Court sets aside bank account freeze order under Money Laundering Act citing lack of notice

The Court set aside an order confirming the freezing of the petitioner's bank account under the Prevention of Money Laundering Act, 2002, as the petitioner was not served the show-cause notice. The petitioner was granted 10 days to respond to the notice, emphasizing the importance of due process and the right to be heard. The Adjudicating Authority was directed to issue a fresh order promptly, without delving into the case's merits, highlighting the principle of natural justice and the obligation to ensure proper communication and fair opportunities for affected parties.

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Issues:
1. Challenge to order under Prevention of Money Laundering Act, 2002 without receiving Show-Cause Notice.

Analysis:
The petitioner challenged an order passed by the Adjudicating Authority under the Prevention of Money Laundering Act, 2002, confirming a freezing order on the petitioner's bank account. The petitioner contended that the order was issued without providing a copy of the show-cause notice or an opportunity to present objections. The petitioner later discovered the show-cause notice in their spam folder, claiming possession of it. The Court considered the petitioner's grievance and granted an opportunity to respond to the show-cause notice. The respondent did not object to this, acknowledging the lack of service of the notice to the petitioner. Consequently, the impugned order was set aside for the petitioner, granting them 10 days to respond to the show-cause notice dated 08.10.2020. The Adjudicating Authority was directed to issue a fresh order after considering the petitioner's response, with a mandate to decide expeditiously, preferably within four weeks, without delving into the merits of the case.

This judgment highlights the importance of due process and the right to be heard before adverse actions are taken under the PMLA. The Court emphasized the need for fairness and granted the petitioner an opportunity to respond to the show-cause notice, rectifying the procedural lapse. The decision underscores the principle of natural justice and the obligation on authorities to ensure proper communication and opportunity for affected parties to present their case. The directive for an expeditious resolution further promotes efficiency and timely adjudication in matters involving financial implications and legal consequences.

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