USHA AGARWAL Vs. UNION OF INDIA AND OTHERS

JUDGEMENT

(1.) This writ petition under Articles 226/227 of the Constitution of India, challenges the constitutional validity and legality of the provisions of Sections 2(u), 3, 4, 5, 8, 13, 24, 45 and 50 of the Prevention of Money Laundering Act, 2002 (for brevity "the Act"). The prayer that follows is that, the provisions be declared ultra vires, illegal, unconstitutional and violative of the fundamental rights of citizens, especially Article 14 and Articles 19 to 22 of the Constitution of India. A further prayer is made for quashing the Enforcement Case Information Report (ECIR), lodged against the Petitioner on 19-2-2014.

(2.) Although mindful that the Act is a path breaking enactment, based on the United Nations Resolutions to globally root out the use of illegal money, acquired via trade in drugs, illegal armaments, acts of terror and misuse of public office and is therefore, the need of the hour, the petitioner is aggrieved by the indiscriminate application of the provisions of the Act at the whims and fancies of the officers of the Respondent No. 3, who it is alleged, in the absence of a mechanism of proper checks and balances is clothed with unbridled powers, under various sections, leading to possibilities of misuse of the law for personal, political and business vendetta. It is suggested that effective implementation of the Act can be achieved by evolving a mechanism consisting of a retired Judge, Ombudsman or Lok Ayukta, to examine cases in which the Act can be attracted, by affording an opportunity of hearing to the alleged offender. Agreeing that Sections 420, 467, 471, 120-B of the Indian Penal Code (for short "IPC") have rightly been inserted in the Schedule of the Act and that a First Information Report (FIR) can be filed by any Police Station and brought under the Act to book those committing such heinous crimes, the petitioner's concern is also with the alleged irrationality and procedural impropriety with regard to the implementation of the Act.

(3.) The facts leading to the instant petition are that the Eastern Institute for Integrated Learning in Management University (henceforth "EIILMU"), a State self-financed Private University, was established by the Eastern Institute for Integrated Learning in Management University, Sikkim Act, 2006 (hereinafter "Act of 2006"), duly approved by the University Grants Commission (for brevity "UGC"), in July 2008, enumerating Courses and Disciplines which the University was authorized to offer. Vide a letter dated 12-4-2009, the EIILMU was permitted to open admission/counselling centres in different parts of the country. As per the petitioner, on 1-9-2012, a suo motu FIR, being Case No. 51/2012, under Sections 406/420/467/120-/34 of the IPC, was registered by the Station House Officer (for short "SHO"), Jorethang, Police Station, South Sikkim, making various allegations against the Management of the EIILMU, regarding opening of various Study Centres outside the south of Sikkim and offering courses without approval of the Distance Education Council (for short "DEC"). However, neither the UGC nor the DEC or any student has lodged any FIR in this context. On completion of investigation and submission of charge-sheet, the Learned Chief Judicial Magistrate took cognizance and summoned the persons named in the charge-sheet on 6-5-2013. On the same set of allegations, the Sadar Police Station, Gangtok, registered another FIR, bearing No. 92/2013, against the Management of EIILMU, which was quashed vide an Order of this Court dated 4-6-2013, in Criminal Misc. Case No. 12 of 2013. A supplementary charge-sheet in FIR No. 51/2012, falsely reflected one Mandeep Kaur to be a regular student of the University, when she was a long distance student, neither had she obtained a Government job, as alleged, on the strength of a degree issued by the University, but was employed in a private college. Based on the FIR, the Respondent Nos. 2 and 3 without conducting any preliminary inquiry, registered an ECIR on 19-2-2014. The Joint Director of the Respondent No. 3, vide Order dated 28-10-2014, provisionally attached nine different Bank Accounts of the EIILMU. A Complaint dated 25-11-2014 was then lodged by the Joint Director before the Adjudicating Authority, seeking confirmation of its Provisional Attachment Order. The Adjudicating Authority issued Show Cause Notice to the EIILMU and confirmed the Provisional Attachment, vide Order dated 3-3-2015, assuming that the fees collected from students were "proceeds of crime". On 9-1-2015, the Joint Director of the Respondent No. 3, provisionally attached immovable properties referred to in the Notice and lodged a complaint dated 2-2-2015, before the Adjudicating Authority for confirmation of the Provisional Attachment Order, who in turn issued shows-cause notice to the EIILMU. That, FIRs for scheduled offences covered under the Act cannot be called money-laundering or the amounts involved as "proceeds of crime". Thus, due to baseless inclusion of the petitioner in the impugned ECIR by the Respondent Nos. 2 and 3, she has been defamed and her fundamental rights seriously prejudiced due to allegations of money-laundering.