M/S Trinity Reinsurance Brokers Ltd vs Enforcement Directorate on 11 July, 2024

[Cites 31, Cited by 0]

Jammu & Kashmir High Court - Srinagar Bench

M/S Trinity Reinsurance Brokers Ltd vs Enforcement Directorate on 11 July, 2024

1. In this petition, filed under Article 226 of the Constitution of India. The petitioners essentially pray for a writ of mandamus to direct the respondents to place on record ECIR No. SRZO /03/23, registered against the petitioners and for a writ of certiorari, to quash the said ECIR and all proceedings initiated consequent thereupon.

Brief Facts of the Case: -

2. The petitioner No. 1 is an insurance broker company. The petitioners 2 to 4 are its directors. The petitioner company, as is claimed, is an Insurance Regulatory Development Authority of India (IRDA) approved insurance broker, having its registered office at A-23, Mandakini, Enclave, Alaknanda, New Delhi, and Corporate Office at "Trinity Towers" Noida, (UP). It is submitted that on 15th June, 2017, Government of Jammu and Kashmir, invited tenders from IRDAI, approved insurance brokers for designing and implementation of Group Mediclaim insurance policy for all the State Government employees, including the employees of PSUs/Autonomous Bodies/Local Bodies/Universities etc., and their dependent family members for a period of three years, extendable as per performance.

3. The petitioner company, after having qualified technical bid, and having been shortlisted, was appointed as an insurance broker to design and implement the Group Mediclaim insurance policy for the State Government employees, etc. An agreement between the Government of Jammu and Kashmir and the petitioner company was executed on 27th November 2017. Subsequently, in the year 2018, a tripartite agreement dated 15 th October, 2018, was executed between the petitioner company, the Government of WP(C) No. 2682/2023 Page No. 2 of 20 Jammu and Kashmir and Reliance General Insurance Company Limited ("RGICL" for short), in order to provide the insurance services.

4. It is claimed by the petitioner company that for providing services in terms of the contract agreement dated 27th November, 2017, the petitioner company did not charge any remuneration from the Government of Jammu and Kashmir. The petitioner company, as it was stipulated in the contract agreement, received remuneration from RGICL only for a brief period of three months on account of brokerage charges. The tripartite agreement dated 15th October, 2018, as also the agreement between the Government of Jammu and Kashmir and the petitioner company dated 27th November, 2017, were foreclosed by the Department of Finance, Government of Jammu and Kashmir, vide notice No. FD-VII-8(210)DONGE/2016, dated 30th November, 2018.

5. Since, the foreclosure of the entire insurance contract was based on some doubts expressed by several cross-sections of society as well as by the employees about the fairness and transparency in selecting and appointing the insurer, as such, the matter was referred to the Anti- Corruption Bureau (ACB), to investigate the allegations of malpractice, if any, in awarding the insurance policy contract to RGICL. It is submitted that the Anti-Corruption Bureau (ACB), after making a thorough investigation, found no irregularity in the process. The preliminary verification undertaken by the Anti-Corruption Bureau, (ACB), was thus closed, and a report dated 8th February, 2023, in this regard, was submitted to the Government.

6. The petitioner company claims that it was fully absolved of any malpractice, as alleged by some employees of the Government. The WP(C) No. 2682/2023 Page No. 3 of 20 grievance of the petitioners is that though the Anti-Corruption Bureau, (ACB), did not find any irregularity in the process of awarding contract of insurance to RGICL, yet a false and frivolous FIR bearing number RC1232022A0004 was registered on 19th April, 2022, by the Central Bureau of Investigation (CBI), at Srinagar.

7. It is claimed that the petitioner company and its directors fully participated and cooperated with the aforesaid investigation. However, no incriminating material was recovered connecting the petitioner company or its directors with the commission of any offence. It is submitted that the petitioner company and its directors have already faced one investigation by the Anti-Corruption Bureau, (ACB), and one other is being carried out by the Central Bureau of Investigation (CBI). The respondents have now issued summons under Section 50(2), and 50(3) of the Jammu and Kashmir Prevention of Money Laundering Act, 2002, [ for short "PMLA] directing the petitioner No. 2, 3 and 4 to appear before it on three different dates, respectively.

