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2023 (8) TMI 1051 - HC - Money LaunderingMoney Laundering - quorum non judis - adjudicating authority presently functioning with only one member - attachment/retention/freezing of property or record during the pendency of the proceedings relating to the schedule (predicate) offence - HELD THAT - The functions of the adjudicating authority are civil in nature to the extent that it does not decide on the criminality of the offences nor does it have power to levy penalties or impose punishment. Thus, the decision in PAREENA SWARUP VERSUS UNION OF INDIA 2008 (9) TMI 558 - SUPREME COURT would go to support the stand taken by the Enforcement Directorate before this Court - The decision in MADRAS BAR ASSOCIATION VERSUS UNION OF INDIA ANR. 2020 (12) TMI 3 - SUPREME COURT pertain to the constitutionality of various provisions concerning the selection, appointment, tenure, conditions of service and ancillary matters relating to various tribunals which act in aid of the judicial branch. While considering such an issue, namely appointment to tribunals which are in aid of the judicial branch namely tribunals constituted under Section 323A and 323B of the Constitution, the court made pointed observations as to the constitution of Search and Selection Committees to such tribunals, and held that the judicial dominance in the composition of the Search and Selection Committees is required to ensure independence of tribunals. Therefore, decision in Madras Bar Association would be inapplicable to the facts and circumstances of the case on hand. Absence of two members in the adjudicating authority whether a single member has become quorum non judis and cannot take up the cases for adjudication - HELD THAT - Section 6 of the PMLA Act deals with adjudicating authorities, composition, powers etc. Sub Section (1) of Section 6 states that the Central Government shall by notification appoint and adjudicating authority to exercise jurisdiction, powers and authority conferred by or under the Act. Sub Section (2) states that the adjudicating authority shall consists of a Chairperson and two other members. The proviso states that one member each shall be a person having experienced in the field of law, administration and finance or accountancy - A plain reading of the provision makes it clear that the Central Government is empowered to appoint an adjudicating authority by issue of notification in the Gazette to exercise the jurisdiction, powers and authority conferred by or under the Act and in accordance with the said provision the Central Government has issued a notification on 01.07.2005 and have appointed the adjudicating authority to exercise jurisdiction, powers and authority conferred by or under the Act. Thus, for all purposes an adjudicating authority has been put in place and the manner in which the business of the adjudicating authority has to be carried out is stipulated in Sub-Section (5) of Section 6 and in terms of Clause (b) of Sub Section (5) of Section 6, a single member bench of the adjudicating authority is competent to adjudicate any matter under the provisions of the Act. Any other interpretation as suggested by the appellant, if acceded to would make the provisions of the Act unworkable, apart from such interpretation not being in line and in tenor with the provisions of Section 6. Therefore, the contention raised by the appellant has to necessarily fail. The Hon ble Division Bench of the High Court of Delhi in J. SEKAR, S. RAMACHANDRAN, K. RETHINAM, SRS MINING, T. VINAYAK RAVI REDDY, SURENDRA KUMAR JAIN AND ORS., M/S. SWASTIK CEMENT PRODUCTS PVT. LTD. ORS., DHAWAN CREATIVE PRINTS PVT. LTD. AND ANR., APARAJITA KUMARI ANR., PRATIBHA SINGH ANR. VERSUS UNION OF INDIA JOINT DIRECTOR, ENFORCEMENT DIRECTORATE ANR. 2018 (1) TMI 535 - DELHI HIGH COURT held that under Section 6(5)(b) of the PMLA Act, a bench may be constituted by the Chairperson of the adjudicating authority with one or two members as the Chairperson may deem fit. It was held that it is possible to have a single member bench. The word bench therefore does not connote plurality; that could, even under Section 6(5)(b) of the PMLA Act be a single member bench . Further it was held that when Section 6(6) of the PMLA Act states that a Chairperson can transfer a member from one bench to another, it has to be noted in the above context of their also being a single member bench. By a reading of Section 6 of the PMLA Act without adding or substituting words into the statute, it is clear that the adjudicating authority which comprises of a single member bench is entitled to adjudicate the matter and any other interpretation would tantamount to distorting the language adopted in the statute which is impermissible. The appellant has not made out any case for interference with the order passed by the learned single bench. Accordingly, the appeal fails and it is dismissed.
Issues Involved:
1. Competence of the adjudicating authority under the PMLA Act. 2. Alleged bias and procedural lapses by the adjudicating authority. 3. Constitution and quorum of the adjudicating authority. Summary: Competence of the Adjudicating Authority: The appellant filed a writ petition seeking a declaration that the adjudicating authority under the PMLA Act was statutorily incompetent to take up their case, arguing that the authority was improperly constituted as it lacked a judicial member. The court noted that the adjudicating authority, as per Section 6 of the PMLA Act, can function with a single member bench, and the Chairperson has the discretion to constitute such a bench. The court held that the adjudicating authority was validly constituted and competent to adjudicate the matter. Alleged Bias and Procedural Lapses: The appellant contended that the adjudicating authority was biased and had procedural lapses, arguing that the Member (Finance) had a potential for bias due to previous government employment. The court found no merit in these claims, stating that the proceedings were at a preliminary stage and the selection of the office of the Enforcement Directorate as the venue did not indicate bias. The court emphasized that the principles of natural justice were not violated as sufficient opportunity had been given to the appellants. Constitution and Quorum of the Adjudicating Authority: The appellant argued that the adjudicating authority was functioning with only one member and thus was quorum non judis. The court referred to Section 6 of the PMLA Act, which allows the Chairperson to constitute a bench with one or two members. The court upheld the validity of a single-member bench, citing previous judgments that supported this interpretation. The court concluded that the adjudicating authority, even with a single member, was competent to proceed with the case. Conclusion: The court dismissed the appeal, affirming that the adjudicating authority was properly constituted and competent to adjudicate the matter. The court also directed compliance with the previous order within three weeks, emphasizing that the appellant's repeated attempts to stall the proceedings were unwarranted.
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