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R. Ravi Versus The Deputy Director Union of India, Director of Enforcement Government of India, The Chairperson Adjudicating Authority under The Prevention of Money Laundering Act

2016 (7) TMI 474 - MADRAS HIGH COURT

Whether the services of the Show Cause Notices u/s. 8[1] of Prevention of Money Laundering Act, 2002 (PMLA) on the minor sons of the petitioner, were proper or not? - Held that:- A careful perusal and scrutiny of PMLA, Rules and Regulations, framed thereunder, do not prohibit the application of the Code of Civil Procedure to the proceedings except certain exceptions. As per the own admission of the 1st respondent complainant, the defendants 2 to 5 in the Original Complaint No.552/2016, are minor .....

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s unable to arrive at any definite conclusion as to whether notices addressed to the minor defendants were received by whom. It is also not clear from the counter affidavit as well as the additional counter affidavit sworn to on behalf of the 1st respondent. - Be that as it may, the four sons of the petitioner did not join with the petitioner challenging the legality of the procedure adopted by the 1st respondent as to their array as parties in the complaint and to the services of notices. T .....

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it petition is taken up for final disposal. 2 The petitioner in the affidavit filed in support of this writ petition, avers as follows : - [a] The 1st respondent had registered ECIR No.CEZO/3/2013 [APS] under the Prevention of Money Laundering Act, 2002 [Central Act 15 of 2013 in short PMLA ] against the petitioner and his four minor children, namely, Harshavardhan, aged about 13 years, Dharanidharan, aged about 17 years, Kushal, aged about 11 years and Harish, aged about 7 years, for the allege .....

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he said crime on 30.03.2013, one Venkatesan and Johnson had surrendered and they have alleged to have given confession statements based on which, FIR was altered. The police effected seizure of ₹ 74,47,700/- at about 11.30 a.m. On 30.03.2013 from the house of one Prabhakaran under the cover of Mahazar. In pursuant to the Alteration Report, sections 212 and 213 IPC were added. Even as per the alleged confession statements, the role of the petitioner have not been stated and so also in the S .....

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asis whatsoever, had registered ECIR against the petitioner and his four minor children stated above, under the provisions of PMLA. Though it has been alleged that the petitioner is a notorious criminal and a habitual offender and through criminal activities, amazed wealth and a reference has also been made to 21 cases registered against him, in most of the cases, after full-fledged trial, had ended in acquittal and no further challenge has been made against the orders of acquittal passed by the .....

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nally attached the properties standing in the names of the petitioner and his four minor children and according to the petitioner, there is no nexus between 21 cases and 8 properties sought to be attached and the criminal cases were between the years 1992 and 1997 and 2002 and the properties in question were acquired between 2005 and 2011 and there were no cases pending against the petitioner. [d] The petitioner is an Income Tax Assessee right from the year 1998 and the properties mentioned in I .....

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titioner, initially started his career as a Cable TV Operator and thereafter, migrated to Real Estate and Construction business and carrying on business under the name and style Ravi Builders . The petitioner's another wife, namely, Tmt.Meena, is an independent Income Tax Assessee and also the Proprietrix of M/s.Meena Enterprises and the properties indicated in Items No.2, 3 and 4 of the complaint were purchased from and out of the funds of Tmt.Meena for the benefit of the minor children, na .....

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petitioner, on receipt of the same, had engaged his counsel, who appeared before the 2nd respondent on 22.04.2016 and filed a Memo stating that section 8[1] Notice has not been served on the petitioner and a submission was also made that the other defendants are minor children and as such, the complaint is defective. However, the 2nd respondent, overlooking the said submission, served the statutory notice on his counsel with a further direction, calling upon the defendants therein to file reply .....

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law, no further proceedings could take place and therefore, prays for quashment of the entire records relating to the Original Complaint No.552/2016 in the Provisional Attachment Order No.3/2016 in ECIR No.EZO/3/2013 [APS] dated 17.02.2016. 3 Mr.K.Sridhar, learned counsel for the petitioner has drawn the attention of this Court to section 8[1] of PMLA and would vehemently contend that as per section 8[1], notice is to be served in time of not less than 30 days on such person, calling upon him t .....

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and only when his counsel entered appearance, he was directed to take notice and to file the reply statements in the said proceedings by 06.06.2016, which is unknown to law. 3A It is the further submission of the learned counsel for the petitioner, while drawing the attention of this Court to the Original complaint No.552/2016 in Provisional Attachment Order No.3/2016 in ECIR CEZO/3/2013 [APS] dated 17.02.2016, that the complainant is the Deputy Director attached to Directorate of Enforcement, .....

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d be served on the next friend and natural guardian and the said procedure has not been followed and as such proceedings on the defendants 2 to 5, are per se illegal. Learned counsel for the petitioner also made a legal plea that when a statute prescribes a thing to be done in a particular way and manner, it should be done only in that manner and admittedly, per se violating the mandate caste upon section 8[1] of PMLA, the respondents are proceeding further and therefore, prays for quashment of .....

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etitioner herein to the family members of the deceased Kathiravan on 23.03.2013 by one of his wives, Tmt.Banumathi, to screen/conceal the evidence of the involvement of the petitioner in the murder. The family members of the deceased Kathiravan were also threatened with dire consequences. The petitioner was also arrested and the jurisdictional police, after completion of investigation, has also filed the final report before the jurisdictional Magistrate Court, on 10.01.2014, charging the petitio .....

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by the said authority vide order dated 28.10.2014 in OC.No.345/2014. Learned Standing counsel for the respondents would further contend that the petitioner had purchased several immovable properties in his name and in the names of his dependent family members and also constructed few luxury apartments and bungalows with swimming pool worth several crores and on perusal of the Income Tax Returns submitted by the petitioner, he has declared a very meager income and the above said purchase of the .....