8. The petitioners submit and state that they have appeared before the respondents in response to the summons and provided them the requisite material and document in their possession, yet the respondents are harassing them by calling them to appear before the investigating officer repeatedly without specifying any reasons. The petitioners claim that they even applied to the respondents for supplying the copy of ECIR registered against them, so that they are in a better position to respond to the summons issued by them and cooperate as desired. However, the copy of the ECIR has not been supplied.

WP(C) No. 2682/2023 Page No. 4 of 20

9. It is in this backdrop, the petitioners have approached this Court and invoked extraordinary jurisdiction of this Court to quash the proceedings initiated by the respondents on the basis of impugned ECIR Brief Submissions Made On Behalf Of The Petitioners And Grounds Of Challenge Urged To Assail Impugned ECIR: -

10. It is argued that absent the commission of scheduled offence by the petitioner company or its directors, no offence of money laundering punishable under Section 4 of the PMLA can be said to have been committed by the petitioners. The Commission of Scheduled Offence is sine qua non for constituting an offence under PMLA. It is thus urged that registration of impugned ECIR by the respondents as against the petitioners is without jurisdiction and competence of the respondents. It is submitted that no roving or fishing inquiry is contemplated under PMLA and, therefore, issuance of summons without any valid reason or justification, that too, in the absence of commission of Scheduled Offence would be tantamount to a fishing inquiry which is not permissible.

11. It is submitted that FIR for Scheduled Offences was registered on 19.04.2022 by Central Bureau of Investigation (CBI), in which the role of the petitioners is yet to be investigated and, therefore, the impugned summons issued for alleged offence of money laundering after a huge gap of time is malafide, unjustifiable and a colourable exercise of power by the respondents. It is further argued that no inquiry or investigation in the Scheduled Offence can be made nor the respondents could issue any summons to the person accused of commission of offence of money laundering, unless the person sought to be summoned is provided with a WP(C) No. 2682/2023 Page No. 5 of 20 copy of the ECIR. The issuance of summons without providing a copy of ECIR to the petitioners is, therefore, not tenable in law.

12. It is argued, that under Section 50 (3) of PMLA, the power to summon any person whose attendance is considered necessary whether to give evidence or to produce any records during investigation is vested with the Director, Additional Director, Joint Director, Deputy Director or Assistant Director, and in terms of Sub Section 3 of Section 50 all persons so summoned shall be bound to attend in person or through authorised agents. However, in the present case, the respondents are insisting the petitioners to appear in person as is evident from the summons dated 8th September, 2023, issued for personal appearance of respondents 2, 3 and 4 on 18 th September, 2023, 20th September, 2023 and 22nd September, 2023. Submissions on behalf of respondents: -

13. The reply affidavit on behalf of respondents is filed by Assistant Director, Zonal Office of the Directorate of Enforcement at Srinagar. In the reply affidavit, it is stated by the respondents that the Director General Codes, Department of Finance, Government of Jammu and Kashmir, noticed certain discrepancies in the health insurance scheme and, accordingly, vide its OM No. FD-Code/16/2022-12 dated 10th February, 2022, referred the matter to the Principal Secretary, General Administration Department. The Office memo pointed out following anomalies in the process: -

         "(i)    E-tendering process was not followed.


         (ii)    After inadequate response to the first tender, criteria was
                 changed for re-tendering.




WP(C) No. 2682/2023                                              Page No. 6 of 20
            (iii)   Changes were made in the agreement with the

intermediary M/S Trinity Reinsurance Brokers Limited after the agreement was signed.

(iv) Cancellation of contract after one month of commencement with the decision to continue the same for a full quarter.

(v) Release of first instalment against premium for health insurance policy credited on 28th September, 2018, which was well before signing of agreement on 15th October, 2018."

14. It is however admitted by the respondents that as per the preliminary verification conducted by ACB, no irregularity could be found in the award of health care insurance contract to RGCIL. However, in terms of clause 17 of the tripartite Agreement, the ACB advised the Government to recover the excess amount of Rs. 44,85,37,143/- from RGICL. It is in these circumstances, the Government thought it appropriate to refer the matter to CBI for thorough investigation. On the request of the State Government, CBI took over the investigation and having found prima facie commission of various offences, registered FIR dated 19.04.2022 at Srinagar, against the petitioner company, RGICL, and unknown public servants and private persons.

