Tribunal denies stay on seized cell phones, upholds investigative retention under PMLA

The Tribunal rejected the appellants' applications for a stay or status quo order regarding the operation of the cell phones seized by the Enforcement Directorate. The Tribunal found that granting such relief would interfere with the ongoing investigation and emphasized its limited jurisdiction to decide constitutional issues or violations of private rights in relation to the investigation. The Tribunal highlighted the statutory provisions governing search and seizure under the PMLA and upheld the retention of records, including digital devices, for investigative purposes for a specified duration.

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Issues Involved:
1. Legality of the retention of cell phones and other digital devices by the Enforcement Directorate.
2. Jurisdiction of the Appellate Tribunal to grant a stay or status quo order.
3. Alleged violation of privacy and fundamental rights under Articles 20(3) and 21 of the Constitution of India.

Detailed Analysis:

1. Legality of the Retention of Cell Phones and Other Digital Devices:
The appellants challenged the common order of the Adjudicating Authority, which allowed the Respondent to retain documents, digital devices, and other items seized on 19.09.2019 from seven different premises under Section 17(4) of the PMLA. The appellants limited their prayer to the cell phones seized, arguing that viewing the contents of the cell phones and other electronic devices by the Enforcement Directorate would be illegal, unconstitutional, and an invasion of privacy, causing grave prejudice to the appellants.

The appellants relied on several judgments, including:
- Justice K.S. Puttaswamy (Retd) and Another v/s. Union of India and Others (2017) 10 SCC.
- Selvi & Ors v/s. State of Karnataka (2010) 7 SCC 263.
- Riley v/s. California (2014 SCC OnLine US SC 71:573 US).
- A Residence in Oakland, California (Case No. 4-19-70053).

They argued that unlocking the cell phones without express consent would violate Articles 20(3) and 21 of the Constitution of India.

2. Jurisdiction of the Appellate Tribunal to Grant a Stay or Status Quo Order:
The Respondent argued that the appellants did not raise the issue of the infringement of fundamental rights before the Adjudicating Authority and that the Tribunal has limited statutory jurisdiction under Section 26 of the PMLA. The Respondent emphasized that the appellants were not cooperating with the investigation despite several summons and that granting a stay would prejudice the investigation.

The Tribunal noted that Section 26(1) of the PMLA allows appeals against orders passed by the Adjudicating Authority. The Tribunal has jurisdiction to grant a stay of the impugned order, but not in a manner that would stall the investigation. The Tribunal concluded that the appellants were seeking a status quo order regarding the cell phones, which would effectively interfere with the ongoing investigation.

3. Alleged Violation of Privacy and Fundamental Rights:
The appellants contended that the Enforcement Directorate's actions would violate their right to privacy and Articles 20(3) and 21 of the Constitution. The Tribunal, however, stated that it does not have jurisdiction to decide constitutional issues or the violation of private rights vis-à-vis the summons issued by the Respondent. The Tribunal must exercise its jurisdiction as per the statute.

The Tribunal referred to Sections 17(1)(i) to (iv), 2(w), 8(3), and 26 of the PMLA. Section 17(1) deals with search and seizure, Section 2(w) defines "records," Section 8(3) deals with adjudication, and Section 26 pertains to appeals. The Tribunal emphasized that the retention of records, including digital devices, is meant for investigations and can continue for a period not exceeding 365 days.

Conclusion:
The Tribunal rejected the appellants' applications for a stay or status quo order regarding the operation of the cell phones. The Tribunal found that the appellants did not have a prima facie case for such relief and that granting the stay would interfere with the ongoing investigation. The Tribunal reiterated that it does not have jurisdiction to decide constitutional issues or the violation of private rights related to the summons issued by the Respondent.

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