JOSEPH MASSEY & ORS Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India impugns the show cause notices dated 12th November, 2015 under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA) issued by the respondent Financial Intelligence Unit ­ India, Department of Revenue, Ministry of Finance of the Government of India to each of the three petitioners namely Shri Joseph Massey, Shri Shreekant Javalgekar and Shri Jignesh Shah and seeks compensation for causing mental and physical harassment to the petitioners.

(2.) It is the case of the petitioners (i) that the respondent which is a statutory body enacted under the PMLA, vide order dated 4th November, 2015 held the National Spot Exchange Limited (NSEL) to be guilty of failing in several obligations under the PMLA and imposed a total fine of Rs.1,66,00,000/ - on NSEL and directed NSEL to register itself as a reporting entity under the PMLA; (ii) that purportedly in pursuance to the aforesaid order, impugned show cause notices were issued to the petitioners; (iii) that the petitioners worked as non -executive directors of NSEL and notices issued to them are in disregard of law and malicious and by way of a roving and fishing inquiry; (iv) that the respondent in the show cause notices also has not stated any basis for implicating the petitioners and do not disclose the material on the basis of which the petitioners are treated as "in charge" and "responsible" for the business of NSEL and the notices do not mention the exact role or specific involvement of the petitioners with regard to the contravention/violation; (v) that PMLA is a draconian legislation and issuance even of a show cause notice thereunder has bearing on the dignity and reputation of the noticee; (vi) moreover, since the notices do not disclose the jurisdiction of the respondent to issue notice to the petitioners, the petitioners ought not to be compelled to respond thereto; and, (vii) reliance in the petition itself is placed on Gorkha Security Services Vs. Govt. (NCT of Delhi) (2014) 9 SCC 105 and CCE Vs. Champdany Industries Ltd. (2009) 9 SCC 466.

(3.) The petition came up first before this Court on 11th January, 2016 when being of the view on the basis of: