Strategic interactions between Customary Law and Insolvency and Bankruptcy Code - Business Guardian
Connect with us

Legally Speaking

Strategic interactions between Customary Law and Insolvency and Bankruptcy Code

Published

on

In all communities, human behavior is regulated by the customs of the country, whereas in terms of law customs act as the earliest source of legal authority in India. But with the advancement of time, and the face-paced process of globalization, things seem to be evolving at an immeasurable speed hence the applicability of customary law is starting to fade away, whereas the practice and applicability of the new modern law, is becoming the need of the hour to deal with the current day problems.

Many years back India was struck with piles of defaults in debt cases and the law present at that time was not able to provide fair enough solutions and was failing badly. It was soon also realized that mere debt recovery will not exactly inflict the damage being inflicted via the Non-Performing Assets (NPA’s), hence making it the need of the hour to find a more realistic and long-lasting solution to deal with this problem. Hence a brand new regulation i.e the Insolvency and Bankruptcy Code, 2016 (IBC) became enacted on 28 May 2016 and came into force. The Introduction of IBC in the year 2016 has been a great step that has helped to reform the insolvency law landscape in India to a great extent. IBC came into force as powerful legislation with solutions to deal with the NPA trouble along with making sure that a wholesome credit score goes with the flow inside the economic system, which the old customary laws were not able to fulfill at their best. Post the implementation of IBC, as consistent with the World Bank’s data India’s rank in resolving insolvency went from 136 in 2017 to 52 in the year 2020 and seems to only be improving with time.

The Indian legislative framework defines the scope and sphere of each legislation. All of them work under a particular sphere and are confined to the powers stated in their provisions. However, there are several legislations that come into interplay and maintain a harmonious relationship. Similar has been the situation between the Insolvency and Bankruptcy Code and Customs Act. Both acts work in their own spheres and have powers and regulations stated amongst them. The judgment has specified the main provisions of the both act which also states the interplay with other statutes. The overriding effect of IBC is only statute that follows the rule against Customs act.

Recently, on 26th August 2022, the apex court in the case of Sundaresh Bhatt, Liquidator of ABG Shipyard Vs Central Board of Indirect Taxes and Customs, held that IBC will prevail over the Customary Act to the extent that if the moratorium proceedings which is the waiting period set by an authority, commence, then, in that case, the customary law will not have the power to call for any action of recovery for dues or claim title over the goods as well as cannot issue notice to sell the goods in cases of liquidation against the corporate debtor under the terms and regulations of the Customs Act. as, the role of customs act works in another sphere that sometimes collides with other legislations.

This observation by the apex court was made by the bench comprising Chief Justice N.V. Ramana, Justices JK Maheshwari, and Hima Kohli. It was also brought into consideration that in the case where the moratorium is declared under the Bankruptcy Code, even then the customary laws will have limited jurisdiction to assess the quantum and that they can’t take steps for recovery of dues, as IBC, being the more recent statute, overrides the Customs Act. Apart from this, there stands many legal and fundamental reasons that are followed in the present judgment. The arguments of the counsels have also made many of the legislative aspects of both the acts more clear.

The recent judgment has stated the prevailing position of IBC over the Customs Act. In 2017, an order was passed by the National Company Law Tribunal, Ahmedabad. It declared a moratorium under Section 13(1)(a). Section 13(1)(a) of IBC states the declaration of the moratorium for the purposes that are stated in Section 14 of the code. Moratorium refers to the legal authorization that is provided to the debtors for postponing the payment. Moratorium, in the present case, plays a vital role in defining the overriding effect of the code.

Another important aspect here is the initiation of CIRP. CIRP is the Corporate Insolvency Resolution Process which stands as a recovery mechanism for creditors. In the present scenario, CIRP was initiated with the permission of the Interim Resolution Professional. In regards to this, it was stated that warehouse goods must be taken into custody and no auction must be initiated for the same. This states that the procedure of moratorium was being followed as declared by NCLT.

However, in the year 2019, a notice was issued by the customs authority. It was regarding the non-fulfillment of export obligations by the Corporate Debtor. In furtherance, the same, five notices were issued regarding the same issue. This stands against the order passed by NCLT. In furtherance of this scenario, the judgment has been passed by the apex court declaring the positions of the IBC and Customs Act.

