2025 (12) TMI 821 - HC - Money Laundering

Section 5 inapplicable: no condonation beyond 120 days for PMLA appeals u/s 42, Section 29(2)

The HC, interpreting Section 42 of PMLA read with Section 29(2) of the Limitation Act, held that Section 5 of the Limitation Act is inapplicable to ... Seeking condonation of delay of 116 days in filing the appeal u/s 42 of PMLA - sufficient cause for delay or not - Applicability of Section 5 of the Limitation Act, 1963 - HELD THAT:- On a bare reading of the aforesaid provision, it is clear that where any special or local law prescribes for a period of limitation different from the period prescribed by the Schedule to the Limitation Act, 1963, the provisions of Sections 4 to 24 of the Limitation Act, 1963 shall apply only in so far as and to the extent which they are not expressly excluded by such special or local law. From a conjoint reading of Section 42 of the PMLA and Section 29(2) of the Limitation Act, 1963, the inevitable conclusion that could be drawn is that Section 5 of the Limitation Act, 1963 cannot be invoked to condone the delay beyond 120 days prescribed under Section 42 of the PMLA and the proviso thereto. The proviso to Section 42 of the PMLA by mandating that “allow it to be filed within a further period not exceeding sixty days” adjures exclusion of the applicability of Section 5 of the Limitation Act, 1963. In Chhatisgarh State Electricity Board vs. Central Electricity Regulatory Commission and Others [2010 (4) TMI 1031 - SUPREME COURT], the Supreme Court held that outer limit for filing of an appeal is 120 days and there is no provision in the Electricity Act, 2003 empowering the Court to entertain an appeal after more than 120 days delay. It needs to be emphasised that while interpreting the period of limitation as contemplated under Section 34(3) of the Arbitration and Conciliation Act, 1996 and the proviso thereto which stipulates that “Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter”, the Supreme Court in Union of India v. Popular Construction Co. [2001 (10) TMI 1044 - SUPREME COURT], has held that applicability of Section 5 of the Limitation Act to a petition filed under Section 34(3) of the Arbitration and Conciliation Act, 1996 is excluded. The application for condonation of delay is dismissed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether an appeal under Section 42 of the Prevention of Money-laundering Act, 2002 can be entertained and delay condoned beyond the outer limit of 120 days prescribed therein. 1.2 Whether Section 5 of the Limitation Act, 1963 is applicable to condone delay in filing an appeal under Section 42 of the Prevention of Money-laundering Act, 2002 beyond the period specified in that provision. 1.3 Consequential relief regarding return of the original order-in-original to enable the appellant to pursue other remedies, if any. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 & 2: Condonation of delay and applicability of Section 5 of the Limitation Act to Section 42 PMLA Legal framework 2.1 Section 42 of the Prevention of Money-laundering Act, 2002 provides that an appeal to the High Court must be filed within sixty days from the date of communication of the decision or order of the Appellate Tribunal, and the proviso authorises the High Court, on being satisfied of 'sufficient cause', to allow it to be filed 'within a further period not exceeding sixty days'. 2.2 Section 29(2) of the Limitation Act, 1963 stipulates that where a special or local law prescribes a period of limitation different from that in the Schedule, Sections 4 to 24 of the Limitation Act apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law. 2.3 The Court considered Supreme Court precedents interpreting similarly worded limitation provisions containing expressions such as 'not exceeding' or 'but not thereafter', including decisions under the Foreign Exchange Management Act, 1999, the Electricity Act, 2003, and the Arbitration and Conciliation Act, 1996, which hold that Section 5 of the Limitation Act cannot be invoked beyond the maximum condonable period prescribed. Interpretation and reasoning 2.4 From the text of Section 42 PMLA, the Court held that the scheme of limitation is two-fold: (i) an initial period of sixty days for filing the appeal, and (ii) an additional, condonable period 'not exceeding sixty days' upon showing sufficient cause. 2.5 The expression 'not exceeding sixty days' in the proviso to Section 42 was construed as prescribing an outer limit of 120 days (60 + 60) for institution of an appeal, beyond which the High Court is statutorily precluded from entertaining an appeal. 2.6 Reading Section 42 of PMLA with Section 29(2) of the Limitation Act, the Court held that the specific language of the proviso to Section 42-especially the phrase 'not exceeding sixty days'-constitutes an express exclusion of the application of Section 5 of the Limitation Act beyond the said outer limit. 2.7 Reliance was placed on the decision under Section 35 of the Foreign Exchange Management Act, 1999, which uses similar wording and in which it was held that the High Court cannot entertain an appeal beyond 120 days; and on the decision under Section 125 of the Electricity Act, 2003, where the Supreme Court held that the outer limit for filing an appeal is 120 days and that Section 5 of the Limitation Act cannot be invoked beyond that period. 2.8 The Court further noted that in relation to Section 34(3) of the Arbitration and Conciliation Act, 1996, the Supreme Court has held that the words 'but not thereafter' exclude the application of Section 5 of the Limitation Act, reinforcing the principle that where the statute uses restrictive expressions, the power to condone delay is confined to the period expressly specified and no further. 2.9 On this settled legal position, the Court held that it had no jurisdiction to condone delay beyond the maximum condonable period of sixty days in addition to the initial sixty days, and that any delay beyond 120 days under Section 42 PMLA is statutorily non-condonable, irrespective of the cause shown. Conclusions 2.10 The Court concluded that an appeal under Section 42 of the Prevention of Money-laundering Act, 2002 must be filed within an absolute outer limit of 120 days from the date of communication of the order of the Appellate Tribunal. 2.11 Section 5 of the Limitation Act, 1963 cannot be invoked to condone delay beyond this outer limit, as the expression 'not exceeding sixty days' in the proviso to Section 42 PMLA expressly excludes such extension. 2.12 As the delay in filing the appeal was 116 days (i.e., beyond the initial 60 days and exceeding the maximum condonable period of a further 60 days), the Court held that the delay was not condonable in law and dismissed the application for condonation of delay, resulting in rejection of the appeal at the stage of scrutiny. Issue 3: Return of original order-in-original Interpretation and reasoning 3.1 After dismissal of the application for condonation of delay, a request was made for return of the original order-in-original to enable the appellant to pursue any other remedies available under law. Conclusions 3.2 The Court permitted the prayer and directed that the original order-in-original be returned to the counsel for the appellant, after retaining a photocopy on record.