TMI Blog2023 (3) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue, the Court cannot reach a conclusion or interpretation that such constitution with a single member having the requisite competence/eligibility is bad in law A full bench of the Apex Court in Newtech Promoters Developers (P) Ltd. v. State of U.P. [ 2021 (12) TMI 892 - SUPREME COURT] 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. In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the offence of money laundering or he/she is in possession of proceeds of crime has to issue a show-cause notice to such person calling upon him to give details of such properties including sources of income involved in purchasing such properties and to show cause why such attachment of properties should not be confirmed - Section 8(2) of the PMLA provides that the Adjudicating Authority shall consider if any reply to such show cause notice is filed and hear the aggrieved person whose property is sought to be attached. Further, the Adjudicating Authority shall also consider 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. Whether the action of issuing a show cause notice under Section 8(1) of the PMLA b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other words, tribunals shall comprise of members having technical expertise in the area which is sought to be regulated by law and members having experience in the field of law. 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. In the present case, as the show cause notices and the orders confirming provisional attachment were passed by a member having no experience in the field of law, such show cause notices and orders are non-est and void in the eyes of law - a member having no experience in the field of law is ineligible to pass judicial orders. This Court holds that issuance of show cause notice under Section 8(1) of the PMLA and passing an order under Section 8(3) of the PMLA confirming the provisional attachment of properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Calcutta High Court in Hiren Panchal [ 2022 (7) TMI 720 - CALCUTTA HIGH COURT] held that vide orders in In re: Limitation [ 2022 (1) TMI 385 - SC ORDER] , the Apex Court extended the period of limitation to safeguard the right of litigants to institute proceedings. The Court held that computation of 180 days to confirm provisional attachment of properties under Section 8(3) of the PMLA cannot be equated to initiation/institution of proceedings. The Court also held that prescription of 180 days is in the form of a protection against deprivation of right to property. 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 pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suing the said fresh attachment order, the ED shall again strictly follow the entire procedure as prescribed under Sections 5 8 of the PMLA and the relevant Rules thereunder - ED should record the reasons to believe before issuing the fresh provisional attachment order, forward such fresh provisional attachment order to the Adjudicating Authority and the Adjudicating Authority shall again satisfy itself that the properties were involved in money laundering and shall issue a fresh show-cause notice in relation to the fresh provisional attachment order, the parties shall again be given a right of hearing before passing orders under Sections 8(2) and 8(3) of the PMLA. Needless to say that after issuance of the fresh provisional attachment order, the confirmation shall be completed within a period of 180 days - thus, the Adjudicating Authority will become functus officio after a lapse of 180 days, if the provisional attachment of properties is not completed. Petition allowed. - WRIT PETITION Nos.34238 & 34627 OF 2022; I.A. No.1 OF 2022 in W.P. No.41133 OF 2022 & I.A. No.1 OF 2022 in 44343 OF 2022, W.P. No.34238 of 2022 - - - Dated:- 13-3-2023 - THE HON BLE SRI JUSTICE K. LAKSH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice dated 17.03.2022 to the Petitioner under Section 8(1) of the PMLA to indicate the source of income out of which the provisionally attached properties were procured and show cause why such properties should not be declared as proceeds of crime. iv) The Petitioner replied to the show cause notice on 23.03.2022 stating that all the documents relied upon to pass PAO No. 04/2022 were not supplied. However, a hearing was conducted by the Adjudicating Authority on 04.08.2022 and an order dated 22.08.2022 was passed confirming the provisional attachment order PAO No. 04/2022. v) It is relevant to note that after the completion of hearing by the Adjudicating Authority on 04.08.2022, the Petitioner had filed W.P. No. 33539 of 2022 before this Court on 23.08.2022 challenging the show cause notice dated 17.03.2022. However, the said writ petition was disposed of vide order dated 30.08.2022 in view of the order dated 22.08.2022 confirming the provisional attachment. vi) The Petitioner challenges the order dated 22.08.2022 confirming the provisional attachment order PAO No. 04/2022 on the ground that the same was passed without jurisdiction and in breach of Section 6 of the PML ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that no scheduled offence was registered. vi) Further, show cause notice dated 19.09.2022 is also challenged on the ground that the same was issued without jurisdiction by a single member Adjudicating Authority having no experience in the field of law is in breach of Section 6 of the PMLA. 5. Factual Background in W.P. No. 44343 of 2022: i) W.P. No. 44343 of 2022 is connected to W.P. No. 41133 of 2022 and both of them arise out of similar set of facts. Based on registration of scheduled offences vide various FIRs as mentioned above in W.P. No. 41133 of 2022, investigation was initiated against the Petitioners under PMLA on File No. ECIR/HYZO/14/2021 dated 19.05.2021. 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. ii) An original complaint bearing OC No. 1680 of 2022 was filed before the Adjudicating Authority. Thereafter, a show cause notice dated 22.04.2022 was issued by the Adjudicating Authority seeking to show cause why the provisional attachment dated 08.03.2022 should not be confirmed. Subsequently, the Petitioners filed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f around Rs.40 crores from the other persons involved in the scam and deposited the same in the bank account of M/s Vaishnavi Bullion Pvt. Ltd. Further, it is also alleged that an amount of Rs.28 crores was transferred by M/s Vaishnavi Bullion Pvt. Ltd. in the bank account of M/s Ashta Laxmi Gold belonging to the Petitioner s husband. Therefore, it is alleged that the Petitioner s husband was directly involved in the scam by converting the illegally demonetized cash to purchase gold. vi) Based on these allegations, the premises of the Petitioner and her husband were searched and certain records were seized and their bank accounts were also frozen. Vide order dated 23.06.2017 in OA No.69 of 2017, the Adjudicating Authority permitted the ED to retain the seized records. An appeal bearing Appeal No. 1889 of 2017 was preferred by the Petitioner s husband against the retention order dated 23.06.2017. vii) Subsequently, the Petitioner started Petitioner No. 1 company. On 15.04.2019, a search was conducted at the Petitioner s residence and according to the Petitioner her stock-intrade was seized. The Petitioner contends that she and her seized property have no connection with the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle member of the Adjudicating Authority who issued the impugned show cause notices and passed the impugned orders was not a judicial member who has experience in the field of law. Therefore, passing orders confirming attachment is a quasi-judicial function, such orders can only be passed by members of Adjudicating Authority having experience in the field of law. Reliance was placed on Eastern Institute for Integrated Learning in Management University v. Govt. of India 2015 SCC OnLineSikk 217 , Madras Bar Assn. v. Union of India (2014) 10 SCC 1 , L. Chandra Kumar v. Union of India (1997) 3 SCC 261 and Rojer Mathew v. South Indian Bank Ltd. (2020) 6 SCC 1. iii) In W.P. Nos. 32438 of 2022 and 34627 of 2022, it was contended that the orders confirming the provisional attachment are without jurisdiction as the same have been passed beyond the period of 180 days as prescribed under Section 5 of the PMLA. The Adjudicating Authority becomes functus officio after a lapse of 180 days, if the provisional attachment of properties is not confirmed within such period. iv) In re: Cognizance for Extension of Limitation (2020) 19 SCC 10 (hereinafter referred to as In re: Limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction of the Adjudicating Authority as the period from 15.03.2020 to 28.02.2022 shall be excluded while computing the period of 180 days. Reliance was placed on In re: Limitation (supra ). v) The Adjudicating Authority does not become functus officio after a lapse of 180 days as prescribed under Section 5(3) of the PMLA. Reliance was placed on Fairdeal Supplies Limited v. Union of India 2021 SCC OnLine Cal 1525 . vi) The present petitions are not maintainable as an efficacious alternative remedy in the form of an appeal under Section 26 of the PMLA is available to the Petitioners. Reliance was placed on United Bank of India v. SatyawatiTondon (2010) 8 SCC 110 , P. Trivikrama Prasad v. Enforcement Directorate 2014 SCC OnLineHyd 819 , Arun Kumar Mishra v. Union of India 2014 SCC OnLine Del 493 , G. Srinivasan v. Chairperson 2011 SCC OnLine Mad 2909 , Nabla Begum v. Union of India 2012 SCC OnLine J K 52 and Karampal Goyal v. Directorate of Enforcement 2012 SCC OnLine P H 621 . 9. Findings of the Court: From the facts and contentions raised by the parties, the following issues fall for consideration before this Court: 1. Whether the scheme under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a Member to be the Chairperson of the Adjudicating Authority. (5) Subject to the provisions of this Act, (a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof; (b) a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two Members as the Chairperson of the Adjudicating Authority may deem fit; (c) the Benches of the Adjudicating Authority shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification, specify; (d) the Central Government shall, by notification, specify the areas in relation to which each Bench of the Adjudicating Authority may exercise jurisdiction. (6) Notwithstanding anything contained in sub-section (5), the Chairperson may transfer a Member from one Bench to another Bench. (7) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority resumes his duties. (15) The Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own procedure. ii) It is clear from Section 6 (2) of the PMLA that an Adjudicating Authority shall consist of a chairperson and two other members. Though the word shall is used in the provision, the said requirement of having a chairperson and two other members is not mandatory in light of Section 6(5) and Section 6(7) of the PMLA. Section 6(5) of the PMLA provides that Benches constituted by the Adjudicating Authority can also exercise jurisdiction under PMLA. Section 6(5)(b) further provides that the chairperson in his discretion can constitute Benches either with one member or with two members. iii) It is also relevant to note that Section 6(7) of the PMLA provides that if the Chairperson or a Member during the course of hearing feels that a matter should be heard by a Bench of two members, he/she may transfer such matter to a Bench consistin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest are wholly without jurisdiction and is in contravention to the scheme of the Act. 89. Learned counsel further submits that the order passed by the single member of the authority is without jurisdiction and it suffers from coram non-judice. Section 21 of the Act clearly provides that the authority shall consist of a Chairperson and not less than two whole time members to be appointed by the Government. Regulation 24(a) of the Regulations 2019 framed by the authority is in clear contravention to the parent statute that the delegation of power can be of class, category of cases, specific to the member of the authority but a general delegation of power to the single member of the authority in exercise of power under Section 81 is not contemplated under the Act and delegation to a single member of the authority in adjudicating the disputes under Sections 12, 14, 18 and 19 is without jurisdiction and that is the reason for which the appellants have approached the High Court by filing a writ petition under Article 226 of the Constitution and in furtherance to this Court. **** 95. Per contra, Mr. DevadattKamat, learned senior counsel for the respondents subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114. In the instant case, the authority by a special order dated 5th December, 2018 has delegated its power to the single member for disposal of complaints filed under Section 31 of the Act. So far as refund of the amount with interest is concerned, it may not be considered strictly to be mechanical in process but the kind of inquiry which has to be undertaken by the authority is of a summary procedure based on the indisputable documentary evidence, indicating the amount which the allottee/home buyer had invested and interest that has been prescribed by the competent authority leaving no discretion with minimal nature of scrutiny of admitted material on record is needed, if has been delegated by the authority, to be exercised by the single member of the authority in exercise of its power under Section 81 of the Act, which explicitly empowers the authority to delegate under its wisdom that cannot be said to be dehors the provisions of the Act. 115. What is being urged by the learned counsel for the appellants in interpreting the scope of Section 29 of the Act is limited only to policy matters and cannot be read in derogation to Section 81 of the Act and the interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n may not hold good for the reason that the power to be exercised by the authority in deciding complaints under Section 31 of the Act is quasi-judicial in nature which is delegable provided there is a provision in the statute. As already observed, Section 81 of the Act empowers the authority to delegate its power and functions to any of its member, by general or special order. 119. In the instant case, by exercising its power under Section 81 of the Act, the authority, by a special order dated 5th December, 2018 has delegated its power to the single member of the authority to exercise and decide complaints under Section 31 of the Act and that being permissible in law, cannot be said to be de hors the mandate of the Act. At the same time, the power to be exercised by the adjudicating officer who has been appointed by the authority in consultation with the appropriate Government under Section 71 of the Act, such powers are non-delegable to any of its members or officers in exercise of power under Section 81 of the Act. 120. That scheme of the Act, 2016 provides an in-built mechanism and any order passed on a complaint by the authority under Section 31 is appealable before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urality. There could, even under Section 6(5)(b) PMLA, be a single member bench . When Section 6(6) PMLA states that a Chairperson can transfer a member from one bench to another bench, it has to be understood in the above context of there also being single-member benches. 