2014 (2) TMI 1305 - HC - Money Laundering

Order of provisional attachment - Jurisdiction of judicating Authority which has subordinate jurisdiction to that of a High Court confirming the order of provisional attachment especially when the petitions filed by the appellants-original petitioners were pending before this Court - alternative remedy - Held that - Section 35 of the PMLA Act provides the procedures and powers of Appellate Tribunal under the Act. It goes without saying that the Act itself is a self-contained Act and therefore even after a contention is raised by both learned Sr. Advocates Mr. Thakore and Mr. Joshi that the Tribunal shall have no jurisdiction same does not find favour with us. Also unable to persuade ourselves to accept the submission made by the learned Sr. Advocates that the Tribunal would not exercise jurisdiction only because the concerned authority has relied upon a decision of the Andhra Pradesh High Court which is a subject-matter of appeal before the Hon ble Apex Court. Be that as it may the Act being a complete Code in itself and in view of the fact that we are inclined to dismiss the appeals only on the ground of jurisdiction the other submissions made and the decisions cited by the learned Counsels for the appellants and the respondents are not delve upon in extenso by us leaving it open for the parties to raise the same before the appropriate forum in appropriate proceedings. The reason for the same being this Bench is of the opinion that the learned Single Judge has after considering the provisions of the Act has relegated the parties to the most efficacious alternative remedy available to them under the law and we do not think that we would like to interfere with same.

Summary

Issues Involved:
1. Challenge to the provisional attachment order under the Prevention of Money Laundering Act, 2002 (PML Act).
2. Jurisdiction of the Adjudicating Authority and the Appellate Tribunal under the PML Act.
3. Bona fide purchaser defense and the impact of pending appeals.

Detailed Analysis:

1. Challenge to the Provisional Attachment Order:
The appellants, referred to as the original petitioners, challenged the orders of provisional attachment dated 15.03.2012 and the subsequent confirmation of these orders by the Adjudicating Authority on 10.07.2012. The petitioners argued that the attachment was based on allegations from a charge sheet dated 26.11.2009, which claimed that the funds used to purchase the subject properties were proceeds of crime, derived from fraudulent activities by respondent No.5 and its directors.

2. Jurisdiction of the Adjudicating Authority and the Appellate Tribunal:
The appellants contended that the Adjudicating Authority, which has subordinate jurisdiction to that of a High Court, should not have passed the order confirming the provisional attachment, especially when petitions were pending before the High Court. They argued that the Tribunal would not exercise jurisdiction because the Adjudicating Authority relied on a decision from the Andhra Pradesh High Court, which was under appeal in the Supreme Court. The court, however, held that the PML Act is a self-contained code, and the Tribunal does have jurisdiction to adjudicate such matters. The court emphasized that the appellants had already preferred appeals before the Appellate Tribunal, which were still pending.

3. Bona Fide Purchaser Defense and Impact of Pending Appeals:
The petitioners claimed to be bona fide purchasers of the properties, having acquired them through public auctions conducted under the SARFAESI Act. They argued that they were unaware of any fraudulent activities and had conducted due diligence before purchasing the properties. Despite these claims, the court noted that the provisional attachment was not final and that the appellants had the option to pursue their appeals before the Appellate Tribunal.

Conclusion:
The court dismissed the appeals, emphasizing that the PML Act provides a comprehensive legal framework, including the procedures and powers of the Appellate Tribunal. The court found no merit in the appellants' argument that the Tribunal lacked jurisdiction and upheld the learned Single Judge's decision to direct the parties to the Tribunal for an efficacious alternative remedy. The court did not delve into other submissions and decisions cited by the parties, leaving them open for consideration by the appropriate forum. The interim relief granted by the Bench was vacated, and no costs were ordered.