Supreme Court Invalidates Attachment Order Exceeding Limitation Period

The Supreme Court clarified that its orders extending limitation periods due to the Covid-19 pandemic were not meant to extend the statutory window for provisional attachment under the Prevention of Money-Laundering Act. As the Enforcement Directorate exceeded the 180-day limit for provisional attachment, the Court invalidated the attachment order issued after this period. The Court allowed the writ petition, setting aside the provisional attachment order and granting consequential benefits to the petitioners.

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Issues Involved:
1. Whether the statutory window for provisional attachment under Section 5(1)(b) of the Prevention of Money-Laundering Act, 2002 (PMLA) is extended by the Supreme Court's orders in Suo Motu Writ Petition (Civil) No.(S) 3/2020.
2. Whether the Enforcement Directorate (ED) can act beyond the statutory limit of 180 days for provisional attachment of property.

Detailed Analysis:

1. Extension of Statutory Window under Section 5(1)(b) of PMLA:
The central issue before the Court was whether the Supreme Court's orders extending the period of limitation due to the Covid-19 pandemic apply to the statutory period for provisional attachment under Section 5(1)(b) of the PMLA. The Supreme Court's orders aimed to address the difficulties faced by litigants in filing petitions and other proceedings due to the pandemic, extending the limitation period from 15th March 2020 till further orders. The Court analyzed these orders and concluded that they were intended to protect the starting point of litigation, not to extend procedural timelines within ongoing proceedings.

2. Acting Beyond the Statutory Limit of 180 Days:
The Court noted that the ED issued a provisional attachment order on 30th September 2021, and the statutory 180 days expired on 31st March 2022. The ED's subsequent action, including a hearing notice in June 2022, was beyond this period. The Court emphasized that Section 5(3) of the PMLA clearly states that any order of attachment ceases to have effect after 180 days. The Court found that the ED failed to act within this statutory timeframe, making the attachment order invalid.

Judicial Precedents:
The Court reviewed various precedents:
- Rajendra Kumar Murarka vs. Mohsina Tabassum: Held that the Supreme Court extended the time for all pending proceedings, implying the 180 days could be extended.
- Adjudicating Authority (PMLA) vs. Gobinda Das: Held that the Adjudicating Authority cannot be seen as a "non-litigant" and vacated the Single Judge's order that extended the 180 days.
- Prakash Corporates vs. Dee Vee Projects Limited: Restricted the application of S. Kasi to specific facts, not extending it to other procedural timelines.
- Knight Riders Sports Private Limited vs. Adjudicating Authority (PMLA): Construed Section 5(3) of the PMLA as restricting attachment orders to 180 days.
- S. Kasi vs. State: Held that the Supreme Court's order was to protect litigants' rights to file proceedings, not to extend procedural timelines within ongoing cases.

Conclusion:
The Court concluded that the Supreme Court's orders did not intend to extend the statutory period for provisional attachment under the PMLA. The ED's failure to act within the 180 days rendered the attachment order invalid. Consequently, the Court set aside the provisional attachment order dated 30th September 2021 and allowed all consequential benefits to the petitioners.

Disposition:
The writ petition WPA 9699 of 2022 was allowed, and the provisional attachment order was set aside. Urgent certified copies of the order were directed to be supplied to the respective parties upon fulfillment of requisite formalities.

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