15. The FIR was registered for commission of offences under section 120-B and 420 of RPC and Section 5 (1) (d) read with Section 5 (2) of J&K Prevention of Corruption Act, Samvat 2006 (JKPC Act). It is submitted that the offences for which the FIR has been registered against the petitioner company and others, are Scheduled Offences and, therefore, the registration of ECIR under PMLA was necessitated to investigate the trail of proceeds of WP(C) No. 2682/2023 Page No. 7 of 20 crime derived or obtained directly or indirectly as a result of criminal activity related to the Scheduled Offence.

16. With a view to carrying out the investigation, the respondents issued summons under Section 50 PMLA to the petitioners to appear in the Office of Directorate on three different dates for recording the statements and providing requisite documents related to their companies, tenders, transactions with RGICL. It is thus submitted that petitioners failed to appear on the given dates, though the Directors, namely, Harshith Jain, Akhilesh Jain and Saloni Jain, had sought exemption from personal appearance through E-Mails. It is thus contended that since the petitioners are not cooperating in the investigation, as such, the respondents are well within their right to enforce their presence. It is submitted that the filing of instant petition is only to avoid the appearance before the respondents and to stop the investigation being carried out into the allegations of money laundering by the petitioner company.

17. It is also brought to the notice of this Court by the respondents, that the petitioner company had unsuccessfully challenged FIR No. RC1232022A0004 dated 19th April, 2022, registered by the Central Bureau of Investigation (CBI), for commission of Scheduled Offences. It is submitted that similar arguments were made before this Court in WP(C) No. 295/2024, wherein the said FIR was assailed, but the Bench of this Court turned down all the arguments and dismissed the petition as not maintainable. This Court, while dismissing the petition, directed the Central Bureau of Investigation (CBI) to conduct the investigation of the case as expeditiously as possible and also directed the petitioner company to participate in the investigation.

WP(C) No. 2682/2023 Page No. 8 of 20

18. It is thus argued that since FIR registered with regard to the Scheduled Offences which is pending investigation by the Central Bureau of Investigation (CBI), has not been interfered with by this Court, as such, no interference is called for with the ECIR registered by the respondents against the petitioners for commission of offence of money laundering punishable under Section 4 of PMLA. It is argued that ECIR is an internal document and is not a statutory document, and therefore, supply of ECIR to every person summoned in the case under Section 50 of PMLA is not mandatory. It is submitted that ECIR which is at the nascent stage and only summons have been issued cannot be quashed at such stage. The Enforcement Directorate must be given an opportunity to investigate the matter and reach the truth.

19. Having heard learned counsel for the parties and perused the material on record, the fate of this petition rests squarely on the determination of the following questions: -

(i) Whether the offences under Sections 120(b) and 420 of RPC and Section 51(d) read with Section 52 of the Jammu and Kashmir Prevention of Corruption Act, constitute Scheduled Offences so as to attract the applicability of PMLA and justify recording of an ECIR for investigation of offence of money laundering?

(ii) Whether providing a copy of ECIR to a person summoned under Section 50 of PMLA is mandatory?

WP(C) No. 2682/2023 Page No. 9 of 20

(iii) Whether the Authorized Officer under Section 50 of PMLA can issue summons to appear before it in person or the person summoned can appear through counsel?

(iv) Whether the offence of money laundering as envisaged under PMLA is made out against the petitioners for carrying out investigation and summoning the petitioners under Section 50 (2) of PMLA?

Question No. i:

20. The question vehemently raised by the learned counsel for the petitioners is no longer res integra. This Court in "Ahsan Ahmad Mirza and Others Vs. Enforcement Directorate and Another", 2019 SCC online J&K 1026, has elaborately dealt with the issue and set the controversy at rest. In the aforesaid case a similar argument was raised that the offences under Sections 406 and 409 RPC were not Scheduled Offences enumerated in Schedule 'A' of PMLA and, therefore, no ECIR could have been recorded for commission of offence of money laundering under PMLA. It was argued in that case, that the commission of Scheduled Offence was sine qua non for attracting the applicability of PMLA. This Court elaborately considered the matter and by referring to Section 3, the definition of 'proceeds of crime' given in Section 2(1)(u) and the definition of 'Scheduled Offence' given in Section 2(1)(y) and interpreting subsection 2 of Section 2 read with Section 2(1)(ia) in Paragraph 17 concluded thus:-

"From the perusal of different provisions of PMLA including those introduced by the amendment Act 2 of 2013 , it is abundantly clear that the reference to the corresponding law as used in subsection 2 of Section 2 of PMLA has nothing to do with the definition of WP(C) No. 2682/2023 Page No. 10 of 20 'corresponding law' given in clause (ia) of subsection 1 of Section 2 which came to be inserted by Act of 2 of 2013 w.e.f 15.02.2013. This distinction is required to be borne in mind while interpreting the provisions of subsection of Section 2 of PMLA which has been relied upon by the respondents strongly to make a point that Section 120-B RPC corresponds to Section 120-B IPC as the same is a corresponding law in operation in the State of J&K to which the Indian Penal Code does not extend."