The positions of both acts have been clarified. It has been clearly stated by the bench that once the proceedings have been initiated under Section 14 or 33(5) of the IBC, the customs act cannot be bought into action. This limits the powers of authorities under Customs Act and due to the same, in the present case, the decision of NCLAT has been challenged. It has been stated that the IBC is a recent statute as compared to the customs Act. Also, the reference has been given to Section 142A of the Customs Act.

Section 142A of the Customs Act states that the Customs authorities would have the first and foremost charge over the assets of an assessee. However, this is an exception to the cases that are under the purview of the Companies Act 1956, Recovery of Debts Due to Banks and Financial Institutions Act 1993, SARFAESI Act, 2002, and the IBC, 2016”. In the present scenario, NCLT had already passed the order as per IBC. Hence it is due to this, that the customs authorities cannot commence acting against the debtor.

The exceptions that are stated in the section 142A of the Customs Act can also be found in Section 238 of IBC. Also, it clearly mentions that Section 238 overrides any of the provisions of other legislations which is inconsistent with the provisions of IBC. Following the given provisions, the following judgment sets a precedent to be followed in further cases too. As, in the present case, once the CIRP proceedings were initiated as per provisions of IBC, the issuance of notices stands void. This is because the same overrides the provisions of IBC that is again void in nature.

The Bench while pronouncement the judgment has stated that “issuance of notices by the respondents were plainly in the teeth of section 14 of the Code”. As they were done after the initiation of CIRP proceedings and this stands against the statutory provisions. Therefore, respondents have no right to claim goods by issuing various notices.

The decision of the apex court is based on two major aspects- overriding clauses and moratorium in IBC. Firstly, Section 238 of the code is facilitated by Sections 245 to 255 of the code. These provisions deal with the amendments of the other statutes and the overriding effects that they can over the code. As the main objective of IBC is to secure the maximized value of assets of the Corporate Debtor. The IBC states for time-bound resolution of the insolvency issues. As, with the initiation of CIRP, the Committee of Creditors gets control over the corporate debtor. This process is also time bound and after that duration, either the entity is revived or liquidation of the same begins. This also includes the calm period that is provided under IBC.

Another important aspect that follows is the moratorium as specified under Section 14 of the code, it is a principle. This applies in various instances including a company that goes into liquidation. This is an important aspect to be included because the provision of the customs act includes not only the IBC but, other acts too. Codes and acts such as IBC, Companies act, work in cooperation with each other and that is why also provides for a speedy trial. All such instances and provisions specify the necessity and application of IBC over the Customs act.

The IBC has certainly revived the insolvency regime in India. It has been very successful in combating the developing threat of NPAs, however, it has additionally benefited the economy in a plethora of ways. As in line with reports, a total of Rs. 2.5 lakh crores has been brought back into the banking system from 2016 upon the decision of insolvencies beneath IBC. There is a long way beforehand for the Indian insolvency regime to meet various other global challenges.

The main aim of the enactment of IBC was to have a clear and fresh start for the Indian industry. This was for providing opportunities to the market players for fair competition in the market. Also, to have a defined and restricted procedure for the initiation of proceedings. Following of the present case states the importance of IBC in the corporate structure too. As, many of the legislations interplays with the code, it is necessary to look after the overriding provisions of the statute. Therefore, the present judgment plays a vital role in defining and simplifying the process of liquidation. Also, this stands as a specified procedure to be followed by corporate debtors too.

The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.

For the latest news Download The Daily Guardian App.

Legally Speaking

Supreme Court: Commercial Transactions Outside Purview Of Consumer Protection Act 1986

Published

on

The Supreme Court in the case Annapurna B. Uppin And Ors. Versus Malsiddappa And Anr. observed wherein the complaints is filed seeking recovery of the investment from which the complainant is deriving benefit in the form of interest cannot be entertained under the Consumer Protection Act of 1986. The bench comprising of Justice Vikram Nath and Justice Satish Chandra Sharma in the case observed and has stated that it was a commercial transaction (investment) and therefore also would be outside the purview of the 1986 Act.

