Supreme Court Calls Madras High Court's Rehearing Of Previously Allowed Quashing Petition “Absolutely Wrong”

The Supreme Court on Monday (September 30) said that the Madras High Court's decision to rehear a quashing petition despite having previously quashed the case was “absolutely wrong”.

“What is this practice? Now what is to be done? This is something which is completely wrong”, Justice Abhay Oka said.

A bench of Justice Abhay Oka and Justice Augustine George Masih was hearing the plea of retired Director General of Police (DGP) Jaffar Sait against the Madras High Court's decision to rehear his quashing petition in a money laundering case, despite having previously quashed the case. The Madras High Court has reserved its judgment after this rehearing.

The Supreme Court had earlier sought a report from the Madras High Court on this issue.

On Monday, Justice Abhay Oka noted, “Now there is a report. The court officer's statement has been recorded; the personal assistant's statement has been recorded. Both of them say order was dictated in the court allowing the petition and later on oral directions were issued to place it for rehearing.”

Advocate Zoheb Hossain, representing the Enforcement Directorate (ED), referenced page six of the report, stating that both counsels had consented to rehearing the case on a subsequent date.

However, Justice Oka questioned the practice of rehearing cases.

Justice Oka noted that the earlier order quashing the case cannot be restored and inquired about the merits of the case. “The order is not available. Can we tell the judges to sign an order which is not available? What was the ground for quashing the case?”

Senior Advocate Sidharth Luthra, representing Sait, explained that the ground for quashing the case was that predicate offence for all accused had been quashed.

Justice Oka noted, “We have to say what is done is absolutely wrong. Subsequent orders will go. If we have to restore the earlier order then the earlier order is not even typed and signed.”

Hossain submitted that the predicate offence had only been quashed for lack of sanction, arguing that if the predicate offence was dismissed on a technicality and there appeared to be proceeds of crime, the money laundering case could still proceed.

Justice Oka noted that such a scenario would be contrary to the Supreme Court's decision in the Vijay Madanlal Choudhary case. He suggested that the matter be resolved in the Supreme Court on merits. “We are telling you, to avoid any controversy if as of today predicate offence stands quashed then the consequences will follow.”

Justice Oka emphasized that if the matter is resolved in the Supreme Court the parties won't need to return to the HC.

“What we are suggesting is this - if necessary, we will pass appropriate orders we are not hesitating on that. But if it can be resolved here on merits, then the parties need not go back to the High Court”, Justice Oka said.

Hossain sought time to seek instructions regarding whether the predicate offence survives for any other accused. The matter was kept on Friday.

Sait's quashing petition before the HC challenges the ED's Enforcement Case Information Report (ECIR) filed on June 22, 2020, and the ensuing proceedings against him. The Madras High Court had initially quashed the ED's complaint on August 21, 2024, but later decided to rehear the matter, prompting the current SLP before the Supreme Court.

The Supreme Court had on the previous hearing stayed the proceedings before the High Court and directed the Registrar General of the High Court to investigate the case records to confirm whether the petition had indeed been disposed of on August 21, 2024.

The case against Sait involves allegations of illegally acquiring a plot from the Tamil Nadu Housing Board in 2011. A corruption case filed by the Directorate of Vigilance and Anti-Corruption, which was the predicate offence for the money laundering case, was quashed by the Madras High Court in 2019.

Case no. – Diary No. 39548/2024

Case Title – MS Jaffar Sait v. Directorate of Enforcement

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