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2018 (12) TMI 443

so in view of Section 42 of The Prevention of Money-Laundering Act, 2002 - jurisdiction of High Court - Held that:- Mr. Chaudhri may be right in contending that the notice under Section 8 of the Act has been issued by the Authority in Delhi, so jurisdiction is there for this Court to entertain the writ petition. But merely because a part of cause of action has arisen under the jurisdiction of this Court, whether this Court needs to exercise its jurisdiction is the question need to be answered. This Court is of the view “that it should not”, for more than one reason; that it is not in dispute that the petitioner is based in Mumbai. The provisional attachment order has been passed in Mumbai. - The complaint though, filed before the adjudicating authority in Delhi, it encompasses all the facts that have arisen in Mumbai. The properties are in Mumbai. It is only after filing of the original complaint as contemplated under Section 5(5) of the Act before the adjudicating authority, which is located in Delhi that the impugned notice has been issued from Delhi but the fact remains that nothing has happened in Delhi. Only notice to show cause has been issued. - After the adjudicat .....

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reunder, as the property is situated in Mumbai, the petitioner is also based in Mumbai, and finally it is the Bombay High Court to which an appeal shall lie from the order of the Appellate Authority, instead of two Courts applying its mind to the facts, it shall be appropriate to relegate the petitioner to the Bombay High Court, as being forum conveniens. 42. Appeal to High Court.-Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.-For the purposes of this section, High Court means- (i) The High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and (ii) Where the Central Government is the aggrieved party, the High Court within the jurisdiction of which .....

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on that the notice to show cause under Section 8 of the Act has been issued by the adjudicating authority, based in Delhi. In other words, a part of cause of action has arisen in Delhi, for this Court to entertain the present writ petition, in terms of Para 33 (b) of the Sterling Agro Industries Ltd. (supra). 5. It is his submission that cause of action in PMLA cases, is not related to the place of investigation or place of a property and as such the plea of Ms. Acharya that investigation has been done in Mumbai and properties are in Mumbai and the Bombay High Court shall have the jurisdiction, is totally misconceived. He heavily relied upon the judgment of the Division Bench of this Court in the case of J. Sekar v. Union of India & Ors. and other connected writ petitions (2018) 246 DLT 610 to contend that the Division Bench has, in the said case by relying upon paras 33(b) and (c) of the judgment held that as part of cause of action has arisen in Delhi, this Court will have jurisdiction. Insofar as Section 42 of the Act is concerned, the Division Bench held that on the existence of an alternative efficacious remedy of appeal before the High Court under Section 42, shall be dec .....

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ate or revisional authority is located constitutes the place of forum conveniens as stated in absolute terms by the Full Bench is not correct as it will vary from case to case and depend upon the lis in question. (e) The finding that the court may refuse to exercise jurisdiction under Article 226 if only the jurisdiction is invoked in a malafide manner is too restricted / constricted as the exercise of power under Article 226 being discretionary cannot be limited or restricted to the ground of malafide alone. (f) While entertaining a writ petition, the doctrine of forum conveniens and the nature of cause of action are required to be scrutinized by the High Court depending upon the factual matrix of each case in view of what has been stated in Ambica Industries (supra) and Adani Exports Ltd. (supra). (g) The conclusion of the earlier decision of the Full Bench in New India Assurance Company Limited (supra) that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens is not correct. (h) Any decision of this Court contrary to the conclusions enumerated hereinabove stands overruled. 8. During the course of th .....

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diction of this Court, whether this Court needs to exercise its jurisdiction is the question need to be answered. This Court is of the view that it should not , for more than one reason; that it is not in dispute that the petitioner is based in Mumbai. The provisional attachment order has been passed in Mumbai. The complaint though, filed before the adjudicating authority in Delhi, it encompasses all the facts that have arisen in Mumbai. The properties are in Mumbai. It is only after filing of the original complaint as contemplated under Section 5(5) of the Act before the adjudicating authority, which is located in Delhi that the impugned notice has been issued from Delhi but the fact remains that nothing has happened in Delhi. Only notice to show cause has been issued. After the adjudicating authority decides the issue, there is a forum of appeal available to the petitioner. Even thereafter, the remedy of appeal to the High Court is also available under Section 42 of the Act, which has already been enumerated above. In other words, in the case in hand, if an order is passed by the Appellate Authority it shall be the Bombay High Court, which shall have the jurisdiction for both, i. .....

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o doubt, has serious fiscal/penal consequences in case the explanation offered by the petitioner is not accepted by the Adjudicating Authority. But entertaining a writ petition seeking quashment of the aforesaid notice would amount to exercising discretion in the matter of arrogating jurisdiction only by virtue of the location of the Adjudicating Authority which is in Delhi. The petitioner, otherwise also has various stages and forums available to him for challenging any decision/action of the respondent or the Adjudicating Authority, viz. the Appellate Tribunal and the High Court. Section 42 of the Act clearly indicates that in case the matter travels upto the Appellate Tribunal under Section 26 of the Act, any person aggrieved against the order of the Appellate Tribunal could approach the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain. In case the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents ordinarily resides or carries on business or personally works for .....

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t and which might suit him and thus he would be able to successfully evade the law laid down by the High Court at Bombay. ... It would give rise to the issue of forum shopping. ....For example, an assessee affected by an assessment order in Bombay may invoke the jurisdiction of the Delhi High Court to take advantage of the law laid down by it which may be contrary to the judgments of the High Court of Bombay . 6. Section 35 of the Foreign Exchange Management Act, 1999 ( FEMA for short) enables any person aggrieved by any decision or order of the Appellate Tribunal to file an Appeal to the High Court. The Explanation to the Section is extremely significant inasmuch as it prescribes that High Court means the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain and further clarifies that if the Appeal is filed by the Central Government it is the residence or place of business of the Respondent which is the relevant and determining factor. Any lingering doubt that may remain stands dispelled by Section 35 of FEMA. 7. Therefore, on two counts this Court ought not to exercise territorial jurisdiction - firs .....

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