2022 (2) TMI 1501 - HC - Money Laundering

Money Laundering - it is contended that though a complaint under Sections 44 and 45 of the PMLA Act has been filed on 25.6.2019 the Appellate Tribunal has committed error in observing that no complaint has been filed under Section 8(3) (a) of the PMLA Act - HELD THAT - The appeal has been filed subsequent to the order passed by the learned Appellate Tribunal. At this stage it is also pertinent to note that neither the prosecution complaint which has been filed on 25.6.2019 is produced on record nor the retention order of the Adjudicating Authority dated 4.4.2018 by which the goods seized from the respondent was ordered to be retained. Even the appellant has not filed any rejoinder to the reply dated 24.1.2022 filed by the respondent. Conclusion - The appeal lacked merit due to the appellant s failure to comply with the statutory requirement of filing a prosecution complaint within the prescribed period. Appeal dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue presented in this case was whether the Appellate Tribunal under the Prevention of Money Laundering Act, 2002 (PMLA Act) erred in its decision to set aside the retention order due to the failure to file a prosecution complaint within the mandatory 90-day period as stipulated under Section 8(3)(a) of the PMLA Act.

ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The legal framework revolves around Section 8(3)(a) of the PMLA Act, which mandates the filing of a prosecution complaint within 90 days from the date of the retention order. This provision is crucial in determining the validity of the retention of seized properties under the Act. The Tribunal's decision was based on the interpretation of this statutory requirement.

Court's interpretation and reasoning:

The Court interpreted Section 8(3)(a) as imposing a mandatory obligation to file a prosecution complaint within the specified period. The Tribunal had observed that the 90-day period had expired without the filing of such a complaint, leading to the conclusion that the retention order had lapsed. The Court found no error in this interpretation, emphasizing the mandatory nature of the timeline.

Key evidence and findings:

The Tribunal's order, dated April 25, 2019, noted that the retention order was passed on April 4, 2018, and more than a year had elapsed without the filing of a prosecution complaint. The appellant's contention that a complaint was filed on June 25, 2019, was deemed irrelevant as it occurred after the Tribunal's decision. Furthermore, the appellant failed to produce the prosecution complaint or the retention order as evidence in the current proceedings.

Application of law to facts:

The application of Section 8(3)(a) to the facts was straightforward. The Tribunal's decision to set aside the retention order was based on the failure to comply with the statutory requirement of filing a prosecution complaint within 90 days. The Court upheld this application, emphasizing the lapse of the retention order due to non-compliance with the mandatory timeline.

Treatment of competing arguments:

The appellant argued that a prosecution complaint was eventually filed on June 25, 2019, under Sections 44 and 45 of the PMLA Act. However, the Court noted that this filing was subsequent to the Tribunal's order and did not address the specific requirement under Section 8(3)(a). The respondent's argument that the Tribunal's observations were correct was supported by the absence of a timely filed complaint.

Conclusions:

The Court concluded that the Tribunal's decision to set aside the retention order was justified due to the appellant's failure to file a prosecution complaint within the mandatory period. The appeal was dismissed, and the Tribunal's order was upheld.

SIGNIFICANT HOLDINGS

The Court's significant holding was the affirmation of the mandatory nature of the 90-day period for filing a prosecution complaint under Section 8(3)(a) of the PMLA Act. The Court emphasized that non-compliance with this requirement results in the lapse of the retention order.

Preserve verbatim quotes of crucial legal reasoning:

The Tribunal had stated: "90 days period has already been expired from the date of passing the impugned order. No prosecution complaint under Section 8(3)(a) of the Act, has been filed. The period is mandatory in nature." This reasoning was pivotal in the Court's decision to uphold the Tribunal's order.

Core principles established:

The core principle established is the strict adherence to statutory timelines under the PMLA Act, particularly the 90-day period for filing a prosecution complaint, which is mandatory and not merely directory.

Final determinations on each issue:

The final determination was that the appeal lacked merit due to the appellant's failure to comply with the statutory requirement of filing a prosecution complaint within the prescribed period. Consequently, the Court dismissed the appeal, affirming the Tribunal's decision to set aside the retention order.