81. The Court is unable to agree with the submission that since the Adjudicating Authority (Procedure) Regulations 2013 requires every order-sheet to have the signatures of the Chairperson and members constituting the bench, it necessarily means that every matter has to be heard by a bench comprising the Chairperson and members. This would be an erroneous interpretation which is contrary to the main provision of the PMLA itself, viz., Section 6(5)(b) PMLA. Likewise, under Rule 3 of the Prevention of Moneylaundering (Appointment and Conditions of Service of Chairperson and Members of the Adjudicating Authorities) Rules 2007, although it states that the AA should have three members, that has to be read along with Section 6(5)(b) that there can be single-member benches. A contrary interpretation would actually frustrate the working of the AA. The Court, therefore, rejects the contention of the Petitioners t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was held that less than three Member Adjudicating Authority is permissible under PMLA. The Delhi High Court held that there can be a single Member of Adjudicating Authority and appellate Tribunal under PMLA and such single Member Bench need not mandatorily have judicial members and can be administrative members as well. This case was relied upon by the learned Addl. Solicitor General for the purpose of contending that the issue of coram non-judice is not a valid argument in the teeth of various provisions which explicitly provide for formation of single Member Bench. This Court is in agreement with the submission made by the learned Addl. Solicitor General that it is not mandatory to have three Member Bench all the time for all adjudication purposes. It is up to the Chairperson of the Adjudicating Authority to form Bench containing one or two Members as it deems fit in order to adjudicate the cases which are placed for consideration before the Authority. ix) In the present case, a plain reading of Section 6 of the PMLA negates the contention of the Petitioners that Adjudicating Authority shall consist of a Chairperson and two members. The word shall used in Section 6(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below: 6. This Court had occasion to consider the nature of the two kinds of acts, namely, judicial which includes quasi-judicial and administrative, a number of times. In Province of Bombay v. Kushaldas S. Advani [1950 SCC 551 : (1950) SCR 621] it adopted the celebrated definition of a quasi-judicial body given by Atkin, L.J. in R. v. Electricity Commissioners [(1924) 1 KB 171] which is as follows: Whenever anybody of persons having legal authority to determine questions affecting rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs. This definition insists on three requisites each of which must be fulfilled in order that the act of the body may be a quasijudicial act, namely, that the body of persons (1) must have legal authority, (2) to determine questions affecting the rights of subjects, and (3) must have the duty to act judicially. After analysing the various cases, Das, J. (as he then was) laid down the following principles as deducible therefrom in Khushaldas S. Advani case [1950 SCC 551 : (1950) SCR 62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y executive. As the dispute between the parties relates to the civil rights and the Act provides for a right of appeal and makes detailed provisions about hearing and disposal according to law, it is impossible to avoid the inference that a duty is imposed upon the Central Government in deciding the appeal to act judicially. 15. The Attorney-General contended that even if the Central Government was required by the provisions of the Act and the rules to act judicially, the Central Government still not being a tribunal, this Court has no power to entertain an appeal against its order or decision. But the proceedings before the Central Government have all the trappings of a judicial tribunal. Pleadings have to be filed, evidence in support of the case of each party has to be furnished and the disputes have to be decided according to law after considering the representations made by the parties. If it be granted that the Central Government exercises judicial power of the State to adjudicate upon rights of the parties in civil matters when there is a lis between the contesting parties, the conclusion is inevitable that it acts as a tribunal and not as an executive body. We therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of Section 5 or retention of property or record seized or frozen under Section 17 or Section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall (a) continue during investigation for a period not exceeding three hundred and sixty-five days] or] the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: Provided that the Special Court shall not consider such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money laundering : Provided further that the Special Court may, if it thinks fit, consider the claim of the claimant for the purposes of restoration of such properties during the trial of the case in such manner as may be prescribed. vii) Section 8 of the PMLA deals with adjudication by the Adjudicating Authority. Under Section 8 (1) of the PMLA, once a complaint is filed under Section 5(5) of the PMLA detailing the nature of offence and the properties involved, the Adjudicating Authority after satisfying itself that reasons to believe exist that a person has committed the offence of money laundering or he/she is in possession of proceeds of crime has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 8(1) of the PMLA shall record such reasons to believe in order to inform the allegations/charges to the party whose properties are provisionally attached. In other words, the purpose of a show cause notice under Section 8(1) of the PMLA is to accord a fair opportunity of adjudication to a party whose property is sought to be attached. iv) The Calcutta High Court expressed a similar view in Excel Powmin Ltd. v. Union of India 2020 SCC OnLine Cal 384 and the relevant paragraphs are extracted below: 26. A perusal of the scope of the cause to be shown by the noticee under Section 8(1) itself reveals that the noticee, in the cause shown by him, has to comprehensively deal with all the aspects as enumerated in Section 8(1) of the PMLA. One of such conditions is the evidence on which he relies and other relevant information and particulars. However, it is well within the scope of such cause to be shown by the noticee to point out that there was no basis for the reasons to believe that the person has committed an offence under Section 3 or is in possession of proceeds of crime, which is the basis of the service of notice by the AA under Section 8(1) of the PMLA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, provisionally attach the property-in-question. 33. On the other hand, Section 8(1) envisages that, on receipt of a complaint under Section 5(5) of the PMLA or applications made under Section 17(4) or Section 18(10), if the Adjudicating Authority has reason to believe that any person has committed the offences mentioned therein, it may serve a notice as envisaged under Section 8(1) of the PMLA. As such, the exercise of arriving at reasons to believe by the AA prior to issuance of a notice asking the noticee to showcause on the counts as indicated in the said application, has to be arrived at independently by the AA, irrespective of the reasons to believe attributed for the initial notice under Section 5(1) of the PMLA. Hence, the very fact that the AA merely adopted the reasons to believe attributed at the stage of Section 5(1) of the PMLA, shows that there was a dereliction of duty on the part of the AA, which palpably failed to exercise jurisdiction vested in it by law and to fulfill a necessary pre-condition of the notice under Section 8(1), that is, arriving at independent reasons to believe regarding commission of the offence. Such fact itself vitiates the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority can only issue a show cause notice if it has reasons to believe that an offence of money laundering was committed. The show cause notice should record such reasons to believe. vi) This raises a question as to what is meant by reasons to believe and when can it be said that such reasons to believe exist. vii) This Court in K. Shoba v. The District Collector, (Panchayat Raj Wing) MANU/TL/0769/2021 relying on the decisions of the Apex Court in