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2022 (9) TMI 1423 - HC - Money LaunderingJurisdiction of Single Member (Adjudicating Authority) - Money Laundering - Validity of the Provisional Attachment Order - It was the submission of learned Senior Counsel who contended that a single member cannot possibly be recognised to be an Adjudicating Authority duly constituted in terms of Section 6 of the PMLA. HELD THAT - The issue of whether a single member can act as the Adjudicating Authority has been duly considered and answered by a Division Bench of the Court in J. Sekar V Union of India 2018 (1) TMI 535 - DELHI HIGH COURT where it was held that There can be single-member benches of the AA and the AT under the PMLA. Such single-member benches need not mandatorily have to be JMs and can be AMs as well. Although the Court is aware that the aforesaid decision has been placed in abeyance in an appeal preferred by the Directorate albeit preferred with respect to certain unrelated aspects of that decision it also bears in mind the salutary principle that while a stay of a judgment may defer its enforcement inter partes it does not efface the dictum thereof. The writ petitions shall stand disposed of with liberty reserved to the petitioners to appear before the concerned Adjudicating Authority and take all objections as may otherwise be permissible in law.
Issues Involved:
1. Validity of the Provisional Attachment Order (PAO) under the Prevention of Money Laundering Act, 2002 (PMLA). 2. Competence and jurisdiction of the Adjudicating Authority comprising a single member. 3. Apprehension of deprivation of possession of properties if PAO is confirmed. Detailed Analysis: 1. Validity of the Provisional Attachment Order (PAO): The batch of petitions challenges the validity of the PAO issued by the Directorate of Enforcement. The petitioners argue that the principal allegations in the ECIR were against Carnoustie Management India Pvt. Ltd., which had previously contested similar PAOs. The court had entertained these challenges and issued interim orders allowing the Adjudicating Authority to pass final orders but not to implement them without the court's leave. The petitioners in the current batch do not rely on the principles enunciated in Vikas WSP and Others vs. Directorate Enforcement and Another, which held that the Adjudicating Authority becomes functus officio after 180 days from the PAO issuance. 2. Competence and Jurisdiction of the Adjudicating Authority: The petitioners questioned the competence of the Adjudicating Authority, which currently comprises a single member, arguing that it should consist of multiple members as per Section 6 of the PMLA. This issue was addressed in J. Sekar V Union of India, where it was held that the Adjudicating Authority could function with single-member benches. The court noted that Section 6(5)(b) of the PMLA allows the Chairperson to constitute benches with one or two members, and the term "bench" does not necessarily imply plurality. The court rejected the contention that every matter must be heard by a bench comprising the Chairperson and members, emphasizing that single-member benches are permissible under the PMLA. 3. Apprehension of Deprivation of Possession: The petitioners expressed concern that the continuation of proceedings by the Adjudicating Authority might lead to the deprivation of their properties if the PAO is confirmed. The court referred to the Supreme Court's decision in Vijay Madanlal Choudhary and Others v. Union of India and Others, which stated that taking possession of the property under Section 8(4) of the PMLA should be an exception and not a rule. The need to take possession arises only for giving effect to a confiscation order, and until such an order is passed, there is no reason to hasten the process of taking possession. The court assured that the Adjudicating Authority would be guided by these principles, alleviating the petitioners' apprehensions. Conclusion: The writ petitions were disposed of with the liberty for the petitioners to present their objections before the Adjudicating Authority. The Adjudicating Authority is free to proceed under Section 8 of the PMLA, but any action regarding the take-over of possession must adhere to the principles laid down in Vijay Madanlal. All contentions on merits remain open for respective parties.
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