Tribunal upholds Authority's orders, denies cross-examination request, stresses efficiency

The Tribunal dismissed both appeals, upholding the Adjudicating Authority's orders. It determined that a single-Member Bench is valid under the Prevention of Money Laundering Act, 2002, and denied the appellant's request for cross-examination of witnesses. The Tribunal emphasized that cross-examination should not be allowed to delay proceedings and should be permitted only exceptionally, not routinely.

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Issues Involved:
1. Constitution of the Adjudicating Authority under Section 6(2) of the Prevention of Money Laundering Act, 2002.
2. Denial of cross-examination of witnesses by the Adjudicating Authority.

Detailed Analysis:

1. Constitution of the Adjudicating Authority under Section 6(2) of the Prevention of Money Laundering Act, 2002

The appellant challenged the order dated 10.11.2022, arguing that the proceedings should be stayed until the Adjudicating Authority is constituted as per Section 6(2) of the Act, which requires a Chairperson and two other Members. The Adjudicating Authority, however, decided the issue with a single Member Bench, which the appellant claimed was "coram non-judice."

Upon reviewing Section 6 of the Act, it was noted that while Section 6(2) stipulates the composition of the Adjudicating Authority, Section 6(5)(b) authorizes the Chairperson to constitute a Bench with one or two Members. The provision does not mandate a three-Member Bench for hearing cases. The Bench can validly consist of one Member unless the case requires a two-Member Bench as per Section 6(7).

The Tribunal referred to the judgment of the Madras High Court in "G. Gopalakrishnan Versus Deputy Director, Directorate of Enforcement, Chennai," which upheld the validity of a single-Member Bench. The Tribunal also cited the Delhi High Court's judgment in "J. Sekar Versus Union of India," which clarified that single-Member Benches are permissible under the Act.

Thus, the Tribunal found no merit in the appellant's argument and upheld the order of the Adjudicating Authority, denying the stay of proceedings.

2. Denial of Cross-Examination of Witnesses

The appellant's second appeal concerned the denial of an application to cross-examine certain witnesses. The appellant argued that cross-examination is a part of natural justice and is essential to bring the truth on record. The appellant cited several judgments to support this argument.

The Tribunal noted that the proceedings before the Adjudicating Authority are summary in nature and are aimed at confirming the Provisional Attachment Order to secure the property obtained from proceeds of crime. The final order of confiscation lies with the Trial Court/Special Court.

The Tribunal reviewed the facts of the case, including the provisional attachment of properties valued at Rs.164,67,00,000/- based on allegations of money laundering involving Yes Bank and DHFL. The appellant sought cross-examination to prove that it had no connection with the alleged transactions or money laundering.

The Tribunal observed that the appellant had not filed a reply to the notice along with the documents provided by the Enforcement Directorate. The cross-examination was sought to substitute the arguments to be raised before the Adjudicating Authority, which the Tribunal found inappropriate. The Tribunal emphasized that cross-examination should not be permitted merely to delay proceedings.

The Tribunal also noted that the principle of natural justice applies when real prejudice is caused. In this case, the appellant failed to demonstrate any real prejudice. The Tribunal cited the Madras High Court's judgment in "G. Gopalakrishnan Versus Deputy Director, Directorate of Enforcement, Chennai," which referred to the Supreme Court's observation that natural justice is not an unruly horse and must be applied with flexibility.

The Tribunal concluded that the appellant's request for cross-examination was intended to derail the proceedings and cause the provisional attachment to lapse. The Tribunal upheld the Adjudicating Authority's order denying the cross-examination, stating that it should be permitted only as an exception and not as a rule.

Conclusion

The Tribunal dismissed both appeals, finding no merit in the appellant's arguments. The Adjudicating Authority's orders were upheld, confirming that a single-Member Bench is valid under the Act and denying the request for cross-examination of witnesses.

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