TaxTMI 
TaxTMI 
2023 (3) TMI 1367
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....i learned counsel for the Petitioner was heard along with Mr. V. Ramakrishna Reddy learned standing counsel for the Respondents. In W.P. No. 34627 of 2022, Mr. Vedula Srinivas representing Mrs. Vedula Chitralekha was heard for the Petitioners and Mr. V. Ramakrishna Reddy, learned standing counsel was heard for the Respondents. In I.A. No. 1 of 2022 in 41133 of 2022 and I.A. No. 1 of 2022 in W.P. No. 44343 of 2022, Mr. T. Niranjan Reddy learned senior counsel representing Mr. Avinash Desai was heard for the Petitioners and Mr. T. Surya Karan Reddy learned Additional Solicitor General of India for Southern Zone was heard for the Respondents therein. 3. Factual Background in W.P. No. 34238 of 2022: i) An inquiry was initiated by the Department of Revenue Intelligence, Hyderabad against the Petitioner herein for alleged illegal manufacturing and sale of DPP and HCL. In furtherance of the said inquiry, the Petitioner was arraigned as an accused in relation to offences committed under the Narcotic Drugs and Psychotropic Substances Act, 1985. Subsequently, Directorate of Enforcement (hereinafter referred as 'ED') initiated investigation under the Prevention of Money Laundering Act, ....
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....ed 19.05.2021. ii) Pursuant to the investigation, a provisional attachment order bearing PAO No. 6 of 2022 dated 08.03.2022 was passed by the ED attaching various moveable and immoveable properties worth Rs. 1984.84 Crores of the Karvy group of companies including its directors under Section 5(1) of the PMLA. Subsequently, an original complaint bearing OC No. 1680 of 2022 dated 06.04.2022 was filed before the Adjudicating Authority. iii) While the adjudication in OC No. 1680 of 2022 was pending, the ED passed another the provisional attachment order bearing PAO No. 15 of 2022 dated 28.07.2022 attaching moveable and immoveable properties worth Rs.110,70,18,735/- of the Petitioners herein in relation to the loans obtained by entities forming part of Karvy group of companies from Lakshmi Vilas Bank (now DBS Bank). iv) Pursuant to PAO No. 15 of 2022, an original complaint bearing OC No. 1799 of 2022 dated 26.08.2022 was filed before the Adjudicating Authority, which in turn, after satisfying itself that an offence of money laundering was committed, issued a show cause notice dated 19.09.2022 seeking to show cause as to why the provisional attachment should not be confirmed. ....
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....oner No. 2. However, for the sake of convenience, Petitioner No. 2 will be referred to as the Petitioner. ii) The facts in the case suggest an alleged commission of a scam during the demonetization in November, 2016. A complaint was lodged by the Deputy Director of Income Tax, Hyderabad based on which a first information report bearing FIR No. 75 of 2016 dated 07.12.2016 was registered under Sections 120B, 420, 467, 471, 474, 477A & 109 r/w Section 34 of the IPC by PS Jubilee Hills. Subsequently, the FIR was transferred to CCS Police and a fresh first information report bearing FIR No. 263 of 2016 dated 11.12.2016 was registered against the accused persons including the Petitioner's husband. iii) Based on FIR No. 263 of 2016, the ED registered a case bearing ECIR/11/HYZO/2016 for investigation into the offence of money laundering which resulted due to the alleged scam. In furtherance of the same a prosecution complaint bearing SC No. 474 of 2018 in ECIR/11/HYZO/2016 was filed before the Metropolitan Sessions Judge cum Special Court under PMLA. iv) As per the allegations, three companies - M/s Mussadilal Jewellers Pvt. Ltd., M/s Mussadilal Gems and Jewels Pvt. Ltd. and M/s ....
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....f 2021, the ED filed an original complaint bearing O.C. No. 1410 of 2021 dated 19.02.2021 before the Adjudicating Authority seeking confirmation of the provisional attachment dated 01.02.2021. The Adjudicating Authority issued a show cause notice dated 03.03.2021 to the Petitioner herein and her husband to show cause as to why the provisional attachment of properties should not be confirmed. The Petitioner submitted her reply to the said show cause notice on 12.06.2021 and thereafter an oral hearing was conducted by the Adjudicating Authority on 05.07.2021. After the hearing, no proceedings have taken place and the provisional attachment order has not been confirmed till date. x) The Petitioner, inter alia, contends that the properties that were attached belong to her and have no connection to the alleged demonetization scam. Her properties cannot be attached as part of proceeds of crime, merely because certain amounts were transferred from the bank account of her husband's company. xi) Further, the Petitioner contends that the provisional attachment order has not been confirmed even after a lapse of 180 days. Therefore, no confirmation order can be passed and the proceedings....
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....80 days and the same is also without jurisdiction. Therefore, writ petitions are maintainable even where an alternative remedy exists, if the authority acts without jurisdiction. Reliance was placed on Kumar Pappu Singh v. Union of India 2021 SCC OnLine AP 983. 8. Contentions of the Respondent (Directorate of Enforcement: i) An order can be passed by the Adjudicating Authority consisting of a single member. Under Section 6(5)(b) of the PMLA, discretion is vested with the chairperson to constitute the Adjudicating Authority with one or two members. Therefore, PMLA permits constitution of Adjudicating Authority with a single member. Reliance was placed on Dyani Antony Paul v. Union of India 2020 SCC OnLine Kar 4995, Alaknanda Realtors Pvt. Ltd. v. Deputy Director, Directorate of Enforcement MANU/DEOR/140156/2022 and G. Gopalakrishnan v. The Deputy Director, Directorate of Enforcement MANU/TN/3622/2019. ii) Further, a single member constituting the Adjudicating Authority need not be a judicial member. Petitioners cannot rely upon the decisions in L. Chandra Kumar (supra), Madras Bar Association (supra) and Rojer Mathew (supra) as the same dealt with tribunals constituted unde....