The court in the case stated that Commercial disputes cannot be decided in summary proceeding as stated under the 1986 Act but the appropriate remedy for recovery of the said amount, if any, admissible to the complainant respondent No.1, would be before the Civil Court. Thus, the complaint was not maintainable. The aforesaid observations came in the judgement authored by Justice Vikram Nath while deciding the civil appeal preferred by the appellants, the Legal heirs of the partner of the firm against the decision of the National Consumer Dispute Redressal Commission, NCDRC.

The present case relates to the alleged for the non-payment of the respondent no.1, the investment amount by the appellant(s). The respondent also had invested an amount of Rs. 5 lakhs in the partnership firm, wherein the husband of appellant’s was a partner to be repayable after 120 months with interest @ 18% per annum.

On the other hand, the Respondent No. 1 sought for the premature release of the invested amount but was asked to wait till the maturity period and when the amount was not returned even after the end of the maturity period, thus, he filed a consumer complaint claiming the said amount. Therefore, the Forums at various levels allowed the respondent No. 1 i.e., complaint, following which the appellant approached the Supreme Court.

Arguments:

It was also contended before the court Supreme Court by the appellants that the transaction to invest in the partnership firm was commercial and the consumer complaint filed seeking recovery of the investment made by respondent no. 1. Would not be maintainable under the 1986 Act. It has also been contended by the appellants that the complainant could not seek the recovery of the investment because when the investment was made by respondent no.1, he was the partner of the firm.

Further, it was contended before the court by respondent no.1 that the refusal of the appellants to return the investment amounted to a deficiency of service and therefore, the complaint was maintainable. It also being the case of respondent No.1 that the appellants herein inherited the estate of the Managing Partner Basavaraj Uppin, and hence cannot escape the liability of making the payment due to respondent No.1.

Observations Made By Supreme Court:

The court while finding force in the appellant’s contentions held that the complaint seeking recovery of the investment would not be maintainable under the old act. The court in the case noted that respondent no.1 would not benefit from the complaint as he was the partner of the partnership firm during the period of the investment made by him.

The court observed that this court is of the considered opinion that once there was a registered partnership deed dated May 27,1996, there is no further document which is placed on record by the complainant-respondent No.1 with regards to the dissolution of the said registered deed which continued till the time when the investment was made by the complainant respondent No.1 on May 21, 2002 and hence the complainant respondent No.1 would be deemed to be partner of the firm.

Deceased Partner Liability Do Not Passes Upon Its Legal Heirs:

The court in the case rejected respondent no.1 or complainant argument that being the legal heirs of the Managing Partner of the firm, the appellants cannot escape from the liability owed by the Managing Partner. It has also been stated by the said court that the legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner.

The court in the case observed that there was no evidence on record in order to show that a fresh partnership deed was executed reconstituting the firm in which the present appellants had become partners so as to take upon themselves the assets and liabilities of the firm. Further, the court stated that the law is well settled that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner.

The court while considering the facts and circumstances of the case allowed the appeal and the complaint preferred by the complainant or respondent No. 1 was set aside. Accordingly, the court allowed the appeal. The counsel, Mr. C. B. Gururaj, Adv. Mr. Prakash Ranjan Nayak, AOR Mr. Animesh Dubey, Adv. Mr. Debendra Ghosal, Adv. Appeared for the Petitioner(s). The counsel, Mr. Chinmay Deshpande, Adv. Mr. Anirudh Sanganeria, AOR represented the respondent(s).

Continue Reading

Legally Speaking

Former AAP Minister Moves Delhi High Court, Seeks Removal Of Kejriwal From CM’s Post

Published

on

In the case Sandeep Kumar v. Arvind Kejriwal and Others, the Delhi High Court observed a petition filed by Aam Aadmi Party MLA Sandeep Kumar seeking the removal of Arvind Kejriwal from the post of Chief Minister of Delhi. Arvind Kejriwal is presently in judicial custody related to an Enforcement Directorate (ED) case concerning the excise policy. This is the third petition seeking such a prayer, with the previous two pleas being rejected by the Division bench headed by Acting Chief Justice Manmohan.

Sandeep Kumar approached the court as a Court of first instance in writ jurisdiction, not as a Public Interest Litigation (PIL), in his individual capacity. He, being a lawyer by profession, claims to be a founding member of the Aam Aadmi Party and a social worker.

