2018 (1) TMI 535 - DELHI HIGH COURT

Declaration to the second proviso to Section 5 (1) of PMLA as ultra vires Article 14 of the Constitution of India - Held that:- (i) The second proviso to Section 5(1) PMLA is not violative of Article 14 of the Constitution of India; the challenge in that regard in these petitions is hereby negatived.

(ii) The expression ‘reasons to believe’ has to meet the safeguards inbuilt in the second proviso to Section 5(1) PMLA read with Section 5(1) PMLA.

(iii) The expression ‘reasons to believe’ in Section 8(1) PMLA again has to satisfy the requirement of law as explained in this decision.

(iv) There has to be a communication of the ‘reasons to believe’ at every stage to the noticee under Section 8(1) PMLA.

(v) The noticee under Section 8(1) PMLA is entitled access to the materials on record that constituted the basis for ‘reasons to believe’ subject to redaction in the manner explained hereinbefore, for reasons to be recorded in writing.

(vi) If there is a violation of the legal requirements outlined hereinbefore, the order of the provisional attachment would be rendered illegal.

(vii) There can be single-member benches of the AA and the AT under the PMLA. Such single-member benches need not mandatorily have to be JMs and can be AMs as well.

As already pointed out, the challenge to the maintainability of the writ petitions on other grounds, and to the ECIR and to the OCs, the SCNs, the provisional attachment orders and to all further proceedings arising therefrom which have been challenged in the individual writ petitions, shall be decided by the learned Single Judge of this High Court. It will be open to the Respondents to raise all pleas, including that of maintainability, before the learned Single Judge. No opinion is expressed with regard thereto.