Madras High Court dismisses cases filed by DMK MP Jagathrakshakan against ED action
The Hindu
Madras HC dismisses writ petition challenging ED proceedings under FEMA. Judge rejects argument that parallel proceedings can't be initiated on same facts. Adjudicating Authority to decide if petitioners violated FEMA provisions.
The Madras High Court has dismissed a writ petition filed by DMK MP S. Jagathrakshakan challenging the proceedings initiated against him and his family members, by the Enforcement Directorate (ED) under the Foreign Exchange Management Act (FEMA) of 1999.
Justice N. Seshasayee also rejected the connected writ petitions filed by the MP’s daughter J. Sri Nisha, his son J. Sundeep Aanand and Accord Distilleries and Breweries Private Limited, in which his son is a director, challenging the same proceedings initiated against them too.
Additional Solicitor General AR.L. Sundaresan, assisted by ED Special Public Prosecutor Rajnish Pathiyil, brought it to the notice of the court that the charge against the MP was that he had subscribed to 70 lakh shares of Singapore-based Silver Park International Private Limited. Since the shares had been purchased without Reserve Bank of India (RBI) approval, on payment of 70 lakh Singapore dollars, equivalent to ₹32.69 crore, he was found to have contravened Sections 3, 4, 8 and 15 of FEMA as well as the statutory regulations framed under the Act.
The ED also found that on September 15, 2018, the MP had transferred 45 lakh shares to his wife J. Anusuya, 22.5 lakh shares to his daughter and the rest of the 2.5 lakh shares to his son. They were also proceeded against for improper acquisition of foreign securities, being Indian citizens.
An authorised officer under FEMA seized certain properties, equivalent to the foreign securities, of the writ petitioners and submitted the order of interim seizure before the competent authority under the Act for approval, as required under Section 37A of FEMA.
On February 3, 2021, the competent authority held that the interim seizure order could not be confirmed since there was no proof of the petitioners having paid any consideration to acquire the shares. The ED took the competent authority’s order on appeal before the appellate tribunal, and it is pending adjudication.
In the meantime, the authorised officer moved the adjudicating authority’ (Special Director of ED) under Section 16 of FEMA and a showcause notice was issued to all the writ petitioners on December 22, 2021, followed by a corrigendum on March 13, 2023.
“We are judges and therefore, cannot act like Mughals of a bygone era ... the writ courts in the guise of doing justice cannot transcend the barriers of law,” the High Court of Karnataka observed while setting aside an order of a single judge, who in 2016 had extended the lease of a public premises allotted to a physically challenged person to 20 years contrary to 12-year period stipulated in the law.
The High Court of Karnataka on Monday declined to interfere, at present, in the investigation against a Bharatiya Janata Party worker, who is among the accused persons facing charges of circulating obscene clips, related to “morphed” images and videos clips related to Prajwal Revanna, former Hassan MP, in public domain through pen drives and other modes.