Barium Chemicals Ltd. v. Company Law Board 1966 Supp SCR 311 , Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chennai (2005) 7 SCC 627 and Bhikhubhai Vithlabhai Patel v. State of Gujarat (2008) 4 SCC 144 held that phrases like reasons to believe are based on subjective satisfaction. However, the reasons to believe shall be based on consideration of relevant material on record and shall be preceded by application of mind by the authority before reaching the conclusion that 'reasons to believe exist . The relevant paragraphs are extracted below: 21. The Hon'ble Apex Court, in BhikhubhaiVithlabhai Patel v. State of Gujarat relying on the principle in Barium Chemicals Ltd. v. Company Law Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt materials. In other words, relevant factors and available information should be considered before forming an opinion . viii) Therefore, the action of issuing show cause notice under Section 8(1) of the PMLA is quasi-judicial in nature. The Adjudicating Authority before issuing a show cause has to apply its mind to the material placed before it along with the complaint filed under Section 5(1) of the PMLA. It is only after such application of mind that the Adjudicating Authority can reach a conclusion that reasons to believe exist regarding the commission of money laundering. The application of mind here involves a quasi-judicial function as the Adjudicating Authority has to come to conclusion and record its reasons that an offence of money laundering as defined under Section 3 of the PMLA was committed. An authority recording its subjective satisfaction after due application of mind performs a quasi-judicial function. An action involving interpretation of a statute and recording of reasons has trappings of judicial functions. Such actions are quasi-judicial and cannot be termed as administrative, more particularly when the requirement of issuing a show cause notice based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng specialized knowledge in the field of law for which the tribunals were constituted. Such quasi-judicial bodies are created by statutes to replace the traditional Courts and were constituted by the executive and members constituting such tribunals were appointed by the executive. During the phase of tribunalisation in India, concerns were raised regarding the interference of executive in performance of judicial functions by such tribunals. The Courts had to deal with questions pertaining to dilution of theory of separation of powers as all tribunals were constituted by the executive. ii) In S.P. Sampath Kumar v. Union of India (1987)1SCC124, the Apex Court held that tribunals/quasi-judicial bodies can be constituted by the executive provided that necessary checks and balances are maintained in appointing the members to such tribunals. The Court held that exercise of judicial powers of such bodies should remain unaffected from executive. In relation to constitution of such tribunals, the Court held that members having requisite qualification in the field of law should be appointed instead of members having no experience in the field of law. The relevant paragraph is extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udges of the High Court or parity or as substitutes. However, the personnel appointed to hold those offices under the State are called upon to discharge judicial or quasi-judicial powers. So they must have judicial approach and also knowledge and expertise in that particular branch of constitutional, administrative and tax laws. The legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage and teeth would definitely impair the efficacy and effectiveness of the judicial adjudication. It is, therefore, necessary that those who adjudicate upon these matters should have legal expertise, judicial experience and modicum of legal training as on many an occasion different and complex questions of law which baffle the minds of even trained judges in the High Court and Supreme Court would arise for discussion and decision . 69. In Krishna Sahai v. State of U.P. [(1990) 2 SCC 673 : 1990 SCC (L S) 375 : (1990) 13 ATC 711] this Court emphasised its need in constituting the U.P. Service Tribunal that, it would be appropriate for the State of Uttar Pradesh to change its manning and a sufficient number of people qualified in L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity it is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instils people's faith and trust in the office and helps to build up reputation and acceptability. Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrong-headed views of the facts and is likely to give rise to nursing grievance of injustice. Therefore, functional fitness, experience at the Bar and aptitudinal approach are fundamental for efficient judicial adjudication. Then only as a repository of the confidence, as its duty, the tribunal would properly and efficiently interpret the law and apply the law to the given set of facts. Absence thereof would be repugnant or derogatory to the Constitution. iv) In L. Chandra Kumar (supra), the Apex Court held that constitution of tribunals with members having no experience in law is permissible provided such members are experts in other fields and are paired with members having experience in law. In other words, tribunals shall c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas a tribunal can have a combination of judicial and technical members. Judicial members are those members having experience in the field of law and technical members are those who are subject experts for the regulation of which the tribunal was constituted. The Court also discussed the question whether technical members can be part of tribunals at all. Answering the question, the Court held that technical members can form part of the tribunal only in cases where their expertise is needed in deciding complicated issues. In cases where only simple adjudicatory functions are involved, technical members cannot be appointed by executive and such appointments will dilute independence of judiciary. It was also held that if the members appointed are not eligible to discharge judicial functions, such appointments will not stand the test of constitutionality. The relevant paragraphs are extracted below: 90. But when we say that the legislature has the competence to make laws, providing which disputes will be decided by courts, and which disputes will be decided by tribunals, it is subject to constitutional limitations, without encroaching upon the independence of the judiciary and kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al worker with ten years' experience in social work can become a technical member? Will it be beyond scrutiny by way of judicial review? 95. Let us look at it from a different angle. Let us assume that three legislations are made in a State providing for constitution of three types of tribunals: (i) Contract Tribunals; (ii) Real Estate Tribunals; and (iii) Compensation Tribunals. Let us further assume that those legislations provide that all cases relating to contractual disputes, property disputes and compensation claims hitherto tried by the civil courts, will be tried by these tribunals instead of the civil courts; and that these tribunals will be manned by members appointed from the civil services, with the rank of Section Officers who have expertise in the respective field; or that a businessman in the case of Contract Tribunal, a Real Estate Dealer in regard to Property Tribunal, and any social worker in regard to Compensation Tribunal, having expertise in the respective field will be the members of the tribunal. Let us say by these legislations, all cases in the civil courts are transferred to tribunal (as virtually all cases in the civil courts will fall under on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are vested in courts by express provisions of the Constitution) to any tribunal. (b) All courts are tribunals. Any tribunal to which any existing jurisdiction of courts is transferred should also be a judicial tribunal. This means that such tribunal should have as members, persons of a rank, capacity and status as nearly as possible equal to the rank, status and capacity of the court which was till then dealing with such matters and the members of the tribunal should have the independence and security of tenure associated with judicial tribunals. (c) Whenever there is need for tribunals , there is no presumption that there should be technical members in the tribunals. When any jurisdiction is shifted from courts to tribunals, on the ground of pendency and delay in courts, and the jurisdiction so transferred does not involve any technical aspects requiring the assistance of experts, the tribunals should normally have only judicial members. Only where the exercise of jurisdiction involves inquiry and decisions into technical or special aspects, where presence of technical members will be useful and necessary, tribunals should have technical members. Indiscrimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs with the prescribed experience, who are eligible for appointment as High Court Judges, can be considered for appointment as judicial members. 