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.... passing of the provisional attachment order, if such provisional attachment is not confirmed under Section 8(3) of the PMLA? 10. Issue No.1: Whether the scheme under PMLA permits an Adjudicating Authority consisting of a single member? i) Relying on Section 6 (2) of the PMLA, the Petitioners contend that the Adjudicating Authority constituted under the PMLA shall necessarily consist of a Chairperson and two other members. The Petitioners contend that there cannot be an Adjudicating Authority consisting of a single member. To examine the issue at hand, the relevant provisions of the PMLA are extracted below: 2(a). - "Adjudicating Authority" means an Adjudicating Authority appointed under sub-section (1)of section 6 6. Adjudicating Authorities, composition, powers, etc.- (1) The Central Government shall, by notification, appoint an Adjudicating Authority] to exercise jurisdiction, powers and authority conferred by or under this Act. (2) An Adjudicating Authority shall consist of a Chairperson and two other Members: Provided that one Member each shall be a person having experience in the field of law, administration, finance or accou....
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.... (10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Adjudicating Authority from the stage at which the vacancy is filled. (11) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office: Provided that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest. (12) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government after giving necessary opportunity of hearing. (13) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his de....
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....A full bench of the Apex Court in Newtech Promoters & Developers (P) Ltd. v. State of U.P. 2021 SCC OnLine SC 1044 dealt with a similar issue as to whether the adjudicating authority therein under Section 81 of the Real Estate (Regulation and Development) Act, 2016 could have delegated its powers to a single member of such authority. The Petitioners therein contended that the Real Estate (Regulation and Development) Act, 2016 does not contemplate delegation of powers to hear complaints to a single member which ought to be heard by the authority consisting of two members. Similar to the present case, the Petitioners therein contended that such delegation of power to a single member is illegal and orders passed by such single member are without jurisdiction. The Apex Court negatived the contention of the Petitioners therein and held that where statutory mandate permits delegation of powers by a competent authority to a single member, such single member can exercise such delegated powers. v) The relevant paragraphs including the contentions of the parties therein are extracted below: 88. Mr. Gopal Sankarnarayanan, learned counsel for the appellants submits that if this Cou....
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.... complaints mandated under the law. According to him, it is factually incorrect to say that the other functions of the authority like imposition of penalty under Section 38, revocation of registration under Section 7 or functions of the authority under Sections 32 or 33 have been delegated to a single member of the authority. 97. Learned counsel further submits that the question is not whether the delegation per se to a single member is bad, but the question is whether the power to hear complaints in reference to Sections 12, 14, 18 and 19 delegated to a single member is permissible under the law. It may be noticed that the authority has been vested with several other powers and functions under the Act, which the authority has consciously not delegated to a single member. 98. Learned counsel further submits that pursuant to the delegation of power under Section 81 by the special order dated 5th December, 2018 read with Regulation 24, a single member has been authorized by the authority to hear the matters related to refund of the amount under Section 31 of the Act. **** 113. Section 81 of the Act 2016 empowers the authority, by general or special....
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....ception to make regulations under Section 85 of the Act. As a consequence, except the power to make regulations under Section 85 of the Act, other powers and functions of the authority, by a general or special order, if delegated to a single member of the authority is indeed within the fold of Section 81 of the Act. 117. The further submission made by learned counsel for the promoters that Section 81 of the Act empowers even delegation to any officer of the authority or any other person, it is true that the authority, by general or special order, can delegate any of its powers and functions to be exercised by any member or officer of the authority or any other person but we are not examining the delegation of power to any third party. To be more specific, this Court is examining the limited question as to whether the power under Section 81 of the Act can be delegated by the authority to any of its member to decide the complaint under Section 31 of the Act. What has been urged by learned counsel for the promoters is hypothetical which does not arise in the facts of the case. If the delegation is made at any point of time which is in contravention to the scheme of the Act or....
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....hority to one of its member for deciding applications/complaints under Section 31 of the Act is not only well defined but expressly permissible and that cannot be said to be dehors the mandate of law. vi) Dealing with the same issue regarding constitution of Adjudicating Authority with a single member, various High Courts have held that such constitution is valid. The Delhi High Court in J. Sekar v. Union of India 2018 SCC OnLine Del 6523 held that constitution of Adjudicating Authority with a single member under PMLA is valid. The relevant paragraphs are extracted below: 79. The Court next takes up the question of the composition of the AA on which extensive arguments were advanced by the learned counsel for the Petitioners. In this context, it must be noticed that under Section 6 PMLA, the AA is supposed to consist of the Chairperson and two other members - one of whom shall be a person having experience in the field of law. Section 6(3) further sets out what the qualifications for appointment as a member of an AA should be. One of those qualifications is that the person has to be qualified for appointment as a District Judge or a person in the field of law or a membe....
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....) & (b), whereunder it is clearly indicated that jurisdiction of the adjudicating authority may be exercised by benches thereof; and, a bench can be constituted by the Chairperson of the adjudicating authority with one or two members, as the Chairperson may deem fit. Hence, this court is of the considered view that constitution of a bench hearing the original complaint or its adjudication thereof consisting of one member cannot be found fault with. It can be further noticed that under sub-section. (13) of Section 6, if the vacancy arises in the office of the Chairperson by reason of death, resignation or otherwise, the senior most member would act as the Chairperson and such Chairperson would exercise the power as provided under Section 6 of the PML Act. viii) The Madras High Court in G. Gopalakrishnan (supra) expressed a similar view that Adjudicating Authority under PMLA can consist of one member. The relevant paragraphs are extracted below: 78. But looking at the entire scheme of PMLA, Section 6 and other connected provisions of PMLA and regulations as referred to by the learned Senior Counsel, this Court can infer that it is possible to have less than three Member t....
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....n that a single member Adjudicating Authority can be constituted, the question then would be whether such single member should necessarily be a person having experience in law to issue a show cause notice under Section 8(1) of the PMLA and pass an order confirming the provisional attachment of the properties under Section 8(3) of the PMLA. The Petitioners have contended that issuing a show cause notice and confirming the provisional attachment of properties are quasi-judicial functions. Therefore, a member of the Adjudicating Authority having no experience in the field of law cannot pass a judicial order. ii) To decide the present issue, it is imperative to decide the following questions: A. Whether the action of issuing a show cause notice under Section 8(1) of the PMLA by the Adjudicating Authority is quasi-judicial in nature? B. Whether the action of passing an order confirming provisional attachment under Section 8(3) of the PMLA is quasi-judicial in nature? iii) Before answering the above questions, it is appropriate to discuss what constitutes a quasi-judicial action. The Apex Court in Shivji Nathubha v. Union of India (1960) 2 SCR 775 relying on a dec....
