Kerala High Court Seeks Centre's Response On Santiago Martin's Appeal Against ED Attachments

'Lottery king' Santiago Martin has moved the Kerala High Court with an appeal challenging the Single Judge's dismissal of his plea against ED's attachment orders freezing his and his company's movable assets under the Prevention of Money Laundering Act, 2002 (PMLA).

When the matter was taken up on Thursday, the Division Bench comprising Chief Justice A.J. Desai and Justice V.G. Arun directed the Central Government to file its reply to the appeal.

Distributor of Sikkim Lotteries and its Managing Director Martin had approached the Court earlier this month challenging the proceedings initiated against them under PMLA. The petitioners contested ED's provisional attachment orders on their properties under the PMLA.

Martin and the company had been accused of being involved in money laundering by being connected to proceeds of crime estimated at Rs. 910.29 crores. Initially, they were facing accusations in a criminal case investigated by the CBI. Subsequently, the ED registered a case under the PMLA.

Last week, the Single Judge Bench of Justice Bechu Kurian Thomas dismissed Martin's plea, holding that PMLA provides a comprehensive three-tier remedy for such grievances and that Martin ought to have exhausted the alternative remedies rather than bypassing them unless they were unsuitable for the situation.

The Single Judge had observed that Article 226 ought to be resorted to only in exceptional cases and that when statutory remedies are available, they should not be bypassed unless entirely ill-suited to the situation, and the plea was dismissed on the ground of maintainability. 

The appellants pointed out that the Single Judge dismissed the petition on the ground that there were alternative remedies available to them, rather than directly addressing the core issues raised by the appellants. The appellants contended that this approach was flawed, as the central concerns revolved around the respondents' actions being arbitrary, lacking valid reasons to believe, and exceeding their jurisdiction under the PMLA.

They argued that the Single Judge's reliance on Section 25 of the Partnership Act was incorrect and irrelevant, as this section was not part of the original reasons to believe presented by the respondents in their orders. Moreover, the appellants highlighted that Section 25 had not been pleaded by the respondents in their counter affidavit or raised at any point during the proceedings.

"In the facts and circumstances of the case Appellants have no equally efficacious alternative remedy. In any event in cases where the actions/orders are ex-facie without Jurisdiction, and there is material to infer that the actions/orders are malafide in law the availability of alternative remedy would not bar the Writ Jurisdiction. The other way of examining the matter is if the requirements of recording reasons to believe (under Section 5 (1) and 8 (1) of the PMLA) are in the nature of safeguards and if a citizen is deprived of such safeguards the Writ would be maintainable," the appeal further states. 

On these grounds, the appellant prayed that the order of the Single Judge be set aside and all further proceedings before the Adjudicating Authority be stayed. 

The appeal has been moved through Advocates Kumar A. and G. Mini. 

Case Title: Santiago Martin & Anr. v. Union of India & Ors. 

Case Number: WA 1450/2023