109. A lifetime of experience in administration may make a member of the civil services a good and able administrator, but not a necessarily good, able and impartial adjudicator with a judicial temperament capable of rendering decisions which have to: (i) inform the parties about the reasons for the decision; (ii) demonstrate fairness and correctness of the decision and absence of arbitrariness; and (iii) ensure that justice is not only done, but also seem to be done. **** 111. As far as technical members are concerned, the officer should be of at least Secretary level officer with known competence and integrity. Reducing the standards, or qualifications for appointment will result in loss of confidence in the tribunals. We hasten to add that our intention is not to say that the persons of Joint Secretary level are not competent. Even persons of Under-Secretary level may be competent to discharge the functions. There may be brilliant and competent people even working as Section Officers or Upper Division Clerks but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hereinbefore. Once it has the trappings of the court and performs judicial functions, albeit limited ones in the context of the overall functioning of the Commission, still while performing such judicial functions which may be of far-reaching effect, the presence of a member having knowledge of law would become necessary. The absence of a member having knowledge of law would make the composition of the State Commission such as would make it incapable of performing the functions under Section 86(1)(f) of the said Act. 117. In Madras Bar Assn. [Madras Bar Assn. v. Union of India, (2014) 10 SCC 1] (MJ-II), the Constitution Bench, referring to the decision in Madras Bar Assn. [Union of India v. Madras Bar Assn., (2010) 11 SCC 1] (MJ-I) observed that members of tribunals discharging judicial functions could only be drawn from sources possessed of expertise in law and competent to discharge judicial functions. We are conscious of the fact that the case (MJ-I) dealt with a factual matrix where the powers vested in courts were sought to be transferred to the tribunal, but what is relevant is the aspect of judicial functions with all the trappings of the court and exercise of j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicatory functions, the Bench must necessarily have at least one member, who is or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in the practice of law and who has the requisite qualifications to have been appointed as a Judge of the High Court or a District Judge. **** 125.2. It is mandatory that there should be a person of law as a Member of the Commission, which requires 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. 125.3. That in any adjudicatory function of the State Commission, it is mandatory for a member having the aforesaid legal expertise to be a member of the Bench. viii) The Delhi High Court in Mahindra Electric Mobility Limited v. Competition Commission of India 2019 SCC OnLine Del 8032 dealt with the constitution of Competition Commission of India. The Court therein relying on Utility Users (supra) held that where a tribunal performs judicial functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts. ix) Subsequently, the decision in Utility Users (supra) holding that a judicial order can only be passed by a judicial member and constitution of such tribunal without a judicial member is unconstitutional was followed by various High Courts. In Assam Power Distribution Company Ltd. v. Eastern India Powertech Ltd. 2021 SCC OnLineGau 1198, the Gauhati High Court held as follows: 24. The point of determination no. (c) is taken up now. In this regard, having arrived at a conclusion in connection with point of determination no. (b) that without there being a Judicial Member in the respondent no. 2 Commission, could not have undertaken judicial function as envisaged under Section 86(1)(f) of the Electricity Act, 2003. Therefore, this is a case where principles of coram non judice would apply in respect of orders dated 21.09.2018, 06.10.2018. Moreover, without entering into the issue as to whether the respondent no. 2 Commission could have exercised power of review, which is conferred by the statute, but nonetheless, rejection of prayer for condonation of delay as well as consequential rejection of review petition and stay petition upon rejection of petition no. 2/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id of the Supreme Court. In other words, it is the duty of the High Court to ensure that the directions of the Hon'ble Supreme Court are complied with in letter and spirit. The Hon'ble Supreme Court expressed its anguish on more than one occasion when the law Member vacancy was not filled up at all. When it has been declared that it is mandatory that there should be a law Member in the Commission, the State Government has no justification in not filling up the same. The technical Member resigned on 17.03.2022. The law Member retired on 05.05.2022. Nothing stopped the Government from filling up both the vacancies simultaneously. It is true that a judgment should not be interpreted like a statute. But when the Hon'ble Supreme Court has made it clear that there must be a Member with legal background in the Commission, it cannot be ignored. It is for this reason, I restrain TNERC from passing final order on the aforementioned tariff petitions till a law Member is appointed. In other words, the present proceedings can very well go on and everything can be finalized by the Commission as now constituted except the formal declaration of the orders on the tariff petitions. The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the two jurors, Shri Sheikh Ashiq Ali and Shri Farman Ali, were not in a position to decide the question of authorship of the forged documents satisfactorily. It was not merely a question of understanding the contents of the documents produced in the case; the jurors also had to decide whether they were written or signed by the respondent as deposed by the prosecution witnesses or not. They did not possess sufficient acquaintance with English to decide that question satisfactorily. On that finding, it is clear that the appellant's contention that it was a trial coram non judice, is well founded. This case is analogous to the case of Ras Behari Lal v. King- Emperor [(1933) LR 60 IA 354, 357] which went up to the Judicial Committee of the Privy Council, from a judgment of the Patna High Court confirming the conviction and the sentences of the accused persons on a charge of murder and rioting. In that case, the trial was by a jury of 7. The jury by a majority of six to one, found the accused guilty. The learned trial Judge accepted the verdict and sentenced some of the accused persons to death. The High court overruled the accused persons' contentions