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.... authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially." iv) Further, the Apex Court in Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala (1962) 2 SCR 339 discussed in detail the question as to what constitutes a quasi-judicial action. The Court therein held that actions of authorities will be treated as judicial functions if such an authority conducts proceedings by hearing parties and passes orders thereon and where a right to appeal is available against such orders. Further, the Court noted that where actions of quasi-judicial authorities have trappings of judicial functions, such actions will be treated as quasi-judicial actions. The relevant paragraphs are extracted below: 14. The authority of the Central Government entertaining an appeal under Section 111(3) being an alternative remedy to an aggrieved party to a petition under Section 15....
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....f show cause notice under Section 8(1) of the PMLA and passing an confirmation order under Section 8(3) of the PMLA are quasi-judicial functions, it is relevant to discuss the scope of Section 8 of the PMLA in relation to the present case. For the sake of convenience, Section 8 of the PMLA is extracted below: 8. Adjudication.-(1) On receipt of a complaint under subsection (5) of Section 5, or applications made under subsection (4) of Section 17 or under sub-section (10) of Section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of Section 5, or, seized or frozen] under Section 17 or Section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government:....
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....hment made under sub-section (1) of Section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub-section (1-A) of Section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1-A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of moneylaundering has been committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government. (6) Where on conclusion of a trail under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in moneylaundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under th....
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....ider all the relevant material placed on record. Upon such consideration of reply to the show cause notice, hearing the parties and other material placed on record, the Adjudicating Authority in its order shall record a finding whether the properties provisionally attached are involved in money laundering. If the Adjudicating Authority reaches a conclusion that the provisionally attached properties were involved in money laundering, it shall pass an order confirming such provisional attachment under Section 8(3) of the PMLA. 12. Issue A: Whether the action of issuing a show cause notice under Section 8(1) of the PMLA by the Adjudicating Authority is quasi-judicial in nature? i) According to this Court, the action of issuing show cause notice under Section 8(1) of the PMLA is quasi-judicial in nature as the same has trappings of judicial functions involving application of mind. ii) As stated above, before issuing a show cause under Section 8(1) of the PMLA, the Adjudicating Authority has to independently reach a conclusion based on the complaint before it that 'reasons to believe' exist regarding the commission of money laundering. After reaching such conclusion, the Adjudi....
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.... 28. As such, although it is not specifically engrafted in Section 8(1) of the PMLA as to there being any requirement of communicating the reasons to believe arrived at by the AA to the noticee, such requirement has to be read into the provision to attribute a proper meaning to the same. A meaningful and complete show-cause and consequentially hearing, cannot take place without the noticee having a clear idea as to what were the reasons for believing the allegations against him. 29. As far as Section 68 is concerned, the same contemplates mistakes, defects or omissions in the notice and provides that those would not ipso facto render a notice invalid, if such notice is in substance and effect in conformity with or according to the intent and purpose of the PMLA. 30. However, as discussed above, the substance and effect of the notice cannot be in conformity with or according to the intent and purpose of the Act, which incorporates the well established principle of natural justice, audi alteram partem, which gives the noticee a right to contest the notice, its basis as well as the contents of the notice elaborately, if the basis of the notice under Section 8(1),....
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....t, factually or legally, which would hit at the very root of the proceeding and vitiate the same in the eye of law. Thus, the ratio laid down in J. Sekar (supra) by the division bench of the Delhi High Court is, with due respect, absolutely correct in law and this court concurs fully with such ratio. As per the said judgment, at least at the stage of issuance of notice under Section 8(1), PMLA, the reasons to believe of the AA, as well as the authority issuing the notice under Section 5(1), have to be mandatorily communicated to the noticee to give rise to a proper show-cause and a hearing on the matter. Such a requirement, although not enumerated in so many words in the statute, has to be read into Section 8(1) to attribute a meaningful interpretation to the said provision. **** 50. Under such circumstances, since nothing has come before the court to prove that the notice given to the petitioner under Section 8(1) of the PMLA disclosed the reasons to believe as contemplated in such section, which was a prerequisite of the notice and had to be arrived at by the AA independently, the notice itself was illegal, being bad in law. 51. That apart, even as argu....
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....ing to the expressions such as "reason to believe", "in the opinion of" observed: "63. ... Therefore, the words, 'reason to believe' or 'in the opinion of' do not always lead to the construction that the process of entertaining 'reason to believe' or 'the opinion' is an altogether subjective process not lending itself even to a limited scrutiny by the court that such 'a reason to believe' or 'opinion' was not formed on relevant facts or within the limits or as Lord Radcliffe and Lord Reid called the restraints of the statute as an alternative safeguard to rules of natural justice where the function is administrative." 22. Further, in Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chennai, the Hon'ble Apex Court held that formation of opinion is based on subjective satisfaction and the same has to be preceded by application of mind as regards consideration of relevant factors and rejection of irrelevant ones. 23. In Barium Chemicals (Supra) the Supreme Court observed the following- 28. ....... An action, not based on circumstances suggesting an inference of the enumerated kind will not be valid....
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....ting Authority is obligated to issue a show cause notice, consider the reply to such show cause notice, conduct a hearing of the concerned person whose provisionally attached properties are sought to be confirmed along with the concerned officer and record a finding that properties were involved in money laundering. All these steps when looked together are akin to judicial proceedings. The Adjudicating Authority while passing an order confirming provisional attachment is essentially deciding a lis between two contesting parties i.e., the Director or the concerned officer who seeks confirmation of the provisional attachment and the concerned person who opposes confirmation of such attachment. ii) Further, Section 8 of the PMLA is titled 'Adjudication' which makes it evident that the actions of Adjudicating Authority under the said provision are adjudicatory in nature and the same are quasi-judicial functions. iii) Therefore, according to this Court, the action of issuing a show cause notice under Section 8(1) of the PMLA and passing an order confirming provisional attachment under Section 8(3) of the PMLA are quasi-judicial in nature as they have trappings of judicial function....
