2021 (7) TMI 963 - HC - Money Laundering

Protection of rights of the Union of India - attachment of property - HELD THAT - In view of the matter being remanded to the Adjudicating Authority, who is still seized of the matter, the Undertaking given by the parties in the connected Appeals are directed to maintain the Status-quo about the property shall continue till the Adjudicating Authority decides the matter again in pursuance of the said remand directions in the order dated 13.12.2017 passed by the learned Tribunal. Appeal disposed off.

Summary

Issues:
1. Appeal against Interlocutory Order dated 28.08.2017 passed by the Appellate Tribunal under the Prevention of Money Laundering Act, 2002.
2. Frivolous litigation by the Union of India.
3. Dismissal of First Appeal No. 4908 of 2018 and remand of the matter to the Adjudicating Authority.

Analysis:
1. The High Court heard appeals filed by the Deputy Director, Directorate of Enforcement, Government of India against various entities arising from an Interlocutory Order dated 28.08.2017 by the Appellate Tribunal under the Prevention of Money Laundering Act, 2002. The Tribunal had passed an interim order protecting the rights of the Union of India by attaching certain properties of the appellants. The Court noted that the present appeals were frivolous and misconceived as the Tribunal had adequately protected the government's interests. Despite the pendency of the appeal before the Tribunal for four years, the High Court found no valid reasons for the filing of the present appeals. The Court deprecated such frivolous litigation and refrained from imposing exemplary costs, but warned of future consequences if similar appeals were filed without valid reasons. Consequently, the appeals were dismissed with no costs imposed.

2. The Court emphasized the need to discourage frivolous litigation by the Union of India. It expressed disapproval of the present appeals filed without valid reasons, causing delays in the Tribunal's proceedings. While refraining from imposing exemplary costs in this instance, the Court warned the officials of the Union of India that future appeals against interlocutory orders without valid grounds would result in costs being imposed on them personally. This decision aimed to deter unnecessary appeals and promote judicial efficiency.

3. In the matter of First Appeal No. 4908 of 2018, the Court dismissed the connected appeals and remanded the case back to the Adjudicating Authority. The Appellate Tribunal under the Prevention of Money Laundering Act, 2002 had allowed the appeal of a company, citing lack of proper notice to concerned parties. The matter was sent back to the Adjudicating Authority for re-hearing after issuing notices to all banks involved. The Court directed that the undertaking given by the parties to maintain the status quo regarding the property would continue until the Adjudicating Authority made a decision following the remand directions. The appeal was disposed of accordingly.