2021 (9) TMI 1446 - HC - Money Laundering

Provisional attachment order - the said order elapsed after the expiry of the 180-day period, i.e. in June, 2021 itself - Section (5(1) r/w Section 5 (3) and Section 8 (3) of the Prevention of PMLA Act, 2002 - HELD THAT - It is evident that the Division Bench is already seized of the question as to whether the 180-days validity period of provisional attachment orders, as contemplated under Sections 5(1), 5(3) r/w Section 8(3) of the PMLA, 2002 has to be treated as sacrosanct in the light of the orders passed by the Hon ble Supreme Court in Suo Moto W.P. (C) No. 3/2020 2020 (5) TMI 418 - SC ORDER extending the period of limitation on account of COVID 19 pandemic and the consequent lockdown. In the present case, though the proceedings before the Adjudicating Authority ought to be permitted to continue and culminate in a final order, the said order ought not to be implemented till the question of law pending before the learned Division Bench is finally decided in LPA No. 362/2020. It is, accordingly, directed that while the Adjudicating Authority will be at liberty to conclude the adjudication proceedings, in which, the petitioner will render its full cooperation; and the final order, as and when passed by the Adjudicating Authority, will not be implemented without the leave of the Court - List on 15.12.2021.

Summary

Issues:
Challenge to the validity of a Provisional Attachment Order under the Prevention of PMLA Act, 2002 based on the expiry of the 180-day period.

Analysis:
The petitioner challenged the Provisional Attachment Order No.16/2020, contending that it expired after the 180-day period as per the Prevention of PMLA Act, 2002. The petitioner relied on a previous decision of the court in a similar matter to support this claim. The court issued a notice to the respondents and directed them to file a counter affidavit within four weeks. The respondent mentioned that the decision relied upon by the petitioner had been stayed by the Division Bench in a related case. The court noted the importance of the 180-day validity period of provisional attachment orders in light of the Supreme Court's orders regarding the extension of limitation periods due to the COVID-19 pandemic and subsequent lockdown.

The court acknowledged that the Division Bench was already considering the issue of the validity period of provisional attachment orders. Despite allowing the adjudication proceedings to continue, the court decided that the final order should not be implemented until the Division Bench resolved the legal question in the related case. The court directed the Adjudicating Authority to proceed with the adjudication process, with the petitioner's cooperation, but specified that the final order should not be enforced without the court's permission. The case was listed for further hearing on a specified date.