2015 (7) TMI 1324 - HC - Money Laundering

Offence under PMLA - Provisional Order of Attachment - availability of alternate remedy - Defective notice - provision for stay in respect of the appeals to be preferred under Section 26 of PMLA - HELD THAT - Notice under Section 8(1) of PMLA is not in consonance with the provisions of PMLA, cannot be gone into by this Court at this stage, as the petitioners were granted liberty to approach the Appellate Authority. Other submission made by the petitioners, that the second respondent had also seized ₹ 50 lakhs being proceeds of crime and is also attempting to open the two lockers and take away it's contents, the legality of the said act cannot be considered by this Court at this stage, in these writ petitions, for the reason that the petitioners are having an effective alternate remedy under Section 26 of PMLA. No doubt, there is no provision for stay in respect of the appeals to be preferred under Section 26 of PMLA. However, it is settled position of law that the Appellate Authority being the creature of a Statute, is having inherent power, to grant interim orders pending disposal of the appeal, and in such a view of the matter, it is always open to the petitioners to move applications for stay. This Court is of the view that the writ petitions are not maintainable on the ground of availability of alternate remedy.

Summary

Issues:
Challenging order under Prevention of Money-Laundering Act, 2002.

Analysis:
The case involved writ petitions challenging an order passed by the Adjudicating Authority under Section 8 of the Prevention of Money-Laundering Act, 2002. The petitioners, a Public Servant and his wife, were facing allegations of offences under the Prevention of Corruption Act, 1988. The Superintendent of Police had registered a case against them, which led to a charge sheet pending in court. Additionally, a Provisional Order of Attachment was issued under the PMLA, followed by a show cause notice calling for justification of the attachment. The petitioners challenged these orders through writ petitions. The petitioners argued that the show cause notice was not in line with the PMLA and that they were not given a fair opportunity to present their defense. They also raised concerns about the seizing of funds and assets by the second respondent, claiming them to be proceeds of crime. The respondents contended that the petitioners had an effective alternate remedy under Section 26 of the PMLA, suggesting that the writ petitions were not maintainable.

The Court noted that the petitioners had previously challenged the Provisional Order of Attachment and the notice issued by the Adjudicating Authority in separate writ petitions. These petitions were closed, granting the petitioners the liberty to pursue their remedies as per the law. Therefore, the Court found that it could not address the issues raised by the petitioners in the current writ petitions as they had an alternate remedy available under the PMLA. The Court highlighted that the petitioners could approach the Appellate Authority under Section 26 of the PMLA. While acknowledging that there was no provision for a stay in the appeals under Section 26, the Court mentioned that the Appellate Authority had the inherent power to grant interim orders. The petitioners were advised to file appeals under Section 26, invoke the proviso if necessary, and seek stay orders if required. Ultimately, the Court dismissed the writ petitions, allowing the petitioners to pursue their remedies under the PMLA, including seeking stay orders through the Appellate Authority.

In conclusion, the judgment emphasized the availability of an alternate remedy under the PMLA for the petitioners to challenge the orders they were contesting. The Court directed the petitioners to approach the Appellate Authority under Section 26 of the PMLA, granting them the option to seek stay orders if needed. The dismissal of the writ petitions was based on the principle that the petitioners had a suitable legal recourse under the PMLA, and they were encouraged to utilize that remedy for further redressal.