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....or an advocate qualified to be a Judge of the High Court, is eligible to be a High Court Judge, there is no reason why he should not equally be eligible to be a Vice- Chairman of the Administrative Tribunal. Can the position of a Vice-Chairman of the Administrative Tribunal be considered higher than that of a High Court Judge so that a person who is eligible to be a High Court Judge may yet be regarded as ineligible for becoming a Vice-Chairman of the Administrative Tribunal? It does appear that the provisions of the impugned Act in regard to the composition of the Administrative Tribunal are a little weighted in favour of members of the Services. This weightage in favour of the members of the Services and value-discounting of the judicial members does have the effect of making the Administrative Tribunal less effective and efficacious than the High Court. I would therefore suggest that a District Judge or an Advocate who is qualified to be a Judge of the High Court should be regarded as eligible for being Vice- Chairman of the Administrative Tribunal and unless an amendment to that effect is carried out on or before 31st March, 1987, the impugned Act would have to be declared to b....
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....d the adjudication being essentially judicial in character it is necessary that adequate number of judges of the appropriate level should man the Services Tribunals. This would create appropriate temper and generate the atmosphere suitable in an adjudicatory tribunal and the institution as well would command the requisite confidence of the disputants. In Shri Kumar Padma Prasad v. Union of India [(1992) 2 SCC 428 : 1992 SCC (L&S) 561 : (1992) 20 ATC 239] this Court emphasised that, "Needless to say that the independence, efficiency and integrity of the judiciary can only be maintained by selecting the best persons in accordance with the procedure provided under the Constitution. The objectives enshrined in the Constitution cannot be achieved unless the functionaries accountable for making appointments act with meticulous care and utmost responsibility." 70. In a democracy governed by rule of law surely the only acceptable repository of absolute discretion should be the courts. Judicial review is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary. It cannot be dispensed with by creating a tribunal under Articles 323-A and 323-B of....
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....uch Tribunals. In the case of Administrative Tribunals, it has been pointed out that the administrative members who have been appointed have little or no experience in adjudicating such disputes; the Malimath Committee has noted that at times, IPS Officers have been appointed to these Tribunals. It is stated that in the short tenures that these Administrative Members are on the Tribunal, they are unable to attain enough experience in adjudication and in cases where they do acquire the ability, it is invariably on the eve of the expiry of their tenures. For these reasons, it has been urged that the appointment of Administrative Members to Administrative Tribunals be stopped. We find it difficult to accept such a contention. It must be remembered that the setting-up of these Tribunals is founded on the premise that specialist bodies comprising both trained administrators and those with judicial experience would, by virtue of their specialised knowledge, be better equipped to dispense speedy and efficient justice. It was expected that a judicious mix of judicial members and those with grass-roots experience would best serve this purpose. To hold that the Tribunal should consist only o....
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....try certain category of cases are transferred from courts to tribunals only to expedite the hearing and disposal or relieve from the rigours of the Evidence Act and procedural laws, there is obviously no need to have any non-judicial technical member. In respect of such tribunals, only members of the judiciary should be the Presiding Officers/Members. Typical examples of such special tribunals are Rent Tribunals, Motor Accidents Claims Tribunals and Special Courts under several enactments. Therefore, when transferring the jurisdiction exercised by courts to tribunals, which does not involve any specialised knowledge or expertise in any field and expediting the disposal and relaxing the procedure is the only object, a provision for technical members in addition to or in substitution of judicial members would clearly be a case of dilution of and encroachment upon the independence of the judiciary and the rule of law and would be unconstitutional. **** 94. We may examine this question with reference to the company jurisdiction exercised by the High Court for nearly a century being shifted to a tribunal on the ground that tribunal consisting of judicial and technical ....
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....ointed as members, the superior courts in the country can, in exercise of the power of judicial review, examine whether the qualifications and eligibility criteria provided for selection of members are proper and adequate to enable them to discharge judicial functions and inspire confidence. 97. This issue was also considered in Sampath Kumar [(1987) 1 SCC 124 : (1987) 2 ATC 82] and it was held that where the prescription of qualification was found by the court, to be not proper and conducive for the proper functioning of the tribunal, it will result in invalidation of the relevant provisions relating to the constitution of the tribunal. If the qualifications/eligibility criteria for appointment fail to ensure that the members of the tribunal are able to discharge judicial functions, the said provisions cannot pass the scrutiny of the higher the judiciary. **** 101. Independent judicial tribunals for determination of the rights of citizens, and for adjudication of the disputes and complaints of the citizens, is a necessary concomitant of the rule of law. The rule of law has several facets, one of which is that disputes of citizens will be decided by Judge....
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....he legislature can prescribe the qualifications/eligibility criteria. The same is however subject to judicial review. If the court in exercise of judicial review is of the view that such tribunalisation would adversely affect the independence of the judiciary or the standards of the judiciary, the court may interfere to preserve the independence and standards of the judiciary. Such an exercise will be part of the checks and balances measures to maintain the separation of powers and to prevent any encroachment, intentional or unintentional, by either the legislature or by the executive. **** 108. The legislature is presumed not to legislate contrary to the rule of law and therefore know that where disputes are to be adjudicated by a judicial body other than courts, its standards should approximately be the same as to what is expected of mainstream judiciary. The rule of law can be meaningful only if there is an independent and impartial judiciary to render justice. An independent judiciary can exist only when persons with competence, ability and independence with impeccable character man the judicial institutions. When the legislature proposes to substitute a tribu....
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....rs which make a person suitable. Therefore, when the legislature substitutes the Judges of the High Court with the Members of the Tribunal, the standards applicable should be as nearly as equal in the case of High Court Judges. That means only Secretary level officers (that is those who were Secretaries or Additional Secretaries) with specialised knowledge and skills can be appointed as technical members of the tribunal. vi) From the above decisions, it is clear that a tribunal or a quasi-judicial body like the Adjudicating Authority under PMLA performs adjudicatory functions. Therefore, such bodies shall be manned by members having necessary experience in the field of law. Such members shall be capable of interpreting law and applying it to various sets of facts that may arise before them. The said view that adjudicatory functions of tribunals can only be performed by members having experience in law is further fortified by the decisions discussed below. vii) The Apex Court in State of Gujarat v. Utility Users' Welfare Assn. (2018) 6 SCC 21 dealt with a similar issue regarding the constitution of tribunal under the Electricity Act, 2003. The Court held that the powers ex....
