2017 (3) TMI 1107 - HC - Money Laundering

Court Orders Deferral of Eviction Pending Appellate Tribunal Hearing

The Court directed the third respondent to defer further proceedings on the eviction notice until the date of the stay petition hearing before the ... Power of Appellate Tribunal to grant interim relief in appeals under PMLA - provisional attachment and its confirmation under PMLA - taking possession of attached property pending disposal of appeal - interim protection from eviction pending hearing of stay petition - undertaking not to alienate or encumber attached propertyPower of Appellate Tribunal to grant interim relief in appeals under PMLA - provisional attachment and its confirmation under PMLA - Appellate Tribunal may entertain and grant interim protection in an appeal under the PMLA despite absence of an express provision for stay. - HELD THAT: - The Court noted that the right of appeal to the Appellate Tribunal under Chapter VI of the PMLA is statutory and, although Section 26 (as noted by the Court) does not expressly provide for grant of a stay, the Appellate Authority possesses inherent power to pass interim orders protecting parties' interests pending disposal of the appeal. The Tribunal was therefore justified in entertaining the stay petition and listing it, granting time to the respondent to file counter and permitting rejoinder, which led to the posting of the stay petition for hearing on 18.04.2017. The Court treated the Tribunal's entry of the stay petition and its procedural directions as consistent with the exercisable power to grant interim relief in aid of the statutory appeal. [Paras 8]The Tribunal rightly entered the petition for stay and took steps to enable adjudication of interim relief pending the appeal.Taking possession of attached property pending disposal of appeal - interim protection from eviction pending hearing of stay petition - undertaking not to alienate or encumber attached property - Further proceedings pursuant to the eviction notice issued to the petitioner were deferred until the date fixed for hearing of the stay petition before the Appellate Tribunal. - HELD THAT: - Balancing the pendency of the appeal and the stay petition listed for 18.04.2017, the Court directed that the third respondent defer any action on the impugned eviction notice until that date. The Court took into account the procedural posture before the Tribunal, the fact that the provisional attachment had been confirmed by the Adjudicating Authority, and the petitioner's undertaking (recorded on instructions) not to alienate, encumber or create third-party rights in respect of the attached immovable property. The personal circumstances of the petitioner (ill-health and residence with family at the premises) were also noted as factors supporting temporary deferral. The Court expressly refrained from adjudicating the merits of the underlying attachment or appeal and limited relief to postponement of eviction proceedings until the Tribunal hearing. [Paras 10, 11]Proceedings pursuant to the eviction notice are deferred until 18.04.2017, the date of hearing of the stay petition before the Appellate Tribunal, without adjudication on merits.Final Conclusion: The writ petition is disposed of by directing that further proceedings on the eviction notice be deferred till 18.04.2017 to enable the Appellate Tribunal to consider the stay petition; the Court recorded the petitioner's undertaking not to alienate or encumber the attached property and did not decide the merits of the attachment or appeal. Issues:- Alleged commission of offences under Sections 465, 468 r/w. 471 and 420 IPC- Order of provisional attachment under Prevention of Money Laundering Act, 2002- Confirmation of provisional attachment by the Adjudicating Authority- Appeal against the order of confirmation pending before the Appellate Tribunal- Impugned notice of eviction issued during pendency of appeal- Petitioner's health condition and possession of the attached propertyAnalysis:1. The case involved allegations of offences under Sections 465, 468 r/w. 471 and 420 IPC, leading to the registration of a case by the Central Crime Branch, Chennai City. Subsequently, the Prevention of Money Laundering Act, 2002 was invoked, resulting in a provisional attachment of assets by the fourth respondent under Section 5(1) of the said Act.2. The Adjudicating Authority confirmed the provisional attachment after finding that the defendants had committed scheduled offences, generated proceeds of crime, and laundered them. This decision was challenged by the petitioner and his wife through an appeal before the Appellate Tribunal.3. During the pendency of the appeal, the petitioner received an impugned notice of eviction, prompting the filing of a writ petition challenging the legality of the eviction. The petitioner argued that the fourth respondent should have waited for the appeal's disposal before taking possession of the property.4. The Senior Counsel for the petitioner highlighted the petitioner's health conditions and the fact that the property was mortgaged with a bank, making alienation or creation of third-party rights impossible. On the other hand, the respondents argued that there was no provision for stay pending appeal under the PMLA Act.5. The Court acknowledged the statutory right of appeal and the inherent power of the Appellate Authority to grant interim orders to protect the parties' interests during the appeal process. Considering the circumstances, including the petitioner's health issues and the pending appeal, the Court directed the third respondent to defer further proceedings on the eviction notice until the date of the stay petition hearing before the Appellate Tribunal.6. The Court, without delving into the merits of the petitioner's claim, disposed of the writ petition, ordering a deferment of eviction proceedings until the hearing of the stay petition before the Appellate Tribunal. No costs were awarded, and the connected miscellaneous petition was closed as a result of the judgment.