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2022 (10) TMI 11 - HC - Money LaunderingFreezing of proceeds of crime - reasons to believe recorded for retention of the property under Section 20 of the PMLA - HELD THAT - The appellants are entitled to an opportunity before the learned Single Judge and to file the requisite documents along with affidavit-in-opposition. The order of the learned Single Judge is interlocutory in nature, therefore, the conclusions drawn therein and findings recorded therein are only tentative in nature. The appeal is disposed off by setting aside the last sentence of paragraph 21 of the order of the learned Single Judge which states WPA 17454 of 2022 is disposed of in terms of the above and permit the appellants to file affidavit-in-opposition within two working weeks from today before the learned Single Judge in WPA 17454 of 2022 and thereafter, affidavit-in-reply be filed within two working weeks - appeal disposed off.
Issues:
1. Stay of freezing order 2. Opportunity to file affidavit-in-opposition 3. Maintainability of appeal 4. Nature of the order Stay of Freezing Order: The intra-court appeal challenged the order granting interim relief against the freezing order dated July 13, 2022. The writ petitioner sought to restrain further action related to a specific case. The learned Single Judge stayed the freezing order and directed the respondents not to proceed further based on that order. The appellants argued that the investigation should not be stayed as per the Prevention of Money-Laundering Act, 2002 (PMLA). They contended that reasons to believe were available and could have been presented if given the chance. The appellants highlighted the scheme of the PMLA and the availability of the remedy of appeal under Section 26 of the Act. The respondents opposed the stay only on the freezing order, not on the investigation itself. Opportunity to File Affidavit-in-Opposition: The appellants raised concerns that the writ petition was disposed of on the first hearing without allowing them to file an affidavit-in-opposition or present relevant documents. The reasons to believe for retaining the property under the PMLA were shared with the Adjudicating Authority but were not presented in the writ court due to lack of opportunity. The Court noted that the appellants should have been given a chance to respond before the disposal of the petition. Maintainability of Appeal: The Court found that the appeal was maintainable as the learned Single Judge had not addressed the prayer to quash the specific case mentioned in the writ petition. Since the Single Judge had only considered the issue of the freezing order, the appeal was deemed valid as the criminal jurisdiction was not exercised. Nature of the Order: The Court observed that the order under appeal was interlocutory in nature, focusing solely on the stay of the freezing order. It was noted that the conclusions and findings in the order were tentative, emphasizing the need for the appellants to have an opportunity to present their case properly. The appeal was disposed of by allowing the appellants to file an affidavit-in-opposition within a specified timeframe, and the writ petition was to be decided expeditiously by the learned Single Judge. In conclusion, the High Court set aside part of the Single Judge's order, granting the appellants the opportunity to present their case properly. The status quo regarding the frozen accounts was to be maintained, and parties were directed to rely on cited judgments during further proceedings before the Single Judge. The High Court refrained from delving into the merits of the case to avoid prejudicing the parties before the Single Judge's final decision.
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