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....f "separation of powers", "rule of law" and "judicial review". The first question raised before the Constitution Bench as to whether judicial review was part of the basic structure of the Constitution was, thus, answered in the affirmative. 118. We are, thus, of the view that it is mandatory to have a person of law, as a member of the State Commission. When we say so, it does not imply that any person from the field of law can be picked up. It has to be a person, who is, or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in the practice of law, who has the requisite qualifications to have been appointed as a Judge of the High Court or a District Judge. 119. In BrahmDutt v. Union of India [BrahmDutt v. Union of India, (2005) 2 SCC 431] it has been observed that if there are advisory and regulatory functions as well as adjudicatory functions to be performed, it may be appropriate to create two separate bodies for the same. That is, however, an aspect, which is in the wisdom of the legislature and that course is certainly open for the future if the legislature deems it so. However, at present there ....
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....sion ipso facto, however, does not satisfy the test of constitutionality, in view of the decisions of the Supreme Court in Utility Users' Welfare Association (supra). In that decision, the Supreme Court dealt with a challenge to Section 113 on the ground that appointment of a judicial member was not mandated, which rendered the functioning of the State Commission (under the Electricity Act) questionable in law. The previous ruling in Tamil Nadu Generation and Distribution Corporation Limited v. PPN Power Generating Co. Private Ltd.. (2014) 11 SCC 53 was cited. In Tamil Nadu Generation (supra) the court had made observations indicating that the chairman of such commission had to be necessarily a person with judicial experience....... 148. It follows, therefore, that in line with the above declaration of law, at all times, when adjudicatory orders (especially final orders) are made by CCI, the presence and participation of the judicial member is necessary. **** 150. With respect to the selection procedure contained in Section 8 (for members of CCI) the court perceives no infirmity in the impugned provision, having regard to the view taken previously, ma....
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....ions of the Assam Electricity Regulatory Commission (Conduct of Business) Regulations, 2004 the prescribed quorum was of two members. Accordingly, it is submitted that the orders impugned herein were passed by two Member Bench of the Commission and as such it cannot be said that the said orders were vitiated by the principles of coram non judice. In this regard, although the argument appears to be attractive, but in light of the decision in the case of Utility Users' Welfare Association (supra), not only it has been held that Section 86(1)(f) of the Electricity Act, 2003 involves adjudicatory function, but in paragraph 116 of the said judgment, it has been further held that absence of member having knowledge of law would make the composition of the State Commission such as would make it incapable of performing the function under Section 86(1)(f) of the Electricity Act. Thus, notwithstanding that the impugned orders were passed by two Member coram, in the absence of Judicial Member, the said orders are found to be vitiated. 26. Therefore, as the orders dated 21.09.2018 and 06.10.2018, suffer from the vice of coram non judice, the said orders are nonest and therefore, un....
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....n other words, a judicial order passed by a tribunal not consisting of a member having experience in the field of law will be deemed to have been passed without jurisdiction. Such order is considered to be passed without authority and will be treated as void and non-est. The said view was expressed by the Apex Court in Dhurandhar Prasad Singh v. Jai Prakash University . (2001) 6 SCC 534 and Chief Engineer, Hydel Project v. Ravinder Nath (2008) 2 SCC 350. xii) Further, the Apex Court in Kapil Deo Shukla v. State of U.P. 1958 SCR 640 held that incompetence of a jury will render the entire trial as no trial on the ground of coram non judice. In other words, incompetence or ineligibility of a body will render its decision as without jurisdiction. The relevant paragraphs are extracted below: In our opinion, the remarks of the High Court quoted above, give a correct impression of the proceedings in the Court of Session. It further appears from the judgment of the High Court that the learned Advocate-General who argued the case in support of the appeal on behalf of the State, urged that the jurors were not equal to the task involved in a proper determination of the contr....
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....en tried, and that, therefore, the convictions and sentences could not stand. Lord Atkin who delivered the judgment of the Judicial Committee, made the following observations upon the concession made by counsel for the respondent: "In Their Lordships' opinion, this is necessarily the correct view. They think that the effect of the incompetence of a juror is to deny to the accused an essential part of the protection accorded to him by law and that the result of the trial in the present case was a clear miscarriage of justice. They have no doubt that in these circumstances the conviction and sentence should not be allowed to stand." 6. In our opinion, the legal position in the instant case, is the same. It was, however, argued on behalf of the State Government that in the instant case, the jury had returned a unanimous verdict of not guilty, and that, therefore, there was no prejudice to the accused persons. It is true that the incompetence of the jury empanelled in this case, was raised by the counsel for the State Government in the High Court, but in view of the findings arrived at by the High Court, as quoted above, the position is clear in law that irrespect....
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....ice. (2) For the Member from the field of administration, a person shall be qualified for appointment if he is or has been a Member of the Indian Administrative Service or the Indian Police Service and has held a post of Joint Secretary to the Government of India or an equivalent post. (3)(a) For the Member from the field of finance or accountancy, a person shall be qualified for appointment if he is or has been a member of an All India Service or a Central Service Group "A", and has held the post of a Joint Secretary to the Central Government or an equivalent post in that service. (b) From among such persons, the Selection Committee shall have due regard to the academic qualifications of chartered accountancy or a degree in finance, economics or accountancy or having special experience in finance or accounts by virtue of having worked for at least two years in the finance or revenue department of either the Central Government or a State Government or being incharge of the finance or accounting wing of a corporation for a like period. xv) Challenging the vires of Section 6 of the PMLA on the ground that the composition of the Adjudicating Authority vio....
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....essed a similar view and the relevant paragraphs are extracted below: 13. In my considered opinion, what emerges from the above with certainty is that in a case where serious questions of law and fact arise, as in the present case, it is essential that one of the Members of the Bench constituted under Clause (b) of Sub-Section (5) of Section 6 of PMLA by the Chairperson of the Adjudicating Authority should be a Judicial Member as he "with his judicial experience would, by virtue of his specialised knowledge, would be better equipped to dispense with speedy and efficient justice". This appears to be import of the words "as the Chairperson of the Adjudicating Authority may deem fit". 14. It is an admitted position that the post of a Judicial Member under Respondent No. 3 is still lying vacant and that the impugned show cause notice was issued and the order under challenge passed in the absence of such a Member. Apart from what have been observed earlier, in a proceeding of the present kind, where orders were passed ex parte by the Adjudicating Authority in the absence of the Petitioner-University, it would have been essential for a Judicial Member to be part of the ....