The plea filed seeks the issuance of a writ of quo warranto against Kejriwal, calling upon him to show by what authority, qualification, and title he is holding the office of the Chief Minister of Delhi. Additionally, the plea prays for an inquiry to dislodge Kejriwal from the office of the Chief Minister, with or without retrospective effect.

Kumar claims that as a voter of the Delhi Assembly Election, he is personally aggrieved for having a Chief Minister for his Union Territory who has incurred an ‘incapacity to hold the post’ and ‘who can never function as the Chief Minister from custody or prison’ as envisaged by the Constitution of India.

The petitioner argues that Kejriwal has incurred an incapacity to carry out his functions as the Chief Minister of Delhi under the Constitution and therefore, he cannot hold the post. The plea emphasizes that the right to have a government in accordance with the Constitution is a Constitutional Right of every citizen and voter.

Arvind Kejriwal was arrested on the night of March 21 and subsequently remanded to judicial custody until April 15. However, the court refused to entertain a Public Interest Litigation (PIL) seeking Kejriwal’s removal from the post of Chief Minister, observing that there is no scope for judicial interference in the matter, and it is for other organs of the State to examine the issue.

Continue Reading

Legally Speaking

Delhi High Court Reserved Verdict On Arvind Kejriwal’s Plea Challenging ED Arrest In Liquor Policy Case

Published

on

The Delhi High Court in the case Arvind Kejriwal v. Directorate Of Enforcement observed and has reserved verdict on the plea moved by Chief Minister Arvind Kejriwal challenging his arrest by the Enforcement Directorate, ED in the money laundering case related to the alleged liquor policy scam case.

The bench headed by Justice Sharma in the case observed and has denied any interim relief to Kejriwal and only issued notice on his plea challenging the arrest, as well as his interim application seeking immediate release.

In the present case, Kejriwal is currently in judicial custody. Kejriwal was being arrested on the night of March 21.

The Trial Court in the case remanded him to six days of ED custody, which was extended by further four days. On April 01, he was remanded to judicial custody till April 15.

It has been stated by the Enforcement Directorate, ED that Kejriwal is the kingpin and the key conspirator of the excise scam and there were reasons to believe on the basis of material in its possession that he was guilty of the offence of money laundering.

It has also been alleged that the Aam Aadmi party was the ‘major beneficiary’ of the proceeds of the crime and has committed the offence through Kejriwal.

The response stated that, the Aam Aadmi Party, AAP is the major beneficiary of the proceeds of crime generated in the Delhi Liquor Scam. The Sh Arvind Kejriwal was and is not only the brain behind the AAP but also controls its major activities, he was also one of the founding members and was also involved in the decision making of the policy as evident from the statements of the witnesses.

Arguments:

The counsel, Additional Solicitor General SV Raju told the Court that investigation qua the sitting CM is at a nascent stage. Thus, he also pointed that Kejriwal has not challenged the latest order remanding him to 15 days judicial custody. He has also challenged the first remand order. Please look at the remand order of 26 March. Today we are on April 3. The second remand order is passed on March 28. That has not been challenged. Thus, the third remand order of judicial custody has not been challenged. So today his custody isn’t pursuant to arrest or first remand order, it’s pursuant to April 1 order which has not been challenged. Therefore, Raju also wondered if Kejriwal can challenge his remand since he did not oppose it. ‘He voluntarily accepts please remand me further. Can he challenge the remand order? Or is it barred by waiver? They are blowing hot and cold at the same time. You cant challenge the remand order and say please pass the order and accept it. They have not challenged the latest orders pursuant to which he is in custody. Thus, custody can’t be said to be illegal.”

The counsel, Senior Advocate Abhishek Manu Singhvi appearing for Kejriwal argued before the court that the central probe agency did not comply with Section 50 PMLA which empowers it to issue summons, collect evidence, etc. thus, it being clear that section 50 involves an inquiry. Because it’s inquiry which enables ED to make up mind about arrest and prosecution. No attempt is made to record my section 50 even at my residence. While pointing out the remand application he added ED wants to “find out” the role of Chief Minister. ‘Surely that’s not a ground for today’s arrest… There has to be specific role of the petitioner, even for the company, which I’m denying.’

