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Madras HC dismisses pleas to quash two IT complaints against Karti, Srinidhi Chidambaram over Muttukadu land sale transactions [Read Order]

In the common order, the Court has also dismissed connected pleas challenging the transfer of these cases from a Magistrate Court trying Economic Offences to a Sessions Court designated as a Special Court for MPs/MLAs.

Meera Emmanuel

The Madras High Court on Tuesday dismissed pleas challenging Income Tax proceedings launched against Member of Parliament Karti Chidambaram and his wife Srinidhi Chidambaram over disputed transactions pertaining to the sale of certain property in Muttukadi village, Tamil Nadu.

Two complaints were filed against the Chidambarams in this regard. The first complaint against Karti Chidambaram involved charges under Sections 276C(1) and 277 of the Income Tax Act, 1961, in relation to transactions in the year 2014-15.

The second complaint involved charges under Sections 276C(1) and 277 read with Section 278 of IT Act against both Karti and Srinidhi Chidambaram, in relation to the Annual Year 2015-16.

After considering rival submissions and finding that that the proceedings were not barred by limitation on an application of the Economic Offences (Inapplicability of Limitation) Act, 1974, Justice M Sundar opined that the dispute needs to be decided in trial. Referring to factual submissions made during the hearing, the Court said,

"The aforesaid narrative leaves this court with the considered view that issues that arise in said criminal complaints are matters for trial and no ground has been made out for quashing the same."
Madras High Court

In the same common order, the Court has also dismissed a challenge raised to the transfer of these cases from the court of an Additional Chief Metropolitan Magistrate in Egmore designated as an Economic Offences Court, to a Special Court for the trial of criminal cases against elected MPs/MLAs.

Notably, the Special Court was established in Tamil Nadu in compliance with the Supreme Court's directions in the Ashwini Kumar Upadhyay case, whereby the top Court directed that all pending criminal cases relating to MPs and MLAs have to be transferred to the Special courts for fast tracking the same.

The Chidambarams had challenged the transfer of the IT case prosecution launched against them from the Economic Offences Court to the Special Court on grounds, inter alia, that they would be thereby deprived of one tier of remedy i.e. the remedy of filing a revision petition in the event of an adverse ruling.

This is because an appeal against a conviction by the Economic Offences court would lie to a Principal Sessions Judge in the City Civil Court, Chennai under section 374(3), CrPC. Further, a revision plea challenging an adverse ruling by the Principal Sessions Judge may then be moved before the High Court under Section 397, CrPC

On the other hand, no such revision plea can be moved against a ruling by the Special Court i.e. the Sessions Court. In this case, only an appeal would lie only to the High Court under 374(2), CrPC.

The Court summed up the grievance thus, "... to put it differently, if said criminal complaints are tried by Economic offences Court, i.e., EO court, then parties can prefer a revision under section 397 of Cr.P.C to this court post appeal, but the same will be unavailable if it is tried and disposed of by transferee court, i.e., Sessions court."

Justice Sundar, however, went on to dismissed this as a ground for invalidating the transfer, since revision is a relief granted on the discretion of the Court, unlike an "appeal" which is a matter of right.

As such, the petitioners cannot claim any right to the remedy of moving a revision petition, the Court said.

"The argument of petitioners that one tier, namely, revision under section 397 of Cr.P.C is taken away does not hold water as courts have repeatedly held that revision under Section 397 Cr.P.C is not a legal right as it is a discretionary relief."
Madras High Court

The Court added that, "no prejudice has been demonstrated by petitioners owing to being asked to stand trial in a Sessions Court."

The Court further dismissed the argument that Chidambaram was not an elected MP at the time of the alleged offence, nor when the complaints were lodged. In this regard, the High Court highlighted that the Supreme Court in Ashwini Kumar's case had directed that all pending cases against legislators be transferred to the Special Court.

The same ruling was invoked to reject a contention that the matter ought not to be transferred to the Special Court since in one complaint, only one of the accessed (Karti Chidambaram) is an elected MLA. In response, the Court reiterated that, "(the) Hon'ble Supreme Court has directed transfer of all cases involving sitting / former M.Ps /M.L.As."

Another ground rejected concerned whether cases could be transferred at all to the Sessions Court since it does not otherwise possess original jurisdiction. Justice Sundar observed that his contention is neutralised in view of the Supreme Court's ruling in Ranbir Yadav v. State of Bihar, wherein it was held that "committal is not necessary in a case of transfer."

In view of these observations, the Court proceeded to quash the four criminal petitions filed before it to quash the IT Act proceedings against the Chidambarams and the transfer of the same to the Special Court.

Before parting with the case, Justice Sundar was also prompted to urge the Tamil Nadu Government and the High Court administration to designate more Metropolitan Magistrate Courts in the State as Special Courts.

This was in view of the fact that the Supreme Court in Ashwini Kumar Upadhyay's case had made it clear made it clear that Courts at both Sessions and Magisterial levels can be designated as Special Courts, as necessary to tackle the case load.

Justice Sundar observed that the concerned authorities will do well "to designate one or more Metropolitan Magistrate/s in Chennai for trying criminal cases related to elected M.Ps/M.L.As, in accordance with the directives of Hon'ble Supreme Court in Ashwini Kumar Upadhyay case which is the basis for this entire matter.Though obvious, it is made clear that this order will be an impetus... for an exercise in this direction."

Read the Order:

Srinidhi Karti Chidambaram and anr v. Deputy Director of IT Dept and ors - Madras HC order - May 12.pdf
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