SAFEMA Tribunal upholds provisional attachment order despite COVID delays and joint property claims under Section 5(3)

The Appellate Tribunal under SAFEMA dismissed an appeal challenging a provisional attachment order under the Prevention of Money Laundering Act, 2002. The appellant argued the confirmation order exceeded the 180-day statutory limit under Section 5(3) and that attachment of joint property without notice to co-owners was invalid. The Tribunal held that COVID-19 extensions applied to the time limitation, as the SC had extended procedural deadlines during the pandemic period in 2021. Regarding joint property, the Tribunal found no evidence of joint ownership and noted that only affected joint holders could challenge such orders. The appeal was dismissed with no interference warranted in the attachment order.

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Issues Involved:

1. Whether the confirmation of the provisional attachment order beyond 180 days should result in its lapse under Section 5(3) of the Prevention of Money Laundering Act, 2002.
2. Whether the attached property being a joint property without notice to the joint holder invalidates the attachment order.

Issue-wise Detailed Analysis:

1. Confirmation of Provisional Attachment Order Beyond 180 Days:

The appellant challenged the confirmation of the provisional attachment order on the grounds that it was confirmed beyond the statutory period of 180 days as stipulated under Section 5(3) of the Prevention of Money Laundering Act, 2002. The appellant argued that the order should lapse due to this delay. However, the respondent countered this argument by citing the Supreme Court's decision in Suo Moto Writ Petition (C) No. 3 of 2020, which excluded the period from 15.03.2020 to 28.02.2022 from the computation of limitation due to the Covid-19 pandemic. This exclusion was reiterated in the case of Prakash Corporates vs. Dee Vee Projects Limited and was elaborated upon by the Telangana High Court in Hygro Chemicals Pharmtek Pvt. Limited Vs. Union of India & Ors. The Tribunal, referencing these judgments, concluded that the period affected by Covid-19 should be excluded from the 180-day computation, thereby validating the confirmation of the attachment order. The Tribunal emphasized that the Supreme Court's directive was to prevent hardships due to the pandemic, which justified the extension of timelines for judicial and quasi-judicial proceedings. Consequently, the Tribunal found no merit in the appellant's argument regarding the lapse of the attachment order due to the delay in confirmation.

2. Attachment of Joint Property Without Notice to Joint Holder:

The appellant further contended that the attached property was jointly owned, and the attachment was made without notifying the joint holder, thus rendering the order invalid. The respondent argued that no evidence was provided to substantiate the claim of joint ownership. Moreover, the respondent pointed out that if the property was indeed jointly owned, the joint holder should have independently challenged the attachment order. The Tribunal observed that the appeal was only filed by the appellant and not by any joint holder, which weakened the claim of joint ownership. The Tribunal held that in the absence of any material evidence or an independent challenge by the joint holder, the argument regarding joint ownership could not be sustained. Therefore, the Tribunal rejected the appellant's second ground for challenging the attachment order.

Conclusion:

After evaluating the arguments and evidence presented, the Tribunal dismissed the appeal. It upheld the confirmation of the provisional attachment order, ruling that the extension of the timeline due to the Covid-19 pandemic was applicable, and found no substantial proof to support the claim of joint ownership of the attached property. The Tribunal concluded that there was no case for interference with the impugned order, leading to the dismissal of the appeal.

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