2021 (1) TMI 182 - AT - Money Laundering

Maintainability of appeal - competency of Assistant Director to file the appeal - scope of Deputy Director - section 2(1)(c), 2(1)(j) 2(1)(k) of PMLA Act - It is submitted by respondent that no other person or authorities other than authorized authority under the Act can prefer an appeal and that reference has made to the title of the appeal and the affidavit thereto - HELD THAT - Section 2(1)(c) has defined the word the Assistant Director whereas section 2(1)(j) defined the word Deputy Director and section 2(1)(k) has defined the words Director Additional Director and Joint Director. They are being defined as the authorities appointed under sub-section 1 of 49 of the said Act. Section 48 of the said Act specified the classes of authorities for the purpose of the PMLA 2002(the said Act.). The Director or Additional Director or Joint Director have been put under the same class in sub clause (a) whereas the Deputy Director and Assistant Director have been placed under sub-clause (b) and (c) of the section 48 of the said Act. If the section 2(1)(k) is read with section 48(a) of the said Act it is clear that the Director Additional Director and Joint Director are put in the same classes of authority for the purpose of this Act so the decision taken by the Joint Director with the approval of the Special Director (Special Director is higher in rank than Additional Director in the hierarchy of the Enforcement Directorate) to file appeal is not contrary to the provisions of PMLA 2002. It is not that for each and every case to file appeal before this Appellate Tribunal the Director who is the head of Enforcement Directorate is to take a decision to file appeal. If any of the officers in the same class of officer (section 48(a) of the said Act) has taken a decision to file an appeal then in my considered view there is no illegality. In this particular appeal it is the department who is aggrieved and who has filed the appeal. Since the decision has been taken at the level of Special Director Kolkata that the Assistant Director/I.O. to file the appeal it is nothing but a ministerial work to be performed by the Assistant Director. The ld. counsel for the respondent no. 2 has raised strong objection to the statement mentioned in para 2 of In the Affidavit to the memo of appeal and submitted that Assistant Director is not competent. I do not agree with the aforesaid submission of the ld. counsel for the respondent no. 2 on the ground that the Assistant Director Mr. Sudarshan Ghosh who is the investigating officer of this case has been duly authorized with the approval of the authority of the level of Special Director to file the appeal vide internal note dated 22.11.2019. The ld. counsel for the respondent nos 2 14 have not disputed the genuineness of the said internal note. The only dispute they have raised is that the Assistant Director ought not to have been authorized to file the appeal. Right from beginning from the stage of the registration of case till its logical conclusion it is the Enforcement Directorate the investigating agency under PMLA is involved. Merely saying that since the filing of appeal by an Assistant Director is contrary to law and therefore they are prejudiced is not sufficient - Raising of objection without showing substantial prejudice being caused on account of procedural lapse as prescribed under the Act is not sufficient in the given present facts and circumstance of the case particularly when the department itself has filed the appeal through its authority i.e. the Assistant Director who is being duly authorized by the competent authority of the same class of the Director . The PMLA 2002 has provided two forum of appeal relating to have attachment one forum is Appellate Tribunal constituted u/s 25 of the said Act and the second appeal lie to High Court u/s 42 of the said Act - Under section 26(1) of the said Act the word the Director is appearing where as no authority is specifically named under section 42 of the said Act. That does not mean neither the Director nor any of the other classes of authorities as prescribed under section 48 or 49 of the Act are eligible to file appeal before the Hon ble High Courts. Appeals are being filed by the ED under section 42 of the said Act before High Courts through either of the class of authorities as specified under section 48 of the said Act read with the notification GSR. 441(E) dated 01.07.2005. It is not that always the director is signing the appeal and the affidavit therein. The appeal is maintainable - With the consent of both the parties list the appeal on 18th January 2021.

Summary

Issues Involved:
1. Maintainability of the appeal filed by the Assistant Director of Enforcement Directorate (ED).
2. Competency of the Assistant Director to file the appeal under Section 26(1) of the Prevention of Money Laundering Act (PMLA), 2002.
3. Procedural and technical aspects of filing the appeal.
4. Authority and delegation of powers within the Enforcement Directorate.

Detailed Analysis:

1. Maintainability of the Appeal:
The primary issue raised was whether the appeal filed by the Assistant Director of ED was maintainable under Section 26(1) of PMLA, 2002. The respondents argued that only the Director, as defined under Section 2(1)(k) of PMLA, is authorized to file such appeals. They contended that the Assistant Director lacked the competency to file the appeal, making it non-maintainable.

The tribunal examined the relevant sections of PMLA, including Sections 2(1)(c), 2(1)(j), 2(1)(k), 5(1), 5(2), 8(2)(b), 26(1), 48, 49, and 51(1). It was noted that Section 26(1) specifically mentions "the Director" as the authority to file appeals, while other sections allow delegation of certain powers to officers not below the rank of Deputy Director.

2. Competency of the Assistant Director:
The respondents argued that the Assistant Director is not competent to file the appeal, citing various sections of PMLA and judgments, including M.P. Wakf Board vs. Subhan Shah, which emphasized that statutory powers must be exercised by the designated authority. They also referred to the notification G.S.R. 441(E) dated 01.07.2005, which conferred exclusive powers on the Director of Enforcement under various sections of PMLA.

The appellant countered that the appeal was filed by the Enforcement Directorate through the Assistant Director, who was duly authorized by the Special Director. The tribunal found that the decision to file the appeal was taken at the level of the Special Director, and the Assistant Director was merely performing a ministerial task.

3. Procedural and Technical Aspects:
The respondents claimed that the procedural and technical aspects of filing the appeal were not followed, rendering the appeal non-maintainable. They argued that the Assistant Director's affidavit in support of the appeal was not valid.

The tribunal referred to judgments such as Union of India vs. Amarjeet Singh Bhalla, which held that procedural defects should not defeat substantive rights. It emphasized that the appeal was filed by the Enforcement Directorate, the aggrieved party, and procedural technicalities should not hinder the pursuit of justice.

4. Authority and Delegation of Powers:
The tribunal examined the delegation of powers within the Enforcement Directorate. It noted that Section 48 of PMLA classifies authorities, including the Director, Additional Director, Joint Director, Deputy Director, and Assistant Director. The decision to file the appeal was taken by the Special Director, a higher authority in the hierarchy, and the Assistant Director was authorized to file the appeal.

The tribunal concluded that the appeal was maintainable, as it was filed by the Enforcement Directorate through an authorized officer. It emphasized that procedural and technical hurdles should not obstruct the administration of justice. The tribunal directed the parties to file written submissions and listed the appeal for further hearing.

Conclusion:
The tribunal held that the appeal filed by the Assistant Director of Enforcement Directorate was maintainable. It emphasized that the decision to file the appeal was taken by a competent authority, and the Assistant Director acted as an authorized representative. The tribunal rejected the respondents' objections and directed the appeal to be heard on merits.