Madras High Court Restrains ED From Proceeding Against TN Minister Senthil Balaji

The Madras High Court recently allowed a petition moved by Minister Senthil Balaji and two others and quashed the summons issued by the Enforcement Directorate. Justice T Raja and Justice K Kumaresh Babu made the orders after observing that the proceedings emerging from the FIRs was quashed in one case and stayed in two others. The court observed that when a stay had been granted, it would eclipse the proceedings initiated thereunder pending disposal of the suit. "In our view, the grant of stay of any particular proceedings would amount to eclipsing the proceedings initiated. An order of stay is interim in nature pending the final proceedings." The Additional Solicitor General appearing for the Enforcement Directorate vehemently contended that even though the department would not continue proceedings in case where the criminal proceedings had been quashed, the same analogy could not be applied to the other two cases where the proceedings were only stayed. The court refrained from going into the merits and demerits of the proceedings and instead deemed it fit to discuss the effect of a stay order. The petitioners contended that there was no jurisdictional facts to initiate the proceedings under the Prevention of Money-laundering Act. According to the petitioners, except for the FIRs there was no document to substantiate that there are proceeds of crime as per Section 2(1)(u) of the Prevention of Money-laundering Act and that proceeds had a link with the scheduled offence. Thus, the petitioners contended that there is no scheduled offence as per section 2(y) of the Prevention of Money-laundering Act, 2002 as on this date for the respondent to proceed under the said Act.The respondent, on the other hand contended that though it was true that the proceedings have been stayed, it did not put an end to the proceedings. Till the proceedings were quashed by a competent court or the person discharged or acquitted, the offence continued to live and the respondent could continue proceedings. The court observed that since the proceedings in one of the calendar cases had been quashed in one case and stayed in the other two, there is no jurisdictional fact or cause of action for the respondent/department to initiate any proceedings during the period of order of stay operating against the two FIRs. The court also opined that the respondents should await the order of the proceedings before continuing further under the Prevention of Money Laundering Act. Case Title: B Shanmugam and others v. Karthik Dasari Case No: W.P.Nos.12159, 18209 & 18213 of 2022Citation: 2022 LiveLaw (Mad) 386Click here to read/download the judgment

Madras High Court Restrains ED From Proceeding Against TN Minister Senthil Balaji

Upasana Sajeev

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