District Collectors summoned under S. 50 PMLA

Supreme Court: In a criminal special leave to appeal by the Directorate of Enforcement (‘ED’) against Madras High Court’s common order and judgment granting interim stay on the operation of the summons issued by the ED to the District Collectors of Vellore, Trichy, Karur, Thanjavur and Ariyalur Districts, the Division Bench of Bela M. Trivedi and Pankaj Mithal, JJ. gave relief to the ED and stayed the operation of the impugned order of the High Court. The District Collectors were directed to appear and respond to the summons on the next date indicated by the ED.

The ED issued summons to the District Collectors in exercise of the powers under Section 50(2) of the PMLA, requiring their appearance to give evidence in connection with the investigation/proceedings under the PMLA.

Writ Petitions were filed before the High Court by the State of Tamil Nadu against the ED under Article 226 of the Constitution of India, seeking relief, which would indirectly stall or delay the inquiry/investigation being made by the ED based on the four FIRs registered for the various offences, some of which are scheduled offences under the Prevention of Money Laundering Act, 2002 (‘PMLA’).

The Court perused the Section 50 of the PMLA and said that the officers mentioned thereof, have the power to summon any person whose attendance is considered necessary, either to give evidence or produce any record during the course of investigation or proceeding under the PMLA.

For the matter at hand, the Court said that since ED was conducting the inquiry/ investigation under the PMLA, in connection with the four FIRs for various offences under Sections 120(B), 421, 409, 109 of the Penal Code, 1860 (‘IPC’) and Sections 13(1)(c), 13(l)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 read with Section 109 of the IPC, etc. and some of these offence being scheduled offences under PMLA, the same would be the investigation/proceeding under the PMLA, and the District Collectors or the persons to whom the summons are issued under Section 50(2) of the PMLA were obliged to respect and respond to the said summons.

Further, the Court said that the writ petitions filed before the High Court at the instance of the State Government against the summons issued to the District Collectors were very strange, unusual and prima facie appeared to be misconceived. The Court also stayed the impugned order and Judgment of the High Court for being under misconception of law. The Court directed the District Collectors to appear and respond to the summons by the ED on the next date, that may be indicated by the ED.

[Directorate of Enforcement (ED) v. State of Tamil Nadu, 2024 SCC OnLine SC 211, Order Dated: 27-02-2024]

Advocates who appeared in this case:

For the petitioner: ASG Suryaprakash V Raju, AOR Mukesh Kumar Maroria, Advocate Samrat Goswami, Advocate Annam Venkatesh, Advocate Zoheb Hussain

For the respondents: Senior Advocate Kapil Sibal, Senior Advocate Mukul Rohtagi, Senior Advocate Ranjith Kumar, AOR D.kumanan, Advocate Deepa. S., Advocate Sheikh F. Kalia, Advocate Veshal Tyagi, Senior Advocate N R Elango, Senior AAG Amit Anand Tiwari, AOR Sabarish Subramanian, Advocate C Kranthi Kumar, Advocate Vishnu Unnikrishnan, Advocate Danish Saifi, Advocate Naman Dwivedi, Advocate Aman Prasad

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