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....ns why the Court finds that the aforementioned decisions of the learned Single Judges of the Sikkim and Gujarat High Courts cannot be concurred with. They fail to notice that under Section 25 PMLA, an appeal is provided for from the order of the AA before the AT. Even so, such an AT is not the equivalent to the High Court since an appeal against the order of the AT is provided to the High Court itself. Thus, the hierarchy of judicial review authorities under the PMLA presents a very different scheme from what is found in other statutes, particularly the ATA. 85. Under the PMLA, however, we first have a decision by an authority under Section 5(1) PMLA. Then we have a review of that decision by the AA under Section 8 PMLA. Then we have an appeal against that decision to the AT under Section 25 PMLA. These authorities, i.e. the AA and the AT, need not be entirely manned only by JMs. They can be AMs as well. xviii) This Court respectfully disagrees with the view expressed in J. Sekar (supra). The question is not whether the Adjudicating Authority was constituted under Article 323B of the Constitution of India. The question is whether such Adjudicating Authority is a quasi-j....
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....d of 180 days in light of the Apex Court's decision in S. Kasi (supra). ii) In W.P. No. 34627 of 2022, the provisional attachment order therein i.e., PAO No. 01 of 2021 was passed on 01.02.2021. Pursuant to which an original complaint under Section 5(5) of the PMLA was filed on 19.02.2021 and show cause notice under Section 8(1) of the PMLA was issued by the Adjudicating Authority on 03.03.2021. A hearing under Section 8(2) of the PMLA was conducted on 05.07.2021 and 06.07.2021. However, no confirmation order was passed till date. The Petitioner contends that as 180 days have lapsed since the passing of the provisional attachment order, the Adjudicating Authority cannot pass an order confirming the provisional attachment. iii) On the other hand, the ED in both W.P. Nos. 34238 of 2022 and 34627 of 2022 contends that due to Covid-19 pandemic the provisional attachment of properties could not have been confirmed within 180 days. However, in In re: Limitation (supra) the Apex Court extended the period limitation from 15.03.2020 to 28.02.2022. ED contends that the period from 15.03.2020 to 28.02.2022 shall be excluded from the date of provisional attachment till the date of passin....
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.... 50] , 27-4-2021 [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [Cognizance for Extension of Limitation, In re, 2021 SCC OnLine SC 947] , it is directed that the period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. 5.2. Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1-3-2022. 5.3. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2-2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3-2022 is greater than 90 days, that longer period shall apply. 5.4. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996, Section 12....
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.... made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in moneylaundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings u....
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....h constitutionality of various provisions of the PMLA held that the period of 180 days is in the form of a procedural safeguard. The relevant paragraph is extracted below: 287. Be that as it may, as aforesaid, sub-section (1) delineates sufficient safeguards to be adhered to by the authorised officer before issuing provisional attachment order in respect of proceeds of crime. It is only upon recording satisfaction regarding the twin requirements referred to in sub-section (1), the authorised officer can proceed to issue order of provisional attachment of such proceeds of crime. Before issuing a formal order, the authorised officer has to form his opinion and delineate the reasons for such belief to be recorded in writing, which indeed is not on the basis of assumption, but on the basis of material in his possession. The order of provisional attachment is, thus, the outcome of such satisfaction already recorded by the authorised officer. Notably, the provisional order of attachment operates for a fixed duration not exceeding one hundred and eighty days from the date of the order. This is yet another safeguard provisioned in the 2002 Act itself. x) It is true that the per....
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....is not applicable to PMLA proceedings. This Court cannot accept the said contention of the Petitioners. xiv) In S. Kasi (supra), the question before the Apex Court was whether the decision in In re: Limitation (supra) extended the time period `to complete investigation and file charge sheet and whether default bail under Section 167(2) of the Code of Criminal Procedure (hereinafter 'CrPC') could be denied on the ground that investigation was not completed and charge sheet was not filed due to Covid-19. The Court therein held that Section 167(2) of the CrPC envisages an indefeasible right to obtain statutory bail, if investigation is not completed within the prescribed time. The Court held that the decision in In re: Limitation (supra) is not applicable to Section 167(2) of the CrPC as personal liberty of an individual cannot be curtailed. The Court noted the decisions of other High Courts and held that the decision in In re: Limitation (supra) is not applicable to police investigations. In other words, time periods prescribed to complete police investigations and where individual liberty of the accused is in question, the benefit of extension of limitation in In re: Limitation (....
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....ions which have been imposed during the Lockdown announced by the Government shall operate as any restriction on the rights of an accused as protected by Section 167(2) regarding his indefeasible right to get a default bail on non-submission of charge-sheet within the time prescribed. The learned Single Judge committed serious error in reading such restriction in the order of this Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10] . **** 34. The Rajasthan High Court had occasion to consider Section 167 as well as the order of this Court dated 23-3-2020 passed in Cognizance for Extension of Limitation, In re [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10] and the Rajasthan High Court has also come to the same conclusion that the order of this Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10] has no consequence on the right, which accrues to an accused on non-filing of charge-sheet within time as prescribed under Section 167CrPC. The Rajasthan High Court in Pankaj v. State [Pankaj v. State, 2020 SCC OnLine Raj 867] decided on 22-5-2020 has also followed the judgment of the l....
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....Provisional Attachment Order is passed of his right to deal in the property against which the attachment is ordered. Such deprivation can therefore, be for a maximum of 180 days and no further, except where such order is confirmed by the Adjudicating Authority prior thereto under Section 8(3) of the Act. Once the 180 day period has lapsed without such order being passed under Section 8(3) of the Act, the Provisional Attachment Order ceases to have effect and therefore, there is no order before the Adjudicating Authority to confirm under Section 8(3) of the Act. The Adjudicating Authority therefore, becomes functus officio. **** 28. In view of the above dicta, the submission of the learned counsel for the respondents that as the delay in proceedings before the Adjudicating Authority cannot be blamed on the respondents, the respondents must not be penalized and the time period should be extended, cannot be accepted. It is not a question of penalization of the respondents for the delay, but of application of the mandate of law from which there is no escape. Equally, the principle of Actus Curiae NeminemGravabit can also have no application. 30. Clearly, the ....