On the other hand, it has been argued by the ASG that the fact that a PMLA offence has taken place is clear and beyond any doubt. Because as far as first Police Custody and subsequent Police Custody is concerned, court has taken cognizance… Categorical finding that there is money laundering. Cognizance of the offence of money laundering. Nobody has challenged the order.

It has also been contended by the Singhvi that ED forced the approvers Raghav Magunta, Sarath Reddy and Magunta Reddy to make statements against Kejriwal. Further, it has been alleged that two approvers even have links with the ruling party. Adding to it, Singhvi stated that initial statements that did not implicate Kejriwal are not even put on record by the ED. ‘These statements are kept in unrelied. Why should the court not see it? Is it fair? What cannon of fairness are you carrying ED? Out of 13 statements by this Reddy. He says nothing in 11 statements. The judge will go by one statement?’

He also questioned the necessity of arrest amid upcoming general elections. The test is not can arrest. It is demonstrating the necessity to arrest. The should arrest test. The necessity to arrest immediately before elections… the only object is to insult, humiliate and disable… So that the petitioner is unable to participate in the election process and to try to demolish the party before the first vote is cast. The timing reeks of basic structure issue, free and fair election issue and democracy issue. What is this urgency or necessity?

Further, Singhvi stated that it said to be a flight risk, given his deep roots in the society. Responding to this ASG stated that, supposing a political person commits murder two days before elections. This means he can’t be arrested? Basic structure comes into play? Criminals are supposed to be arrested and put in jail. In such cases there is no infringement of basic structure.

Further, it has been argued by ASG that calculation was done as to why 5 percent profit was made 12 percent in the new policy. “Only inference is that it was done so that 7 percent of portion is used for giving kickbacks. The fact that there is a scam is beyond doubt. Howsoever hue and cry you make, its a fact that a scam was there… Finding of the actual proceeds of crime is irrelevant if we make out a case that you were involved in money laundering.

Facts of the Case:

Kejriwal had skipped nine summons issued to him by ED. The Aam Aadmi Party leaders Manish Sisodia and Sanjay Singh are also accused in the case and are presently in judicial custody. While following his arrest, Kejriwal had promptly moved an urgent petition before the Supreme Court challenging his arrest. However, the same was withdrawn later. Kejriwal has previously moved the Delhi High Court, the division bench wherein it challenged the summons issued to him by the central probe agency. He has also filed an application seeking interim protection. The matter is fixed for hearing on April 22. The Kejriwal has skipped the summons, claiming that they are illegal.

It has also been alleged by the ED that Arvind Kejriwal is the ‘kingpin’ of Delhi excise scam and is directly involved in the use of proceeds of crime accounting to over Rs. 100 crores. It being the case of ED’s that the excise policy was implemented as part of a conspiracy to give wholesale business profit of 12 percent to certain private companies, although such a stipulation was not mentioned in the minutes of meetings of Group of Ministers, GoM. Further, it has also been claimed by the Central agency that there was a conspiracy that was coordinated by Vijay Nair and other individuals along with South Group to give extraordinary profit margins to wholesalers. According to the agency, Nair was acting on behalf of Chief Minister Arvind Kejriwal and Manish Sisodia.

Continue Reading

Legally Speaking

Delhi High Court CM Arvind Kejriwal’s ED Custody extended By 4 Days Till April 1 In Liquor Policy Case

Published

on

The Delhi High Court in the case Surjit Singh Yadav v. Union Of India observed and has remanded the Chief Minister Arvind Kejriwal to Enforcement Directorate, ED custody till April 01 in the money laundering case which relates to the alleged liquor policy scam case. Arwind Kejriwal was being arrested on the night of March 21, 2024. The Special CBI judge Kaveri Baweja of the Rouse Avenue Courts passed the order after Kejriwal was produced in court on the expiry of his six days of Enforcement Directorate, ED custody.

The Delhi High Court in the case declined any interim relief to Kejriwal and only issued notice on his plea challenging the arrest and remand. The counsel, Additional Solicitor General SV Raju told the court that the sitting CM was giving “evasive replies” during interrogation and the agency needs to confront him with some individuals who have been summoned from Goa. Thus, ED sought 7 more days of custody. He doesn’t get exonerated if he is a CM. There is no different standards for a CM. Right to arrest a CM is no different from an ordinary man.”

