No Exemption For Woman To Appear Before Enforcement Directorate”, Madras High Court Dismisses Nalini Chidambaram’s Challenge Against Summons Under Money Laundering Act

“Merely because trappings of police power is given, an authority cannot be compared with the policemen”- Madras HC BD stated while dismissing Nalini Chidambaram's appeal

A Division Bench of the Madras High Court has dismissed the challenge made by Senior Advocate Nalini Chidambaram against the summons issued under Section 50 of Prevention of Money Laundering Act (PMLA). The summons required Nalini Chidambaram to appear before the authorized officer of the Enforcement Directorate(ED) in connection with the Sharda Chit Fund Scam.  The probe pertained to the payment of Rs. One Crore made by the company of Sudipta Sen, the main accused in Sharda Scam to Nalini Chidambaram, which was claimed to have been received as advocate fees.

 The main legal contention urged by Senior Advocate K.T.S Tulsi for Nalini Chidambaram was that as per Section 160 of the Code of Criminal Procedure, a woman cannot be compelled to appear before police. The proceedings under PMLA Act are akin to investigation under Cr.P.C and hence the ED authorities are circumscribed by Cr.P.C.  It was further contended that the CBI investigation in Sharda Fund Scam had not revealed anything incriminatory against Nalini Chidambaram. It was pointed out that even though a supplementary charge sheet has been filed, Nalini Chidambaram has not been named in that, even as a witness.

It may be noted that earlier a single judge, Justice S.M Subramaniam, had dismissed the petition stating  “there was no absolute bar in summoning an aged woman before Enforcement Directorate”.  The present bench was considering the intra-court appeal against that judgment.

 Cr.P.C and PMLA Act in different spheres.

The Division Bench of Justice M.M Sundresh and Justice Anand Venkatesh was not impressed by the argument that Section 160 Cr.P.C was applicable to proceedings under PMLA. The Court noted that though Section 65 of the PMLA provided for application of Cr.P.C, it is to enable the PMLA authorities to take recourse to Cr.P.C wherever PMLA was silent regarding procedure for arrest, seizure etc. But that cannot be taken to mean that PMLA authorities have to act only as per Cr.P.C.  The Court also took note of Section 71, which gave PMLA an overriding effect over other statutes.

The Court clarified that authorities under PMLA are different from police.

"Merely because trappings of police power is given, an authority cannot be compared with the policemen under all circumstances and so is his office.”, said the Court.

It also stated that the rationale for exempting appearance of woman before police was not applicable in a proceeding under PMLA.

The object behind Section 160 of the Criminal Procedure Code is not to expose a woman to the environment surrounding police station which will certainly not be available in a proceeding by way of an investigation under Act 15 of 2003. The summons that were issued by the competent authority under the Act was in exercise of powers conferred on the authority under Section 50 of the Act. There is no necessity to meet the requirements of the proviso to Section 160 of the Code of Criminal Procedure since an independent power has been conferred on the authority under Section 50 of the Act. Wherever the Act itself stipulates the specific power, authority and procedure, there is no requirement to read the provisions of Code of Criminal Procedure into it. In fact, the most harmonious manner in which both the enactments can be parallely invoked would be to ensure that the provisions of Code of Criminal Procedure are not read into or invoked wherever the Act itself specifically provides for the same.

 The arguments regarding malice and bias were unsuccessful in moving the Court. The Court noted that the appellant had appeared before the ED through authorized agent earlier. She had not challenged the summons then. Therefore the appeal was dismissed.