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.... Supreme Court. It also highlights that the said order was never meant to curtail any provision of other statute which is enacted to protect the personal liberty of a person. In my opinion, in a similar manner, the order dated 23.03.2020 was not meant to deny any person his/her property rights. **** 37. In view of the above, the 180 days from the date of the Provisional Attachment Order dated 13.11.2019 having expired without any order under Section 8(3) of the Act being passed by the Adjudicating Authority, it is held that the Adjudicating Authority has been rendered functus officio and cannot proceed with the Original Complaint, being O.C. No. 1228/2019 pending before it. The Notice/Summons dated 26.05.2020 is accordingly set aside. 38. In the present case I have intentionally refrained myself from making any comment on whether the period of total lockdown declared by the Central Government, that is from 24.03.2020 to 20.04.2020, can be excluded for computation of the 180 days, as it is not disputed that even on exclusion of this period, the 180 days would have expired on 16.06.2020, the returnable date of the notice issued by the Adjudicating Authority....
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.... on 9th June, 2021 is ceased to have any effect or force as a consequence of failure on the part of the Respondent Enforcement authority/Adjudicating authority in passing further order under Section 8 (3) of The Prevention of Money Laundering Act, 2002 extending or confirming order dated 11th December, 2020 under Section 5 (1) of the said Act on or before 9th June, 2021 after expiry of its validity under Section 5 (3) of the said Act by taking the stand of automatic deemed extension/confirmation of the said order by virtue of the order of the Hon'ble Supreme Court in Suo moto Writ Petition (Civil) No. 3 of 2020 (supra) by claiming itself as a litigant or advocate or quasi-judicial authority when it was not required to approach physically any quasi-judicial or judicial authority to initiate any proceeding or to file any application/suit/appeal for the purpose of extension or confirmation of the order under Section 5 (1) of The Prevention of Money Laundering Act, 2002. xvii) Similarly, the Calcutta High Court in Hiren Panchal (supra) held that vide orders in In re: Limitation (supra), the Apex Court extended the period of limitation to safeguard the right of litigants to insti....
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....ected by the orders of the Supreme Court was the right to remedy, not the right to take away a remedy under a given statute. The respondents before this Court seek to do the latter. The only step taken by the ED is the order of the provisional attachment dated 30th September, 2021. No other steps were taken by the ED before the petitioners reply on 3rd January, 2022 or before the expiry of 180 days period on 31st March, 2022. By its inaction and failure to act in terms of Section 5(1)(b) or the other conditions of the said section, the ED has made itself vulnerable to Section 5(3) of the PMLA. The petitioner in turn has been given the breather of exhaustion of the 180 days window from 1st April, 2022 and the ED cannot now revive the proceedings after more than 80 days have passed from the end point of the 180 days period. 21. In Gobindo Das, the Appeal Court disagreed with the view of the Adjudicating Authority being a "non-litigant". The Division Bench was also disturbed by the fact that the bank accounts of the writ petitioners have been debited leaving the balance at zero despite the order of attachment. Prakash Corporates dealt with the prescribed statutory time period....
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....ys. xix) It is true that provisional attachment of property has an effect of potentially depriving a person of his property. However, right to personal liberty and right to property stand on a different footing and cannot be equated. This is evident from the fact that the urgency in concluding proceedings dealing with a person in jail is much higher than a person whose property is provisionally attached. Further, under Section 5(4) of the PMLA, the person whose property is provisionally attached can still enjoy such property till the same is confiscated. Even in cases of confirmation of provisional attachment, a person can still enjoy such property till the same is confiscated. xx) In Vijay Madanlal Choudhary (supra), the Apex Court held that provisionally attached properties which are confirmed can still be enjoyed by a party till a confiscation order is passed. The relevant paragraphs are extracted below: 304. The other grievance of the petitioners is in reference to the stipulation in sub-section (4) of Section 8 providing for taking possession of the property. This provision ought to be invoked only in exceptional situation keeping in mind the peculiar facts of t....
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....rovisions, it is not possible to countenance challenge to the validity of subsection (4) of Section 8 of the 2002 Act. xxi) Therefore, provisions prescribing timelines and which deal with police investigation upon which a person's liberty is dependent has to be strictly construed. On the other hand, where timeline is prescribed for attachment of properties and due to unforeseen circumstances like Covid-19 such attachment was not confirmed, benefit can be granted in favour of the Adjudicating Authority by excluding the period as prescribed under In re: Limitation (supra), a fortiori when the property can still be enjoyed. xxii) It is relevant to note that the Supreme Court in Prakash Corporates v. Dee Vee Projects Ltd. (2022) 5 SCC 112 dealt with the application of In re: Limitation (supra) in relation to filing of a written statement. The Court therein held that the scope of In re: Limitation (supra) cannot be unnecessarily narrowed and in relation to S. Kasi (supra) held that the same stands on different footing as it dealt with Article 21 of the Constitution of India. The relevant paragraphs are extracted below: 27.7. We are not elaborating on other directions issu....
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....g officer, cannot be applied to the present case relating to the matter of filing written statement by the defendant in a civil suit. xxiii) Further, a Division Bench of Madras High Court in S. Prasanna v. The Deputy Director, Directorate of Enforcement, Government of India MANU/TN/8962/2022 held that the decision in S. Kasi (supra) is not applicable to compute the period of 180 days under Section 5(3) of the PMLA. The Court also disagreed with the view adopted in Vikas WSP Ltd. (supra), and Hiren Panchal (supra). The relevant paragraphs are extracted below: 12. Insofar as the judgment of the Calcutta High Court that was brought to our notice, we find that the Calcutta High Court had mainly relied upon the judgment of the Apex Court in S. Kasi case. With utmost respect to the learned Single Judge of the Calcutta High Court, we are not in agreement with the reasoning in the above judgment. The issue that was dealt with by the Apex Court in S. Kasi case pertains to the scope of Section 167(2) of Cr.P.C. which is directly referable to Article 21 of the Constitution of India viz., personal liberty of a person. The same cannot be equated while dealing with a property right u....
