The Supreme Court on January 31, 2023 reserved orders in a petition filed by journalist Rana Ayyub challenging the summons of a Uttar Pradesh court in a money laundering case.
Appearing before a Bench of Justices V. Ramasubramanian and J.B. Pardiwala, advocate Vrinda Grover, for Ms. Ayyub, argued that the summons was an "abuse of the process of law" as the Ghaziabad court in Uttar Pradesh had "absolutely no jurisdiction" in the case. The funds were allegedly collected through an online crowd-funding platform and transferred to a bank account in Navi Mumbai.
She submitted that an FIR lodged by a founding member of the Hindu IT Cell against Ms Ayyub in Ghaziabad was the "trigger" for an Enforcement Directorate (ED) complaint against Ms. Ayyub under the Prevention of Money Laundering Act (PMLA). The FIR complainant had no personal grievance against Ms. Ayyub. Further, no chargesheet had been filed against Ms. Ayyub under the predicate/scheduled offence for the past 16 months after the FIR was filed.
Ms. Grover said her client had cooperated with the ED investigation.
"Then why am I being summoned to Ghaziabad? I was never arrested. The ED, armed with a draconian law like PMLA, has chosen the place where I should be tried… a place where my very safety is under threat… Can my personal liberty be deprived by a procedure not authorised by law? That is the question," Ms. Grover argued on behalf of Ms. Ayyub.
Solicitor General Tushar Mehta, for ED, said a large number of people from Ghaziabad and Uttar Pradesh had contributed to the crowd-funding through an online platform called Ketto. A part of the cause of action had taken place in Uttar Pradesh, undeniably.
He alleged that the money received was launderered by Ms. Ayyub through fake bills and for personal luxury items and consumption, including "groceries".
Mr. Mehta said since the predicate offence was registered in Ghaziabad, the PMLA case had to be concurrently tried in the same place. He argued that the ED cannot be expected to run around and file cases where the laundered money is deposited.
"What is being said that if a person chooses to launder money in Singapore then only Singapore court has jurisdiction and ED has to go there? That is not the scheme of the Act," he argued.
He said the petitioner cannot make a case on the basis of the antecedents of the complainant or on the argument that the latter was not personally aggrieved by the act in question. The ED, after investigation, had prima facie registered a case of money laundering.
Mr. Mehta said Ms. Ayyub could seek anticipatory bail if she feared arrest. A judicial order of the Ghaziabad court cannot be subject of a writ petition under Article 32 of the Constitution.
The Ghaziabad Police had registered the case in September 2021 with respect to the money raised through fundraiser campaigns via Ketto. Various provisions of the Indian Penal Code, the Information Technology Act, and the Black Money Act were invoked. Based on the case, the ED initiated its money laundering probe.
It was also alleged that Ms. Ayyub had received overseas donations without registration under the Foreign Contribution (Regulation Act).
According to the ED, its probe revealed that Ms. Ayyub had launched three fundraiser campaigns on the Ketto platform starting from April 2020 and collected funds totalling to over ₹2.69 crore. The campaigns were to help raise funds for slum dwellers and farmers, relief work for Assam, Bihar, and Maharashtra, and assist those impacted by COVID-19 in the country.
The agency has alleged that the funds raised on the online platforms were received in the accounts of her father and sister and subsequently transferred to her personal accounts. Ms. Ayyub allegedly used the funds to create a fixed-deposit of ₹50 lakh for herself and also transferred ₹50 lakh in a new bank account.
Only about ₹29 lakh was used for relief work, said the ED, alleging that in order to claim more expenses towards relief work, fake bills were submitted by Ms. Ayyub.
Ms. Ayyub had earlier issued a statement terming the allegations in the media baseless, mala fide, and fanciful. Giving a detailed account of the funds and expenditures, she said that she had provided bills/invoices for relief work worth ₹40 lakh.
She had donated ₹74.50 lakh to the CM CARES Fund of Maharashtra and the PM CARES Fund. Over ₹1.14 crore was used for relief work and ₹1.05 crore was collected as tax by the Income Tax Department, and the rest of the money was in the form of the fixed deposit in her account, which had been created for setting up a hospital, said her statement.