21. In view of the aforesaid legal position, I do not think it appropriate to relook into the issue vociferously agitated by learned senior counsel appearing for the petitioners.

Question No. ii:

22. This issue too is well settled in "Vijay Madanlal Chowdhary and others Vs. Union of India and others", 2022 SCC Online SC 929, wherein Hon'ble Supreme Court has dealt with the issue in Paragraph 177 to 179, which for facility of reference are set at below: -

"177. Suffice it to observe that being a special legislation providing for special mechanism regarding inquiry/investigation of offence of money-laundering, analogy cannot be drawn from the provisions of 1973 Code, in regard to registration of offence of money-laundering and more so being a complaint procedure prescribed under the 2002 Act. Further, the authorities referred to in Section 48 of the 2002 Act alone are competent to file such complaint. It is a different matter that the materials/evidence collected by the same authorities for the purpose of civil action of attachment of proceeds of crime and confiscation thereof may be used to prosecute the person involved in the process or activity connected with the proceeds of crime for offence of money- laundering. Considering the mechanism of inquiry/investigation for proceeding against the property (being proceeds of crime) under this Act by way of civil action (attachment and confiscation), there is no need to formally register an ECIR, unlike WP(C) No. 2682/2023 Page No. 11 of 20 registration of an FIR by the jurisdictional police in respect of cognizable offence under the ordinary law. There is force in the stand taken by the ED that ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with proceeds of crime. Thus, ECIR is not a statutory document, nor there is any provision in 2002 Act requiring Authority referred to in Section 48 to record ECIR or to furnish copy thereof to the accused unlike Section 154 of the 1973 Code. The fact that such ECIR has not been recorded, does not come in the way of the authorities referred to in Section 48 of the 2002 Act to commence inquiry/investigation for initiating civil action of attachment of property being proceeds of crime by following prescribed procedure in that regard.

178. The next issue is: whether it is necessary to furnish copy of ECIR to the person concerned apprehending arrest or at least after his arrest? Section 19(1) of the 2002 Act postulates that after arrest, as soon as may be, the person should be informed about the grounds for such arrest. This stipulation is compliant with the mandate of Article 22(1) of the Constitution. Being a special legislation and considering the complexity of the inquiry/investigation both for the purposes of initiating civil action as well as prosecution, non-supply of ECIR in a given case cannot be faulted. The ECIR may contain details of the material in possession of the Authority and recording satisfaction of reason to believe that the person is guilty of money- laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested WP(C) No. 2682/2023 Page No. 12 of 20 person in the offence of money-laundering. In any case, upon filing of the complaint before the statutory period provided in 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the Authority under Section 44(1)(b) of the 2002 Act before the Special Court.

179. Viewed thus, supply of ECIR in every case to person concerned is not mandatory. From the submissions made across the Bar, it is noticed that in some cases ED has furnished copy of ECIR to the person before filing of the complaint. That does not mean that in every case same procedure must be followed. It is enough, if ED at the time of arrest, contemporaneously discloses the grounds of such arrest to such person. Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime). Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right. Concededly, the person arrested, in terms of Section 19 of the 2002 Act, is contemporaneously made aware about the grounds of his arrest. This is compliant with the mandate of Article 22(1) of the Constitution. It is not unknown that at times FIR does not reveal all aspects of the offence in question. In several cases, even the names of persons actually involved in the commission of offence are not mentioned in the FIR and described as unknown accused. Even, the particulars as unfolded are not fully recorded in the FIR. Despite that, the accused named in any ordinary offence is able to apply for anticipatory bail or regular bail, in which proceeding, the police papers are normally perused by the concerned Court. On the same analogy, the argument of prejudice pressed into service by the petitioners for non-supply of ECIR deserves to be answered against the petitioners. For, the arrested person for offence of money-laundering is contemporaneously informed about the grounds of his arrest; and when produced before the Special Court, it is open to the Special Court to call upon the representative of ED to produce relevant WP(C) No. 2682/2023 Page No. 13 of 20 record concerning the case of the accused before him and look into the same for answering the need for his continued detention. Taking any view of the matter, therefore, the argument under consideration does not take the matter any further."