that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-est and void in the eyes of law. As stated above, a member having no experience in the field of law is ineligible to pass judicial orders. xiv) It is relevant to note that under Section 6(2) of the PMLA, members having experience in the field of law and members having experience in the fields of finance, accountancy or administration can be appointed. Section 6(3) of the PMLA prescribes qualifications for a member in the field of law as someone who is qualified for appointment as a District Judge or being qualified for appointment as a member of Indian Legal Service and has held a post in Grade I of that service. However, no such qualification is prescribed under PMLA for appointment of a member having experience in the fields of finance, accountancy or administration. Further, the Prevention of Money-Laundering (Appointment and Conditions of Service of Chairperson and Members of Adjudicating Authorities) Rules, 2007 (hereinafter Rules, 2007 ) do not prescribe any qualifications relating to experience in law for appointment of members having experience in the fields of finance, accountancy or administration. Rule 3 of the Rules, 2007 is extracted below: 3. Qualification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Mr K.K. Venugopal would be incorporated on disposal of the above writ petition. For convenience, let us refer to the doubts raised by the petitioner and amended/proposed provisions as well as the remarks of the department in complying with the same: Sl. No. Issues Amended/Proposed provision Remarks 1. Rule 3(3) of the Adjudicating Authority Rules, 2007 does not explicitly specify the qualifications of member from the field of finance or accountancy Rule 3(3) of the Adjudicating Authority Rules, 2007 have been amended to specify the academic qualification for the member from the field of finance and accounting by inserting a subclause (b) as follows: (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 in charge of the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 323B of the Constitution of India and Adjudicating Authority is not constituted under the said constitutional provisions. The relevant paragraphs of J. Sekar (supra) are extracted below: 82. It was then contended on the strength of the decisions in L. Chandrakumar v. Union of India (1997) 3 SCC 261; Eastern Institute for Integrated Learning v. Joint Directorate 2016 Cri LJ 526, Vishal Exports Overseas Ltd. v. Union of India (decision dated 9th March 2016 of the Gujarat High Court in SCA No. 13949 of 2014) and Uday NavinchandraSanghani v. Union of India (decision dated 1st April 2016 of the Gujarat High Court SCA No. 10076/2015) that even that Single Member has to necessarily be a Judicial Member (JM) and not an Administrative Member (AM). 83. The reliance on L. Chandrakumar v. Union of India (supra) is misplaced. There the question was whether the ousting the jurisdiction of the High Court and vesting the powers of the High Court in a Tribunal is constitutionally valid. That is not what is sought to be done under Section 8 PMLA. It is only to provide an internal judicial review of the orders passed by the authorities under Section 5(1) PMLA. The AA under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy is a facet of natural justice. xx) To decide this issue, this Court holds that issuance of show cause notice under Section 8(1) of the PMLA and passing an order under Section 8(3) of the PMLA confirming the provisional attachment of properties are quasi-judicial functions. Therefore, an Adjudicating Authority consisting of a single member cannot pass quasi-judicial orders, unless such single member has experience in the field of law. Any quasi-judicial function performed by a single member having experience in the field of finance, accountancy or administration is non-est and would be hit by coram non judice. A single member Adjudicating Authority shall necessarily and mandatorily has to be manned by a person having experience in the field of law. Issue No. 2 is answered accordingly. xxi) In the present case, the show cause notice under Section 8(1) of the PMLA were issued and confirmation orders under Section 8(3) of the PMLA were passed by a single member having no experience in law. Therefore, the said show cause notices and confirmation orders are non-est and are liable to be set aside. 15. Issue No.3: Whether the period from 15.03.2020 to 28.02.2022 which was exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has taken suo motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under special laws (both Central and/or State). 2. To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective courts/tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or special laws whether condonable or not shall stand extended w.e.f. 15-3- 2020 till further order(s) to be passed by this Court in present proceedings. v) Subsequently, the limitation period was extended vide In re: Cognizance for Extension of Limitation (2022) 3 SCC 117 (hereinafter In re: Limitation, 2022 ) till 28.02.2022. The Apex Court vide the said order clarified that where any statute provides an outer limit of limitation perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Act, 1996. Similarly, Section 12A(3) of the Commercial Courts Act, 2015 provides an outer time period of three months within which pre-institution mediation shall be completed. However, by virtue of In re: Limitation, 2022 (supra), the period from 15.03.2020 to 28.02.2022 shall be excluded to compute the period of 3 months. Therefore, In re: Limitation, 2022 (supra) states that wherever a statute prescribes a maximum period within which proceedings have to be completed, the period from 15.03.2020 to 28.02.2022 shall be excluded to compute such maximum period. vii) To decide the applicability of In re: Limitation (supra) in computation of 180 days for confirming the provisional attachment of property, it is apposite to discuss the nature of time frame prescribed under Section 5 of the PMLA. For the sake of convenience, Section 5 is extracted below: 5. Attachment of property involved in money-laundering. 29[(1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made undersub-section (3) of Section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation. For the purposes of this sub-section, person interested , in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. viii) Section 5(1) of the PMLA provides that the authorized officer can provisionally attach properties for a period not exceeding 180 days. The third proviso to Section 5(1) of the PMLA states that if the proceedings initiated under the PMLA are stayed by the High Court, then such period during which the stay operates shall be excluded in computing the 180-day period. Further, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph is extracted below: 22. In view of the above discussion, this Writ Petition is disposed of granting two months time from today to the petitioners to submit their explanation/reply to the show cause notice dated 19.09.2022. However, it is made clear that the petitioners herein shall not seek further extension of time and they shall submit explanation/reply within the said extended period of two months by keeping in view the object and legislative intent of Section 8 of the Act, that the adjudicating process is time bound. It is relevant to note that for the purpose of computing the period of 180 days, the period which was extended by this Court for submitting reply is excluded as per third proviso to Section 5(1) of the Act. xi) The decision in Karvy Realty (supra) confirmed by a division bench of this Court vide order dated 13.02.2023 in W.A. No. 194 of 2023. xii) According to this Court, in appropriate cases, certain period can be excluded while computing the 180 day period under Section 5(3) of the PMLA. It is important to note exclusion of certain period is different from extending the period. In the present case, the Apex Court exercising its inherent