2019 (10) TMI 961 - HC - Money Laundering

Condonation of delay in filing appeal - appellant's case is that the reasons for delay in filing the appeals were beyond the control of the appellant - sufficient reasons or not? - Section 42 of the PMLA - Money Laundering - Provisional attachment of properties - proceeds of crime - scheduled offences - HELD THAT - If any person is aggrieved by any decision or order of the Appellate Tribunal, he may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him. Proviso to this Section provides that if the High Court is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period of sixty days, the High Court may allow it to be filed within a further period not exceeding sixty days. Thus, the proviso clearly mandates the High Court not to allow the appellant to file an appeal after a further period of sixty days. In M/S SIMPLEX INFRASTRUCTURE LTD VERSUS UNION OF INDIA 2018 (12) TMI 388 - SUPREME COURT , the Supreme Court has held that delay beyond the three months plus thirty days under Section 34 of the Arbitration Act cannot be condoned - Similarly in the matter of BENGAL CHEMISTS AND DRUGGISTS ASSOCIATION VERSUS KALYAN CHOWDHURY 2018 (2) TMI 487 - SUPREME COURT , the Hon;ble Supreme Court held that limitation period of 45 days in Section 421 (3) plus additional 45 days grace period are peremptory and mandatory nature and no further time can be granted beyond this total period. Thus, this Court is of the view that the High Court cannot breach statutory mandate and cannot make the provisions of Limitation Act applicable. Consequently, the appeals filed by the appellant are held not maintainable as the same have been filed beyond the prescribed period of limitation as provided under Section 42 of the PMLA - applications for condonation of delay in filing the appeals are rejected - appeal dismissed.

Issues Involved:
1. Provisional Attachment Orders under PMLA.
2. Unauthorized awarding of degrees by the University.
3. Referral to Enforcement Directorate by Sikkim Police.
4. Challenge to Provisional Attachment Order.
5. Compliance with High Court Order.
6. Delay in filing appeals.
7. Applicability of Limitation Act to PMLA.
8. Arguments for condonation of delay.
9. Arguments against condonation of delay.
10. Legal precedents on condonation of delay.
11. High Court's jurisdiction to condone delay.

Detailed Analysis:

1. Provisional Attachment Orders under PMLA:
The appellant, an investigating agency for money laundering, issued Provisional Attachment Orders under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) for properties worth ?137 Crores acquired from proceeds of crime.

2. Unauthorized Awarding of Degrees by the University:
The University was accused of creating and selling degrees, diplomas, and certificates without authorization. Coordinators across India conducted distance education courses, making payments to the University after keeping their commission. The University allegedly duped thousands of students by selling unauthorized degrees and charging exorbitant fees.

3. Referral to Enforcement Directorate by Sikkim Police:
Offences under Sections 420, 467, 471, 120B of the Indian Penal Code (IPC) were scheduled offences under Section 2(1)(y) of the PMLA. The matter was referred to the Enforcement Directorate by Sikkim Police for investigation.

4. Challenge to Provisional Attachment Order:
The University challenged the Provisional Attachment Order before the High Court on the basis of the constitution and adjudication by a non-legal Member. The High Court ordered the appointment of a Judicial Member and reconstitution of the Bench for adjudication.

5. Compliance with High Court Order:
A Member (Legal) was appointed as per Section 6 of PMLA, and the matter was re-adjudicated, confirming the Provisional Attachment Order. The respondents appealed to the Appellate Tribunal, which set aside the Confirmation Order and remanded the matter for compliance with the High Court's directions.

6. Delay in Filing Appeals:
The appeals were filed with significant delays: 456 days in one appeal and 571 days in others. The appellant cited various reasons for the delay, including administrative processes and legal opinions.

7. Applicability of Limitation Act to PMLA:
The respondents argued that Section 42 of the PMLA, which provides a specific limitation period for filing appeals, excludes the applicability of the Limitation Act, 1963. The High Court can only condone delay up to a further period of sixty days beyond the initial sixty days.

8. Arguments for Condonation of Delay:
The appellant argued that the delay was due to circumstances beyond their control and that substantial justice should be prioritized over technicalities. They cited the involvement of a significant amount of money (over ?100 crores) and the potential threat to the economy from money laundering offences.

9. Arguments Against Condonation of Delay:
The respondents contended that the High Court has no statutory power to condone delays beyond the additional sixty days as stipulated in Section 42 of the PMLA. They supported their argument with legal precedents where similar provisions in other special acts were interpreted to exclude the application of Section 5 of the Limitation Act.

10. Legal Precedents on Condonation of Delay:
Various judgments were cited, including:
- Simplex Infrastructure Ltd. Vs. Union of India (2019): Delay beyond the statutory limit cannot be condoned.
- Bengal Chemists and Druggists Association Vs. Kalyan Chowdhury (2018): Limitation periods in special acts are peremptory.
- ONGC Ltd. Vs. Gujarat Energy Transmission Corporation Ltd. (2017): Similar interpretation of limitation periods in special statutes.
- Commissioner of Customs and Central Excise Vs. Hongo India Private Ltd. (2009): High Court cannot condone delay beyond the specified period.

11. High Court's Jurisdiction to Condon Delay:
The High Court concluded that it cannot condone delays beyond the statutory limit set by Section 42 of the PMLA. The appeals were dismissed as they were filed beyond the permissible period.

Conclusion:
The applications for condonation of delay were rejected, and consequently, all appeals were dismissed. The High Court emphasized the statutory mandate and the limited jurisdiction to condone delays under the PMLA. The Director of the appellant agency was advised to conduct an inquiry into the delay and take appropriate action.

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