23. It is thus trite that recording of ECIR is not akin to the registration of FIR under the Code of Criminal Procedure, 1973. ECIR is an internal document created by the Department before initiating penal action or prosecution against the person involved with a process or activity connected with proceeds of crime. The ECIR is not statutory document nor is there any provision in PMLA to necessarily record ECIR or furnish copy thereof to the accused unlike Section 154 of Code of Criminal Procedure, 1973.

24. In the instant case also, ECIR recorded by the respondents is only an internal document in possession of the respondents for initiating action under the Act against the petitioners. The investigation by the Enforcement Directorate into the offence of money laundering would ultimately constitute a complaint to be filed before the Competent Authority.

25. Viewed thus, it cannot be contended by the petitioners that absent the supply of a copy of ECIR, the Authorities under Section 50 of PMLA are not competent to issue summons requiring the presence of the petitioners either for the purposes of giving evidence or for production of documents. Question No. iii:-

26. For better appreciation of the question, it is necessary to first set out Section 50 of PMLA: -

50. Powers of authorities regarding summons, production of documents and to give evidence, etc. WP(C) No. 2682/2023 Page No. 14 of 20 (1)The Director shall, for the purposes of section 12, have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:

(a)discovery and inspection;

(b)enforcing the attendance of any person, including any officer of a [reporting entity] [Substituted for the words "banking company or a financial institution or a company," by Act No. 2 OF 2013], and examining him on oath;

(c)compelling the production of records;

(d)receiving evidence on affidavits;

(e)issuing commissions for examination of witnesses and documents; and

(f)any other matter which may be prescribed.

(2)The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.

(3)All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(4)Every proceeding under subsections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

(5)Subject to any rules made in this behalf by the Central Government, any officer referred to in subsection (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act:

Provided that an Assistant Director or a Deputy Director shall not WP(C) No. 2682/2023 Page No. 15 of 20

(a)impound any records without recording his reasons for so doing;

(b)retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the [Joint Director] [Substituted 'Director' by Finance Act, 2018 (Act No. 13 of 2018) dated 29.3.2018.].

27. From plain reading of subsection 2 and subsection 3 of Section 50 of the PMLA, it is clear beyond any doubt that the Authority to summon any person whose attendance is considered necessary, whether to give evidence or to produce any records during the course of any investigation or proceedings under PMLA, is vested in the Director, Additional Director, Joint Director, Deputy Director or Assistant Director and all the persons summoned under subsection 2 are bound to attend in person or through agents, as such, Authorized Officer may direct. It is thus, beyond any pale of doubt that the discretion to summon a person whose attendance is considered necessary under subsection 2 to appear either in person or through his authorized agent is conferred upon the Authorized Officer. It is not left to the discretion of persons summoned to either appear in person or appear through authorized representatives as is sought to be contended by the learned senior counsel appearing for the petitioners.

28. A plain reading of subsection 3 makes it clear that the person summoned under subsection 2 is bound to appear in person or through his authorized agent as is directed by the Authorized Officer. If the direction of the Officer is to appear in person, the person summoned has no discretion in the matter and is bound to appear in person. The argument of learned senior counsel appearing for the petitioners that it is left to the discretion of the person summoned either to appear in person or through his authorized agent, WP(C) No. 2682/2023 Page No. 16 of 20 is not correct in law and is not supported by the provisions of subsection 2 and subsection 3 of Section 50 of PMLA.

Question No. iv:-

29. It needs to be noticed at the outset that writ petition filed under Article 226 of Constitution of India i.e., WP (C) No. 295/2024, challenging FIR registered by the Central Bureau of Investigation (CBI), in respect of deemed to be Scheduled Offences, stands already dismissed by this Court, meaning thereby this Court has recorded its satisfaction, that the commission of offences under Section 120 B read with Section 420 of RPC and Section 5(2) read with Section 5(i)(d) of the J&K Prevention of Corruption Act, is clearly disclosed in the FIR, requiring investigation in the matter.

