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of <h1>Court upholds officer's power in PMLA case, dismisses writ petition challenging provisional attachment.</h1> <h3>Gautam Khaitan & Another Versus Union of India And Another</h3> Gautam Khaitan & Another Versus Union of India And Another - TMI Issues Involved1. Jurisdiction of the officer passing the provisional attachment order under Section 5(1) of the PMLA.2. Whether the officer had 'reasons to believe' based on material in his possession to order provisional attachment.3. Breach of principles of natural justice due to lack of opportunity of hearing before passing the provisional attachment order.Detailed AnalysisJurisdiction of the OfficerThe petitioners argued that the officer who passed the impugned order lacked jurisdiction as the necessary conditions under Section 5(1) of the PMLA were not met, specifically the absence of a charge sheet under Section 173 of the Cr.P.C. for the scheduled offence. The court clarified that the 2013 amendment to the PMLA removed the requirement that a person must be charged with a scheduled offence for their property to be provisionally attached. The court concluded that the designated officer could provisionally attach property if he had reason to believe, based on material in his possession, that the property was involved in money laundering and that its non-attachment could frustrate proceedings under the Act.Reasons to BelieveThe petitioners contended that the officer did not have 'reasons to believe' based on material in his possession to justify the provisional attachment. The court stated that the belief must be based on reasonable grounds and not mere suspicion. The court examined the material cited by the officer, including the FIR, documents from the Ministry of Defence, witness statements, and bank statements, and concluded that there was sufficient material to form a prima facie view that non-attachment of the properties could frustrate proceedings under the PMLA. Thus, the officer had jurisdiction to pass the provisional attachment order.Breach of Principles of Natural JusticeThe petitioners argued that the impugned order was violative of principles of natural justice as no opportunity of hearing was provided before passing the order. The court highlighted that the PMLA implicitly excludes the requirement of notice and hearing at the provisional attachment stage to prevent frustration of proceedings. The court noted that a post facto hearing is provided under Section 8 of the PMLA, where the adjudicating authority issues a notice and provides an opportunity to the aggrieved party to present their case. The court concluded that the legislative scheme of the PMLA, which provides for a post-attachment hearing, does not breach principles of natural justice.ConclusionThe court dismissed the writ petition, finding no merit in the arguments presented by the petitioners. The court held that the designated officer had the jurisdiction to pass the provisional attachment order, that there was sufficient material to form a 'reason to believe,' and that the legislative scheme of the PMLA did not breach principles of natural justice. The interim order dated 22.12.2014 was vacated, and costs were to follow the result in the petition. The court's observations were not to impact the proceedings before the adjudicating authority or the merits of the case.
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