2021 (6) TMI 413 - HC - Money Laundering

Enforcement Directorate's Appeal Dismissed in Money Laundering Case

Nillesh Parrekh Versus Assistant Director, Enforcement Directorate, Kolkata & Ors

The Court dismissed the appeal filed by the Enforcement Directorate through the Assistant Director under the Prevention of Money Laundering Act, 2002. It ... Jurisdiction - maintainability of appeal filed by Enforcement Directorate itself before Learned Tribunal - Money Laundering - scheduled offences - proceeds of crime - defalcation of ₹ 2672 Crores, involving 25 banks of which five were private ones - Section 26(1) of the PML Act - HELD THAT:- Section 26 is a provision enabling certain entities to file an appeal. In this, so far the Directorate is concerned, the Legislature thought it prudent to specify the Head of the Directorate i.e., the Director as the authority to initiate an appeal. This, however, cannot preclude the Enforcement Directorate itself from preferring an appeal if it decides to do so for some reason. In doing so, the Directorate may fairly be represented by any of its authorities, especially the ones who have been specifically mentioned in section 48 of the Act. Had the appeal been filed by the Assistant Director in his own name instead of by the Director, then a question could have at all arisen about proper adherence to the provisions of section 26 of the Act in filing an appeal. But, when the Directorate itself files the same, whether through the Assistant Director or any other authority as mentioned in the Act itself, it is a substantial compliance of the said provision - Moreover, section 68 of the PML Act espouses a spirit of pragmatism and shuns thwarting actions taken under the said Act merely on the excuse of technicalities. Whether the Enforcement Directorate could also invoke the locus of an 'aggrieved person' in filing an appeal under section 26 of the PML Act? - HELD THAT:- It is true that in the instant case, there is no interpretation clause present to qualify the inclusive definition. However, section 48 of the PML Act, as referred to above, squarely brings an aggrieved entity like the Enforcement Directorate within the ambit of a 'person' as described in section 2 (s) of the Act - the Enforcement Directorate should be competent to file an appeal under section 26 of the PML Act. Thus, there is no bar on the Enforcement Directorate to file an appeal under section 26 of the PML Act, through the Assistant Director, before the learned Appellate Tribunal - appeal dismissed. Issues involved:- Maintainability of appeal filed by Enforcement Directorate through Assistant Director under Prevention of Money Laundering Act, 2002Analysis:1. The appeal challenged an order by the Appellate Tribunal, Prevention of Money Laundering Act, 2002, regarding the maintainability of the appeal filed by the Enforcement Directorate, Kolkata, through the Assistant Director under Section 26 of the PML Act. The Enforcement Directorate contended that only the Director could file an appeal under the Act, not the Directorate itself. The Tribunal's decision was based on the Directorate's authority to challenge adjudication orders affecting the objectives of the Act.2. The appellant argued that the Enforcement Directorate, as an entity, did not qualify as an 'aggrieved person' under Section 26(1) of the PML Act, which allows the Director or any aggrieved person to file an appeal. However, the Court emphasized that the Directorate, being a specialized financial investigating agency under the Department of Revenue, could be more aggrieved by certain orders than the Director, justifying its locus to file an appeal.3. The Court highlighted that while the Act specifies the Director as the authority to initiate an appeal, this does not preclude the Enforcement Directorate itself from filing an appeal through any of its authorized authorities. The spirit of pragmatism under Section 68 of the PML Act supports actions taken under the Act, even if not strictly adhering to technicalities.4. Referring to legal precedents, the Court noted that the inclusive definition of 'person' in the Act encompassed entities like the Enforcement Directorate, and section 48 of the Act further supported the Directorate's eligibility to file an appeal under Section 26. The Court dismissed the appeal, affirming the Enforcement Directorate's competence to file an appeal through the Assistant Director under the PML Act.5. The Court concluded by dismissing the appeal, vacating the interim order, and refraining from issuing any costs. Certified copies of the judgment were to be provided to the advocates upon request. Additionally, the request for a stay of the judgment was considered and rejected by the Court.