TMI Blog2017 (8) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority passed the impugned on 15th June, 2015. Admittedly the officer who have passed the impugned order is not the Judicial officer. We are of the view that the proceedings conducted in violation of principles of natural justice and contrary to the PMLA and Regulation Act, 2013. The appellants were only asking for one week time to file the reply, however the said request was refused. We are of view that once it is held by the Hon’ble Court that the hearing officer was not a judicial Member and was not competent to decide the matter of a party who was one of the defendant in the common OC, the said final judgment has to be applied in favour of other defendants also who are parties to the same OC. For the reasons stated above, all the appeals are allowed. The impugned order is set-aside on the ground of parity only and however not on merit - MP-PMLA-3135/KOL/2017 (Misc.) MP-PMLA-1791/KOL/2015 (Stay) FPA-PMLA-943/KOL/2015 - - - Dated:- 9-3-2017 - MP-PMLA-3137/KOL/2017 (Misc.) MP-PMLA-1886/KOL/2015 (Stay) FPA-PMLA-997/KOL/2015, MP-PMLA-3115/KOL/2017 (Misc.) MP-PMLA-1898/KOL/2015 (Stay) FPA-PMLA-995/KOL/2015, MP-PMLA-3136/KOL/2017 (Misc.) MP-PMLA-1891/KOL/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owment Fund/properties of Appellants. 5. On 03.02.2015 (in complaint being OC No. 409 of 2015) show cause notice were issued by the Adjudicating Authority calling upon the Appellants as to why the attachment made under section 5(1) of the PML Act, 2002 be not confirmed. It was the case of the appellants that their assets both movable and immovable do not come within the ambit of Prevention of Money Laundering Act, 2002 as the proceeds of crime are allegedly generated by EIILM University. 6. It was directed by the Adjudicating Authority to the appellants herein and EIILM vide notice dated 03.02.2015 to be present before the Learned Adjudicating Authority on 06.04.2015. One of the defendants i.e. EIILM University (i.e. Defendant No. 1) in the said OC No. 409 of 2015, had approached the High Court of Sikkim at Gangtok by way of Writ Petition (Criminal) No. 2 of 2015 along with Crl. M. Appl. No. 18 of 2015, praying for quashing and setting aside the show cause notice dated 3.2.2015 (common for all including the present Appellants) and the prior and subsequent investigating proceedings of the Respondent herein who also preferred an application for interim direction for staying fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng reasonable time for appearance fixed the date of argument on 11.06.2015. 15. The appellants thereafter appeared through their counsels and filed an application for recall of any order passed on 08.06.2015 and to also grant a week s time for filing of reply. However, Adjudicating Authority summarily dismissed the application. As per record the Learned Adjudicating Authority did not even give any time to the Appellant to file reply and reserved orders in O.C. 409 of 2015. 16. One of the appellants namely, Rai Technology University, Bangalore, thereafter approached the Hon'ble High Court of Karnataka by way of writ petition being Writ Petition No. 24563/2015 [GM-RES] challenging the action of the Learned Adjudicating Authority in not granting any opportunity to the Appellant to file its reply and for personal hearing before passing order under Section 8(3) of the PMLA 2002 and recalling the order dated 11.06.2015 in O.C. no. 409 of 2015. 17. The above mentioned Writ Petition was listed before the Hon'ble High Court of Karnataka on 16.06.2015 and the Hon'ble Court was pleased to passed an interim order:- Issue notice to respondents no. 1 and 3. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority has adopted a procedure which is violative of principles of natural justice and also contrary to the provisions of the PML Act and the Regulation of 2013. The reasonable time to file the reply was not granted rather the Adjudicating Authority was in a rush to pass order against the principles of natural justice. The appellants were denied time to the Appellant to file reply or address arguments. Therefore the impugned order is liable to set aside. (d) The Adjudicating Authority ought to have decided the preliminary contentions / objections of coram non judice raised by the appellant and not insisted in proceeding with the matter on merits and such a procedure is also contrary to settled principles of law as the issue regarding lack of jurisdiction of an authority goes to the root of the matter and unless and until the authority has jurisdiction in law to adjudicate on a matter, it should not have proceeded to decide upon the merits of the matter. The act of the adjudicating authority was whimsical even no time was granted to inspect the record of the adjudicating authority. (e) The Learned Adjudicating Authority failed to appreciate that the action of the respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... University and the Petitioner- University shall appear before the Bench and place before it all grievances expressed in the Petition; and (iv) Since the proceedings before the Adjudicating Authority was stayed by this Court by order dated 02-04-2015, the period of attachment prescribed under Sub-Section (1) of Section 5 shall exclude the period spent during the pendency of the case before this Court . 