2023 (8) TMI 1051 - HC - Money Laundering

Court affirms adjudicating authority's competence under PMLA Act, stresses natural justice principles

R.P. Infosystems Limited And Another Versus The Adjudication Authority And Another

R.P. Infosystems Limited And Another Versus The Adjudication Authority And Another - TMI Issues Involved:1. Competence of the adjudicating authority under the PMLA Act.2. Alleged bias and procedural lapses by the adjudicating authority.3. Constitution and quorum of the adjudicating authority.Summary:Competence of the Adjudicating Authority:The appellant filed a writ petition seeking a declaration that the adjudicating authority under the PMLA Act was statutorily incompetent to take up their case, arguing that the authority was improperly constituted as it lacked a judicial member. The court noted that the adjudicating authority, as per Section 6 of the PMLA Act, can function with a single member bench, and the Chairperson has the discretion to constitute such a bench. The court held that the adjudicating authority was validly constituted and competent to adjudicate the matter.Alleged Bias and Procedural Lapses:The appellant contended that the adjudicating authority was biased and had procedural lapses, arguing that the Member (Finance) had a potential for bias due to previous government employment. The court found no merit in these claims, stating that the proceedings were at a preliminary stage and the selection of the office of the Enforcement Directorate as the venue did not indicate bias. The court emphasized that the principles of natural justice were not violated as sufficient opportunity had been given to the appellants.Constitution and Quorum of the Adjudicating Authority:The appellant argued that the adjudicating authority was functioning with only one member and thus was quorum non judis. The court referred to Section 6 of the PMLA Act, which allows the Chairperson to constitute a bench with one or two members. The court upheld the validity of a single-member bench, citing previous judgments that supported this interpretation. The court concluded that the adjudicating authority, even with a single member, was competent to proceed with the case.Conclusion:The court dismissed the appeal, affirming that the adjudicating authority was properly constituted and competent to adjudicate the matter. The court also directed compliance with the previous order within three weeks, emphasizing that the appellant's repeated attempts to stall the proceedings were unwarranted.