Enforcement Directorate penalty: No relief for Dinakaran

Justice R Mahadevan part of the first bench who penned the judgement, relied on four questions of law framed by the bench which included Chief Justice Sanjay Kishan Kaul: The first one was whether ED was right in concluding that Dinakaran was a resident within India, the second dwelt on as to whether ED can exercise suo motu powers under Section 52 and reframe the charges sitting in appeal, the third one is whether ED’s order is vitiated on account of bias and the final question was as to whether Section 3 (1) of the Companies Act, which confers a separate legal entity to the company, absolutely dissolves the liability of the Director of a company under every circumstances. 

On the first aspect, Justice Mahadevan held that “It is seen from the records that the Dinakaran claimed not a citizen before the division bench of this court in the Habeas Corpus Petition. In the Election petition filed by him, he claimed as an Indian citizen. But before the Foreign Exchange Regulation Authorities, he claimed as if he is a non-resident Indian. Thus, Dinakaran has taken different stands, which are not permissible under law.”

On the aspect of whether ED’s order is vitiated on account of bias, violations of the principles of natural justice and fair play, the judge held that “Upon perusal of the records, we find that Dinakaran was given a fair opportunity. As found by ED, the guilt of Dinakaran was culled out only from documentary evidence and the entire statements of other witnesses were discarded. Thus, the plea of bias put forth by the senior counsel appearing for Dinakaran, will not hold any water.” 

The judge also held that “In view of the clear finding that the various acts done in the name of the company could not be attributed to the company and that there is no evidence that these were done in the course of company’s business, it is clear that Dinakaran is legally liable for those acts.”