Enforcement Directorate

Hot Off The PressNews

Editors Guild of India statement on ED raids at the office of NewsClick.in, and residences of its senior journalists and officials

The Editors Guild of India is deeply concerned about the raids by the Enforcement Directorate (ED), at the office of the independent news website NewsClick.in, the residences of its editor-in-chief and promoter, the editor, as well as some of its senior management officials.

In the recent past the website has been at the frontline of reporting on the farmers agitation, the anti-CAA protests, and has been critical of various government policies and of a few powerful corporates houses.

EGI is concerned that raids by government agencies are not used as coercive measures to suppress free and independent journalism. The Guild demands that care be taken to not undermine the news operations of NewsClick and that it’s journalists and stakeholders are not harassed under the garb of such measures.

Editors Guild of India

[Press Statement dt. 10-02-2021]

Case BriefsHigh Courts

Kerala High Court: V. G. Arun, J., dismissed the instant petition filed by the petitioner, the Additional Private Secretary to the Chief Minister of Kerala, seeking to restrain the Enforcement Directorate (ED) from detaining the petitioner beyond reasonable time and to permit the presence of a legal practitioner during questioning.

The petitioner contended that are such that, repeated summons were issued to him in spite of his ailments and weak physical condition, which speaks volumes about the arbitrariness and mala fides behind the actions of ED. The petitioner apprehends that he will be detained for long hours and made to give statements against his will. It was submitted that having recently recovered from Covid-19 the continuous interrogation for long hours would have an adverse impact on the already weak health condition of the petitioner. The counsel for the petitioner further submitted that the petition is not against the power of ED to issue the summons, but against the injudicious manner in which the power is being exercised.

Additional Solicitor General, S.V. Raju, on behalf of respondent questioned the maintainability of the petition. It was contended that the writ petition is liable to be dismissed as premature since, the mere issuance of summons under Section 50 of the Prevention of Money Laundering Act, 2002 does not give rise to any cause of action. The respondent relied on Commissioner of Customs, Calcutta v. M.M.Exports, (2010) 15 SCC 647, wherein the Supreme Court had cautioned that, as far as possible, High Courts should not interfere at the stage when the Department has issued the summons.

The Court disposed of the petition, reiterating the Supreme Court’s decision in Kirit Shrimankar v. Union of India, 2014 SCC OnLine SC 1614, that no cause of action arises merely for the reason of a person being called upon to state the truth or to make statements and produce documents. The Court further relied on Dukhishyam Benupani, Assistant Director, Enforcement Directorate v. Arun Kumar Bajoria, (1998)1 SCC 52, where the Supreme Court held that it is not for this Court to monitor the investigation and to decide the venue, the timings, the questions and the manner of questioning. [C.M.Raveendran v. Union of India, WP(C) No. 28049 of 2020(E), decided on 17-02-020]

Hot Off The PressNews

As per the media reports, The Special PMLA Court declared Nirav Modi a fugitive economic offender on a plea of the Enforcement Directorate.

Nirav Modi and his uncle Mehul Choksi are the main accused in the PNB Scam.

Background of the scam:

As reported by Hindustan Times, Two PNB employees sent unauthorised letters of undertakings (LoUs), essentially bank guarantees, to foreign branches of Indian lenders, on behalf of firms related to Nirav Modi and the Gitanjali Group. The LoUs basically told these other lenders: Lend money to Nirav Modi firms so that they can pay for their imports. If they don’t pay up, we will make good this payment.

In the PNB fraud case, the bank employees had sent these guarantees in the absence of credit limits and collateral security (in Modi’s case). Secondly, they didn’t make an entry in the bank’s core banking system – the software used to support a bank’s most common transactions, which also acts as a record keeper.

[Source: Media Reports]

Hot Off The PressNews

Supreme Court: The Bench comprising of  R Banumathi, A S Bopanna and Hrishikesh Roy, JJ., granted bail to P. Chidambaram in INX money Laundering Case registered by the Enforcement directorate.