Yesterday, the Enforcement Directorate, ED summoned AAP’s Goa unit chief Amit Palekar and some other party leaders for questioning. Thus, they have been asked to appear at the agency’s Goa office on March 28, 2024. Further, the Kejriwal while appearing in person submitted before the court that he is not opposing remand. He claimed the entire case is a ‘political conspiracy’ and there is no such material against him. It has also been alleged by the Delhi CM that the central probe agency was collecting selective material and even the approver was forced to make a statement against him. Further, the central probe agency submitted before the court that Kejriwal has refused to share the password of his mobile phone.

Adding to it, Kejriwal responded that ED cannot force him to unlock his electronic gadgets. Delhi High Court Rejected PIL For Removal Of Arvind Kejriwal From Post Of Chief Minister The Delhi High Court rejected the Public Interest Litigation, PIL moved seeking removal of Arvind Kejriwal, who has been arrested by the Enforcement Directorate, ED in the liquor policy case, from the post of Chief Minister of Delhi. The Division bench comprising of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora in the case observed and has stated that the petitioner failed to show any bar in the law which prohibits the arrested CM from holding office. The CJI orally stated that, ‘Show us, where is the prohibition. Show us any legal bar which you’re canvassing’.

Further, the bench stated that there is no scope for judicial interference in the matter and the executive is examining the issue. The court in the case observed that if there is a constitutional failure, President or Governor will act on it…Is there any scope for judicial interference in this? The LG is examining the issue. It will go to the President. It belongs to a different wing. There is no scope for judicial interference in this. In the present case, the petition is moved by one Surjit Singh Yadav, a Delhi resident claiming to be a farmer and social worker. It has been claimed by him before the court that a Chief Minister accused of a financial scandal should not be permitted to continue in public office. Kejriwal is presently in ED custody which ends on March 28, 2024. It has been submitted by Yadav in the PIL that Kejriwal’s continuation in the post would not only lead to obstruction of due process of law and disrupt the course of justice, but also would lead to a breakdown of the constitutional machinery in the State as Kejriwal does not satisfy most of the limbs of Article 163 and 164 of the Constitution of India owing to his incarceration.

Further, the plea stated that the Respondent No.4 has virtually forfeited his office as a Chief Minister of account of being arrested and as he is in the Custody he has disabled himself from performing the duties and responsibilities of being a public servant and as such he ought not to continue as a Chief Minister. Therefore, the AAP Ministers have been making statements in the media that Kejriwal will not resign from the post and if need be, he will run the government from inside the prison.

It has been submitted by Yadav that a jailed CM would be incapable of transacting any business that the law enjoins upon him and if he is allowed to do so, any material, irrespective of its secretive nature, would have to be scanned thoroughly by the prison authorities before it reaches Kejriwal’s hands and such an act would amount to direct breach of oath of secrecy administered to the CM under the Third Schedule of the Constitution. Further, the plea stated that the Transaction of Business of the Government of National Capital Territory of Delhi Rules, 1993 empowers a CM to call for files from any department of the Cabinet and if Kejriwal continues as CM, he would be well within his rights to demand for the investigation of files wherein he has been arraigned as an accused.

The plea states that, such a situation is against the ethos of Criminal Jurisprudence. Therefore, Yadav had prayed the Court to issue a writ in the nature of Quo Warranto, calling upon Kejriwal to answer under what authority he is holding the post of CM and consequently remove him. However, Yadav has also filed another PIL seeking to prevent Kejriwal from issuing directions or orders while in ED custody. About The Case: The Kejriwal had skipped nine summons which were issued to him by the Enforcement Directorate, ED.

The Aam Aadmi Party leaders Manish Sisodia and Sanjay Singh are also accused in the case and are presently in judicial custody. The Kejriwal while following the arrest of him had promptly moved an urgent petition before the Supreme Court challenging his arrest. Later, the same was withdrawn. Therefore, Kejriwal has previously moved the Delhi High Court (division bench) challenging the summons issued to him by the central probe agency. Further, the Kejriwal has also filed an application seeking interim protection.

