Court orders respondent to grant extension for response to show-cause notice under PMLA.

The court directed the 1st respondent to grant an extension of one month to the petitioners to prepare a proper response to the show-cause notice under Section 8(1) of the Prevention of Money Laundering Act, 2002. The extension period would be excluded from the 180-day statutory timeline for adjudication proceedings as per the third proviso to Section 5 of the PMLA. The Writ Petition was disposed of with these directions, and no order as to costs was made.

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Issues Involved:
1. Extension of time to respond to the show-cause notice under Section 8(1) of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Violation of principles of natural justice.
3. Adherence to statutory timelines under PMLA.

Detailed Analysis:

1. Extension of time to respond to the show-cause notice under Section 8(1) of the PMLA:
The petitioners filed a Writ Petition under Article 226 of the Constitution of India seeking an extension of time to respond to a show-cause notice dated 22.04.2022 issued by the 1st respondent under Section 8(1) of the PMLA. The notice required the petitioners to indicate the source of income, earnings, or assets out of which they had acquired certain assets specified in the Provisional Attachment Order (PAO) No.06/2022. The petitioners contended that the show-cause notice and its annexures were voluminous, running into 5000 pages, and that the 6th petitioner, who had full knowledge of the allegations, was in judicial custody, making it difficult to prepare an effective reply.

2. Violation of principles of natural justice:
The petitioners argued that not granting an extension of time to respond to the show-cause notice would violate the principles of natural justice and Articles 14 and 21 of the Constitution of India. They emphasized that an inadequate reply due to the lack of time would cause irreparable injury and affect their ability to provide a comprehensive defense. The court noted that the original complaint and its annexures were voluminous, and the petitioners needed time to peruse the documents and prepare a proper response. The court held that not granting an extension would deprive the petitioners of their right to a fair hearing and the opportunity to present evidence in support of their defense.

3. Adherence to statutory timelines under PMLA:
The respondents contended that the proceedings before the Adjudicating Authority were time-bound, and an order had to be passed within 180 days of the issuance of the provisional attachment order. They argued that the petitioners were using frivolous grounds to derail the adjudication proceedings. The court acknowledged the statutory time limit but noted that the third proviso to Section 5 of the PMLA allows for the exclusion of the period during which proceedings are stayed by the High Court. The court directed the 1st respondent to grant an extension of one month to the petitioners to prepare a proper response, and for the purpose of computing the 180-day period, the extension period would be excluded as per the third proviso to Section 5 of the PMLA.

Conclusion:
The court directed the 1st respondent to grant an extension of one month to the petitioners to prepare a proper response to the show-cause notice. The period during which the proceedings were extended would be excluded from the 180-day period as per the third proviso to Section 5 of the PMLA. The Writ Petition was disposed of with these directions, and no order as to costs was made.

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