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....supra) was further clarified in In re: Limitation 2022 (supra) wherein the Court at Para 5.4 (extracted supra) held that where time period is prescribed for termination of proceedings, the period from 15.03.2020 to 28.02.2022 shall be excluded. In the present case, Section 5(3) of the PMLA states that provisional attachment of properties will cease to have effect after a lapse of 180 days from the date of provisional attachment. That would mean that attachment proceedings shall terminate if the same are not confirmed within a period of 180 days. Therefore, while calculating/computing the 180 day period, the period from15 .03.2022 to 28.02.2022 shall be excluded. xxviii) To answer Issue No. 3, this Court holds that the decision in In re: Limitation (supra) and subsequent extensions vide In re: Limitation 2022 (supra) are applicable to PMLA proceedings to compute the period of 180 days. While computing such period, the period from15.03.2020 to 28.02.2022 shall be excluded. 16. Issue No.4: Whether the Adjudicating Authority becomes functus officio after a lapse of 180 days from the date of passing of the provisional attachment order, if such provisional attachment is not confirm....
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....) However, it is relevant to note that the decision rendered by the learned single judge in Vikas WSP Ltd. (supra) was stayed by a Division Bench of the Delhi High Court in Directorate of Enforcement v. Vikas WSP Ltd. 2021 SCC OnLine Del 5577. The relevant paragraph is extracted below: 5. In view of the above, we hereby stay the operation, implementation and execution of the judgment and order of the learned Single Judge dated 18.11.2020 passed in W.P.(C) 3551/2020 and impugned in the present appeal. iv) On the other hand, the ED contends that the Adjudicating Authority does not become functus officio after a lapse of 180 days. Reliance was placed on the decision of a Single Bench of the Calcutta High Court in Fairdeal Supplies (supra). v) The learned single judge in Fairdeal Supplies (supra) disagreed with the view expressed by the learned single judge of the Delhi High Court in Vikas WSP Ltd. (supra) that the Adjudicating Authority becomes functus officio after a lapse of 180 days. vi) The Calcutta High Court in Fairdeal Supplies (supra) held that Section 8 of the PMLA contemplates two stages. Section 8(2) of the PMLA involves adjudication by the Adjudicating Au....
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....hority on receiving the complaint under Section 5(5) upon having reasons to believe that the petitioner no. 1 has committed an offence under Section 3 or is in possession of proceeds of crime, served a notice under Section 8(1) of PMLA on 19th February, 2020 upon the petitioner no. 1 and its Directors calling upon them to indicate the source of income, earnings or assets out of which or by means of which the property attached under the provisions of Section 5(1) of PMLA was acquired. It is an admitted position that immediately upon expiry of the minimum 30 days' notice period for show cause under Section 8(1) was over, the country went into a national lockdown. As a natural consequence, the matter being fixed on 4th May, 2020 before the Adjudicating Authority for a hearing under Section 8(2) could not take place. The petitioner no. 1 also did not file any reply as required under Section 8(2) of PMLA. Before the adjudication under Section 8(2) was over, the 180 days time period from the date of passing of the provisional order of attachment had expired. (xii) It appears from Section 8(2) of PMLA that there is no time limit for completing the adjudication. The stipulation in Sect....
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....that the petitioners are seeking review of the order dated 26th March, 2021 does not fall for any scrutiny in the facts of the instant case though there is no dispute as to the ratio laid down in Ram Chandra Singh (Supra) cited by the said respondents. Conclusion:- 10. The order dated 26th March, 2021 is accordingly clarified that hearing of Complaint No. 1262 of 2020 now pending before the Adjudicating Authority shall continue up to the stage indicated in Section 8(2) of PMLA but the confirmation provided under Section 8(3) of PMLA shall take place after the final hearing of the writ petition depending upon the final result. I had in fact meant this in my order dated 26th March, 2021. ix) According to this Court, the Adjudicating Authority becomes functus officio after a lapse of 180 days, if the provisional attachment of properties is not confirmed. The effect of Adjudicating Authority being rendered functus officio makes all the proceedings emanating from such provisional attachment order as void. In other words, as the provisional attachment of properties ceases to exist, the original complaint filed under Section 5(5) of the PMLA, the show cause notice iss....
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....other principle of statutory interpretation. In the case of Mahadeo Prasad Bais (Dead) v. Income-Tax Officer 'A' Ward, Gorakhpur, this Court held that an interpretation, which will result in anomaly or absurdity, should be avoided. It has been held that at times, the circumstances justify a slight straining of the language of the clause so as to avoid a meaningless anomaly. **** 43. It could thus be seen that this Court has held that the court should not always cling to literal interpretation and should endeavor to avoid an unjust or absurd result. The court should not permit a mockery of legislation. It has been held that to make sense out of an unhappily worded provision, where the purpose is apparent to the judicial eye, 'some' violence to language is also permissible. xiv) The view in Fairdeal Supplies (supra) that after a lapse of 180 days, the Adjudicating Authority can record a finding whether the properties were involved in money laundering under Section 8(2) of the PMLA, but cannot confirm the provisional attachment, if given affect, will result in absurdity and subversion of rights of the parties involved. xv) For instance, let's consider a case wh....
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.... no experience in the field of law cannot issue a show cause notice under Section 8(1) of the PMLA and cannot pass an order confirming the provisional attachment of properties under Section 8(3) of the PMLA as the same are quasijudicial functions. Only a member having experience in the field of law can perform quasi-judicial functions. iii. Issue No. 3 is decided by holding that the decision in In re: Limitation (supra) and subsequent extensions vide In re: Limitation 2022 (supra) are applicable to PMLA proceedings to compute the period of 180 days. The period from 15.03.2020 to 28.02.2022 shall be excluded while computing such period of 180 days. iv. Issue No. 4 is decided by holding that the Adjudicating Authority is rendered functus officio for the purpose of confirming a provisional attachment order after a lapse of 180 days. After a lapse of 180 days, the ED or the authorized officer can re-initiate the process of attachment by issuing a fresh provisional attachment order. 18. Result in the respective writ petitions: i. W.P. No. 34238 of 2022 is allowed and the order dated 22.08.2022 confirming the provisional attachment of properties in relation to O.C. No. 1633 o....