31 Jan 2023 7:16 AM GMT
The Supreme Court on Tuesday reserved judgment on a writ petition filed by journalist and author Rana Ayyub challenging the order passed by a special court in Ghaziabad taking cognisance of the prosecution complaint filed by the Enforcement Directorate alleging money laundering in the crowdfunding campaigns run by her for charity work.A bench comprising Justices V. Ramasubramanian and...
The Supreme Court on Tuesday reserved judgment on a writ petition filed by journalist and author Rana Ayyub challenging the order passed by a special court in Ghaziabad taking cognisance of the prosecution complaint filed by the Enforcement Directorate alleging money laundering in the crowdfunding campaigns run by her for charity work.
A bench comprising Justices V. Ramasubramanian and JB Pardiwala heard the matter.
Arguments of Ayyub
Appearing on behalf of the petitioner, Advocate Vrinda Grover submitted that the Ghaziabad Court has no jurisdiction to take cognisance of the complaint. The petitioner is a resident of Mumbai and the allegations pertain to fund raising through an online platform called Ketto in Mumbai. The account in which the funds are collected is in Navi Mumbai.
Grover pointed out that the trigger of the case was an FIR registered at Indirapuram Police Station in Ghaziabad by a member of the Hindu IT Cell. The investigation was conducted by the ED Zonal Office in Delhi. Ayyub was never arrested during the investigation and has completely cooperated with the same.
Referring to Section 44 of the Prevention of Money Laundering Act and also the judgment in Vijay Madanlal Choudhary case, Grover argued that the trial in the money laundering case has to be carried out in the special court which has jurisdiction over the area where the offence of money laundering took place.
"The allegations as per the respondent is that the offence of money laundering took place through an online platform registered at Mumbai and through accounts in Mumbai", Grover pointed out. She further said that the complainant in the FIR is not an affected party, as he does not claim to have donated for the campaign.
Reading out the statements made by Hindu IT Cell against Rana Ayyub, Grover argued that the filing of complaint at Ghaziabad is "mala fide and an abuse of process of law". Solicitor General of India Tushar Mehta at this juncture made an intervention to say that the ED has not relied on the statements of Hindu IT Cell and has carried out an independent investigation.
In response, Grover read out certain tweets of Hindu IT Cell members thanking ED for registering the complaint. Another tweet of a member which roughly said 'send Rana Ayyub to Ghaziabad jail, seven days will suffice for us' was also read out.
"My grievance which has brought me before this court is that... the alleged proceeds of crime is attached in Mumbai. Under Section 44 PMLA, and further clarified by Vijay Madanlal Choudhary case, the only court which has jurisdiction is the court at Navi Mumbai. Why should I be taken to Ghaziabad? Can the Enforcement Directorate, armed with such a draconian legislation under which bail is extremely difficulty, choose to file the prosecution complaint in a court which has no jurisdiction, and where I am facing a threat to personal liberty and safety", Grover argued.
Enforcement Directorate's arguments
At the outset, Solicitor-General of India Tushar Mehta, appearing for ED, said that money laundering is not a standalone offence and is linked with the scheduled offence.
"If my learned friend's argument is accepted, if someone does corruption and does money laundering in Singapore, then ED has to file complaint in Singapore?", SG asked while asserting that the ED's prosecution complaint has to be filed at the place where the scheduled offence took place. The FIR for the scheduled offence is registered at Ghaziabad. The top law officer added that several persons from UP have donated to Ayyub's campaign and hence a part of cause of action has arisen in Ghaziabad and UP.
He termed Grover's argument that the complaint has to be filed at the place where the bank account is situated a "fundamental fallacy". The Enforcement Case Information Report (ECIR) necessarily follows the FIR in the scheduled offence. There will be simultaneous trial in both offences.
The SG said that the complainant may be a "loud-mouth" or a "bad person", but pointed out that criminal law can be set into motion by any person. The ED has conducted independent investigation into the matter which has brought into its notice.
Mehta also said that the agency has found that the money received was used for "travel and joy". "People are donating crores of rupees believing it to be a good cause and they are entitled to know how it is utilised...this practise should stop", SG said.
