Madras HC refuses to interfere with ED proceedings against agrifurane firm

A division bench of the Madras High Court has refused to interfere with the proceedings initiated by the Enforcement Directorate (ED) HERE against an agrifurane company here.

The bench of Justices P N Prakash and N Anand Venkatesh upheld the proceedings on Monday while dismissing a writ petition from Southern Agrifurane Industries Private Limited, by its director Joseph Anand Muthu alias MGM Anand in Mylapore.

The petition sought to restrain the ED from proceeding further in the case registered under the provisions of Prevention of Money Laundering Act (PMLA) by the agency.

Petitioner contended that the registration of the case was without jurisdiction since the allegation of contravention of Foreign Exchange Management Act (FEMA) does not fall within the schedule to PML Act.

Following a complaint from a private bank, a case under the FEMA was registered against the petitioner company on the allegation that it had sent foreign exchange abroad in violation of FEMA Rules and investigation was taken up by the ED in August this year.

Summons were issued and provisional orders of seizure of certain movable and immovable properties of the petitioner company were issued. Hence, the present petition.

The Special Public Prosecutor (SPP) submitted that till now, the ED was able to find out that the siphoning had taken place to the tune of Rs 216.40 crore out of India at the cost of the foreign exchange of the country.

The probe is at a crucial stage and MGM Maran, who is holding almost 91 per cent of the shares in the petitioner company is not cooperating with the investigation and this case involves serious cross-border money laundering. Hence, the ongoing investigation cannot be interfered with, he said.

The bench noted that various contentions were raised on either side on the merits of the case and by pointing out various provisions under FEMA and relevant regulations.

It (bench) does not want to deal with any issue touching upon the merits of the case by taking the role of the investigating agency (IA). The bench has to satisfy itself as to whether the ED is acting within the four corners of PML Act and not misusing the powers of investigation.

If the bench is convinced that the investigation taken up by the ED is within their powers and there is no misuse of powers, it cannot act as a stumbling block in the further progress of the probe, it added and left open to the petitioner company to submit their explanation to the ED along with all supporting documents.

The Supreme Court has time and again frowned upon interference into the investigations conducted by the IA since courts are not expected to stall investigations, which falls within the exclusive domain of the executive, unless such an investigation is found to be without jurisdiction or there is misuse of power of investigation or such an investigation is an abuse of process of law, it added.

"In view of the foregoing discussion, we do not find any ground to interfere with the investigation conducted by the respondent (ED) and in the result, this writ petition stands dismissed," the bench said.