2017 (4) TMI 305 - AT - Money Laundering

Dismissal of Application for Appellate Tribunal Bench under PMLA

N.K. Proteins Ltd. Versus Dy. Dir., Directorate of Enforcement, Mumbai

The application under Section 35 of the Prevention of Money Laundering Act, 2002 for the constitution of the Appellate Tribunal Bench was dismissed as ... Prevention of Money Laundering - praying the appeal filed by the appellant may be posted before a Bench comprising of the Hon’ble Chairperson/Legal Member - Held that:- The application relies on certain provisions of the PMLA namely 27, 28, and 33 which have been repealed by the Finance Act of 2016 (28 of 2016) with effect from 1-6-2016. The application is therefore, infructuous and is liable to be dismissed as such. It is also noted that by virtue of Section 25 of the PMLA as amended by the Finance Act, 2016 (28 of 2016) it is provided that the Appellate Tribunal constituted under Section 12 of SAFEMA shall be the Appellate Tribunal under the PMLA. With regard to the composition of Benches of the Appellate Tribunal, sub-section (6A) of Section 12 of SAFEMA as amended by the Finance Act, 2016 (28 of 2016) specifically provides for constitution of single Member or two Member Benches and for such Benches to exercise the powers and functions of the Appellate Tribunal. It is well settled that the Appellate Tribunal being a creation of the statute is bound to act in accordance with the provisions of the said statute. The application is therefore, without any merit also. Issues:Application under Section 35 of Prevention of Money Laundering Act, 2002 (PMLA) for constitution of the Appellate Tribunal Bench.Analysis:1. The application sought the appeal to be heard by a Bench comprising the Chairperson/Legal Member due to the intricate and complicated nature of questions involved, emphasizing the judicial functions of the Tribunal. Reference was made to provisions of Sections 25, 27, 28 & 33 of PMLA for the establishment and composition of the Appellate Tribunal. The application cited judgments of the Supreme Court and the Madras High Court to support the necessity of a preponderance of judicial members in the Bench.2. The amendment in the PMLA by the Finance Act, 2016, altered the constitution and composition of the Appellate Tribunal. The appellant was directed to decide whether to continue with the application in light of the changes. Despite no instructions to withdraw, the appellant's counsel could not justify reliance on Section 28 of the Act, which had been repealed by the Finance Act of 2016. The counsel failed to respond to queries regarding the Tribunal's obligation to act as per the amended provisions.3. The respondent argued that the Finance Act, 2016, repealed several sections of PMLA related to the Appellate Tribunal's composition. The amended Section 25 designated the Appellate Tribunal under SAFEMA as the tribunal for PMLA appeals, with provisions for single or two-member Benches. The respondent contended that the application was without merit due to the changes brought about by the Finance Act, 2016.4. The Tribunal observed that the application relied on repealed provisions of PMLA and deemed it infructuous. It noted that the Appellate Tribunal under SAFEMA was now the designated tribunal for PMLA appeals. The composition of Benches was governed by the amended Section 12 of SAFEMA, emphasizing the Tribunal's obligation to act in accordance with statutory provisions. Consequently, the application was dismissed for being infructuous and lacking merit.