No Prima Facie Case For Money Laundering Against Nalini Chidambaram In Saradha Chit Fund Scam: PMLA Court

A Prevention of Money Laundering Act (PMLA) Court at Kolkata has dismissed the Enforcement Directorate (ED's) complaint against Senior Advocate Nalini Chidambaram in relation to the Saradha Chit Fund Fund scam.

Presiding judge Prashanta Mukhopadhyay said that there was no prime facie offence of money laundering and "no case was made out for the offence under Section 3 punishable under Section 4 of the PMLA, 2002 against Chidambaram.

Before the Court, the ED had contended that the senior advocate had received a total amount of Rs. 1.349 Cr between 11.06.2010 to 17.06.2012 from Sudipta Sen through his companies and no bill or invoice was raised by Mrs. Chidambaram against the receipt of payment.

Further, it is submitted that during the investigation, several summons/directives were issued to her requiring her to furnish necessary facts and information. On 03.02.2016, a directive was issued, in response to which Mr. N.R.R. Arun Natarajan, Advocate and her authorized representative stated that no formal agreement was ever made between Nalini Chidambaram and Sudipta Sen or his entities; no service was rendered by Nalini Chidambaram to Sudipta Sen and his entities.

It was stated that her interaction with Sudipta Sen was only through Mrs. Manoranjana Sinh and it was related to the TV business of Manoranjana. Mr. Natarajan further submitted that Sudipta Sen paid Rs. 1 Cr. through 10 cheques of Rs. 10 lakh each after deducting TDS of Rs. 10 lakh.

She stated that she was acting as Counsel for Mrs. Manoranjana Sinh and as per the MOU and agreement entered between Mrs. Manoranjana Sinh and M/s Bengal Media Pvt. Ltd. and the fees of the petitioner were paid by M/s Saradha Reality India Ltd. on behalf of Mrs. Manoranjana Sinh.

The prosecution submitted that the accused could not produce any supporting documents that she received payments from Saradha Realty India Ltd. in lieu of the agreement entered between Mrs Manoranjana Sinh and M/s Bengal Media Pvt. Ltd. Furthermore, she did not issue any acknowledgement of payment to either Manoranjana or Saradha specifying that the payment is due/has been received on account of Manoranjana Sinh. 

Further, it was submitted that Naresh Balodia, Advocate of Saradha Group in his statement dated 31.08.2022 U/S. 50, stated that in various meeting held on SEBI-related matters, Nalini Chidambaram used to participate along with him, Sudipta Sen and other staff of Saradha, and the expenses for her stay were borne by the Sarada group.

It is further contended that during the investigation it was learnt that between 11.06.2010 to 17.06.2012, a total of Rs. 1,32,75,000/- was paid by Saradha Group to Nalini Chidambaram and there is no agreement entered between Saradha / Sudipta Sen and Nalini Chidambaram which would oblige him to pay that amount.

Upon hearing the submissions of the ED, the court delved into whether it could take cognizance of the alleged offence at hand. 

While laying down the various scenarios of money laundering, the judge observed that in the present case Chidambaram, a senior advocate and tax consultant provided legal consultation to her client, Sudipta Sen or his Companies and Mrs. Manoranjana Sinh and received fees to the tune of Rs. 1.349 Cr. from time to time during 11.06.2010 to 17.06.2012.

Court said that whether the issuance of no tax invoice or bill is a violation of any law relating to service tax is a matter to be investigated by other authorities or agencies, not the ED.

Finally, it was held that lawyers' fees and expenses can't be said to be proceeds of crime.

When a lawyer is invited to any place as a part of professional relationship, the clients pay the fees of air ticket, hotel charges, etc., which is also not unusual to sense anything foul. I hold that no prima facie case for the offence under Section 3 punishable under Section 4 of the PML Act, 2002 is made out against accused, Mrs. Nalini Chidambaram, the court concluded.

Click here to read order