Today(6th September), The Supreme Court directed the Registrar General of the Madras High Court to submit a detailed report on the handling of Jaffar Sait’s PMLA quashing petition. This action follows the unexpected recall of the quashing order and subsequent relisting of the case.
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NEW DELHI: Today(6th September), The Supreme Court of India, directed the Registrar General of the Madras High Court to provide a comprehensive report in a sealed cover concerning the handling of a petition filed by a retired IPS officer, Jaffar Sait, in a Prevention of Money Laundering Act (PMLA) case. The court’s action follows a series of irregular events, including a quashing order that was unexpectedly recalled.
A Bench comprising Justices Abhay S Oka and Augustine George Masih issued this directive after Senior Advocate Sidharth Luthra, representing Sait, brought to the Court’s attention that his client’s case, which had previously been shown as quashed, was suddenly relisted for hearing.
Case Background:
The controversy dates back to August 21, when a Bench of Justices SM Subramaniam and V Sivagnanam of the Madras High Court quashed the Enforcement Directorate’s (ED) complaint against the former IPS officer, Jaffar Sait. The ED had filed a money laundering case against Sait, alleging his illegal acquisition of a Tamil Nadu Housing Board plot in 2011. Notably, a related corruption case filed by the Directorate of Vigilance and Anti-Corruption (DVAC) had already been quashed by the Madras High Court in 2019.
On August 21, the High Court ruled in favor of Sait, noting that since the predicate case, which is the DVAC case, had been quashed, the ECIR (Enforcement Case Information Report) filed by the ED under the PMLA should also be dismissed.
However, just two days later, on August 23, the same Bench that had quashed the ED complaint reconsidered its earlier decision. In an unexpected turn, the Bench recalled its August 21 order and decided to rehear the matter. This reversal raised significant questions about the continuity of the ED’s cases under the PMLA, especially when the predicate offense FIRs are quashed.
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During the hearing on August 23, the Bench, now comprising Justices Subramaniam and R Sakthivel, expressed serious concerns regarding how money laundering cases were often dismissed following the quashing of predicate offenses.
The Bench noted-
“Cases filed by the ED under the PMLA must not be allowed to be dismissed without proper examination.”
emphasizing the importance of prosecuting these cases to their logical conclusion.
The Court further added that it needed to examine the issue in greater detail, highlighting the potential implications for similar cases in the future. It directed the ED’s counsel to provide explanations on why money laundering cases are often dismissed when the original predicate offenses are quashed.
The Bench asked-
“Why should money laundering cases be dismissed before reaching their conclusion simply because the FIRs related to the predicate offenses were quashed?”
Senior Advocate Sidharth Luthra raised concerns before the Supreme Court, prompting the apex court to take swift action. The Supreme Court not only directed the submission of a detailed report on the handling of Sait’s case but also stayed all proceedings before the Madras High Court until further orders. The Court said it would address the matter during a hearing scheduled for September 30.
Justice Oka’s Bench emphasized that it was crucial to understand the sequence of events that led to the quashing of the ED’s complaint and its subsequent recall by the same Bench. The Court’s directive for a sealed report suggests the sensitivity and complexity of the case, with potential ramifications on other ongoing PMLA investigations.
The Bench’s remarks echo a growing concern among legal experts about the robustness of the PMLA framework and how predicate offenses play a crucial role in sustaining money laundering prosecutions. The ED’s struggle to pursue cases when such offenses are quashed could hinder the fight against financial crimes.
The allegations against Jaffar Sait, a retired Indian Police Service officer, revolve around the illegal acquisition of land from the Tamil Nadu Housing Board in 2011. The Directorate of Vigilance and Anti-Corruption (DVAC) initially registered a corruption case against him, which the Madras High Court quashed in 2019. Following this, Sait sought the quashing of the Enforcement Directorate’s complaint under the PMLA, which was based on the same land acquisition issue.
The August 21 order of the Madras High Court quashing the ED’s case was predicated on the fact that the DVAC case, which served as the basis for the money laundering allegations, no longer held legal validity. However, the Bench’s sudden reversal of its decision on August 23 has led to uncertainty regarding the final outcome of Sait’s plea.