Rejoinder on behalf of Ayyub
In rejoinder, Grover said that if Ayyub has laundered money, she should face the consequences, but the issue here is a pure question of law regarding jurisdiction. She contended that Vijay Madanlal Choudhary judgment says exactly the opposite to what the SG argued.
"The only question is whether the prosecution of scheduled offence will follow the money laundering offence or otherwise?", Justice Ramasubramanian asked.
Grover agreed and said that Vijay Madanlal Choudhary has answered it. Referring to page 171 and para 356 of the judgment, she submitted that the trial in money laundering case has to be at the place where the offence of money laundering took place. The trial of the scheduled offence also has to be conducted at the place where the money laundering has taken place. The offence of money laundering is deemed to have taken place where the proceeds of crime are found. Here, the bank account is in Mumbai.
As the bench said that it was reserving judgment, Solicitor General cited the Constitution Bench judgments in Mirajkar and AR Antulay cases which held that judicial orders cannot be challenged through writ petitions filed under Article 32 of the Constitution. In response, Grover said that she is entitled to invoke Article 32 jurisdiction when the issue of personal liberty is involved.
"Here my personal liberty is sought to be infringed through a procedure which is not in accordance with the PMLA", she submitted.
Ayyub came under the scanner of ED for allegedly ‘cheating’ the public by misappropriating charitable donations worth Rs 2.69 crore and for receiving overseas donations without registration under the Foreign Contribution (Regulation) Act, 2010. The investigation was initiated on the strength of a first information report registered in September 2021 by the Indirapuram Police Station in Ghaziabad under various sections of the Indian Penal Code, 1860, Information Technology Amendment Act, 2008, and Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. What was of interest to the law enforcement agency was a series of three campaigns launched since 2020 by the journalist on an online crowdfunding platform called Ketto to raise funds for slumdwellers and farmers, relief work in Assam, Bihar, and Maharashtra, and for people impacted by the COVID-19 pandemic in India.
In February, in the course of the investigation, bank balances in the accounts of Ayyub amounting to around Rs 1.77 crore, including a fixed deposit of Rs 50 lakh were attached by means of provisional attachment order. In March, the award-winning journalist was stopped by immigration officials at the Mumbai airport from taking a flight to London, on the basis of a ‘Look out Circular’ issued against her by the ED for allegedly failing to comply with their summons. The Delhi High Court, in April, quashed the circular, allowing Ayyub to travel abroad, and in August, restrained the federal agency from proceeding further with the provisional attachment of her properties in connection with the money laundering probe.
Finally, in October, the Enforcement Directorate concluded the investigation. “The investigation has established that Rana Ayyub had launched the fund raising campaigns with the sole intention to cheat the general public and acquired proceeds of crime in form of fixed deposits and balances in bank accounts projecting them as untainted,” the ED claimed in statement on October 13, one day after it filed a charge-sheet against Ayyub before a special PMLA court in Ghaziabad under Section 45 read with Section 44 of the anti-money laundering act. Ayyub, a prominent critic of the current ruling dispensation, claimed that she was being targeted and intimidated for her work and for questioning the ruling regime.
On November 29, the special court took cognizance of the prosecution complaint and summoned Ayyub to appear before the court on January 27. The journalist moved the top court in January praying for the proceedings initiated by the Enforcement Directorate in Ghaziabad to be quashed. The petitioner has, inter alia, cited the lack of jurisdiction of the special court in Ghaziabad since the alleged offence occurred in Mumbai. On January 17, Chief Justice D.Y. Chandrachud said this matter would be listed on January 23, after Grover mentioned it before a division bench headed by the chief justice for an early hearing. However, the hearing was postponed to January 25, when a bench comprising Justices Ramasubramanian and J.B. Pardiwala cancelled the sitting and Grover mentioned it again before the chief justice. The matter was finally taken up last week, but owing to the paucity of time, the hearing could not be concluded. Therefore, as an interim measure, the top court instructed the special PMLA court in Uttar Pradesh to adjourn the proceedings scheduled to be held on Friday to a date after January 31.
Rana Ayyub v. Directorate of Enforcement | Writ Petition (Criminal) No. 12 of 2023
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