TMI Blog2021 (4) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... hment of property with materials as required under Section 5(2) of PMLA is provided in Rule 3 of the Prevention of Money-Laundering (the Manner of Forwarding a Copy of the Order of Provisional Attachment of Property along with the Material, and copy of the Reasons along with the material in respect of Survey, to the Adjudicating Authority and its Period of Retention) Rules, 2005. Rule 6 of the 2005 Rules provides for the period of time such order of provisional attachment, the materials and copy of the reasons are required to be retained by the Adjudicating Authority. Section 5(2) of PMLA, therefor, does not trigger the initiation of any Adjudication under Section 8(1) of PMLA - The Adjudicating Authority after conclusion of hearing under Section 8 (2) of PMLA, therefor can either declare that the property or properties are involved in money-laundering or hold that they are not so. The adjudication process, by the Adjudicating Authority is thus not dependent on the order of provisional attachment being in force, though the initiation of adjudication under Section 8(1) of PMLA had commenced after a complaint being lodged under Section 5(5) of PMLA pursuant to an order of provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss such order is confirmed under Section 8(3) in view of the provisions of Section 5(3) of the PMLA, the Adjudicating Authority in the instant case, is, free to proceed with the Complaint Case being Complaint no. 1262 of 2020 till the Sec. 8(2) stage i.e., to give a finding whether the property is involved in money-laundering or not. 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 - Application disposed off. - CAN 1 OF 2021 IN W.P.A. 8232 OF 2020 - - - Dated:- 23-4-2021 - THE HON'BLE JUSTICE ARINDAM MUKHERJEE. For the petitioners : Mr. Jishnu Chowdhury, Mr. Sarvapriya Mukherjee, Mr. Aniruddha Agarwalla, .... Advocates For the Respondents no. 2, 3, 4 : Ms. Debjani Ray, 13 Mr. Sumitava Chakraborty. .... Advocates For the Respondent no. 5 : Mr. Rajarshi Dutta, Mr. Arjun Mookherjee. .... Advocates For the Respondent no.6 : Mr. Om Narayan Rai, .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of PMLA. 3. On 19th February, 2020, the Adjudicating Authority issued a notice under Section 8(1) of the PMLA. 4. The petitioners filed a writ petition on or about 7th October, 2020. In the said writ petition, on 21 October, 2020 an interim order was passed. The operative portion of the order is set out hereunder for convenience: This Court is of the view that since an adjournment has been prayed for on behalf of the respondents, the respondent should not take any steps in terms of the impugned order until the matter is heard out on merits. 5. The writ petition was again taken up on 5th February, 2021, when the matter was fixed for hearing in view of the interim order of stay being in operation. 6. On 18th March, 2021 when the matter was again taken up, it was submitted on behalf of the petitioners that the petitioners intended to withdraw the writ petition as the order of provisional attachment had lapsed with the expiry of 180 days in view of the provisions of Section 5 (1) (b) of the PMLA. The petitioners' prayer was opposed by the respondents no. 2, 3, 4 and 13 and as such the matter was adjourned. On 22nd March, 2021, the petitioners prayer for withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its force with the expiry of 180 days, as submitted by the petitioners, then the writ petition has been filed much beyond 180 days commencing from 20th January, 2020. The writ petition, according to the petitioners, therefor, is not maintainable on such ground alone as the only challenge therein is the provisional order of attachment dated 20th January, 2020. So far as the prayer for vacating the interim order made by the respondent nos.2, 3, 4 and 13 is concerned, the same cannot be vacated at this stage, particularly in view of the fact that such interim order is continuing from 21st October, 2020 and no vacating application has been made by the said respondents in the meantime. Pendency of the writ petition will, however, not be an embargo on the respondents in proceeding with the complaint no.1262 of 2020 made under the provisions of Section 5(5) of PMLA as the same will not amount to any coercive step in terms of the provisional order of attachment. After hearing the respective submissions and considering the materials on record, I find that the matter can be more effectively heard after calling for affidavits. Let affidavit-in-opposition be filed within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttachment should be allowed to continue any further. The petitioners therefor, are seeking modification of the said order. (b) The petitioners say that so far as the other part of the order dated 26th March, 2021 is concerned, the petitioners have no objection and intend to have the writ petition heard after completion of affidavits. The petitioners also say that so far as the criminal proceedings for ascertainment of scheduled offence is concerned, the petitioners have no objection and the trial before the Special Court may be allowed to continue. The petitioners have relied upon a judgement dated 8th November, 2020 passed by a Learned Single Judge of the High Court at Delhi in W.P.(C) 3551/2020 and 12626/2020 M/S VIKAS WSP LTD. ORS. Vs. DIRECTORATE ENFORCEMENT ANR, in support of their contention that the Adjudicating Authority with the expiry of the validity/life of an order of provisional attachment becomes functus officio and cannot proceed any further for adjudication in terms of provisions of Section 8(1), 8(2) and 8(3) of PMLA. The petitioners have also relied upon an order dated 9th April, 2021 passed by a Learned Single Judge, of this Court in WPA no. 4845 of 2021 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February, 2020 on or before 4th May, 2020 and appear before the respondent no. 13 on 4th may, 2020. The mandate under Sec. 8(1) according to the respondent nos. 2, 3, 4 and 13 is to serve a notice of not less than 30 days. If that minimum notice period is taken into consideration, then the 30 days period from 19th February, 2020 expires on 20th March, 2020. But from 24th March, 2020 national lockdown had been declared due to pandemic. Even after withdrawal of the lockdown period, owing to the pandemic, the Adjudicating Authority was not functioning regularly and as such the maximum time period of 180 days to confirm the order of provisional attachment should be computed by holding that such time period has expired between 15th March, 2020 and 14th March, 2021 as per the order of