TMI Blog2023 (8) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... idering such an issue, namely appointment to tribunals which are in aid of the judicial branch namely tribunals constituted under Section 323A and 323B of the Constitution, the court made pointed observations as to the constitution of Search and Selection Committees to such tribunals, and held that the judicial dominance in the composition of the Search and Selection Committees is required to ensure independence of tribunals. Therefore, decision in Madras Bar Association would be inapplicable to the facts and circumstances of the case on hand. Absence of two members in the adjudicating authority whether a single member has become quorum non judis and cannot take up the cases for adjudication - HELD THAT:- Section 6 of the PMLA Act deals with adjudicating authorities, composition, powers etc. Sub Section (1) of Section 6 states that the Central Government shall by notification appoint and adjudicating authority to exercise jurisdiction, powers and authority conferred by or under the Act. Sub Section (2) states that the adjudicating authority shall consists of a Chairperson and two other members. The proviso states that one member each shall be a person having experienced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle member bench is entitled to adjudicate the matter and any other interpretation would tantamount to distorting the language adopted in the statute which is impermissible. The appellant has not made out any case for interference with the order passed by the learned single bench. Accordingly, the appeal fails and it is dismissed. - HON BLE MR. CHIEF JUSTICE T.S. SIVAGNANAM AND HON BLE MR. JUSTICE HIRANMAY BHATTACHARYYA Appearance:- For the Appellants : Mr. Jayanta Kumar Mitra, Adv. Mr. Bikash Ranjan Bhattacharya, Adv. Mr. S. Ghosh, Adv. Mr. Subhankar Nag, Adv. Mr. R. Ganguly, Adv. For the Respondent No. 2 : Mr. Arijit Chakrabarti, Adv. Mr. Deepak Sharma, Adv. JUDGMENT (T.S. SIVAGNANAM, CJ.) 1. This intra court appeal filed by the writ petitioner is directed against the order dated 16.06.2023 in WPA No. 12335 of 2023. The said writ petition was filed by the appellant praying for issuance of a writ of declaration that the adjudicating authority under the provisions of the Preventing of Money Laundering Act, 2002 (the Act), the first respondent herein is statutorily incompetent to take up the case of the appellant in respect of OA No. 798 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrieval in the office of the investigation agency. The Special Court rejected the said application. Challenging the same, the appellant filed revision petition before this court in CRR No. 143 of 2023. In the said revision case, a direction was issued that the appellant shall be present in the office of ED on 13.01.2023 after which the Assistant Director, ED to prepare sealed cover of seized mobile phones and laptops in his presence and the articles will be sent to CFSL for data extraction and CFSL will in turn submit a report. This order was further clarified that the proceedings under Section 17(4) of the PMLA Act can continue but the adjudicating authority should not consider the CFSL report. On 05.05.2023, the first respondent informed the appellant that OA No. 798 of 2023 is listed on 12.05.2023 for final disposal before the adjudicating authority. It is stated that the learned advocate for the appellant prayed for adjournment as reply had been served to him during the course of the hearing and expressing certain other inconvenience as the learned advocate for the appellant was placed at Delhi at the relevant time. It is stated that the said prayer was rejected and the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expression shall has been used which makes it mandatory for the authority to consists of three members. 6. The respondent, Enforcement Directorate (ED) contended that the appellants have been repeatedly attempting to stall the proceedings initiated under Section 17(4) of the Act by filing criminal revision petitions and also the present writ petition. It was contended that the proceedings under Sub Section (4) of Section 17 is only a preliminary stage and the question of granting a detailed or elaborate hearing does not arise. It was further contended that in terms of the Section 6(7) of the PMLA Act only if at any stage of hearing of any case or matter it appears to the Chairperson or the member that the case or the 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 transfer, to such bench as the Chairperson may deem fit. Hence, it was contended that the normal rule is hearing by a Single Bench and not by two or more members and the circumstances arising under Sub Section (7) of Section 6 is an exception which is provided to refer the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an option of constituting a bench with one or more members was considered and it was held that such argument is rather academic in view of the Chairperson having expressed his intention to constitute himself as the bench. The argument of the Enforcement Directorate that under Sub Section (7) of Section 6 the normal rule is to constitute a bench consisting of single member and the only in case the Chairperson or member finds that the adjudication is critical or compliance, the matter shall be referred to a multiple member bench was sustained. Thus, it was held that the Chairperson did not commit any jurisdictional error in himself being a single member to entertain and proceed with the hearing of the application pending before the authority. The court also found that sufficient opportunity has already been given to the appellants by the adjudicating authority and the next date of hearing was fixed on 16.06.2023. The Hon ble Court also pointed out that repeated attempts of the appellant to come up in challenge in connection with the pending proceedings indicates that the appellant wants to stall the same unnecessarily and such dilatory tactics on the part of the appellant ought not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Directorate submitted that Sub Section (2) of Section 6 states that an adjudicating authority shall consists of a Chairperson and two other members but the statute does not state that the bench shall consists of two members and in terms of Sub Section (5) (b) of Section 6,a bench may be constituted by the Chairperson with one or two members as the Chairperson of the adjudicating authority may deem fit. Reference was also made to Sub-Section (7) of Section 6. The learned counsel referred to the decision of the High Court of Delhi in Alaknanda Realtors Private Limited and Others