2022 (7) TMI 720 - HC - Money Laundering

Extension of time limitation - provisional order of attachment of immovable properties - whether the Enforcement Directorate (ED) can seek refuge under the orders passed by the Supreme Court extending the period of limitation in all general and special laws - HELD THAT - What was being protected by the orders of the Supreme Court was the right to remedy not the right to take away a remedy under a given statute. The respondents before this Court seek to do the latter. The only step taken by the ED is the order of the provisional attachment dated 30th September 2021. No other steps were taken by the ED before the petitioners reply on 3rd January 2022 or before the expiry of 180 days period on 31st March 2022. By its inaction and failure to act in terms of Section 5(1)(b) or the other conditions of the said section the ED has made itself vulnerable to Section 5(3) of the PMLA. The petitioner in turn has been given the breather of exhaustion of the 180 days window from 1st April 2022 and the ED cannot now revive the proceedings after more than 80 days have passed from the end point of the 180 days period - In RAJENDRA KUMAR MURARKA VERSUS MOHSINA TABASSUM ORS. 2021 (7) TMI 1273 - CALCUTTA HIGH COURT the Court noted that the writ petitioner had not only participated in the adjudication but the hearing had also been concluded and final orders were awaited. In the appeal from this order the Division Bench declined to interfere taking into account that the Single Bench had expressed its wish to finally adjudicate the issue on the strength of affidavits directed to be exchanged by the parties. The Division Bench also took note of the fact that the Single Bench had directed that any decision taken by the Adjudicating Authority would abide by the result of the writ petition. In the present facts the petitioner has only replied to the ECIR case which cannot be equated to participating in the proceedings. In Rajendra Kumar Murarka the hearing was complete and final orders remained to be passed. The Court also noted the element of personal liberty of a person which was required to be protected. Although the right of the petitioners before the Court is more to do with the right not to be deprived of property save by authority of law - Article 300A the petitioners have established a case where such right is under threat by the action of the ED. The litigants have been conferred a benefit under Section 5(1)(b) and 5(3) of the PMLA on the failure of the Authority to take action within the specified time frame. If the Authority does fail to take requisite steps the right to relief arises immediately after exhaustion of the 180 days window and once such right is given to a litigant it cannot be taken away. This Court is therefore of the considered view that the petitioners are entitled to the relief claimed - Application disposed off.

Summary

Issues Involved:
1. Whether the statutory window for provisional attachment under Section 5(1)(b) of the Prevention of Money-Laundering Act, 2002 (PMLA) is extended by the Supreme Court's orders in Suo Motu Writ Petition (Civil) No.(S) 3/2020.
2. Whether the Enforcement Directorate (ED) can act beyond the statutory limit of 180 days for provisional attachment of property.

Detailed Analysis:

1. Extension of Statutory Window under Section 5(1)(b) of PMLA:
The central issue before the Court was whether the Supreme Court's orders extending the period of limitation due to the Covid-19 pandemic apply to the statutory period for provisional attachment under Section 5(1)(b) of the PMLA. The Supreme Court's orders aimed to address the difficulties faced by litigants in filing petitions and other proceedings due to the pandemic, extending the limitation period from 15th March 2020 till further orders. The Court analyzed these orders and concluded that they were intended to protect the starting point of litigation, not to extend procedural timelines within ongoing proceedings.

2. Acting Beyond the Statutory Limit of 180 Days:
The Court noted that the ED issued a provisional attachment order on 30th September 2021, and the statutory 180 days expired on 31st March 2022. The ED's subsequent action, including a hearing notice in June 2022, was beyond this period. The Court emphasized that Section 5(3) of the PMLA clearly states that any order of attachment ceases to have effect after 180 days. The Court found that the ED failed to act within this statutory timeframe, making the attachment order invalid.

Judicial Precedents:
The Court reviewed various precedents:
- Rajendra Kumar Murarka vs. Mohsina Tabassum: Held that the Supreme Court extended the time for all pending proceedings, implying the 180 days could be extended.
- Adjudicating Authority (PMLA) vs. Gobinda Das: Held that the Adjudicating Authority cannot be seen as a "non-litigant" and vacated the Single Judge's order that extended the 180 days.
- Prakash Corporates vs. Dee Vee Projects Limited: Restricted the application of S. Kasi to specific facts, not extending it to other procedural timelines.
- Knight Riders Sports Private Limited vs. Adjudicating Authority (PMLA): Construed Section 5(3) of the PMLA as restricting attachment orders to 180 days.
- S. Kasi vs. State: Held that the Supreme Court's order was to protect litigants' rights to file proceedings, not to extend procedural timelines within ongoing cases.

Conclusion:
The Court concluded that the Supreme Court's orders did not intend to extend the statutory period for provisional attachment under the PMLA. The ED's failure to act within the 180 days rendered the attachment order invalid. Consequently, the Court set aside the provisional attachment order dated 30th September 2021 and allowed all consequential benefits to the petitioners.

Disposition:
The writ petition WPA 9699 of 2022 was allowed, and the provisional attachment order was set aside. Urgent certified copies of the order were directed to be supplied to the respective parties upon fulfillment of requisite formalities.