Madras HC dismisses case filed by Swami Premananda Trust in 2007 against SAFEMA proceedings

Madras High Court. File
| Photo Credit: K. Pichumani

The Madras High Court on Tuesday (December 10, 2024) dismissed a 17-year-old writ petition filed by Sri Premananda Trust, represented by its managing trustee K. Sivathi, challenging the 2005 and 2007 notices issued to it by the Union Ministry of Finance under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

A Division Bench of Justices S.M. Subramaniam and M. Jothiraman took up the writ petition for final hearing, after finding that the SAFEMA proceedings initiated against the trust had come to a grinding halt due to the interim orders passed by the court, and dismissed the case after finding no reason to interfere with the notices.

The decision was taken after hearing the arguments advanced by senior counsel B. Kumar for the trust and Additional Solicitor General AR.L. Sundaresan for the Finance Ministry. The ASG told the court that the trust had submitted its response to the 2005 notice in 2006 and then filed a writ petition in 2007.

Since the petitioner trust had already participated in the inquiry proceedings by filing its reply in 2006, the Division Bench held that the trust was obligated to continue the participation and discharge the burden of proof that was cast upon it to prove that its properties were not liable to forfeiture under the SAFEMA.

Authoring the verdict, Justice Subramaniam pointed out, the trust was established by Swami Premananda alias Ravi alias Somasundaram Premkumar, a Sri Lankan Tamil who had come to India as a refugee during the anti-Tamil pogrom by the Sinhalese in July 1983, and established an ashram in Pudukottai district.

On August 20, 1997, the then Pudukottai Sessions Judge R. Banumathi (who subsequently got elevated as a Supreme Court judge in 2014 and retired from service in 2020) convicted and sentenced Premananda to two consecutive life terms and also imposed ₹66.40 lakh for multiple rape and murder charges.

The punishment was confirmed by the Madras High Court as well as the Supreme Court and the convict died in 2011. However, in the meantime, the Income Tax department had conducted search and seizure operations at the ashram run by him and unearthed several acres of land owned by the trust.

The sleuths also found several lakh rupees having been deposited by the trust in multiple bank accounts, seized foreign currencies, and found hawala transactions having been carried out. Premananda was booked under the Foreign Exchange Regulation Act of 1973 and also got convicted in that case.

It was thereafter, the SAFEMA was invoked for forfeiting the properties of the trust. Though the petitioner trust contended that the notices had not been served on the competent person, the judges rejected the argument and held that the trust must participate in the inquiry and discharge the burden of proof.