2020 (3) TMI 662 - HC - Money Laundering

Condonation of delay of 80 days in filing the appeal - Time Limitation - Section 5 of Limitation Act, 1973 - HELD THAT - It is an admitted case of applicant that initially appeal was filed on 24.12.2019 vide diary No.1621374/2019 and same was returned under objections which is still pending in the Registry. Whereas, in para 5 of the captioned appeal, it is specifically mentioned that no other appeal is filed or pending before this Court or any other Court - Learned counsel for applicant submits that instead of re-filing the appeal filed on 24.12.2019, the applicant/appellant has filed the present appeal by mistake. As per Section 42 of PMLA, 2002, any person, aggrieved by any decision or order of the Appellate Tribunal, may file an appeal before the High Court within 60 days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order, provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days. Fact remains that order of the Appellate Tribunal was pronounced on 29.08.2019, however, as argued by learned counsel for applicant, the same was received on 11.09.2019 whereas the captioned appeal is filed on 22.01.2020. As per Section 42 of PMLA, 2002 as mentioned above, the maximum limit to condone delay is (60 days 60 days) 120 days whereas, captioned appeal is filed beyond the period of limitation - thus, this Court has no power to condone the delay beyond 120 days. Thus, the present application is dismissed. Delay cannot be condoned - COD application dismissed.

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Investigation and findings related to money laundering.
3. Freezing orders and retention of documents/articles.
4. Tribunal's decision and its implications.
5. Legal principles regarding limitation and condonation of delay.

Detailed Analysis:

Condonation of Delay in Filing the Appeal:
1. The Directorate of Enforcement sought condonation of an 80-day delay in filing an appeal against the Appellate Tribunal's order dated 29.08.2019. The appeal was filed on 22.01.2020, beyond the statutory period prescribed under Section 42 of the Prevention of Money Laundering Act (PMLA), 2002, which allows a maximum of 120 days (60 days plus a further 60 days if sufficient cause is shown).

2. The court emphasized that the law of limitation is based on public policy to ensure the timely resolution of disputes. The applicant's reliance on Supreme Court decisions (N. Balakrishnan vs. M. Krishnamurthy and State of Nagaland vs. Lipokao) highlighted that the sufficiency of the cause for delay is crucial, not the length of the delay.

3. However, the court noted that the appeal was filed beyond the permissible period, and as per the Supreme Court's rulings in Union of India vs. Popular Construction Co. and other cases, the court has no power to condone delays beyond the statutory limit.

Investigation and Findings Related to Money Laundering:
1. The case involved allegations of illegal dealings in the procurement of VVIP helicopters from M/s AgustaWestland International Ltd., with kickbacks amounting to Euro 70 million. Investigations revealed complex transactions involving multiple companies and individuals, transferring proceeds of crime across various accounts.

2. Funds were traced to M/s Interstellar Technologies Limited, Mauritius, and subsequently to M/s Rawasi Al Khaleej General Trading LLC, Dubai, under the ledger head Omar Ali Balsharaf-GK. The investigation indicated that these funds were ill-gotten and parked under misleading ledger entries.

3. Further investigations and searches, including those conducted by the Income Tax Department and the Directorate of Enforcement, uncovered significant evidence of money laundering, including the transfer of shares and funds to frustrate proceedings under PMLA.

Freezing Orders and Retention of Documents/Articles:
1. During the investigation, shares and funds were frozen under Section 17(1A) of PMLA to prevent the dissipation of proceeds of crime. The Adjudicating Authority allowed the retention of documents and continuation of freezing orders during the pendency of proceedings.

2. The Tribunal's order dated 29.08.2019 partly allowed the appeal by the respondents, directing them to execute an indemnity bond of Rs. 111 crores as a surety, pending the outcome of the investigation.

Tribunal's Decision and Its Implications:
1. The Tribunal noted the absence of concrete evidence against the appellants and directed the de-freezing of shares upon compliance with the indemnity bond condition. The Tribunal's decision aimed to balance justice, equity, and fair play, considering the ongoing investigation.

2. The Directorate of Enforcement's appeal against the Tribunal's order was filed late, leading to the dismissal of the condonation application and the appeal itself.

Legal Principles Regarding Limitation and Condonation of Delay:
1. The court reiterated that statutory periods for filing appeals are strict, and delays beyond the prescribed limit cannot be condoned, as emphasized in various Supreme Court judgments.

2. The applicant's argument that the delay was due to procedural issues was insufficient to override the statutory limitation, leading to the dismissal of the appeal.

Conclusion:
The High Court dismissed the application for condonation of delay and the subsequent appeal, emphasizing the strict adherence to statutory limitations and the importance of timely legal actions. The investigation into money laundering and the Tribunal's conditional relief to the respondents were significant aspects of the case.

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