23. On 07.09.2015, Judicial Member was appointed, who alongwith Chairman heard the said matter and confirmed the provision attachment by order dated 01.12.2015. The same was challenged before us by filing of an appeal 1184/2016 in which notice has been issued. The next date in the said appeal is fixed for 06.04.2017. 24. Subsequent to the said judgment, all the appellants have filed an application for direction for remanding back the matter to the Ld. Adjudicating Authority for fresh consideration by a coram consisting with the Judicial Member in view of judgment delivered by the Hon ble High Court. It is also alleged in the application that impugned order has been passed by the coram of the Ld. Adjudicating Authority which is not consisting with a Judicial Members in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sikkim High Court was not challenged in higher court by the respondent. 31. It is also admitted position that the said judgment has been acted upon by the respondent. 32. As far as the argument of the respondent at the time of hearing in the application is concerned to the effect that the member as per the scheme of the Act was/is empowered to hear the matter on behalf of Adjudicating Authority, we do not wish to express any opinion being larger issue which is also raised in many appeals. The said would be considered as and when the said pending appeals are heard. Till that time we do not wish to pass the order in rem . At present, we are concerned with the legal issue only in relation to these pending appeals. 33. Admittedly, the Hon ble High Court in para 6 has specifically come to the conclusion that the important legal issues are involved in the matter wherein the present appellants were the defendants in the same O.C. At present we are concerned only in relation to these appeals wherein one of the defendant in common O.C. had challenged the show cause notice in which the following findings have been arrived:- 13. In my considered opinion, what emerges from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants are parties in the same O.C. and are placed in the same position. We are of the considered opinion that after final judgment, the same is binding upon this Tribunal particularly once the appellants appeals arose from the same ECIR No. KLZO/01/2014 and same O.C. 35. Even on parity, similar directions are to be passed. When the present appeals were filed, the judgment was awaited which has been delivered during the pendency of appeals. 36. The Officer who passed the impugned common order is not Judicial Members. The Judicial Member was appointed after the judgment was delivered. In the present appeals similar grounds are taken which were taken in writ petition by one of the defendant regarding validity of the constitution of Bench 37. The respondent is also not correct while making the submissions that as per direction issued on 05.06.2015 by the High Court, the similarly situated defendants cannot derive any benefit of the final judgment as the Adjudicating Authority had heard the matters on the basis of direction of the High Court. The said arguments have no force as the fact of the matter is that the final judgment was passed in 22nd September, 2015. The impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority. We may reproduce below Sub- Sections (1), (2) and (3) and Clauses (a) and (b) of Sub-Section (5) of Section 6 of the PMLA- 6. Adjudicating Authorities, composition, powers, etc.- (l) 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 accountancy. (3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority,- (a) in the field of law, unless he- (i) is qualified for appointment as District Judge; or (ii) has been a member of the Indian Legal Service and has held a post in Grade I of that service; (b) in the field of finance, accountancy or administration unless he possesses such qualifications, as may be prescribed. .. (5) Subject to the provisions of this Act,- (a) the jurisdiction of the Adjudicating Authority may be exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound reproduced in paragraph 58 of the Tamil Nadu Generation and Distribution Corporation Limited (supra) which we may also reproduce below:- 58. Again in para 99, it is observed as follows: (Kihoto Hollohan case, SCC p.707) 99. Where there is a lis-an affirmation by one party and denial by another-and the dispute necessarily involves a decision on the rights and obligations of the parties to it and the authority is called upon to decide it, there is an exercise of judicial power. That authority is called a Tribunal, if it does not have all the trappings of a Court. In Associated Cement Companies Ltd. v. P.N. Sharma this Court said: (AIR p. 1606, para 33 : SCR pp. 386-87 33... The main and the basic test, however, is whether the adjudicating power which a particular authority is empowered to exercise, has been conferred on it by a statute and can be described as a part of the State's inherent power exercised in discharging its judicial function. Applying this test, there can be no doubt that the power which the State Government exercises under Rule 6(5) and Rule 6(6) is a part of the State's judicial power. ... There is, in that sense, a lis; there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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