2022 (4) TMI 8 - HC - Money Laundering

Court Validates Authority and Actions of Officers under PML Act, Dismissing Challenge

The court upheld the appointment and actions of respondent officers under the Prevention of Money Laundering Act (PML Act), dismissing the petitioner's ... Money Laundering - Ponzy Scheme - scheduled offence - issuance of general or special authorization for Officers on deputation to be Deputy Director in the office of the Directorate of Enforcement, under the PML Act - Directorate of Enforcement could have bestowed powers on such an Officer to be an Officer as provided under Section 48 of the PML Act or not - validity of registration of ECIR by an Officer acting as Deputy Director the PML Act, in the absence of general or special authorization - provisional attachment order - Section 45(1A) of the PML Act - HELD THAT:- It is the specific case of the petitioner that Central Government did not issue any special authorization for the officer on deputation to be worked as deputy director and Assistant Director in the office of the Directorate of Enforcement and PML Act. As such, no powers conferred on those officers under Section 48 of the PML Act, absolutely there is no authority or filing the complaint by the Assistant Director against the petitioner under the PML Act. The vacancy circular also not available to show the exercise of power under Section 49(1) of PML Act and on the deputation basis as authority for the purpose of investigation no special order has been passed therefore, the action taken by the respondent under the PML Act is nonest in the eye of law. On bare reading of Sub-section (2) to the 2nd proviso to the section 45 (1) of PML Act empowers any officer of the Central Government or a State Government authorize in writing in this behalf by a Central Government by a general or special order made in this behalf by that Government. The amendment to provision 45 i.e., 45 (1-A) provides that no police officers shall investigate into an offence under this Act unless specifically authorized by Central Government by a general or special order and subject to such conditions as may be prescribed - the complaint in this case has been filed by respondent 2 who is the Assistant Director, working in Enforcement Directorate, (ED) filed the complaint by exercising the power under the PML Act. The question of considering the power of the respondent No.1 cannot be dealt with by this Court in this petition. Respondent No.2 has filed the complaint as Assistant Director which is in the nature of charge sheet and there are two different proceedings in view of the order passed under Section 5 and filing complaint under section 45 of the PML Act. Therefore, the contention of the petitioner's counsel at paragraphs 7 and 8 of the petition questioning the authority of respondent Nos.1 and 2 is not sustainable and the respondents are the authorities under the PML Act and who have been duly appointed by the Central Government and they exercised their power under the Act which is within the jurisdiction under the PML Act. On perusal of the entire records, respondent No.2 is an authorised officer under the PML Act appointed as per Section 49 of the PML Act and he is one of the officers specified under Section 48 of the PML Act. By issuing the notifications, the Central Government has empowered the officer to file the complaint before the Special Court and respondent No.2 is not officer who comes below the rank of the Assistant Director. Therefore, the question of quashing the complaint/challan filed by the respondent No.2 before the Special Court does not call for any interference. Petition dismissed. Issues Involved:1. Authority of Officers under the PML Act.2. Validity of ECIR registration by an unauthorized officer.3. Legality of provisional attachment orders.4. Special Court's cognizance of the complaint.Detailed Analysis:1. Authority of Officers under the PML Act:The petitioner challenged the authority of respondent officers, contending they were not properly authorized under the Prevention of Money Laundering Act (PML Act). The petitioner argued that the Central Government did not issue specific authorization for officers on deputation to serve as Deputy Director or Assistant Director in the Directorate of Enforcement (ED), as required under Section 48 of the PML Act. The petitioner further argued that the vacancy circular and appointment orders did not comply with Section 49(1) of the PML Act, making the actions of these officers invalid.The court, however, found that the Deputy Director and Assistant Director were appointed in accordance with Sections 48, 49, and 51 of the PML Act. Notifications and government orders were produced, showing that the officers were duly appointed and authorized by the Central Government. The court emphasized that once an officer is appointed and deputed to work in ED, they are vested with all powers under the PML Act, regardless of their original cadre. The court referred to specific notifications and orders, including the general order dated 11.11.2014, which authorized officers not below the rank of Assistant Directors to file complaints under Section 45 of the PML Act.2. Validity of ECIR Registration by an Unauthorized Officer:The petitioner questioned the validity of the Enforcement Case Information Report (ECIR) registered by an officer acting as Deputy Director without specific authorization. The court reiterated that the officers were duly appointed and authorized under the PML Act, and their actions, including the registration of ECIR, were valid. The court referred to Section 45(1-A) of the PML Act, which states that no police officer shall investigate an offence under this Act unless specifically authorized by the Central Government.3. Legality of Provisional Attachment Orders:The petitioner challenged the provisional attachment order issued by the Deputy Director under Section 5(1) of the PML Act. The court noted that the provisional attachment order was an administrative order, which had already been challenged before the Appellate Tribunal. The Appellate Tribunal had allowed the petitioner's claim and passed an order. The court held that the provisional attachment order and the filing of the complaint under Section 45 of the PML Act were two different proceedings. The court found no illegality in the actions of the respondent officers and upheld their authority to issue provisional attachment orders.4. Special Court's Cognizance of the Complaint:The petitioner argued that the Special Court did not apply its mind while taking cognizance of the complaint and did not pass a detailed order. The court referred to the judgment of the Supreme Court in Pradeep S. Wodeyar vs. State of Karnataka, which clarified that a detailed order is not required while taking cognizance based on a police report. The court held that the Special Court's order to register a special case and issue summons was sufficient and in compliance with legal requirements.Conclusion:The court dismissed the writ petition, stating that the appointment and actions of the respondent officers were within the jurisdiction and authority conferred by the PML Act. The court found no merit in the petitioner's contentions and upheld the validity of the complaint filed by the Assistant Director of ED. The court also emphasized that the provisional attachment order and the filing of the complaint were separate proceedings, and the actions of the respondent officers were legally sound.