Court Has Every Right To Ask Questions, Re-Hear Matter: Madras High Court Reserves Order On Retd DGP's Plea For Quashing PMLA Proceedings

The bench of Justice SM Subramaniam and Justice V Sivagnanam reserved orders after “re-hearing” the case. Interestingly on August 21, the bench, in open court had said that it would quash the proceedings against Sait since the proceedings under the Predicate offence had already been quashed.

However, on August 23, the court questioned the ED on why appeals were not being moved against the quashing of predicate offences. The court remarked that the PMLA proceedings could not be allowed to disappear and went on to recall its earlier order and decided to re-hear the matter. Following this, the case was taken up on Tuesday.

When the matter was taken up, Senior Advocate T Mohan, appearing for Sait raised his preliminary objections against the court's decision to recall the order in the absence of any extraordinary circumstances. He argued that the court had not stated the reasons for deciding to recall the order on August 23 and also suggested that the matter be heard by a different bench. Mohan also submitted that nothing survived in the matter as the ED had already conceded. To this, however, the court objected and pointed out that the ED had not submitted that nothing survives.

“He (ED Counsel) never said nothing survives. He conceded. But the court has a duty. We were surprised to see he conceded. We realized a few things before passing the order and decided to re-hear. The court has every right to ask questions and re-hear,” the court said.

The court also informed Mohan that the order made on August 21 was passed without any hearing and the court decided to quash the PMLA proceeding only upon being informed that the predicate offence had been quashed. The court added that later, upon noting that ECIR need not be quashed in every case where predicate offence is quashed, the court decided to rehear the case. The court then asked Mohan to argue on the merits of the case.

Mohan, however, argued that the court of law called for certainty. He submitted that when the ED had itself said that the predicate offence had been quashed, the PMLA proceedings also would not survive in light of the Supreme Court's decision in Vijay Madanlal Choudhary case. Pointing to Nambi Narayan's case, Mohan argued that the Supreme Court had stressed the importance of reputation and if the case is re-heard, it would affect Sait's reputation which is part of his fundamental right.

“Once the court quashes the case but then decides to re-hear it, what will the public think? They will think that there is some thing which is why the court is re-hearing the case. That will affect my reputation,” he said.

Mohan also argued that the entire ECIR itself was registered based on an anonymous complaint and that the Supreme Court itself had deprecated such practices. He thus urged the court to quash the PMLA proceedings.

Refuting these allegations, Special Public Prosecutor for ED, N Ramesh submitted that ECIR was not based on anonymous complaints but was based on the FIR registered by the DVAC. Ramesh also backed the court's remarks and submitted that the merits of the matter were never argued before the court.

Ramesh also submitted that the predicate offence was quashed on a technical ground for not obtaining prior sanction from the Government and thus the same would not result in automatically quashing the PMLA proceedings. He further submitted that the predicate offence is still pending as the chargesheet filed against another accused had not been quashed by the court.

After hearing the submission, the court reserved its order.

Case Title: M.S Jaffer Sait v The Directorate of Enforcement

Case No: Crl OP 17762 of 2024