2020 (8) TMI 380 - HC - Money Laundering

Court dismisses challenge to attachment order under Money-Laundering Act, allows withdrawal, stresses timeline compliance

The Court dismissed the writ petition challenging a provisional attachment order issued under the Prevention of Money-Laundering Act. The petitioner's ... Permission for withdrawal of petition - Validity of provisional attachment order - Proceeds of crime - petitioner seeks to withdraw the writ petition today on the ground that the provisional order of attachment no longer remains in force by efflux of time under Section 5 of The Prevention of Money-Laundering Act, 2002 - HELD THAT:- his Court is of the view that under Section 5(1)(b) of the PMLA, an order of provisional attachment remains in force only for a period of 180 days from the date of the order passed by the Director with regard to the proceeds of crime which the concerned Director has reasons to believe are likely to be concealed, transferred or dealt with in a manner which may frustrate any proceedings relating to confiscation of such proceeds of crime under Chapter III of the PMLA - Section 8(3) deals with a situation where the Adjudicating Authority makes an order in writing confirming the attachment of the property made under Section 5(1) or for retention of the property etc. Admittedly, no such order has been passed by the Adjudicating Authority against the petitioner under Section 8(3). It should be mentioned that the Adjudicating Authority has been served with copies of the petition. If the concerned Act provides certain windows to a party in relation to a provisional order of attachment expressed in the clear language of Section 5(1)(b), this Court cannot come in the way of the petitioner taking advantage of the said exit route - petition dismissed as withdrawn. Issues:1. Validity of provisional order of attachment under PMLA.2. Extension of provisional attachment order.3. Interpretation of Section 5(1)(b) and Section 8(3) of PMLA.4. Prerogative of the petitioner to withdraw the writ petition.Analysis:The judgment pertains to a writ petition challenging a provisional order of attachment issued by the Enforcement Directorate under the Prevention of Money-Laundering Act, 2002 (PMLA). The petitioner sought to withdraw the petition citing the expiration of the provisional attachment order as per Section 5 of the PMLA. However, the Additional Solicitor General opposed the withdrawal, requesting an extension of the attachment order for three months due to repeated adjournments sought by the petitioner. The ASG argued that the petitioner's conduct of delaying proceedings should not allow them to benefit from the expiration of the attachment order.Upon deliberation, the Court analyzed Section 5(1)(b) of the PMLA, which specifies that a provisional attachment order remains valid for 180 days from the date of issuance by the Director. The Court highlighted that the attachment ceases to have effect after 180 days or upon an order made under Section 8(3) of the Act. Section 8(3) deals with the Adjudicating Authority confirming the attachment of property. Since no such order was passed against the petitioner, the provisional attachment lapsed as per the statutory provisions.The Court emphasized that if the law provides a specific timeline for a provisional attachment order, such as in Section 5(1)(b) of the PMLA, the petitioner is entitled to avail the exit route provided by the statute. Allowing the withdrawal of the petition would not prejudice the rights or contentions of the parties in any future proceedings. Consequently, the Court dismissed the writ petition as withdrawn, affirming the petitioner's prerogative to withdraw the petition in accordance with the law. The judgment also disposed of the connected application.