NITIN GUPTA AND ORS. Vs. DIRECTORATE OF ENFORCEMENT

JUDGEMENT

(1.) This Criminal Petition is filed to quash the summons dated 03.05.2019 issued by the respondent in F.No. ECIR No.11/HYZO/2016 on the file of the Directorate of Enforcement, Hyderabad, wherein the petitioners were directed to appear before him, after filing complaint in S.C.No.474 of 2018 on the file of Metropolitan Sessions Judge-cum-Special Court, under Prevention of Money Laundering Act, at Nampally.

(2.) It is stated that one Mr.N.Srikanth, Deputy Director of Income Tax (Investigation) Unit II (2), Hyderabad, had made a complaint to the Station House Officer, Jubilee Hills Police Station, Hyderabad on 07.12.2016 stating that as per the terms of Gazette Notification No.2652 dated 08.11.2016 issued by the Government of India, Rs.500 and Rs.1000 denomination of bank notes of the existing series issued by Reserve Bank of India shall cease to be legal tender with effect from 09.11.2016 to the extent specified in the notification. Based on the information that Mussaddilal Gems and Jewellers Pvt. Ltd., and M/s.Vaishnavi Bullion Pvt. Ltd., Hyderabad have deposited an amount of Rs.57 crores and Rs.40 crores in State Bank of India, Industrial Finance Branch, Panjagutta, Hyderabad and Axis Bank, Jubilee Hills,Hyderabad respectively, after the demonetization of Rs.500 and Rs.1000 notes by raising around 5200 cash advance receipts on 08.11.2016. Since the aforesaid companies and their management have indulged into illegal practice by converting old demonetization of high value notes in the name of sale of gold bullion/jewelers on or after 8.00 p.m of 08.11.2016, causing loss to the government exchequer in the form of direct taxes, the respondent initiated crime proceedings under Sections 44 and 45 r/w Sections 70 and 8(5) of Prevention of Money Laundering Act, 2002 (for short "the Act of 2002'). The respondent filed charge sheet before the Metropolitan Sessions Judge-cum-Special Court, under the Act of 2002, at Nampally, Hyderabad. On such complaint, the Special Court issued summons in SC No.474 of 2018 and the same is pending. However, the respondent, who is investigating officer issued summons under sub sections (2) and (3) of Section 50 of the Act, directing the petitioners to appear before him. Aggrieved by the same, present petition is filed to quash the said summons.

(3.) Heard Sri B.Chandrasen Reddy, learned counsel for the petitioners and Sri K.Lakshman, learned Assistant Solicitor General of India appearing for the respondent.