2015 (9) TMI 1252 - HC - Money Laundering

Provisional Attachment - Complaint under Section 5(5) of the Prevention of Money-Laundering Act, 2002 - Held that - the fact remains, challenging the confirmation of Provisional Order of Attachment, the statutory appeal has been preferred by the petitioner and other persons. The impugned notice has been served only on the petitioner and not on any other resident residing and even the name of any other resident has not been given in the said notice. Chapter VI of the Money-Laundering Act deals with Appellate Tribunal and Section 26 provides for appeal to such Tribunal. A perusal of the same would disclose that though there is no specific provision for moving an application for stay, in the considered opinion of the Court, the Statutory Appellate Authority is having an inherent power to decide the application for stay pending disposal of the appeal, also, or he can take the appeal itself and dispose of the same finally, within six months from the date of filing of the appeal, in terms of Sub-Section (6) of Section 26 of the said Act. The writ petition is disposed of and the petitioner and other appellants are at liberty to move the appeal filed by them before the Appellate Authority, for hearing and disposal, or in the alternative, move an application for stay pending disposal of the appeal, within a period of four weeks from the date of receipt of a copy of this order and till such time, the second respondent shall defer the proceedings of the impugned notice dated 26.2.2015.

Issues:
1. Confirmation of Provisional Attachment Order under Prevention of Money-Laundering Act, 2002.
2. Legality of notice for taking possession of attached property.
3. Statutory appeal under Section 26 of the Money-Laundering Act.
4. Application for stay pending disposal of appeal.
5. Interpretation of powers of Appellate Authority under Section 26.

Analysis:

1. The judgment dealt with the confirmation of a Provisional Attachment Order under the Prevention of Money-Laundering Act, 2002. The Adjudicating Authority concluded that certain individuals had committed scheduled offenses, generated proceeds of crime, and laundered them. The Authority confirmed the Provisional Attachment Order, stating that the attached properties were proceeds of crime involved in money laundering. The order was to continue during the pendency of proceedings related to offenses under the Money-Laundering Act.

2. The legality of a notice issued by the second respondent for taking possession of the attached property was challenged. The notice stated that the property would be at the disposal of the Directorate of Enforcement. The petitioner contested the notice's legality, leading to the writ petition.

3. The judgment addressed the statutory appeal filed under Section 26 of the Money-Laundering Act by the aggrieved private individuals. The appeal was filed in compliance with The Prevention of Money-Laundering (Appeal) Rules, 2005, challenging the order of the Adjudicating Authority confirming the Provisional Attachment Order.

4. The petitioner sought a stay on further proceedings following the notice until the appeal was heard. The Court considered the appeal papers to be in order and granted the petitioner and other appellants the liberty to move the appeal for hearing and disposal or file an application for stay pending the appeal's resolution.

5. The interpretation of the powers of the Appellate Authority under Section 26 was discussed. The Court held that the Appellate Authority had inherent power to decide on applications for stay pending appeal or to expedite the appeal's disposal within six months from the filing date.

In conclusion, the judgment disposed of the writ petition, allowing the appellants to proceed with the appeal or apply for a stay. The second respondent was directed to defer proceedings until the appeal or stay application was resolved.

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