2013 (2) TMI 343 - HC - Money Laundering

Attachment of Property whether the order of provisionally attachment passed by the Enforcement Director ceases to have effect after expiry of period of 150 days petitioner has objected on the ground that the time period of 150 days as laid down in sub Section (3) of Section 5 of the. At, 2002 has since lapsed and, as such, the complaint cannot be adjudicated upon by the Adjudicating Authority Held that - The principle is rested upon a public policy enunciated in the maxim actus curiae neminem gravabit . This maxim is founded upon justice and good sense and also affords safe and certain guide for the administration of law. By virtue of the intervention of a Court, which intended to examine the veracity of the claim made in the case, no party can be construed to have been prejudice by the delay that occasioned in testing the question by the Court. The principle laid down shall also be applicable in the facts of the present case. The delay caused on account of the proceedings having been stalled on the statement made by the respondent which he later on sought to rectify by moving an application for proponing of the date of hearing, cannot be used to prejudice the respondents. Thus, the period from the date when the respondent gave an undertaking before this Court i.e. 07.06.2011 till the passing of the order shall have to be excluded from the stipulated time period of 150 days as provided under the Act, 2002 for the purpose of sub Section (3) of Section 5 of the Act, 2002 Petitions disposed of with liberty to the petitioner to file his reply/response.

Issues Involved:
1. Quashing of the summoning order dated 08.12.2010.
2. Availability of alternative statutory remedy under the Prevention of Money Laundering Act, 2002 (PMLA).
3. Compliance with the 150-day period for provisional attachment under Section 5 of the PMLA.
4. Exclusion of time due to court proceedings from the 150-day period.

Issue-wise Detailed Analysis:

1. Quashing of the Summoning Order:
The petitioner sought to quash the summoning order dated 08.12.2010 and all subsequent proceedings initiated under the PMLA. The respondent argued that the proceedings under the PMLA were quasi-judicial in nature and an appeal could be filed before the Appellate Tribunal against the order of the Adjudicating Authority. The court found merit in the respondent's argument, emphasizing that the petitioner should utilize the alternative statutory remedy available under the PMLA.

2. Availability of Alternative Statutory Remedy:
The court highlighted that Chapter III of the PMLA deals with attachment, adjudication, and confiscation of property. Section 5 of the PMLA allows for the provisional attachment of property involved in money laundering. The court noted that Section 26 of the PMLA provides an opportunity for appeal to the Appellate Tribunal against the Adjudicating Authority's order. Additionally, Section 42 allows for an appeal to the High Court against the Appellate Tribunal's decision. The court emphasized that the petitioner had the liberty and right to respond to the notice issued by the Adjudicating Authority and, if necessary, appeal to the Appellate Tribunal and the High Court.

3. Compliance with the 150-day Period for Provisional Attachment:
The petitioner argued that the 150-day period for provisional attachment under Section 5(3) of the PMLA had lapsed, rendering the complaint non-adjudicable. The court found no merit in this argument, noting that the matter had reached the Adjudicating Authority and was listed for hearing before the expiry of the stipulated period. The delay was caused by the respondent's undertaking before the court, and the respondent had sought to expedite the hearing. The court concluded that the delay caused by court proceedings should not prejudice the respondent.

4. Exclusion of Time Due to Court Proceedings:
The court referred to a judgment by the Andhra Pradesh High Court, which held that the period during which court proceedings were pending should be excluded from the 150-day period for provisional attachment under Section 5(3) of the PMLA. The court applied this principle to the present case, excluding the period from the date of the respondent's undertaking (07.06.2011) until the passing of the order from the 150-day period. This exclusion ensured that the proceedings were not prejudiced by the delay caused by court intervention.

Conclusion:
The court disposed of the petitions, granting the petitioner the liberty to file a response to the notice served by the Adjudicating Authority. The Adjudicating Authority was directed to decide the matter after providing a proper opportunity for a hearing, ensuring the principles of natural justice were upheld. The court emphasized that the Adjudicating Authority should not be prejudiced by the petitioner's failure to submit objections before the Enforcement Director. The petitions were disposed of in these terms, and a photocopy of the order was placed on the connected file.

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