Reason to Believe under PMLA must be formed by the Adjudicating Authority, but recording and service are not statutorily required.

The article addresses whether Section 8(1) PMLA requires the Adjudicating Authority to record and serve its "reason to believe" when issuing a show-cause notice after provisional attachment. It explains the Tribunal's conclusion that the Adjudicating Authority must form its own reason to believe (a two-tier satisfaction distinct from the attaching authority) but that the statute does not mandate recording those reasons in writing or serving them with the notice; providing access to the recorded reasons via the registry satisfied the statutory requirement. The piece emphasises that courts must not impose procedural requirements absent in the statute and treats non-recording at the provisional stage as a curable infraction adjudicable under Section 8.

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Issues: (i) Whether the Adjudicating Authority erred in confirming the Provisional Attachment Order by failing to record or serve its "reason to believe" under Section 8(1) of the Prevention of Money Laundering Act, 2002.

Analysis: The issue revolves around the statutory requirement under Section 8(1) of the Prevention of Money Laundering Act, 2002 that the Adjudicating Authority must have a reason to believe before issuing a show-cause notice. The Tribunal examined whether Section 8(1) mandates that such reason to believe be recorded in writing and served on the noticee, and considered contrasting High Court authorities (including J.K. Tyre and Vanpic) and Supreme Court dicta prohibiting courts from rewriting statutes. The Tribunal found that Section 8(1) does require the Adjudicating Authority to form its own reason to believe (a two-tier satisfaction distinct from the attaching authority under Section 5(1)), but the provision does not itself mandate that the reason to believe be recorded in writing and served with the notice. The record showed that the notice indicated that reasons to believe were recorded and that a certified copy could be obtained from the Adjudicating Authority's registry. The Tribunal further noted authorities holding that non-recording at the provisional attachment stage is a curable statutory infraction subject to full adjudication under Section 8 and that courts cannot add procedural requirements absent in the statute.

Conclusion: The Tribunal concluded that there was no substance in the appellants' contention that Section 8(1) required the Adjudicating Authority to record and serve the reasons to believe in writing; the Adjudicating Authority had satisfied the statutory requirement and provided for access to the recorded reasons. Accordingly, the appeals challenging confirmation of the Provisional Attachment Order were dismissed.

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