2020 (12) TMI 1094 - HC - Money Laundering

Jurisdiction - power of the Appellate Tribunal to pass an order, allowing the application for interim relief during the pendency of the appeal, such as restoration of the property for a specific purpose for a short period of time- Interim restoration of the attached property - residential house - Prayer was made for interim restoration of the property attached between 15.11.2020 to 30.11.2020 with additional 15 days time to prepare to be used and vacate the property before and after the function. HELD THAT - The only bar, if any, which has been projected by counsel for the respondent with reference to Section 8 of the Act, would step in only where the trial has commenced before the Special Court, which, in the present case, admittedly is not the position as till date no charges have been framed against the respondent. The said power of the Special Court, therefore, would not be applicable in any case at this stage, which again is an aspect to be looked into in an appropriate case - There is nothing which would bar the Appellate Tribunal from ordering de-sealing the attached property and that too for a limited period. It goes without saying that exercise of such power will obviously be a subject matter of adjudication depending upon the facts and circumstances where such discretion has been exercised by the Appellate Tribunal. This power, although is discretionary in nature, but the same is required to be based upon proper appreciation of the provisions of the statute and its applicability, which includes non-compliance thereof. This answers the basic issue with regard to jurisdiction of the Appellate Tribunal to pass an interim order or granting an interim relief for a short period of time and that too for a specific purpose. Admittedly, the proceedings which have been initiated by the Enforcement Directorate, are against the respondent alone and the property in question is a joint property, of which one of the co-sharers is Abhay Singh Chautala, who is not a party to the present appeal - application for seeking interim restoration of the attached property has been allowed alongwith the application for the same relief by respondent-Om Prakash Chautala. As the appeal has been filed against Om Prakash Chautala, this Court is dealing with the appeal qua him only. A perusal of the order passed by the Appellate Tribunal clearly indicates that the issue raised by the appellant in its reply to the application for grant of interim prayer has not been dealt with, especially with regard to the statutory provisions referred to and relied upon by the appellant. The Appellate Tribunal has simply said in the order that it had inherent powers to restore the property in case the possession of the property is taken without following due procedure of law. No reasons whatsoever with regard to the non-compliance of the specific provisions of the statute has been made in the impugned order.No reference has been made to the facts as to how, when and where there has been non-compliance or violation of the statutory procedural and mandatory provisions of law. This renders the order passed by the Appellate Tribunal unsustainable in law being cryptic, sketchy and non-speaking without any justification for passing such order. There appears to be non-application of mind, rendering the order liable to be set-aside. The case is remanded to the Appellate Tribunal for fresh decision in accordance with law at an early date keeping in view the prayer of the respondent - Petition allowed by way of remand.

Summary

Issues Involved:
1. Jurisdiction of the Appellate Tribunal to pass interim orders for restoration of attached property.
2. Compliance with procedural requirements under the Prevention of Money Laundering Act, 2002 (PMLA).
3. Validity of the Appellate Tribunal's order granting interim relief.

Detailed Analysis:

Jurisdiction of the Appellate Tribunal to Pass Interim Orders
The primary question addressed was whether the Appellate Tribunal has the power to pass an interim order for the temporary restoration of attached property. The court examined Sections 26 and 35 of the PMLA. Section 26(4) allows the Appellate Tribunal to pass orders as it thinks fit after giving parties an opportunity to be heard. The court noted that this provision does not explicitly bar the Tribunal from granting interim relief. The Tribunal has the discretion to pass interim orders if it finds prima facie errors in the attachment process or procedural compliance. The court emphasized that denying this power would render the appeal process ineffective.

Compliance with Procedural Requirements under PMLA
The appellant argued that the Appellate Tribunal lacked the authority to restore the property temporarily, citing Section 8(8) of the PMLA, which confers such power on the Special Court. The appellant also contended that the use of attached property is impermissible during the pendency of money laundering proceedings under Section 3 of the Act. The court noted that the trial had not commenced as charges were yet to be framed, thus the Special Court's powers were not applicable at this stage. The Tribunal's interim order was deemed permissible, provided it adhered to statutory requirements and principles of natural justice.

Validity of the Appellate Tribunal's Order Granting Interim Relief
The court found that the Appellate Tribunal's order lacked detailed reasoning and failed to address the statutory provisions cited by the appellant. The Tribunal had stated it had inherent powers to restore the property if possession was taken without following due procedure, but did not provide specific reasons or facts demonstrating non-compliance with statutory requirements. This rendered the Tribunal's order unsustainable as it was cryptic, sketchy, and non-speaking. Consequently, the court set aside the Tribunal’s order and remanded the case for a fresh decision, emphasizing the need for a detailed and reasoned order.

Conclusion:
The High Court allowed the appeal, setting aside the Appellate Tribunal's order due to insufficient reasoning and lack of detailed consideration of statutory provisions. The case was remanded to the Appellate Tribunal for a fresh decision in accordance with the law, with directions for the parties to appear before the Tribunal on a specified date. The court underscored the necessity for the Tribunal to provide a well-reasoned order addressing all relevant legal and factual issues.