Therefore, interference of this court is necessary in the facts and circumstances of the case, in as much as there is breach of the protection of law guaranteed under Article 14 of the Constitution," he said.

The agency had challenged the maintainability of the proceedings, stating that only summons has been issued in the case and the petition is filed at a highly premature stage. SV Raju referred to various precedents on this point and argued that a High Court should refrain from interfering with the course of investigation.

Issue of Maintainability

The state counsel referred to the Supreme Court's verdict in Union of India & Anr. v. Kunisetty Satyanarayana, to contend that invocation of Court's writ jurisdiction at this stage is premature.

In this case, the Top Court had held,

"The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ lies when some right of any party is infringed. A mere show-cause notice or charge-sheet does not infringe the right of any one."

Referring to Dukhishyam Benupani, Asstt. v. Arun Kumar Bajoria, the Senior Advocate stressed that "Such kind of supervision on the enquiry or investigation under a statute is uncalled for. We have no doubt that such type of interference would impede the even course of enquiry or investigation into the serious allegations now pending…It is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offences."

He further argued that the agency is empowered under Section 50 of the PMLA to issue summons and mere issue of summons does not make a person an accused. Raju quoted from the decision in Virbhadra Singh & Anr v. Enforcement Directorate & Anr., "The powers conferred on the enforcement officers for purposes of complete and effective investigation include the power to summon and examine "any person". The law declares that every such person who is summoned is bound to state the truth. At the time of such investigative process, the person summoned is not an accused. Mere registration of ECIR does not make a person an accused."

"He cannot come to court and say that summons can't be issued or I can't be called for questioning," Raju added.

Lastly, he submitted that no right of the Petitioner had been infringed to enable him to move an Article 226 petition. Relying on Poolpandi, Etc. v. Superintendent, Central Excise, the Senior Advocate submitted,

"We do not find any force in the arguments of Mr. Salve and Mr. Lalit that if a person is called away from his own house and questioned in the atmosphere of the customs office without the assistance of his lawyer or his friends his constitutional right under Article 21 is violated. The argument proceeds thus: if the person who is used to certain comforts and convenience is asked to come by himself to the Department for answering question it amounts to mental torture. We are unable to agree. It is true that large majority of persons connected with illegal trade and evasion of taxes and duties are in a position to afford luxuries on lavish scale of which an honest ordinary citizen of this country cannot dream of and they are surrounded by persons similarly involved either directly or indirectly in such pursuits. But that cannot be a ground for holding that he has a constitutional right to claim similar luxuries and company of his choice."

Raveendran was issued summons by the agency thrice however, he did not appear before it citing his ill health. The present petition was filed after the agency issued a fresh summons with a direction to appear on December 17.

Petitioner's arguments

Responding to this preliminary issue, Advocate Lakshmi Sankar appearing for the Petitioner submitted that the State counsel had gone out of context in citing the above judgments. He stated that the petition does not question the power to issue summons but is aggrieved by non-judicious exercise of such power.

"Going by Section 50(2)of PMLA, there cannot be any doubt that the Additional Director, etc. have the power to summon a person. I have not challenged the power to summon. My contention is that power has to be judiciously exercised. If it's not judiciously exercised, then the only remedy I have is to approach this Court under Article 226," Sankar said.

At this juncture, the Court inquired as to why the Petitioner thinks that the power was not judiciously exercised.

He submitted that the Petitioner was infected with Covid-19 and had sought time from the agency given his ill-health and the mandatory quarantine period. However, the agency went to issue summons.

He submitted that Raveendran has not denied appearance. "My apprehension is he being a sick person, he should be given some reasonable time to appear," Sankar argued.

He added, "Section 50(3) says that person summoned is bound to appear. Now the question is when a person appears in response to a summons, how long can he be detained?"

He pointed out that the Act is silent on this aspect and the Government, which was supposed to frame Rules under PMLA, has not done so.

Sankar submitted that Raveendran does not have any hesitation in appearing before the agency and he will appear. "But they (ED) should assure that he shall not be detained beyond a reasonable time. That is the grey area where Government may not abide by the rules…He is not an accused but witness...it should have all trappings of civil proceedings," Sankar added.

The Court however noted that the Petitioner was accommodated thrice, despite issue of summons and there was nothing on record to draw an adverse conclusion against the authority. It said, "merely for the fact that repeated summons was issued, you say the power was not judiciously exercised? Every time you asked for time, on three occasions, you were given time. We have no reason to assume otherwise."

Adding to this, SV Raju said he, "where is the question of detention? We have only summoned. Investigation can't be controlled. It depends on how he (Raveendran) answers. There is no material. On what basis should the court pass an order?"

Responding to this, Sankar said,

"Look at the dates when I was asked to appear. I was in the hospital when summons was issued. The Act does not authorize the agency to interrogate a person as if it is custodial interrogation."

Sankar added, "The act is silent as to how long they may detain me. Where will I go? They were supposed to frame the Rules but that has not been done. In such a case, Jurisdiction of this court should not be questioned."

In his plea, Raveendran has also sought permission to have a legal practitioner of his choice present during his appearance before the agency.

The plea also stated that since he is not an accused in any case under investigation by the ED, he has a right to know and the investigation officer has a duty to disclose, the case under investigation in which his presence is required.