2016 (3) TMI 1416 - HC - Money Laundering

High Court directs Adjudicating Authority to halt orders, emphasizes fair process and compliance.

GUJARAT ENVIRO PROTECTION AND INFRASTRUCTURE LTD Versus UNION OF INDIA

The High Court acknowledged the petitioners' challenges regarding the constitution of the Adjudicating Authority under the Prevention of Money Laundering ... Provisional attachment of goods - refusal to decide the preliminary objections/contentions regarding lack of jurisdiction - refusal to direct the respondent No.2 to place on record the entire material collected during the course of investigation - refusal to grant cross examination of the officers of the ED, transporters and the competent officers - violation of principles of natural justice - HELD THAT:- The present petition is disposed of and the learned authority, respondent no.3 herein, shall give opportunity of being heard to the petitioners and pass appropriate orders. It goes without saying that the learned authority, respondent no.3 herein, shall follow Adjudicating Authority (Procedure) Regulations, 2013. Petition disposed off. Issues:1. Jurisdiction and constitution of the Adjudicating Authority under the Prevention of Money Laundering Act, 2002.2. Violation of principles of natural justice and procedural irregularities in the adjudication process.3. Relief sought by the petitioners under Article 226 of the Constitution of India.Analysis:Issue 1: Jurisdiction and constitution of the Adjudicating AuthorityThe petitioners challenged the constitution of the Adjudicating Authority under the Prevention of Money Laundering Act, 2002, alleging that it was not properly constituted and lacked the required members. The High Court acknowledged this contention and issued a notice to the authority, directing it not to pass any orders until the matter was resolved. The Court emphasized the importance of a duly constituted authority for quasi-judicial proceedings, ensuring fair adjudication and compliance with legal procedures.Issue 2: Violation of principles of natural justice and procedural irregularitiesThe petitioners raised concerns about procedural irregularities, including the refusal of the Adjudicating Authority to allow cross-examination and provide copies of certain documents during the adjudication process. The Court noted that the denial of these rights could be a violation of principles of natural justice, causing prejudice to the petitioners. It highlighted the need for adherence to legal principles, such as the right to cross-examination and access to relevant material, to ensure a fair and transparent adjudication process.Issue 3: Relief sought under Article 226 of the Constitution of IndiaThe petitioners sought various reliefs under Article 226, including quashing the provisional attachment order, setting aside the impugned complaint, and directing the adjudicating authority to follow proper procedures. The Court disposed of the petition based on a statement by the respondent authority regarding the appointment of new members to the Adjudicating Authority. It directed the authority to conduct proceedings in accordance with the law, provide an opportunity for the petitioners to be heard, and follow the Adjudicating Authority (Procedure) Regulations, 2013. The Court clarified that it did not express any opinion on other pending issues before the authority.In conclusion, the judgment addressed the concerns raised by the petitioners regarding the jurisdiction and constitution of the Adjudicating Authority, procedural irregularities in the adjudication process, and the relief sought under Article 226 of the Constitution of India. It emphasized the importance of a fair and lawful adjudication process, ensuring compliance with legal principles and procedural safeguards to uphold the rights of the parties involved.