AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 658
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....ular sale consideration. An FIR was lodged under the Prevention of Corruption Act, 1988 and proceedings from the same are pending trial in Ahmedabad. The Petitioner was arrested, thereafter, by the CBI in RC No. 221/2023/E0018. The Petitioner was again arrested by the Respondent No. 2 - Directorate of Enforcement (ED) on 6th August, 2022 and proceedings under PMLA were commenced by the ED. The Petitioner was subsequently granted bail. 4. Pursuant to proceedings under the PMLA, Provisional attachment order was passed on 3rd October, 2022 by the Respondent No. 1 whereby the two properties of the Petitioner were attached. In the said proceedings before the Adjudicating Authority, the Petitioner filed an application seeking permission to cross-examine the three persons whose statements were relied upon by the ED. The said application was decided by the impugned order dated 6th March, 2023. The operative portion of the impugned order reads as under: "5. Having perused the contents of the submissions of the defendant, it is evident the fact and circumstances of the case leading to the attachment has been brought on record by the Complainant alongwith there lied upon documents which ha....
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....he submissions made by the defendants with reference to their reply in the context of the property attached will be based on examination of facts with evidence brought on record. Although the Act does not mandate the recording of reasons in writing and communication of the same a copy of the reasons recorded u/s 8(1) has already been supplied to the defendant. In this context reference is made to the order of Hon'ble Madurai Bench of Madras High Court in W.P.(MD)No. 11454 of 2018 (G. Gopalakrishnan V. Deputy Director, Directorate of enforcement, Chennai) which has taken into consideration the order of Hon'ble High Court of Delhi in J. Sekar V. Union of India & Ors. 7. Further, the application of principles of natural justice have to be tested on the touchstone of higher principle, namely prejudice and in the scheme of PMLA this authority can safely come to the conclusion that no prejudice is caused to the defendants by not acceding to their request of cross examination, On principles of natural justice, In G. Gopalakrishnan v/s Deputy Director, Directorate of Enforcement, Chennai before Hon'ble High Court of Madras (W.P.(MD) No. 11454 of 2018) has further observed as ....
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...., operative part of which is as under:- " ....... Therefore, sufficient safeguard has been provided and looking to the nature of proceedings, cross examination cannot be permitted as a rule rather it an be as an exception. A case of exceptional nature is not made out herein. Thus, we do not find any reason to cause interference with the order of the Ld. Adjudicating Authority. We cannot ignore even one more aspect of the matter arising out of the cross examination of the witnesses. It cannot be disputed that Special Court would try the matter under the Act of 2002 against the accused and the few witnesses summoned for cross examination are even the accused in the case. If those accused are summoned for cross examination, they may be required to open their defence at a premature estage, while the defence can be opened by them in the case when tried by the Special Court. The cross examination in these proceedings may have serious consequences against those who are accused. Looking to the scope of attachment proceedings, cross examination can be permitted only as an exception and not as a rule, otherwise it may delay the proceedings, resulting in lapse of proceedings and cau....
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.... of the PMLA. The observations of the Court in Dr. U.S. Awasthi (supra) are set out below: "15. The Prevention of Money-Laundering (Appeal) Rules, 2005 define 'order' to read as under:- "2. Definitions.-(1) In these rules, unless the context otherwise requires,- (g) "order" means an order passed by the Director under sub-section (2) of section 13 of the Act or by the Adjudicating Authority- under section 8 of the Act, as the case may be;" The Petitioner's contention is that in terms of the Prevention of Money-Laundering (Appeal) Rules, 2005, only orders under Section 13(2) and Section 8 of PMLA are appealable to the Appellate Tribunal. As per the Petitioner, an order passed in an application seeking cross-examination is merely a procedural order, and not one under either of the provisions specified in Section 26. 16. The powers of the Adjudicating Authority, under Section 8 of PMLA, are quite vast. The said provision stipulates the various steps to be taken, prior to the passing of the final order by the Adjudicating Authority. The Adjudicating Authority has to consider the show cause notice, the reply of the notice/s, hear the aggrieved person, as also, the Director o....
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.... appeal ought to be entertained at all. Construing Rule 2 of the Prevention of Money-Laundering (Appeal) Rules, 2005 to the contrary would, in fact, mean that parallel proceedings would continue in writ petitions against procedural orders and before the Appellate Tribunal, once the final order is passed. This could lead to conflicting orders and lack of uniformity and consistency in dealing with the procedures to be followed by the Adjudicating Authority and other authorities under the PMLA. 22. In Arun Kumar Mishra (supra), the ld. Division Bench while dealing with a similar order of the Adjudicating Authority rejecting a request for cross-examination observed as under: "11. We have further enquired from the senior counsel for the appellant that even if the appellants are right in their contention of having a right to cross-examine the persons whose oral testimony is intended to be used against the appellants and even if the Adjudicating Authority is wrongly depriving the appellants of the said right, is it not open to the appellants to, if at all aggrieved by the orders of the Adjudicating Authority, to take up the said aspect in appeal under Section 26 of the Act against the....
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....narily be exercised by quashing a show cause notice." 23. Thus, in view of the scheme of the PMLA and the provisions of Section 26 of the Act as also the decision of the ld. Division Bench in Arun Kumar Mishra (supra), this Court is of the opinion that the Petitioner ought to be relegated to the Appellate Tribunal for assailing the impugned order dated 13th December 2022." 9. The Appellate Tribunal, PMLA is currently constituted and is functioning. The impugned order would be appealable to the Appellate Tribunal. Thus, this Court is not inclined to entertain the present writ petition. The Petitioner is relegated to avail of its Appellate remedy in accordance with law. 10. However, this Court would like to specifically note that it appears that the Respondent No. 1 has failed to take into consideration the observations of this Court in the U.S. Awasthi (supra) case where the use of such disconcerting language as contained in paragraph 8 of the impugned order, has been frowned upon by this Court. Repeated use of templated paragraphs, as though the principles of Natural Justice are mere rhetoric, is not permissible. The present order shall be treated as a warning to the concerned ....