Court rules on jurisdiction under PMLA, upholds validity of proceedings and dismisses bias allegations

The Court rejected objections to its jurisdiction, ruling that the Adjudicating Authority under the PMLA is not a "Central Agency." It also upheld the validity of the proceedings, noting the flexibility in constituting benches. Allegations of bias and procedural irregularities were dismissed, emphasizing the urgency in combating money-laundering. The Court directed the Adjudicating Authority to allow the petitioners a hearing opportunity before closing proceedings and not to consider the ED's rejoinder without the petitioners' objections. No costs were awarded.

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Issues Involved:
1. Jurisdiction of the Court to entertain the matter.
2. Validity of the proceedings by the Adjudicating Authority under the PMLA.
3. Alleged bias and procedural irregularities by the Adjudicating Authority.

Summary:

Jurisdiction of the Court:

The Enforcement Directorate (ED) raised an objection regarding the Court's determination to take up the matter, citing a Notification dated September 30, 2022, which clarified that matters relating to CBI and Central Agencies in writ petitions under Article 226 of the Constitution are included within the special category "Police" in the Appellate Side Rules. The petitioners argued that the writ petition challenges the jurisdiction of the Adjudicating Authority under the PMLA, which is a quasi-judicial statutory authority and not a "Central Agency." The Court, referencing a Division Bench judgment and the Supreme Court's decision in Vijay Madanlal Choudhury Vs. Union of India, held that the Authorities under the PMLA are not Police Authorities and thus, the objection to jurisdiction was turned down.

Validity of the Proceedings by the Adjudicating Authority:

The petitioners challenged the impugned order of the PMLA authority on the ground of coram non judice, arguing that Section 6(2) of the PMLA mandates the Adjudicating Authority to consist of a Chairperson and two other Members. The Court noted that Section 6(5)(b) allows a Bench to be constituted by the Chairperson with one or two Members, and sub-section (7) provides for the Chairperson's discretion to constitute a Bench with only one Member. Therefore, the objection as to coram non judice was not accepted.

Alleged Bias and Procedural Irregularities:

The petitioners argued that the Adjudicating Authority showed bias by fixing the first hearing at the ED Office and not providing an opportunity to respond to a rejoinder filed by the ED. The Court found that the venue was selected for administrative convenience and that the hearing was ultimately held in a different Government office in the same building. The Court also noted that the petitioners' counsel participated in the hearing and did not object to the venue at that time. Regarding the rejoinder, the Chairperson had clarified that it would not be relied upon without giving the petitioners an opportunity to file a written objection.

The Court observed that the proceedings under Section 17(4) of the PMLA are of a summary nature and do not require detailed arguments. The repeated attempts by the petitioners to challenge the proceedings indicated an intention to stall the same unnecessarily. The Court emphasized the urgency involved in combating money-laundering and related serious crimes, justifying some amount of urgency in the proceedings.

Conclusion:

The writ petition was disposed of by directing the Adjudicating Authority to afford an opportunity of hearing to the petitioners and/or their counsel before closing the hearing on the pending interim applications. The Adjudicating Authority was also directed not to rely on the rejoinder filed by the ED unless adequate opportunity is given to the petitioners to file a written objection thereto. There was no order as to costs.

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