Versus Deputy Director, Directorate of Enforcement, WP(C) 12243/2022 dated 12.09.2022. The decision in the case of Gold Croft Properties Private Limited was also pressed into service. It was contended that the decision of the Hon ble Supreme Court in Pareena Swaroop would support the case of the department more particularly, in the suggestions made for amendment of the rules qua the adjudicating authority as could be seen from the paragraph 11 of the said judgment. Further it is contended that the issue involved in the said case deals with the appellate tribunal and not with a case concerning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k economy, which is unaccounted and many a time the holders of black money also launder the black money in order to acquire legitimate assets. It is further opined that laundering the black money and laundering proceeds of crimes are two different issues although there is frequent overlap between the two. The learned author points out while laundering black money is to be handled through taxation laws or similar laws, the laundering of proceeds of crime is to be handled through special anti-money laundering laws. At this juncture, it will be beneficial to refer to the decision of the Hon ble Supreme Court in Ram Jeth Malani Versus Union of India (2011) 8 SCC 1. 17. In Maqbool Hussain Versus State of Bombay AIR 1953 SC 325 Constitution Bench of the Hon ble Supreme Court laid down various tests for determining whether a tribunal can be considered to be a judicial tribunal and after referring to several decisions and the relevant provisions of the Sea Customs Act, 1878 and the nature of adjudicatory proceedings as contained in that Act, held that an adjudicatory authority functioning under the Act was merely an administrative machinery for the purpose of adjudicating confis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judiciary to decide the cases under the Act but the members and the Chairpersons to be selected by the Selection Committee headed by the Revenue Secretary. It was agreed that the suggestions for amendment to be incorporated after the writ petition is being disposed of. 19. In sub para 7(3) of para 11 of the judgment with regard to the adjudicating authority, it had been stated that the adjudicating authority is a body of experts from different fields to adjudicate on the issue of confirmation of provisional attachment of properties involved in money laundering. The functions of the adjudicating authority are civil in nature to the extent that it does not decide on the criminality of the offence nor does it have power to levy penalties or impose punishment. 20. In sub-para 4 of para 11, it is stated that adjudication is a function which is performed by the executives under many statutes. The competent authority under NDPS/SAFEMA have been conducting adjudication proceedings routinely since 1978 from 2004 to 2008, the competent authority has taken up 1374 new cases, issued 275 show cause notices, forfeited 162 properties and disposed of 30 properties without any judicial object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exercise jurisdiction, powers and authority conferred by or under the Act. Sub Section (2) states that the adjudicating authority shall consists of a Chairperson and two other members. The proviso states that one member each shall be a person having experienced in the field of law, administration and finance or accountancy. 23. Sub-Section (3) deals with the qualification of being appointed as members of an adjudicating authority. Clause (a) deals with the persons in the field of law and Clause (b) deals with the persons in the field of finance, accountancy or administration and he is required to possess such qualification as may be prescribed. 24. Sub-Section (4) empowers the Central Government to appoint a member to be a Chairperson of the adjudicating authority. Clause (a) of Section 6(5) states that the jurisdiction of the adjudicating authority may be exercise by benches thereof. In terms of Clause (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. 25. Sub-Section (6) of Section 6 states that notwithstanding anything contained in Sub-Section (5) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 01.07.2005. The fact that there is a vacancy in the post of a member or more than one member will not impact the appointment of the adjudicating authority in terms of Sub-Section (1) of Section 6. The manner in which the adjudicating authority has to function or in other words as regards, the constitution of the benches there is clear stipulation in Clause (b) of Sub Section (5) of Section 6 that 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. Therefore, it would be incorrect interpretation on the part of the appellant state that the adjudicating authority namely the Chairperson who has presently taken up the case for adjudication has no jurisdiction to do so. A plain reading of the provision makes it clear that the Central Government is empowered to appoint an adjudicating authority by issue of notification in the Gazette to exercise the jurisdiction, powers and authority conferred by or under the Act and in accordance with the said provision the Central Government has issued a notification on 01.07.2005 and have appointed the adjudicating authority to exercise ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction of the High Court and vesting the powers of the High Court in a tribunal is constitutionally valid. It was held that such is not sought to be done under Section 8 of the PMLA Act. It was further held that adjudicating authority while proceeding with the adjudication in terms of Section 8 of the Act cannot be equated with the Administrative Tribunal under the Administrative Tribunal Act, 1985 as the tribunal was constituted under Section 323 B of the Constitution of India and that the adjudicatory authority is not that kind of a tribunal. 29. In J. Sekar two decisions, one of the High Court of Sikkim and the other of the High Court of Gujarat were relied on by the petitioners which were decisions of Hon ble Single Benches of the respective high courts. The Hon ble Division Bench in J. Sekar held that they are unable to agree with the decision by the learned single benches of the Sikkim and Gujarat High Courts as in the said decisions, it has not been noticed that under Section 25 of the PMLA Act, an appeal is provided for from the order of the adjudicating authority before the appellate tribunal and such appellate tribunal is not equivalent to the High Court since an appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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