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ing the writ petition, had taken note of the submission of the learned counsel for the petitioner as to the non-service of the notice u/s.8[1] of PMLA and directed the matter to be called on 24.06.2016 for production of acknowledgments and on that day, the learned counsel for the respondents prayed for further time for production of the same and also to file an additional counter affidavit and accordingly, the matter was directed to be called on 27.06.2016 and an additional counter affidavit on .....

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ted 14.03.2016 and the same were dispatched by the postal authorities vide receipts dated 14.03.2016 and it was delivered on them on 22.03.2016 vide Delivery Report dated 22.03.2016 and the copies of the Postal Delivery Receipts and Reports were also furnished in the typed set of documents. Since the learned counsel made the complaint as to the non-service of the Show Cause Notices, once again the Show Cause Notices to the petitioner and to the minor sons were sent by Speed Post on 26.04.2016 an .....

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etition with exemplary cost. 6 This Court paid its best attention to the rival submissions and also perused the materials placed before it in the form of typed set of documents. 7 It is relevant to extract section 8[1] of PMLA:- 8.Adjudication:- [1]On receipt of a complaint under sub-section [5] of section 5, or applications made under sub-section [4] of section 17 or under sub-section [10] of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offenc .....

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d not be declared to be the properties involved in money-laundering and confiscated by the Central Government. Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person ; Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. 8 In section 8[1] of PMLA, it has been s .....

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tended by the legislature with respect to the Tenancy Act, keeping in mind the purpose for which the statute was enacted. The provisions of the Act, thus, have to be construed to achieve the purpose of its enactment. The Court has to adopt a constructive approach not contrary to attempted objective of the enactment. The Court must examine and give meaning to the said words, in view of the statute of which it is a part considering the context and the subject of the said statute.. 9 Since PMLA or .....

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u/s.8[1] of PMLA were dispatched to the petitioner and his minor sons on 18.02.2016. However, this Court has pointed out that the averments to that effect in paragraphs 10, 12 and 13 may not be correct and thereafter, realising the said mistake, the respondents has filed the additional counter affidavit dated 23.06.2016, stating that section 8[1] Notices were sent on 18.02.2016 and were delivered on 22.03.2016 and as per the directions of the Adjudicating Authority, once again the Show Cause No .....

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016 to the minor sons of the petitioner and a per the Detailed Track Events, the said Notices were delivered on 27.04.2016 and it was a due and proper compliance. 11 The present writ petition is filed by the petitioner alone and not by his four minor sons represented by the next friend and natural guardian. A perusal of the additional counter affidavit coupled with the typed set of documents filed on behalf the respondents would disclose that section 8[1] notices were dispatched to the petitione .....

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e that the petitioner was served with the Show Cause Notices u/s.8[1] of PMLA. 12 Incidentally, the question arises for consideration is as to whether the services of the Show Cause Notices u/s.8[1] of PMLA on the minor sons of the petitioner, were proper or not? 13 It is not in serious dispute that the four sons of the petitioner, namely, Harshavardhan, Dharanidharan, Kushal and Harish are minor children and the Cause Title of the Original complaint No.552/2016 dated 24.02.2016 filed by the 1st .....

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11.Power regarding Summons, production of documents and evidence etc.,:- [1] The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 [5 of 1908] while trying a suit in respect of the following matters, namely- [a] discovery and inspection ; [b] enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company and examining him on oath ; [c] .....

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y proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code [45 of 1860]. 15 In exercise of powers u/s.6[15] of PMLA, the Adjudicating Authority [Procedure] Regulations, 2013, came to be framed. Chapter IV of Regulation No.13 speaks about the issuance of summons and notices and it is relevant to extract the same:- 13. Issue of summons and notices:- [1] Every summon or notice shall be issued in Form 3 or Fo .....

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he Civil Procedure Code, 1908 [5 of 1908] for the purpose of service of summon or notice, as the case may be, Provided further that there shall be no requirement of an order of the Adjudicating Authority as provided under rule 20 of the Order V of Schedule I of the Civil Procedure Code, 1908 [5 of 1908] for effecting substituted service. [3] Notwithstanding anything in sub-regulation [2], a summon or notice may be communicated through electronic mode as provided in section 13 of the Information .....

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f Civil Procedure, 1908 is having application as to the services of summons and notices except Rule 9-A[1] and Rule 20 CPC. Even as per the complaint of the 1st respondent, the four children of the petitioner are minors and if at all the notices to be served, it can be served only on the next friend and natural guardian. In the considered opinion of the Court, in the Cause Title of the complaint also, the array of parties insofar as the minor children of the petitioner, viz., the defendants 2 to .....

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ence and understanding, no act which is prejudicial to his interests may bind him. In the judgment reported in AIR 1990 Kerala 92 [DB] [M.Mathai Vs. The General Manager, KSRTC], it is held that Order XXXII CPC reflects the principles of natural justice to the equity and good conscience, in as much they allow the litigation to be prosecuted or defended on behalf of the persons under a disability. 18 In Rup Chand Vs. Dasoda reported in 1908 Indian Law Reporter 3 Allahabad 55, it is observed that t .....

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roceeding without the next friend is only an irregularity and as per the decision of this Court in [Thinamappa Vs. Hanusva] reported in AIR 1959 Madras 157 , it can be waived by the conduct of the defendant and since it is only an irregularity, normally time is granted to enable the minor/plaintiff to be represented by the next friend. 20 It is useful to refer to Appendix A Pleadings, as title of suits and it says that in description of properties in particular cases, in case of minor A.B., a mi .....

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