power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for Extension of Limitation, In re, (2020) 19 SCC 10] never meant to curtail any provision of the Code of Criminal Procedure or any other statute which was enacted to protect the personal liberty of a person. The right of prosecution to file a charge-sheet even after a period of 60 days/90 days is not barred. The prosecution can very well file a charge-sheet after 60 days/90 days but without filing a charge-sheet they cannot detain an accused beyond a said period when the accused prays to the court to set him at liberty due to non-filing of the charge-sheet within the period prescribed. The right of prosecution to carry on investigation and submit a chargesheet is not akin to right of liberty of a person enshrined under Article 21 and reflected in other statutes including Section 167CrPC . **** 28. We, thus, are of the clear opinion that the learned Single Judge in the impugned judgment [S. Kasi v. State, 2020 SCC OnLine Mad 1244] erred in holding that the Lockdown announced by the Government of India is akin to the proclamation of Emergency. The view of the learned Single Judge that the restrictions, which have been imposed during the period of Lockdown by the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the learned Single Judge of the Madras High Court in Settu v. State [Settu v. State, 2020 SCC OnLine Mad 1026] as well as by the Kerala High Court [Mohd. Ali v. State of Kerala, 2020 SCC OnLine Ker 1742] , the Rajasthan High Court [Pankaj v. State, 2020 SCC OnLine Raj 867] and the Uttarakhand High Court [Vivek Sharma v. State of Uttarakhand First Bail Application No. 511 of 2020, order dated 12-5-2020 (Utt)] noticed above. xv) Relying on the decision in S. Kasi (supra), a learned single judge of the Delhi High Court in Vikas WSP Ltd. (supra) held that provisional attachment of properties deprives a party of his right to property. Therefore, In re: Limitation (supra) does not extend to PMLA proceedings in computation of 180 days within which provisional attachment of properties has to be confirmed by the Adjudicating Authority. The Court therein also held no period of limitation is prescribed under Section 5(1) 5(3) of the PMLA and after the lapse of 180 days, the Adjudicating Authority becomes functus officio. Further, had the legislature or the Government thought it fit, they would have expressly extended the period within which provisional attachment of properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, which clearly shows that the above referred two orders of the Supreme Court were only in relation to the period of limitation and did not extend the period to do something required under a Statute or the period of validity of an order, as in the present case. Realizing such difference, the Supreme Court extended the period to pass an Arbitral Award under Section 29A and for completion of pleadings under Section 23(4) of the Arbitration and Conciliation Act, 1996 as also for completing the process of compulsory pre-litigation, mediation and settlement under Section 12A of the Commercial Courts Act, 2015, however, refused to extend the period of validity of a cheque. This itself shows that the orders of the Supreme Court are not a universal extension of time across the board, be it limitation or period prescribed for doing a particular thing, or as in the present case, the period of validity of an order. 32. The above distinction is also apparent to the Government of India as it promulgated The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 on 31.03.2020, extending the time limit for completion of any proceedings or passing of any order etc. spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-judicial authority and cannot take the benefit of the order of the Hon'ble Supreme court passed in Suo moto Writ Petition (Civil) No. 3 of 2020 (supra) by taking the stand that on the expiry of validity of the said provisional attachment order after 180 days under Section 5 (3) of the aforesaid Act, the same would be deemed to have been extended automatically by virtue of the aforesaid order of the Hon'ble Supreme Court when he was not required to pass any formal order of extension of the same under Section 8 (3) of the aforesaid Ac t . I am of the considered opinion that such stand of the Respondent No. 2 is legally not sustainable since the impugned order of provisional attachment of bank accounts and postal accounts in question of the petitioner, dated 11th December, 2019, which has expired its validity on 9th June, 2021, has no force after expiry of 180 days from the date of passing of such order in view of not passing any formal order under Section 8 (3) of the said Act extending the validity of the same by the Respondent No. 2 and the action of Respondent No. 3 in not allowing the petitioner to operate its bank and postal accounts in question after the expiry of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (c) of the Negotiable Instrument Act, 1881. On an examination of the specific statutes mentioned by the Supreme Court, it will be seen that all these statutes prescribed provide for specific time frame for instituting a suit, filing a claim/counter claim or an application in furtherance of a remedy provided under the statute. The intention was hence to preserve the right of a litigant to seek a remedy under the Act and not to deprive a litigant of such right of remedy where the litigant has not been able to physically come to the Court or to the Tribunal to file the proceeding in aid of the right. 16. The right thus conferred by the Supreme Court is in relation to the prescribed period of limitation in instituting a proceeding . **** 18. Section 5(3) is a clear embargo on the order of attachment continuing to have effect after the expiry of 180 days. Section 5(1) designates the authority and the steps to be taken for proceeding against any person who is in possession of any proceeds of crime. The section is hence concerned with the procedure to be undertaken for provisional attachment of a property subject to the fulfillment of the other conditions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. The Supreme Court made a distinction between the benefit given to litigants and extension of time for filing of a chargesheet by the police as contemplated under Section 167(2) of the Cr.P.C. The Court also noted the element of personal liberty of a person which was required to be protected. Although, the right of the petitioners before the Court is more to do with the right not to be deprived of property save by authority of law - Article 300A, the petitioners have established a case where such right is under threat by the action of the ED. The litigants have been conferred a benefit under Section 5(1)(b) and 5(3) of the PMLA on the failure of the Authority to take action within the specified time frame. If the Authority does fail to take requisite steps, the right to relief arises immediately after exhaustion of the 180 days window and once such right is given to a litigant, it cannot be taken away. This Court respectfully disagrees with the views expressed in Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra) in relation to applicability of In re: Limitation (supra). xviii) According to this Court, the decision in S. Kasi (supra) cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The need to take possession of the attached property would arise only for giving effect to the order of confiscation. This is also because sub-section (6) of Section 8 postulates that where on conclusion of a trial under the 2002 Act which is obviously in respect of offence of money-laundering, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it . Once the possession of the property is taken in terms of sub-section (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the peculiar facts of a particular case so as to invoke the option available under sub-section (4) of Section 8. 