Madras HC quashes IT department's criminal prosecution against Chidambaram's family

Chennai: In a relief to embattled Congress leader P Chidambaram, the Madras High Court on Friday quashed criminal prosecution against his family members in a black money case, holding that no such offence was made out against them.

The issue relates to alleged non-disclosure of overseas assets and bank accounts held by Chidambaram’s wife Nalini, his son Karti and daughter-in-law Srinidhi.

According to the I-T Department, the three had not disclosed a property they jointly owned in Cambridge in the UK worth Rs 5.37 crore in their returns which amounted to an offence under the Black Money (Undisclosed Foreign Income and Assets) Act and Imposition of Tax Act.

When their petitions came up before a division bench of justices S Manikumar and Subramania Prasad, the judges said no case was made out and quashed the criminal prosecution.

The family members of the former union minister had filed writ petitions challenging the criminal prosecution.

On October 12, the high court had extended its interim order dispensing with their appearance before a special court here till Friday.

The department has also alleged that Karti Chidambaram had not disclosed an overseas bank account he holds with Metro Bank in the UK and investments he had made in Nano Holdings LLC, USA.

He had also “failed” to disclose investments made by Chess Global Advisory, a company co-owned by him, which amounted to committing an offence under the Black Money Act, the department said in its complaint in the special court in May.

Contesting the prosecution order, the three had approached the high court. As a single judge bench refused any relief, they moved in appeal.

On June 27, the first bench headed by the then Chief Justice Indira Banerjee had reserved its order on the appeal.

However, as Justice Banerjee was later elevated to the Supreme Court, the order could not be pronounced.

The appeal was then referred to the bench headed by Justice Manikumar for fresh hearing but no relief was granted.

The Enforcement Directorate had on October 25 listed in a charge sheet former union finance minister Chidambaram in the Aircel-Maxis money laundering case, accusing him of conspiring with foreign investors to clear their venture.

The nine accused in the case are alleged to have laundered Rs 1.16 crore they got in return for alleged illegal approval by the Foreign Investment Promotion Board (FIPB) in March 2006 to the foreign investor Global Communication and Services Holdings Limited, Mauritius.

The investigating agencies have claimed that Chidambaram, who was then the finance minister, was not empowered to grant FIPB approval to the firm which, given the quantum of the proposed investment, should have been accorded by the Cabinet Committee on Economic Affairs.

Chidambaram and his son have both denied the allegations levelled against them by the CBI and the ED.

The court has fixed November 26 for consideration of the charge sheet but extended till then the protection granted to them from arrest.

If found guilty, they would be liable to a jail term of up to seven years besides fine.

The senior Congress leader’s role has come under the scanner of investigating agencies in the Rs 3,500-crore Aircel-Maxis deal besides the INX Media case involving Rs 305 crore.