Special Judge's property release order in money laundering case set aside for violating PMLA Rules 3 and 3A procedures

The MP HC allowed a revision petition challenging a Special Judge's order that released property in lieu of fixed deposit in a money laundering case. The court held that while the impugned order was interlocutory, revision was maintainable when challenging orders passed without jurisdiction or proper procedure. The Special Judge failed to consider Rules 3 and 3A of PMLA Rules 2016 and did not clarify how the applicant qualified as a claimant under Rule 2(b) and Section 8(8) of PMLA 2002. The court found the order violated PMLA provisions and was passed without proper appreciation of the law, rendering it grossly infirm and illegal.

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Issues Involved:
1. Whether the revision petition is liable to be dismissed on the basis of non-maintainability as the impugned order is an interlocutory orderRs.
2. Whether the impugned order passed by the learned Special Court is suffering from infirmity, illegality, and improprietyRs.

Summary:

Issue 1: Non-maintainability as Interlocutory Order
The petitioner contended that the order passed by the Special Court is final in nature because the property substituted will never be retained if the case decides in favor of the Directorate of Enforcement. The order under challenge finally decides the rights of the prosecution and cannot be considered as an interlocutory order. On the contrary, the respondents argued that the order was passed in interim form and cannot be treated as a final order. The court referred to various judgments, including Parmeshwari Devi Vs. State & Anr., and concluded that if the order is finally deciding the rights and liabilities of the parties, even in an interim stage, it will be treated as a final order. Therefore, the revision against such an order lies.

Issue 2: Infirmity, Illegality, and Impropriety of the Impugned Order
The court examined the legality of the order passed by the Special Court. The order was mainly based on the second proviso of Section 8(8) of PMLA, 2002, which allows the Special Court to consider the claim of the claimant for the restoration of properties during the trial. However, the court noted that the applicants could not be treated as claimants as defined in the Prevention of Money-Laundering (Restoration of Property) Rules, 2016. The Special Court did not follow the manner specified in Rules 3 and 3A of the PMLA Rules, 2016, and did not clarify how the applicants fit the definition of 'claimants.' Therefore, the impugned order was found to be in violation of the respective provisions of PMLA, 2002, and PMLA Rule, 2016.

Conclusion:
The revision petition was allowed, and the impugned order passed by the learned Special Judge, PMLA Court, was set aside due to gross infirmity and illegality.

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