305. Indisputably, statutory Rules have been framed by the Central Government in exercise of powers under Section 73 of the 2002 Act regarding the manner of taking possession of attached or fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led this Court to again deal with the matter in SMWP No. 3 of 2020 on an application bearing No. 21 of 2022; and by the order dated 10-1-2022 [Cognizance for Extension of Limitation, In re, (2022) 3 SCC 117 : (2022) 2 SCC (Civ) 46 : (2022) 1 SCC (Cri) 580 : (2022) 1 SCC (L S) 501], this Court again restored the principal order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] and in continuation of the previous orders, has further 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. Be that as it may, the fresh order in SMWP No. 3 of 2020 need not be elaborated for the present purpose.] **** 32.2. In fact, in S. Kasi case [S. Kasi v. State, (2021) 12 SCC 1 : 2020 SCC OnLine SC 529] , this Court also noticed that a coordinate Bench of the same High Court had already held [Settu v. State, 2020 SCC OnLine Mad 1026] that the said order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] did not cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue open to enable the petitioner to agitate the same before the Appellate Tribunal. xxiv) This Court also disagrees with the view adopted in Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra). The decision in Vikas WSP Ltd. (supra) was stayed by a Division Bench of the Delhi High Court vide order dated 08.01.2021 in LPA 362/2020. In any case, the question regarding the application of In re: Limitation (supra) was left open. xxv) As far as Gobindo Das (supra), is concerned, though it is true that Adjudicating Authority is not a litigant, the authorized officer representing the ED is a litigant to the proceedings initiated under PMLA and for the purpose of application of In re: Limitation (supra). Therefore, where the ED has been diligent in provisionally attaching the property and filing the original complaint within 30 days under Section 5 of the PMLA, prejudice cannot be caused to it by not excluding the period from 15.03.2020 to 28.02.2022. One litigant s interests cannot be protected at the cost of another. This Court would further like to stress that the provisionally attached properties can still be enjoyed under Section 5(4) of the PMLA. xx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and held that provisional attachment of properties ceases to have effect if the same is not confirmed within a period of 180 days. The learned single judge held that the Adjudicating Authority becomes functus officio after the expiry of the 180-day period and cannot act on the original complaint under Section 5(5) of the PMLA. In other words, the learned single judge held that even the original complaint ceases to have effect after the lapse of the 180-day period. The relevant paragraphs are extracted below: 25. In the present case, the Act clearly deprives the person against whom the 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 ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority under Section 8(3) of the PMLA cannot confirm the provisional attachment of properties after a lapse of 180 days. However, even after a lapse of the 180-day period, it can give a finding whether such provisionally attached properties were involved in the offence of money laundering or not under Section 8(2) of the PMLA. viii) The decision in Fairdeal Supplies (supra) states that Adjudicating Authority does not become functus officio after a lapse of 180 days for all purposes. The Adjudicating Authority can still continue with the adjudication and give a finding under Section 8(2) of the PMLA. However, it cannot confirm the provisional attachment under Section 8(3) of the PMLA. The relevant paragraphs in Fairdeal Supplies (supra) are extracted below: 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 ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of provisional attachment has lost its force by efflux of 180 days, however cannot be an impediment for the Adjudicating Authority in hearing a matter in terms of section 8(1) and 8(2) of PMLA. The narrow construction of the stature as sought to be made by the petitioners, therefore cannot be accepted as it will lead 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 moneylaundering 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 5(1) of the PMLA by passing a fresh provisional attachment order by recording their reasons to believe. While issuing the said fresh attachment order, the ED shall again strictly follow the entire procedure as prescribed under Sections 5 8 of the PMLA and the relevant Rules thereunder. xii) In other words, ED should record the reasons to believe before issuing the fresh provisional attachment order, forward such fresh provisional attachment order to the Adjudicating Authority and the Adjudicating Authority shall again satisfy itself that the properties were involved in money laundering and shall issue a fresh show-cause notice in relation to the fresh provisional attachment order, the parties shall again be given a right of hearing before passing orders under Sections 8(2) and 8(3) of the PMLA. Needless to say that after issuance of the fresh provisional attachment order, the confirmation shall be completed within a period of 180 days. xiii) As far as the decision in Fairdeal Supplies (supra) is concerned, this Court respectfully disagrees with the view expressed by the Calcutta High Court. According to this Court, the decision in Fairdeal Supplies (supra) results in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority already records a finding under Section 8(2) of the PMLA that the properties were involved in money laundering, then the entire process in relation to the fresh provisional attachment order is redundant as a view is already expressed against the person whose property is sought to be attached. xvii) In other words, a person whose property is sought to be attached by issuing a fresh provisional attachment order is prejudiced as a finding is already recorded against him in relation to the earlier provisional attachment order. The effect of such a situation is a farce. The procedure to be followed after issuing a fresh provisional attachment order under Sections 5 8 of the PMLA i.e., recording of reasons to believe by the authorized officer and the Adjudicating Authority, issue of show cause notice and consequent adjudication is rendered ineffective as the Adjudicating Authority had already reached the conclusion that the properties were involved in money laundering. Therefore, this Court disagrees with the view expressed by the Calcutta High Court in Fairdeal Supplies (supra). xviii) Issue no. 4 is decided by holding that the Adjudicating Authority will becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings in relation to O.C. No. 1799 of 2022 till the Adjudicating Authority is duly constituted either with a single member having experience in the field of law or with two members one of whom shall necessarily be a member having experience in the field of law. Further, the period from the date of issuing show cause notice till the date when the Adjudicating Authority is duly constituted shall be excluded in computing the 180-day period under Section 5(3) of the PMLA. iii. I.A. No. 1 of 2022 in W.P. No. 44343 of 2022 is allowed, and the order dated 01.12.2022 confirming the provisional attachment of properties is stayed along with all further proceedings in relation to O.C. No. 1680 of 2022 till the Adjudicating Authority is duly constituted either with a single member having experience in the field of law or with two members one of whom shall necessarily be a member having experience in the field of law. iv. W.P. No. 34627 of 2022 is allowed and the entire proceedings emanating from provisional attachment order dated 01.02.2021, the original complaint bearing O.C. No. 1410 of 2021 and consequent show cause notice dated 03.03.2021 are set aside as the Adjudicating Authority f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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