Legal expertise required for PMLA Adjudicating Authority; COVID-19 extension applies; orders without expertise void

The Court held that a single-member Adjudicating Authority under PMLA must have legal experience to perform quasi-judicial functions. The Court also ruled that the Supreme Court's extension of the limitation period due to COVID-19 applies to PMLA proceedings. If provisional attachment is not confirmed within 180 days, the Adjudicating Authority becomes functus officio. As a result, orders issued without legal expertise are void, and ED can re-initiate the process. In specific cases, orders confirming provisional attachment were set aside or stayed pending the reconstitution of the Adjudicating Authority.

---

---

Issues Involved:
1. Constitution of Adjudicating Authority under PMLA.
2. Jurisdiction of a single member Adjudicating Authority with no legal experience.
3. Applicability of the Supreme Court's extension of limitation period due to COVID-19.
4. Whether the Adjudicating Authority becomes functus officio after 180 days if provisional attachment is not confirmed.

Issue No. 1: Constitution of Adjudicating Authority under PMLA
The Court held that the scheme under PMLA permits an Adjudicating Authority consisting of a single member. Section 6(5)(b) of the PMLA provides that the Chairperson can constitute Benches with one or two members. Therefore, the word 'shall' in Section 6(2) is not mandatory.

Issue No. 2: Jurisdiction of a single member Adjudicating Authority with no legal experience
The Court held that quasi-judicial functions like issuing a show cause notice under Section 8(1) and passing an order confirming provisional attachment under Section 8(3) of the PMLA can only be performed by a member having experience in the field of law. The actions of the Adjudicating Authority are quasi-judicial in nature and require legal expertise. Orders passed by a single member with no legal experience are void and non-est.

Issue No. 3: Applicability of the Supreme Court's extension of limitation period due to COVID-19
The Court held that the decision in In re: Limitation (2020) and subsequent extensions are applicable to PMLA proceedings. The period from 15.03.2020 to 28.02.2022 shall be excluded while computing the 180-day period for confirming provisional attachment under Section 5(3) of the PMLA. The Court disagreed with the decisions that held otherwise, emphasizing that the exclusion applies to all judicial or quasi-judicial proceedings.

Issue No. 4: Whether the Adjudicating Authority becomes functus officio after 180 days if provisional attachment is not confirmed
The Court held that the Adjudicating Authority becomes functus officio after a lapse of 180 days if the provisional attachment is not confirmed. This renders all proceedings emanating from such provisional attachment order void. The Enforcement Directorate (ED) can re-initiate the process by issuing a fresh provisional attachment order and following the prescribed procedure.

Conclusion of Findings:
1. The scheme under PMLA permits the constitution of an Adjudicating Authority consisting of a single member.
2. A single member Adjudicating Authority with no legal experience cannot perform quasi-judicial functions.
3. The period from 15.03.2020 to 28.02.2022 shall be excluded in computing the 180-day period for confirming provisional attachment.
4. The Adjudicating Authority becomes functus officio after 180 days if the provisional attachment is not confirmed, and the ED can re-initiate the attachment process.

Result in the Respective Writ Petitions:
1. W.P. No. 34238 of 2022: Order confirming provisional attachment set aside; Adjudicating Authority to re-issue show cause notice after due constitution.
2. I.A. No. 1 of 2022 in W.P. No. 41133 of 2022: Show cause notice stayed; proceedings to continue after due constitution of Adjudicating Authority.
3. I.A. No. 1 of 2022 in W.P. No. 44343 of 2022: Order confirming provisional attachment stayed; proceedings to continue after due constitution of Adjudicating Authority.
4. W.P. No. 34627 of 2022: Entire proceedings set aside; ED/authorized officer can re-initiate the attachment process.

---