2024 (8) TMI 210 - HC - Money Laundering

Determination of jurisdiction to entertain the present writ petition - reasons to believe - relied upon documents - whether the existence of alternative remedies, as stipulated under Section 42 of the PMLA and as argued by the Respondents, precludes this Court from exercising its discretionary powers under Article 226 of the Constitution? - HELD THAT - The statute clearly outlines that appeals can be filed to the High Court within sixty days from the date the decision or order is communicated to the aggrieved party, addressing any question of law or fact arising out of such order. For the purpose of this Section, High Court has been defined to be the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain. The Petitioner is based in Mumbai, conducting business and presumably working for gain there. Consequently, based on the explicit language of Section 42, the High Court of Bombay would ordinarily have jurisdiction to hear appeal against decision passed by the Appellate Tribunal on 25th July, 2024. In M/s Incred Financial Services Ltd. 2022 (6) TMI 1360 - DELHI HIGH COURT , the Court diverged from the precedent set in Aasma Mohammed Farooq, focusing on the specific circumstances of the cases before and overruled objection of maintainability of the petition on the ground of territorial jurisdiction. The Petitioner is assailing the order of the Appellate Tribunal. They have invoked the jurisdiction of this Court based on the presence of the Appellate Authority within its geographical bounds. This fact, while establishing a basic criterion for territorial jurisdiction, does not inherently justify overlooking the structured remedies provided under statutory law. The legal framework provided by Section 42 of the PMLA specifies that appeals against decisions of the Appellate Tribunal are to be filed at the High Court within the jurisdiction where the aggrieved party resides or conducts business. The Petitioner cannot override the statutory mechanism by relying on the geographical location of the Appellate Authority within this Court s jurisdiction. There is no basis for the Court to conclude that the alternate remedy is not equally efficient and adequate - the Court concludes that the mere location of the Appellate Authority within its territorial bounds does not provide sufficient ground to deviate from the prescribed statutory appellate route. The Petitioner can easily pursue their grievances through the statutory appellate process as stipulated in Section 42 of the PMLA, by following the hierarchal judicial process intended by law. In this instance, given the specific statutory remedies provided under the PMLA, particularly the appeal mechanism outlined in Section 42, the court finds that the said remedy is both appropriate and sufficient for addressing the grievances presented by the Petitioner. There is no evidence to suggest that the remedy would be ineffective or lead to an injustice that justifies bypassing them - considering the established legal framework and the factual circumstances of this case, the Court is not inclined to exercise its discretionary powers under Article 226 of the Constitution. The Petitioner is free to pursue the available statutory remedies, which are deemed adequate for resolving the legal challenges at hand. Petition dismissed.

Issues Involved:
1. Jurisdiction of the High Court to entertain the writ petition under Article 226 of the Constitution of India.
2. Denial of access to critical documents, including "reasons to believe" and Relied Upon Documents (RUD).
3. Maintainability of the writ petition given the existence of alternative statutory remedies under the PMLA.

Issue-Wise Analysis:

1. Jurisdiction of the High Court to entertain the writ petition under Article 226 of the Constitution of India:
The Court first addressed the preliminary determination of its jurisdiction to entertain the writ petition. The jurisdictional inquiry centered on whether the existence of alternative remedies, as stipulated under Section 42 of the PMLA, precludes the Court from exercising its discretionary powers under Article 226. The statute explicitly outlines that appeals can be filed to the High Court within sixty days from the date the decision or order is communicated to the aggrieved party. The High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business is the appropriate forum. Given that the Petitioner is based in Mumbai, the High Court of Bombay would ordinarily have jurisdiction to hear the appeal against the decision passed by the Appellate Tribunal.

The Court referenced the judgment in Aasma Mohammed Farooq v. Union of India, where it was held that although part of the cause of action arose within the jurisdiction of the Delhi High Court, the Bombay High Court would be the "forum conveniens" due to the location of the Petitioner and the properties involved. This judgment was upheld by the Supreme Court, reinforcing the principle that the High Court of the jurisdiction where the aggrieved party resides should be approached.

2. Denial of access to critical documents, including "reasons to believe" and Relied Upon Documents (RUD):
The Petitioner argued that the lack of documentation severely undermined their ability to comprehend and effectively respond to the Original Application before the Adjudicating Authority. They contended that the denial of access to the "reasons to believe" and other critical documents violated their fundamental rights under Articles 14 and 21 of the Constitution. The Court acknowledged the Petitioner's argument but noted that the primary issue was whether the Court had jurisdiction to entertain the writ petition given the statutory remedies available.

3. Maintainability of the writ petition given the existence of alternative statutory remedies under the PMLA:
The Respondents argued that the petition was not maintainable due to the availability of an alternative efficacious remedy under Section 42 of the PMLA. They cited the judgment in Aasma Mohammed Farooq, which was upheld by the Supreme Court, to support their contention. The Petitioner countered by arguing that the availability of an alternative remedy does not inherently preclude the maintainability of a writ petition under Article 226. They cited precedents where writ petitions were entertained despite the availability of statutory appellate remedies, particularly in cases where fundamental rights were at stake.

The Court considered the precedents and statutory language, concluding that the appeal mechanism under Section 42 of the PMLA is both appropriate and sufficient for addressing the grievances presented by the Petitioner. The Court found no basis to conclude that the alternative remedy was not equally efficient and adequate. The Court emphasized that the rule regarding the exhaustion of statutory remedies is a matter of judicial discretion, and in this case, the statutory remedies provided under the PMLA were deemed adequate for resolving the legal challenges at hand.

Conclusion:
The Court dismissed the writ petition, along with pending applications, on the grounds that the statutory remedies provided under the PMLA were adequate and sufficient for addressing the Petitioner's grievances. The Petitioner was directed to pursue the available statutory remedies, specifically the appeal mechanism outlined in Section 42 of the PMLA, which was deemed appropriate for resolving the legal challenges presented.

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