Appellate Tribunal upholds PMLA Section 20(3) order dismissing COVID-19 period exclusion and single-member constitution challenges

The Appellate Tribunal under SAFEMA dismissed an appeal challenging an Adjudicating Authority order under PMLA, 2002. The appellant contested the order was passed beyond the 180-day period under Section 20(3) and challenged the single-member constitution of the Adjudicating Authority. The Tribunal held that the COVID-19 period exclusion (15.03.2020 to 28.02.2022) as per SC directions applied to court remedies, not termination proceedings, following Delhi HC precedent. Regarding constitution, the Tribunal relied on Calcutta HC and Telangana HC decisions confirming single-member Adjudicating Authority's competence under PMLA provisions.

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Issues Involved:
1. Whether the impugned order was passed beyond the period of 180 days as specified under Section 20(3) of the Prevention of Money Laundering Act, 2002.
2. Whether the constitution of the Adjudicating Authority was in accordance with the Act of 2002 and the Rules of 2007.

Detailed Analysis:

Issue 1: Period of 180 Days
The appellant argued that the impugned order was passed beyond the 180-day period allowed under Section 20(3) of the Prevention of Money Laundering Act, 2002. The freezing of the appellant's FDRs and bank accounts occurred on 05.11.2021, and the impugned order was passed on 22.08.2022. The respondent countered this argument by citing the Supreme Court's order in Suo Motu Writ Petition No. 3/2020, which excluded the period from 15.03.2020 to 28.02.2022 due to the Covid-19 pandemic. This exclusion applied to the computation of the period prescribed under various laws, including the termination of proceedings. The Tribunal agreed with the respondent, stating that the period from 15.03.2020 to 28.02.2022 must be excluded from the 180-day computation, thus making the impugned order timely. The Tribunal cited multiple judgments, including the Telangana High Court's decision in Hygro Chemicals Pharmtek Pvt. Limited vs. Union of India, which supported the exclusion of this period for the termination of proceedings.

Issue 2: Constitution of the Adjudicating Authority
The appellant contended that the Adjudicating Authority was not properly constituted as per the Act of 2002 and the Rules of 2007, arguing that the order was passed by a single member not from the field of law. The respondent countered by referencing Rule 3 of the Rules of 2007 and Section 6 of the Act of 2002, which allow for the Adjudicating Authority to consist of members from various fields, including administration and finance. The Tribunal noted that the member who passed the order possessed the necessary qualifications under Rule 3(3) of the Rules of 2007. The Tribunal further cited multiple judicial precedents, including the Delhi High Court's decision in J. Shekhar vs. Union of India and the Madras High Court's decision in G. Gopalakrishnan vs. Deputy Director, Directorate of Enforcement, which upheld the validity of single-member benches. The Tribunal concluded that the Adjudicating Authority was properly constituted and that the single member was competent to pass the impugned order.

Conclusion
The Tribunal dismissed the appeal, finding no merit in the arguments presented by the appellant. The impugned order was deemed to have been passed within the permissible period after excluding the Covid-19 period, and the constitution of the Adjudicating Authority was found to be in compliance with the relevant legal provisions.

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