Saradha Chit Fund Case: SC Extends Interim Order Restraining ED From Summoning Nalini Chidambaram

In a reprieve to Nalini Chidambaram, senior advocate and wife of former finance minister P. Chidambaram, the Supreme Court on Friday extended its interim order restraining the Enforcement Directorate (ED) from summoning her in connection with the multi-crore Saradha Chit Fund scam.

A bench of Justices U.U. Lalit and Ashok Bhushan was hearing her challenge to the Madras High Court decision refusing to quash the summons issued by the ED.

The summons issued under Section 50 of the Prevention of Money Laundering Act (PMLA) required her to appear before the authorised  officer of the ED in connection with the Saradha Chit Fund scam. The probe pertained to the payment of Rs 1 crore made by the company of Sudipta Sen, the main accused in Saradha scam, to Nalini Chidambaram, which was claimed to have been received as advocate fees.

At the previous hearing on August 3, a bench of Justice AK Sikri and Justice Bhushan had issued notice to the ED, directing that no coercive action be initiated against Nalini Chidambaram in the meantime.

This interim relief was extended on Friday when the ED sought more time to file its response. The matter is next scheduled to be heard three weeks hence.

On July 10, a division bench of the Madras High Court had dismissed the challenge against the summons. The primary legal contention advanced was that Section 160 of the Code of Criminal Procedure provides against compelling a woman to appear before the police.

It was argued that the proceedings under the PMLA were akin to an investigation under the CrPC and hence, the ED authorities could not summon a woman. It was further suggested that the CBI investigation in the scam had not revealed anything incriminatory against Nalini Chidambaram. It was pointed out that even though a supplementary charge sheet has been filed, she has not been named in that, even as a witness.

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