2022 (10) TMI 1148 - HC - Money Laundering

High Court upholds PMLA provisional attachment order, emphasizes appellate process over direct relief

K. Subburaj, N.K. Pothiraaj, S. Vimala, S. Srividhya, S. Sreepriya, Lalitha Versus Directorate of Enforcement Rep. by M. Raje Saker Deputy Director Directorate of Enforcement Chennai, Hon. Adjudicating Authority (PMLA)

The High Court dismissed the writ petition seeking quashment of the order confirming provisional attachment under the Prevention of Money-Laundering Act, ... Appellate Jurisdiction - Provisional order of attachment - jurisdictional error - HELD THAT:- Had there been no Presiding Officer for the Appellate Tribunal, we would have entertained this petition. Now that a Presiding Officer has been appointed to the Appellate Tribunal, the petitioners can approach the said Tribunal and urge all these points. In fact, under Section 42 of PML Act, a further appeal from the order of the Appellate Tribunal has been provided to the High Court, which is entertained as a Civil Miscellaneous Appeal (CMA). We do not want to arrogate to ourselves the powers of the Appellate Tribunal by entertaining this writ petition. Hence, this petition is dismissed with liberty to the petitioners to approach the Appellate Tribunal constituted under Section 26 of PML Act. No costs. Issues:1. Seeking quashment of the order confirming provisional attachment2. Interpretation of statutory limitation period under PML Act3. Jurisdictional error in the order of the Adjudicating AuthorityIssue 1: Seeking quashment of the order confirming provisional attachmentThe writ petition was filed to quash the order confirming the provisional attachment of properties under the Prevention of Money-Laundering Act, 2002 (PMLA). The case originated from a FIR registered by the CBI against certain individuals and a company for offenses under IPC. Subsequently, the Enforcement Directorate initiated an investigation under the PMLA based on the scheduled offense disclosed in the FIR. The Deputy Director of Enforcement passed a provisional order of attachment, followed by a complaint before the Adjudicating Authority, which confirmed the attachment order. The petitioners challenged this order, arguing that the Adjudicating Authority's decision was flawed due to a jurisdictional error.Issue 2: Interpretation of statutory limitation period under PML ActA crucial aspect of the case revolved around the interpretation of the statutory limitation period under the PMLA. The petitioners contended that the provisional attachment order, issued on 01.02.2022, should have lapsed after 180 days, expiring on 30.07.2022. However, the Adjudicating Authority justified its decision by citing orders from the Supreme Court that extended the limitation period due to the COVID-19 pandemic. The Enforcement Directorate argued that the statutory limitation period automatically extended based on the Supreme Court's orders, contrary to the petitioner's assertion that the Adjudicating Authority violated the mandate of the PML Act.Issue 3: Jurisdictional error in the order of the Adjudicating AuthorityDuring the proceedings, the petitioner's counsel referred to a Supreme Court judgment to support the contention that approaching the Appellate Tribunal might not be necessary in case of a jurisdictional error by the Adjudicating Authority. The counsel highlighted concerns regarding the right to liberty, self-incrimination, and due process under the PMLA, emphasizing the need to address jurisdictional errors promptly. However, the High Court dismissed the writ petition, stating that with the appointment of a Presiding Officer for the Appellate Tribunal, the petitioners should approach the Tribunal to raise their arguments. The Court emphasized the availability of further appeals to the High Court under the PMLA, indicating that the petitioners should follow the prescribed appellate process rather than seeking relief directly from the High Court.