The matter was fixed for hearing on April 22. It has been alleged by ED that two criminal complaints had been filed against Kejriwal in city’s Rouse Avenue Courts alleging non-compliance of the summons by him. Kejriwal has skipped the summons, claiming that they are illegal. It has been alleged by the ED that Arvind Kejriwal is the ‘kingpin’ of Delhi excise scam and is directly involved in the use of proceeds of crime accounting to over Rs. 100 crores.

It being the case of ED that the excise policy was implemented as part of a conspiracy to give wholesale business profit of 12 percent to certain private companies, although such a stipulation was not mentioned in the minutes of meetings of Group of Ministers, GoM. It has been claimed by the Central Agency that there was a conspiracy that was coordinated by Vijay Nair and other individuals along with South Group to give extraordinary profit margins to wholesalers.

Continue Reading

Legally Speaking

Supreme Court: Plea To Stay Citizenship Amendment Act

Published

on

The Supreme Court in the case was hearing the application filed to stay the Citizenship Amendment Act 2019 and the Citizenship Amendment Rules 2024.

The bench comprising of CJI DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra was hearing the present matter. In the present case, the court was hearing the 237 writ petitions challenging the CAA, filed in 2019.

Therefore, these petition before the Court on October 31, 2022. The Union Government notified the Citizenship Amendment Rules 2024 to implement the CAA and notified the formation of committees at the State or UT levels to process the applications on March 11.

The petitioner are Political party Indian Union Muslim League (IUML, the lead petitioner in the case), Democratic Youth Front of India (DYFI, youth wing of the CPI(M)), All Assam Students Union, Assam opposition leaders Debrabata Saika and Abdul Khaleque, State of Kerala, AIMIM head Asaduddin Owaisi, Socialist Democratic Party of India etc.,

The Senior Advocate Kapil Sibal told the court that there was no question of a pause back then since the rules were not notified. Adding to it, Solicitor General Tushar Mehta then said that the fact that the rules were notified before the elections was irrelevant.

The party leader Jairam Ramesh has stated that, the pposition has slammed the Narendra Modi government over the timing of the law’s implementation – four years after it cleared the Parliament. The move is “evidently designed to polarise the elections, especially in West Bengal and Assam”.

Further, the Trinamool Congress chief and Bengal Chief Minister Mamata Banerjee stated that she doubts the legality of CAA and alleged a conspiracy to “snatch citizenship rights. The Bengal Chief Minister Mamata Banerjee says that, BJP leaders say CAA gives you rights. But the moment you apply for citizenship, you become illegal migrants and you will lose your rights. You will lose rights and be taken to detention camps. Please think before you apply. The Centre has trashed the Opposition’s allegations. Stressing that the CAA is not “unconstitutional”, Home Minister Amit Shah has accused the Opposition of resorting to the “politics of lies”.

Amit Shah stated that, On the timing of the law’s implementation, “BJP made it clear in its 2019 manifesto that it will bring CAA and provide Indian citizenship to refugees (from Pakistan, Bangladesh and Afghanistan). BJP has a clear agenda and under that promise, the Citizenship (Amendment) Bill was passed in both houses of Parliament in 2019. It got delayed due to Covid.” Further, Amit Shah stated that, minorities of the country “need not be afraid because CAA has no provision to take back the rights of any citizen”.

Court Hearing:

