Saradha scam: PMLA court dismisses case against Nalini Chidambaram for receiving ₹1.35 crore in legal fees

A Prevention of Money Laundering Act (PMLA) court in Kolkata recently dismissed a case registered against Senior Advocate Nalini Chidambaram by the Enforcement Directorate (ED) in connection with the multi-crore Saradha chit fund scandal..Judge Prashanta Mukhopadhyay said that the legal fees of ₹1.35 crore received by Chidambaram could not be treated as proceeds of crime for non-issuance of tax invoice or bill."I find that in a collective investment scheme or ponzi scam of Rs. 1983,02,37,713.00/- (About 2000 Cr.) an amount of Rs. 1.349 Cr. is so minuscule that same cannot, under any stretch of imagination, be said to have nexus with the activity of concealment or disguising the illicit source of the same. So far as the acquisition or possession is concerned, the lawyer’s fee from such tainted persons are not uncommon, inasmuch as, the clients approaches the lawyers when he / she faces such serious legal issues," the order stated..The ED had argued that Chidambaram received a total amount of ₹1.349 crore between 2010 and 2012 from erstwhile Saradha Group Chairman and Managing Director Sudipto Sen through his companies. It stated that no bill or invoice was raised by Chidambaram against such receipt of payment.In response to a 2016 directive sent by the ED, Chidambaram through her representative said that there was no formal agreement between her and Sen or his entities, and that her interaction with Sen was only through Manoranjana Sinh, who was also implicated in the Saradha chit fund case. Chidambaram argued that she had received the alleged amount as her legal fees, which was paid to her by M/s Saradha Reality India on behalf of Manoranjana Sinh.ED also alleged on the basis of an email exchange between Chidambaram and Sen that they had asked then Finance Minister Pranab Mukherjee to stall a Securities and Exchange Board of India (SEBI) inquiry into the scam..The Court observed that no money or property is tainted unless it is derived from illicit sources or activities. In this regard, the judge referred to an example:"...a criminal lawyer defending an accused in a case for kidnapping for ransom, receives his fee from the accused which he (accused) had derived in committing the offence, is tainted money so long it is in his possession, but when the same money is received by the lawyer as his fees, it is no longer tainted because any of the activities relatable to the schedule offence cannot be attributed to the lawyer defending him before the court of law."The Court considered the facts that Chidambaram had received the money in her bank account after deducting tax at source (TDS), and that she received money not exceeding ₹10 lakh at a time."Whether she is liable for service tax or not is a matter to be investigated into by other agency, and not by the ED. Whether issuance of no tax invoice or bill is violation of any law relating service tax is a matter to be investigated into by other authority or agency," the judge added.On going through the submissions and evidence, the Court held,"A lawyer, many times, send his/her client(s) to other lawyer or friends or officers or professionals for further assistance...There is nothing wrong in it. In the present case, Mrs. Chidambaram guided his client to take assistance of other professionals who were having better skill and knowledge to provide him /her (Mr. Sudipta Sen or his companies or Mnoranjana Sinh) proper advice. When a lawyer is invited to any place as a part of professional relationship, the clients pay the fees of air ticket, hotel charges, etc., which is also not unusual to sense anything foul.".It also held that the allegation that Chidambaram and Sen approached Mukherjee to stall the SEBI inquiry is not at all supported by any legally admissible evidence.Thus, it dismissed the complaint against Chidambaram..Special Public Prosecutors Abhijit Bhadra and Bhaskar Prosad Banerjee represented for the complainant, Enforcement Directorate (ED)..[Read Order]