2015 (7) TMI 255 - HC - Money Laundering

Maintainability of appeal - Availability of alternate remedy - Held that - Even aggrieved by the order of the Appellate Tribunal the Statute under Section 42 of the PML Act provides for an appeal on any question of law or fact to the High Court. Thus, even accepting the version of the petitioner that the impugned order is a non-reasoned order and the Appellate Court would not have the benefit of reasoning before it however such order is also an appealable order and wherein the Appellate Court on appreciation of facts and law can form its opinion. There is no denial that giving reasons is one of the fundamentals of good administration and failure to give reasons amounts to denial of justice. However, it is not a principle of law that if an order of a competent authority is bereft of reasons, the appellate authority is denuded of its statutory jurisdiction to entertain the appeal. However, brevity of reasoning cannot be understood in legal parlance as absence of reasoning. While no reasoning in support of order whether judicial/quasi-judicial order is impermissible, the brief reasoning would suffice to meet the ends of justice at least at interlocutory stages and would render the remedy of appeal purposeful and meaningful. - without dwelling into the merits of the matter since the case of the petitioners do not fall in the exceptions as laid down in Whirlpool Corporation (1998 (10) TMI 510 - SUPREME COURT), the writ petitions and applications are dismissed with liberty to the petitioner to avail the alternative efficacious remedies available under Section 26 of the PML Act - Decided against Appellant.

Summary

Issues:
Challenge to order under Prevention of Money Laundering Act, 2002; Maintainability of writ petitions; Jurisdictional error in impugned order; Lack of reasoning in adjudicating authority's findings; Appeal provisions under PML Act; Stay on SEBI proceedings by Guwahati High Court; Violation of principles of natural justice; Application of Whirlpool Corporation triple test; Availability of alternative remedies; Dismissal of writ petitions.

Analysis:

1. The writ petitions challenge an order confirming Provisional Attachment Order (PAO) under the Prevention of Money Laundering Act, 2002 (PML Act), alleging commission of scheduled offences, generation of proceeds of crime, and money laundering. The maintainability of the writ petitions is questioned due to the availability of an alternate remedy of appeal under Section 26 of the PML Act, as per the Supreme Court's decision in United Bank of India Vs. Satyawati Tondon.

2. The petitioners argue that the impugned order lacks jurisdiction, contending that the adjudicating authority's error can only be corrected by the High Court under Article 226 of the Constitution of India. They highlight the absence of detailed reasoning in the authority's findings regarding the 'proceeds of crime' and the lack of identification of individuals induced to invest money. The reliance on SEBI's order, which was stayed by the Guwahati High Court, is also challenged.

3. Section 26 of the PML Act allows appeals to the Appellate Tribunal, and further to the High Court on questions of law or fact. The absence of detailed reasoning in the impugned order is acknowledged, but it is noted that the appellate court can still form its opinion based on facts and law. The importance of providing reasons in administrative orders is emphasized, but the lack of detailed reasoning does not deprive the appellate authority of its statutory jurisdiction.

4. The petitioners' arguments regarding the stay on SEBI proceedings and the nature of the complainant in the FIR are countered by the court, stating that these do not render the impugned order without jurisdiction. The reliance on statements of company officials recorded under the PML Act is highlighted, emphasizing their admissibility in evidence.

5. The court examines the applicability of the triple test laid down in Whirlpool Corporation for entertaining a writ petition despite the availability of alternative remedies. It is concluded that the petitioners do not meet the exceptions for bypassing the alternative remedies provided under the PML Act. The dismissal of the writ petitions is ordered, granting liberty to the petitioners to pursue the available remedies under Section 26 of the PML Act.

This comprehensive analysis covers the key issues raised in the legal judgment, addressing the challenges to the impugned order under the PML Act, the maintainability of the writ petitions, the jurisdictional errors, the lack of detailed reasoning, and the applicability of alternative remedies and legal principles.