Pointers to be noted:

  • P Chidambaram will not leave the country without prior permission of the court
  • He has been released on a personal bond of Rs 2 lakh with two surety of like amount
  • Delhi High Court’s November 15 verdict dismissing bail plea of P Chidambaram has been set aside.
  • Court has also restrained Chidambaram from giving any press interviews or making statements in the media

Background:

Chidambaram sought bail in a case pertaining to the Foreign Investment Promotion Board (FIPB) clearance given to INX Media to the tune of Rs 305 crore in 2007 by Chidambaram when he was the Finance Minister. He was arrested by the ED on October 16 and is currently in judicial custody. Denying bail to Chidambaram in the case, the High Court had stated that prima facie allegations against him are “serious in nature” and he played an “active and key role” in the offence.

Senior advocates Kapil Sibal and Abhishek Manu Singhvi, appearing on behalf of Chidambaram today, submitted before the top court that their client has been in jail for over 90 days and has cleared the triple test criterion to avail the bail. Chidambaram had sought bail on the health grounds. The Congress leader also asserted that no part of the triple test, which includes flight risk, influencing witnesses and tampering with evidence, has been made out against him. He stated that there was no allegation that he was a flight risk following the issuance of a Look out Circular (LOC).

On October 22, 2019, the bench had granted bail to former Finance Minister and senior Congress leader P Chidambaram in connection with the INX Media case registered by the Central Bureau of Investigation (CBI).

The Court noticed that Chidambaram was neither a “flight risk” nor there was possibility of his abscondence and said that Chidambaram

“being the Member of Parliament and a Senior Member of the Bar has strong roots in society and his passport having been surrendered and “look out notice” issued against him, there is no likelihood of his fleeing away from the country or his abscondence from the trial.”

[Detailed Judgment to be Updated] Stay tuned in!

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS & PBPT Act: Manmohan Singh, J. set aside Enforcement Directorate’s order imposing a penalty on a company for contravention of provisions of Foreign Exchange Management Act, 1999.

Appellant company which was engaged in the manufacturing of graphite electrodes, received an order from a company Padmaja Impex Ltd. for supply of carbon bricks On appellant’s insistence for full payment before delivery of carbon bricks, Padmaja got an overseas buyer to open a letter of credit (LC) in the appellant’s name, whereafter appellant delivered the bricks to Padmaja. The LC was encashed later on by the appellant. ED initiated investigation against certain exporters including Padmaja, and notice was issued to appellant alleging contravention of Section 3(a) for receiving USD 256,604 through encashing LC, from the overseas buyer; and subsequent to a hearing penalty was imposed on it. Thus, the present appeal.

Appellant submitted that Regulation 12 of the Foreign Exchange Management (Export of Goods & Services) Regulation, 2000 allows a person other than exporter to receive a foreign exchange, subject to fulfillment of certain conditions by the Authorized Dealer of the constituent. It was submitted that ED’s sole reason for dismissing Regulation 12 was the presumption that Padmaja had not furnished any proof of filing declaration (SDF). However, mere failure to submit proof of filing of SDF by Padmaja could not lead to a conclusion that no such SDF was filed by Padmaja at the time of export of goods. No enquiry was conducted to ascertain factual position with respect to filing of SDF.

The Tribunal noted that it was a matter of fact that LC opened by the overseas buyer was negotiated by the Authorised Dealer against a shipping bill. Therefore, the presumption must be that all conditions prescribed under Regulation 12 had duly complied including the condition with respect to SDF. In absence of any evidence, it could not be assumed that Authorised Dealer had accepted shipping documents without SDF. It was observed that the onus was on the ED to prove that Padmaja was allowed export without filing of SDF, and also that the documents were negotiated by the Authorised Dealer without SDF.

In view of the above, the appeal was allowed.[Graphite India Ltd. v. Joint Director, Directorate of Enforcement, Chennai, FPA-FE-12-13/CHN/2016, decided on 26-03-2019]