2014 (3) TMI 137 - HC - Money Laundering

Principle of natural justice - appellant contends that if the appellants have a right in law to cross-examine the witnesses whose testimonies are intended to be used against the appellants, why should this Court not interfere at this stage itself instead of allowing the Adjudicating Authority to proceed on a futile exercise and which will only result in multiplicity of proceedings. - Proceedings under Prevention of Money Laundering Act, 2002. Held that - The Adjudicating Authority is currently seized of and in seisin of the complaints. We, at this stage, do not know as to which way the order of the Adjudicating Authority will go. It cannot also be said at this stage whether the Adjudicating Authority even if deciding against the appellants will rely upon the material before it qua which the appellants claim a right of cross-examination. All this can be known only when the Adjudicating Authority passes an order and qua which if the appellants are aggrieved, the appellants shall have their statutory remedy. Any interference by us at this stage in the proceedings of which the Adjudicating Authority is seized is thus uncalled for and would result in a situation which the Supreme Court has warned the High Courts to avoid. - The Supreme Court 2006 (11) TMI 543 - SUPREME COURT OF INDIA held that the writ jurisdiction being discretionary, should not ordinarily be exercised by quashing a show cause notice. - Decided against the petitioners.

Summary

Issues:
Dismissal of writ petitions seeking opportunity for cross-examination before Adjudicating Authority under Prevention of Money Laundering Act, 2002.

Analysis:
The case involved intra court appeals challenging identical orders of dismissal of writ petitions by the learned Single Judge. The respondent Directorate of Enforcement provisionally attached property under the Prevention of Money Laundering Act, 2002, against the appellants. The appellants sought permission for cross-examination of witnesses, but the Adjudicating Authority did not pass a speaking order on the applications, leading to the filing of writ petitions. The Single Judge dismissed the writ petitions, allowing the appellants to raise grievances after the final order by the Adjudicating Authority.

The senior counsel for the appellant argued that the Adjudicating Authority should pass a speaking order on the applications for cross-examination. However, the court referred to legal precedents emphasizing the need to avoid stalling final adjudication by challenging preliminary issues. The court highlighted the burden of proof on the accused, the importance of natural justice, and the statutory remedy available to the appellants under the Act.

The court questioned the necessity of interference at that stage, considering the ongoing proceedings before the Adjudicating Authority. It cited Supreme Court rulings on the premature nature of challenging show cause notices and the discretionary nature of writ jurisdiction. The court upheld the Single Judge's decision, stating that the rights of the appellants were protected, and there was no demonstrated prejudice suffered by them. Consequently, the appeals were dismissed without costs.

In conclusion, the court found no merit in the appeals challenging the dismissal of the writ petitions seeking cross-examination before the Adjudicating Authority. The decision emphasized the importance of allowing statutory remedies and avoiding premature interference in ongoing proceedings, in line with established legal principles and precedents.