The bench passed an order appointing separate nodal counsels for petitions which relates t0o States of Assam and Tripure. The Adv Ankit Yadav appointed for the petitioners’ side and Adv Kanu Agarwal for the Petitioners.
Sibal: the moment something like this happens, give us liberty to move here.
CJI: We are here.
Jaising : Would your lordships be pleased to say that any citizenship granted will be subject to the outcome of the petitions.
SG : No, no.
CJI : They don’t have the infrastructure in place, the committee..
SG : This attempt was made outside the court four years back. Misleading people that you will be out of NRC. Same thing Mr. Pasha did. NRC is not an issue here. Grant of citizenship is. Please don’t do this. Nizam Pasha : Muslim members left out of NRC will be prejudiced.. 19 lakhs people left out of NRC, it applies to them.
SG : NRC is not an issue
CJI : They are not willing to make a statement, that is why we keep on April 9.
Sibal : If something happens, we will come..
CJI : What we will do is we will keep on April 9, 2024.
Jaising : In the meantime no citizenship.
SG : I am not making any statement.
SC : We direct the proceedings be listed on April 9, 2024.
Sibal : In meantime no citizenship be granted.
SG: Realistically speaking, I need 4 weeks.
CJI : You can file response in one case, opposing interim prayer.
SG : Many matters have different contentions.
Sibal : Then make a statement that no citizenship will be granted
CJI dictates order : On 22.01.2020 notice was issued. The rules have been
recently notified. This has given rise to applications for stay. SG submits that 4 weeks’ time be granted to file response. The request of 4 weeks’ time is opposed on the ground that in the meantime if citizenship is granted, it will be irreversible.
Sibal : There are serious issues of constitutionality.
Sr Adv Ranjit Kumar (for migrant) : From Balochistan, I came to India because I was persecuted. If I am given citizenship, how is it affecting them?
Jaising : They will get the right to vote!.

Continue Reading

Legally Speaking

Delhi High Court: ED summons cannot be quashed merely because documents required for confrontation or probe not specified in it

Published

on

The Delhi High Court in the case Mr Talib Hassan Darvesh v. The Directorate Of Enforcement observed and has said that the summons issued by Enforcement Directorate, ED cannot be quashed merely because relevant documents are required for investigation or confrontation with an accused who have not been specified in them.

The bench of Justice Anoop Kumar Mendiratta in the case observed and has stated that the summoning, in exercise of statutory powers, cannot be stalled merely on mere apprehension that the accused may be arrested and prosecuted on basis of summons issued after registration of ECIR in the proceedings which are initiated by the Enforcement Directorate, ED. The court in the case observed and has denied the interim relief to Talib Hassan Darvesh, the accused in the money laundering case.

Before the court, he also sought a stay on the summons which is issued to him by Enforcement Directorate, ED and to restrain the probe agency from taking any further coercive steps against him. Therefore, the Enforcement Directorate, ED opposed the petition which being on the ground that Darvesh cannot be insulated from any coercive action at the initial stage itself and no protective orders could be passed in his favour, ignoring the mandate of Section 45 of PMLA.

It has also been submitted before the court that the proceedings which are initiated by ED were an independent investigation into money laundering allegations based upon the ECIR and the benefit could not be granted which being merely on account of orders granting anticipatory bail to Darvesh in FIR registered by CBI.

The court stated while denying the relief that the summons issued by the Enforcement Directorate, ED cannot be quashed merely because the relevant documents required for purpose of investigation or confrontation to the petitioner, have not been specified in the summons. Adding to it, the court stated that since ECIR is an internal document which is being created before initiation of prosecution against persons involved with process or activity connected with proceeds of crime and it is not necessary to reveal the evidence collected by the Enforcement Directorate, ED at this stage in the summons forwarded to Darvesh.

Further, the court stated that the petitioner is yet to be absolved of scheduled offence by way of discharge, acquittal or quashing and as such protection orders cannot be issued in favour of petitioner ignoring the mandate as it is stated under Section 45 of PMLA, 2002 for grant of bail. Further, the court stated that summoning in exercise of statutory powers cannot be stalled merely on mere apprehension that petitioner may be arrested and prosecuted on basis of summons issued after registration of ECIR, in proceedings initiated by Enforcement Directorate, ED.

The court while considering the facts and circumstances of the case observed and found no grounds for interim relief to be made out at this stage, thus, the court disposed of the plea. Accordingly, the court the petition seeking to quash of the ECIR and summons for hearing on May 07.

The counsel, Advocates Mr. Siddharth Luthra and Mr. Siddharth Agarwal, Sr. Advs. with Mr. Ayush Agarwal, Mr. Udhav Sinha, Mr. Amar Gahlot, Ms. Srishty Jaura, Mr. Nalin Bajaj, Ms. Purvi Garg and Mr. Prashant Singh appeared for the Petitioner. The counsel, Advocates Mr. Zoheb Hossain, Special Counsel for E.D. with Mr. Vivek Gurnani, Mr. Kartik Sabharwal and Mr. Abhigiya represented the respondent.

Continue Reading

Trending