The High Court of Karnataka on Friday refused to interfere, at this stage, with the proceedings initiated against Devas Multimedia Pvt Ltd under the Prevention of Money Laundering Act (PMLA), 2002, in connection with the scam allegedly involving the company in its deal with Antrix Corporation Ltd, a commercial arm of the Indian Space Research Organisation.
The Court also refused to interfere with the proceedings initiated under the Foreign Exchange Management Act (FEMA).
Justice B.S. Patil passed the order while dismissing the petitions filed by the company, and D. Venugopal and M. Umesh, who were the directors of the company.
The Court said that the petitioners have adequate safeguard in the form of effective remedies within the four corners of FEMA to seek redressal.
Similarly, the Court said that there is an efficacious alternative mechanism provided under the PMLA for redressal of grievances at different stages – first before the adjudicating authority and later before the appellate authority. The petitioners could approach the Court after availing the remedy under the appellate authority as per Section 42 of the PMLA, the Court said.
While terming the provisional attachment of assets and issuance of show-cause notices as pre-emptive measures, the Court said that the petitioners were not justified in rushing to the High Court when the the law provides an opportunity for persons to place such materials before the authorities concerned to show that the property is not involved in money laundering.
The Court also did not accept the contention of the company that provisions of PMLA could not have invoked retrospectively against it as the deal with Antrix was related 2005 and the offences under Section 420 and 120B of the IPC and Section 13 of the Prevention of Corruption of Act were brought under the ambit of PMLA only in 2009.
“The question whether petitioner was involved in money laundering as provided under Section 3 of PML Act has to be decided by the competent authority. What is the date of laundering in the facts of present case…has to be examined by the authorities,” the Court observed.
The Enforcement Directorate (ED) had initiated proceedings under the FEMA based on a complaint, dated May 31, 2016, that Devas had received foreign investment of around Rs.578 crore in violation of FEMA. The ED had provisionally attachment of mutual funds and bank accounts of Devas under PMLA on February 27, 2017 with respect to its deal with Antrix to secure S-band satellite spectrum for providing multimedia service.