30. The recording of impugned ECIR is a consequence of registration of FIR against the petitioners. It has come to the notice of respondents that the petitioners are directly or indirectly involved in the process or activity connected with the proceeds of crime and are projecting or claiming it as untainted property and, therefore, prima facie guilty of offence of money laundering as defined under Section 3 of the Act and punishable under Section 4 of PMLA. The investigation is at nascent stage and only summons under Section 50 of the PMLA have been issued to the petitioners to enforce their presence before the Authorized Officer for the purposes of carrying out the investigation. Neither the ECIR recorded in the matter is on record, nor the petitioners have made out any special ground at this stage to interfere with the ongoing investigation being made by the respondents.

31. The legal position in this regard is well settled. The observations made by the Delhi High Court in para 25 to 27 of "Amit Katyal Vs. WP(C) No. 2682/2023 Page No. 17 of 20 Directorate of Enforcement", 2023 SCC Online Delhi, 7119, provide apt answer to the question raised and are, therefore, reproduced as under: -

25. "Thus, the investigation in the present ECIR is still continuing and the petitioner has merely been summoned to appear and submit certain documents. Even as per the own case of petitioner, he has joined investigation in the present ECIR upon being summoned by the Directorate of Enforcement on six occasions in past, between March till August 2023. Thus, no tenable grounds have been shown now as to why the impugned summons deserve to be quashed.

26. Even otherwise, as held in several judicial precedents discussed above, this Court cannot throttle the investigative process at the stage of issuance of summons to the petitioner.

27. The other alternate relief sought by the petitioner is for quashing of present ECIR qua the petitioner. However, having examined the records of the case and the law on point, this Court is of the opinion that the prayer for quashing of ECIR is highly premature in the present case, for the reasons discussed in the succeeding paragraphs."

32. The Hon'ble Supreme Court in "Commissioner of Customs Calcutta Vs. M.M. Exports", 2010 (15 SCC) 647, while dealing with a case of issuance of summons under Section 108 of Customs Act, had expressed that except in exceptional cases, the High Court should not interfere at the stage of issuance of summons. The relevant observations read thus: -

"(1) By consent the impugned order is set aside. However, we wish make it clear that as far as possible the High Court should not interfere at the stage when the Department has issued the summons. This is not one of those exceptional cases where the High Court should have interfered at the stage of issuance of summons."

WP(C) No. 2682/2023 Page No. 18 of 20

33. In the instant case, the petitioners have not been able to demonstrate that the case on hand is an exceptional case requiring interference by the High Court, even at the stage of issuance of summons to the petitioners. The investigation in the Scheduled Offences by the Central Bureau of Investigation is going on and the attempt by the petitioners to scuttle the investigation by the Central Bureau of Investigation in the Scheduled Offences by approaching this Court invoking Article 226 of the Constitution of India, has already failed.

34. It means that this Court has, on appreciation of material placed before it, come to a prima facie conclusion that this is a case for investigation by the Central Bureau of Investigation in the allegations of commission of various offences under RPC and Jammu and Kashmir Prevention of Corruption Act. Since the offences which are under investigation before the Central Bureau of Investigation, have the potential of generating the proceeds of crime and, as such, recording of ECIR and investigation by the Enforcement Directorate is necessitated. The petitioners have only been put on notice to produce the requisite documents and, therefore, it is well within their right to produce the documents and evidence which is consistent with their innocence.

35. For the foregoing reasons, I am not inclined to interfere with the investigation initiated by the respondents in the offence of money laundering under PMLA. The petition is found to be without any merit and the same is, accordingly, dismissed. However, before parting, I would like to place on record that in the instant case, the allegation of money laundering is against the petitioner-company which can, therefore, be well represented before the Enforcement Directorate through its Managing Director or the Director who WP(C) No. 2682/2023 Page No. 19 of 20 is in-charge of the affairs of the company. It may not be necessary to summon all the Directors, particularly the women, that too, frequently. I leave it to the Enforcement Directorate to consider this aspect and ensure that no unnecessary harassment is caused to the petitioners, provided they cooperate with the respondents as and when required to do so.

(SANJEEV KUMAR) JUDGE SRINAGAR:

11 .07.2024 "Mir Arif"

(i) Whether the Judgment is reportable? Yes MIR ARIF MANZOOR I attest to the accuracy and authenticity of this document 11.07.24 WP(C) No. 2682/2023 Page No. 20 of 20

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