Click, you’ve been served: Calcutta High Court rules ED can send PMLA notices, summons via email

Validity of email service settled

• After examining the statutory framework, the court held that Rule 13 clearly allows multiple modes of service, including email.
• Sub-rule (11) unequivocally provides that electronic transmission constitutes valid service.
• Therefore, the petitioner’s objection based on the absence of physical service was untenable.
• The court underscored that procedural rules must be interpreted pragmatically, particularly where legislation expressly accommodates digital communication.

Justice Krishna Rao was hearing a writ petition challenging a show-cause notice issued under Section 8(1) of the PMLA.

Crucial distinction

• However, the court drew a critical distinction between validity of service, and completeness of disclosure of relied-upon documents.
• While the former was upheld, the court recognised that the latter raised legitimate concerns of natural justice.
• It noted that the petitioner had persistently sought documents.
• He had even filed para-wise comments “without prejudice”, indicating constrained participation.
• The question of whether all relevant documents had been supplied remained unresolved.

Directions: Ensuring procedural fairness

• Balancing both sides, the court refrained from quashing the proceedings but issued structured directions.
• The adjudicating authority must first determine whether the documents sought by the petitioner qualify as “relied upon documents”.
• If found relevant, the ED must supply such documents within two weeks.
• The petitioner must then be granted two weeks to file a supplementary reply.
• Any party aggrieved by the authority’s decision may pursue statutory appeal under Section 26.

Findings on ‘reasons to believe’

• The court also examined the “reasons to believe” recorded by the adjudicating authority under Section 8(1) of the PMLA.
• It found that the authority had prima facie material linking the petitioner to money laundering activity under Section 3.
• The recorded reasons referred to the analysis of seized cash, digital devices, and documents.
• There was no illegality in forming such a belief.
• The court noted that the final determination would follow only after “hearing both sides and considering all materials on record”.

ED action, show-cause notice

• The case arose from a writ petition filed by Dipak De, challenging a show cause notice dated November 25, 2025, issued under Section 8(1) of the PMLA by the adjudicating authority.
• The proceedings originated from search operations conducted by the Enforcement Directorate (ED) in October 2025, during which cash amounting to Rs 25.5 lakh was seized from the petitioner’s residence, digital devices and documents were also taken into custody.
• According to the ED, the petitioner failed to substantiate the source of the seized cash. Although he claimed that the money represented proceeds from restaurant businesses during the Durga Puja season, no supporting invoices, receipts, or bank records were produced.
• Subsequently, the adjudicating authority issued a notice asking the petitioner to explain why the seized assets should not be retained as proceeds of crime.

Petitioner’s case: Incomplete disclosure

• The petitioner’s primary grievance was not against the issuance of notice per se, but against the alleged non-supply of complete “Relied Upon Documents” (RUDs), which are essential for preparing a defence.
• Senior advocate Raj Mohan Chattoraj, appearing for the petitioner, argued that despite multiple emails and legal notices sent between December 2025 and January 2026, the ED failed to supply all relevant documents.
• Only partial documents labelled as RUD-1, RUD-2A, RUD-2B, and RUD-3 were shared via email on December 24, 2025.
• The mandatory requirement under Rule 13(2) to serve complete documents in a bound paper book was not complied with.
• The petitioner identified 34 specific documents that were allegedly relied upon but not furnished.
• It was further contended that this denial of documents vitiated the proceedings, as it prevented the petitioner from filing a meaningful reply.

ED’s defence: Electronic compliance

• Opposing the petition, the ED and the Centre argued that the show-cause notice and documents were duly served via email in PDF format.
• The petitioner had, in fact, acknowledged receipt of certain RUDs.
• The law explicitly permits electronic service, and there is no requirement that documents must only be served physically.
• The ED relied on Rule 13(3)(iii) and Rule 13(11), which recognise service by email and validate electronic communication in line with the Information Technology Act, 2000.
• It was also argued that the petitioner had the opportunity to inspect records.
• He could lead evidence and seek documents before the adjudicating authority itself.
• Any grievance could be addressed in appeal under Section 26 of the PMLA.

Legal context: Dual safeguards under PMLA

• The judgment reiterates the dual structure of PMLA proceedings.
• Adjudicatory proceedings before the adjudicating authority (for attachment and retention of property).
• Criminal prosecution before special courts.
• It also highlights that the adjudicating authority possesses civil court powers, including discovery, inspection, and evidence collection, ensuring that parties are not left without remedy even if initial disclosures are incomplete.