"Nothing But A Phishing Investigation": SNC Lavalin Engineering India Moves Kerala High Court Against ED Summons

The summons purportedly relate to contracts executed between 1995 and 1998, which were the basis of a CBI Investigation between 2005-2009.

The petition came up before a vacation bench of Justice K Haripal today. The matter was adjourned after the Bench directed the Enforcement Directorate to respond to the writ petition with a counter affidavit.

In its petition, the company charges the ED with issuing the summons under the Prevention of Money Laundering Act, 2002 (PMLA), mischievously, arbitrarily, and in colourable exercise of power and seeks a quash of the same and a prohibition against any action pursuant to these, among other prayers.

The company, Lavalin Engineering, states in its petition that it is a subsidiary of SNC Lavalin Inc., Canada (SLI) . The allegations investigated by the CBI were against its parent company and related to a period prior to the commencement of the Prevention of Money Laundering Act, the petition says.

Accordingly, it is stated,

"The Petitioner Company has no role whatsoever to play with the contracts and/or the transactions between 1995 and 1998, which were directly handled by SLI from Canada. The Petitioner Company was not subjected to investigation by DRI, and is not an accused in the charge-sheet fled by CBl in 2009"

Lavalin Engineering narrates that the summons was addressed to 'M/s SNC Lavalin, India' and sent to Lavalin Engineering's branch office in Gurgaon. The Company recounts that it responded informing that no such entity operated from that office. Lavalin Engineering was a separate entity with a registered office in Mumbai and a branch office in Gurgaon, it was additionally said in its response.

Following this, in April, Lavalin Engineering's Finance Director was summoned in connection with certain documents relating to the CBI investigation, without specifications about the offences investigated, the petition lays out.

"The summons issued are bald and vague. The summons merely state "certain investigations under PMLA" without disclosing the name or the nature of the case or the transaction in respect of which, the summons have been issued. The summons are mala fide and peverse."

The petition seeks the quash of summons since,

• -Lavalin Engineering had no connection to the CBI investigation
• -The offences investigated pertained to activities prior to the commencement of the PMLA and continuing the ED investigation would violate Article 20 of the Constitution
• -The summonses were vague

Lavalin Engineering's petition reads,

"the said action of the 2 Respondent, in issuing the summons dated 08.04.2021, merely because the letter was written by the Petitioner in response to the first Summons dated 25.02.2021 being sent to its address under the name of a non-existing entity, clearly shows that the investigation is a phishing investigation and is being conducted on conjectures and surmises, without any tangible information or any reason to believe that the Petitioner needs to be investigated under PMLA."

SNC-Lavalin Case

The instances in the case relate to a period between 1995 and 1997 when Pinarayi Vijayan was electricity minister in the then LDF government in Kerala and pertain to contracts between the Kerala State Electricity Board (KSEB) and Canadian firm SNC-Lavalin for renovation of three hydel power projects in Kerala.

The Supreme Court is presently seized of a plea against a Kerala High Court verdict upholding a special court's decision to allow the discharge petition of sitting Kerala Chief Minister Pinarayi Vijayan, one of the accused in the SNC-Lavalin case.

The case in the High Court is expected to be taken up in three weeks, after the respondents file a counter affidavit.

CASE NAME: SNC Lavalin Engineering India Private Limited v. Union of India and Another

COUNSEL: Advocates Leejoy Mathew V, Sabu S.Kallaramoola along with Jitendra Motwani. for the petitioner