the Hon'ble Supreme Court of India dated 8th march, 2021 thereby allowing the confirmation if necessary to be completed within a period of 90 days from 15th March, 2020. (iii) It is further submitted on behalf of the respondent no. 2, 3, 4 and 13 that the adjudication under Sections 8 (1), 8(2) and 8(3) is not only restricted to the confirmation of the provisional order of attachment but, for declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clearly provided by the legislature for offence of money-laundering which is different from the punishment in case of scheduled offence under different statutes wherein the punishment for offences under those statutes are specifically provided. (iii) On a reading of Section 43 and 44 of the PMLA, it also appears that an offence punishable under Section 4 and any scheduled offence connected to the offence punishable under that Section shall be tried by the Special Court constituted for the area in which the offence has been committed. It is, therefore, apparent from Section 44 that an offence punishable under Section 4 and any scheduled offence connected to the offence under Section 4 shall be tried by the Special Court. The second proviso of Section 45 of PMLA also clearly provide that the Special Court shall not take cognizance of any offence punishable under Section 4 of PMLA except upon a complaint in writing made by the director or any officer of the Central Government or the State Government authorised in writing in this behalf by the Central Government. Sub-Section 1A of Section 45 debars a police officer otherwise authorised under the Code of Criminal Procedure 1973 (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (1) of PMLA, therefor, requires further scrutiny to ascertain whether such Magistrate has to take a passive role in committing the case by not exercising its cognizance power so that the Special Court is free to exercise the same for the first time as a Court of Original Jurisdiction under Section 193 of the Cr.P.C., or that the Magistrate can take cognizance of the matter on a report under the first proviso of Section 5(1) filed before it. Since I am not required to answer this question while adjudicating the issue in hand, I refrain from dealing with this point further. These are so far as trying an offence punishable under Section 4 of PMLA and a scheduled offence connected thereto are concerned. Thus, it is apparent that PMLA is a Complete Code in itself for taking cognizance of an offence punishable under Section 4 of PMLA with connected schedule offences, its investigation and trial. (vi) This now takes me to analyse the role of the Adjudicating Authority appointed under Section 6 of PMLA as it is necessary to answer the issue involved. (vii) Section 5 has a heading Attachment of Property involved in money- laundering . Attachment has been defined in Section 2 (1) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order along with materials in his possession to the Adjudicating Authority. The Prevention of Money-Laundering (Issuance of Provisional Attachment Order) Rules, 2013 specifies the manner of issuance of provisional attachment order. The manner of forwarding a copy of the order of provisional attachment of property with materials as required under Section 5(2) of PMLA is provided in Rule 3 of the Prevention of Money-Laundering (the Manner of Forwarding a Copy of the Order of Provisional Attachment of Property along with the Material, and copy of the Reasons along with the material in respect of Survey, to the Adjudicating Authority and its Period of Retention) Rules, 2005. Rule 6 of the 2005 Rules provides for the period of time such order of provisional attachment, the materials and copy of the reasons are required to be retained by the Adjudicating Authority. Section 5(2) of PMLA, therefor, does not trigger the initiation of any Adjudication under Section 8(1) of PMLA. The concerned officer on passing an order of provisional attachment has to within 30 days therefrom file a complaint before the Adjudicating Authority under Section 5(5) of the PMLA. The process of adjudication is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connected with scheduled offence, if any and hold the accused guilty of the same if finds such offence has been committed. The punishment consequent upon such finding follows. The Adjudicating Authority on the other hand makes an endeavour to find out whether the property(s) are involved in money-laundering and makes a declaration to that effect on finding it in the affirmative. Upon such declaration being made the order of provisional attachment is confirmed. (x) In the light of the discussion as above, I am unable to agree with the view taken by a Learned Single Judge of Delhi high Court in Vikas WSP (supra) cited by the petitioners that the Adjudicating Authority becomes functus officio with the expiry of 180 days time period from the date of passing the order of provisional attachment unless the Adjudicating Authority completes the adjudication and confirms the order of provisional attachment before such 180 days period. (xi) In the instant case, the jurisdiction of the Adjudicating Authority was attracted on a complaint under Section 5(5) being lodged after an order for provisional attachment under Section 5(1) was made. The Deputy Director under PMLA in the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead to holding 180 days to be the time period for completing adjudication under Section 8(2) of PMLA. (xiii) Since I have already held that the Adjudicating Authority does not become functus officio on expiry of the period of 180 days from the passing of the order of provisional attachment unless such order is confirmed under Section 8(3) in view of the provisions of Section 5(3) of the PMLA, the Adjudicating Authority in the instant case, is, free to proceed with the Complaint Case being Complaint no. 1262 of 2020 till the Sec. 8(2) stage i.e., to give a finding whether the property is involved in money-laundering or not. (xiv) So far as the issue of the order of provisional attachment remained valid or not after expiry of 180 days due to the pandemic is concerned, I keep the same open to be decided in the writ petition wherein direction for affidavits have been given without vacating the interim order passed on 21st October, 2020. In fact, the confirmation of the order of provisional attachment under Section 8(3) of PMLA cannot be also done in the instant case before the writ petition being finally disposed of even if the Adjudicating Authority comes to a finding that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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