Court sets aside Appellate Tribunal's order granting interim relief under PMLA, emphasizing procedural fairness

The court held that the Appellate Tribunal's order allowing the interim restoration of the attached property under the Prevention of Money Laundering Act (PMLA) was contrary to the law as there is no provision for such interim relief. The court found the order to be legally unsustainable as it did not comply with the statutory provisions of the PMLA and the Rules 2013. The lack of procedural fairness, including inadequate notice and opportunity for hearing, led the court to set aside the Tribunal's order. The appeal was allowed, emphasizing the importance of adherence to statutory requirements and procedural fairness.

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Issues Involved:
1. Validity of the interim restoration of attached property under the Prevention of Money Laundering Act (PMLA).
2. Compliance with statutory provisions of PMLA and the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 (Rules 2013).
3. Jurisdiction and powers of the Appellate Tribunal under PMLA.
4. Adequacy of notice and opportunity for hearing provided to the parties.

Issue-wise Detailed Analysis:

1. Validity of the interim restoration of attached property under PMLA:
The core issue before the court was whether the property attached under Section 5 of PMLA and confirmed under Section 8 of PMLA can be de-sealed/released on an interim basis by the Appellate Tribunal during the pendency of the proceedings. The court noted that there is no provision in PMLA or Rules 2013 that allows for the temporary de-sealing or interim release of attached property for use by the accused. The court emphasized that the statutory framework does not support such interim relief, and the Appellate Tribunal's order allowing the interim restoration was contrary to the law.

2. Compliance with statutory provisions of PMLA and Rules 2013:
The appellant argued that the impugned order violated the statutory provisions of PMLA and Rules 2013, as there is no provision for temporarily de-sealing the property during the pendency of proceedings. The court agreed with the appellant, noting that the Appellate Tribunal had not appreciated or discussed the relevant provisions of PMLA and Rules 2013 in its order. The court found that the Tribunal's order was passed without proper consideration of the statutory requirements and was thus legally unsustainable.

3. Jurisdiction and powers of the Appellate Tribunal under PMLA:
The respondents contended that the Appellate Tribunal has the jurisdiction to pass interim orders and that there is no specific bar against such orders. However, the court clarified that while the Tribunal has the power to pass orders under Section 26(4) of PMLA, such orders must be made after giving both parties an opportunity for a hearing. In this case, the Tribunal did not provide adequate opportunity for the appellant to present relevant records, rendering the order procedurally flawed.

4. Adequacy of notice and opportunity for hearing provided to the parties:
The appellant argued that the Tribunal's order was passed without giving sufficient opportunity to produce relevant records or rebut the respondents' contentions. The court observed that respondent No.2 had been issued 17 notices and had filed 10 replies, indicating awareness of the proceedings. Despite this, the Tribunal passed the impugned order on the same day the parties were directed to appear, without adjourning for arguments or record production. This lack of procedural fairness contributed to the court's decision to set aside the Tribunal's order.

Conclusion:
The court concluded that the Appellate Tribunal's order dated 18.11.2020 was not only contrary to the provisions of PMLA and Rules 2013 but also procedurally flawed due to the lack of adequate notice and opportunity for hearing. The appeal filed by the appellant was allowed, and the impugned order was set aside. The court emphasized the necessity of compliance with statutory provisions and procedural fairness in such cases.

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