2022 (10) TMI 807 - HC - Money Laundering

Attachment of property - eviction notice provides only ten days time to the petitioner to vacate the subject property - Entitlement to take possession of the property attached under Section 5 or frozen under Sub Section 1-A of Section 17 of PMLA - requirement of serving ten days notice under Rule 5(2) of the Rules of 2013 or should wait for ten days after the expiry of 45 days period prescribed for filing appeal before the Appellate Tribunal against the order of Adjudicating Authority confirming the attachment of the property made under Sub Section 1 of Section 5 or retention of property or record seized or frozen under Section 17 or 18? HELD THAT - There are no absurdity or incongruity between Section 8 and Section 26 of the Act of 2002. Section 8(4) of the Act of 2002 clearly provides that the authorized officer can forthwith take over possession of the attached property once the order of provisional attachment is confirmed by the Adjudicating Authority. The expression forthwith used in Section 8(4) of the Act of 2002 denotes clear intention of the legislature not to wait for the period of limitation prescribed for filing of appeal under Section 26 of the Act of 2002. Rule 5(2) of the Rules of 2013, however, relaxes the mandate of word forthwith by providing for issuance of ten days notice to the owner/occupier of the attached property. The person aggrieved by the order of confirmation of provisional attachment made by the Adjudicating Authority is well within his/her right to file appeal under Section 26 of the Act of 2002 within this period of ten days and may persuade the Appellate Authority to intervene in the matter - One may not come across any legislation where the effect and operation of decree, judgment or order is deferred till the expiry of period of limitation prescribed for filing appeal or revision against such decree, order or judgment, as the case may be. One would rarely find a provision of automatic stay of decree, order or judgment appealable or revisable before higher forum or authority till the aggrieved person avails the remedy before such forum. It is true that in some circumstances or in a given case, ten days time available to the aggrieved person to approach the Appellate Tribunal by way of an appeal may seem to be a bit short of reasonable time, yet this Court cannot in the disguise of interpretative process substitute ten days time given under Rules 5(2) of the Rules of 2013 and the expression forthwith used in Section 8(4) of the Act of 2002 by forty five (45) days or (fifty five (55) days , as is contended by the learned counsel for the petitioner. Notwithstanding the fact that in some cases ten days time prescribed for taking possession of the attached property may result into harsh results but this Court cannot help, more particularly, when the Supreme Court has already upheld the vires of Section 8(4) of the Act of 2002 and has not found fault with any of the provisions of the Act of 2002 and the Rules framed thereunder. It is, thus, trite that principle of statutory interpretation that legislature is presumed to be careful in choice of language is well founded. First and primary Rule of construction, which is also known as literal rule of interpretation, is that the intention of the legislature must be found in the words used by the legislature itself. If the words used in the Statute are plain, clear, unambiguous and capable of only one construction then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction would make the Statute more consistent with its object and policy - Even if there is a defect or omission in the Statute the Court cannot correct the defect or supply the omission. It is only in certain set of circumstances when the language of the Statute is not clear, ambiguous and throws up absurd results, the resort can be had to the principles of statutory interpretation to construe such statute. The domains of reading into and reading down the Statute may come into play. It is not found that this Court is required to resort to the principles of statutory interpretation to construe and understand the otherwise plain, clear and unambiguous provisions of Section 8 of the Act of 2002 and the Rule 5(2) of the Rules of 2013 whatever be the difficulty and whatever be the consequences, the provisions of Section 8(4) of the Act of 2013 read with Rule 5(2) of the Rules of 2013 are required to be given effect to so long as these provisions exist on the Statute - petition dismissed.

Summary

Issues Involved:

1. Legality of the eviction notice issued under Section 8(4) of the Prevention of Money Laundering Act, 2002.
2. Interpretation of the time frame for eviction and appeal under the Prevention of Money Laundering Act, 2002 and the Rules of 2013.
3. Applicability and interpretation of relevant case laws and judgments.

Detailed Analysis:

1. Legality of the Eviction Notice:

The petitioner challenged the eviction notice dated 23rd September 2022, issued under Section 8(4) of the Prevention of Money Laundering Act, 2002 (the Act of 2002). The petitioner argued that the order of attachment confirmed by the Adjudicating Authority under Section 8(3) is appealable within 45 days as per Section 26 of the Act. The eviction notice provided only ten days to vacate the property, potentially rendering the appeal under Section 26 otiose if the eviction is enforced before the appeal is filed.

2. Interpretation of Time Frame for Eviction and Appeal:

The respondent argued that Section 8(4) allows for immediate eviction after the attachment is confirmed, and Rule 5(2) of the Rules of 2013 provides ten days for the owner/occupier to vacate. The court examined whether the eviction should wait until ten days after the 45-day appeal period expires. The petitioner cited judgments from the Bombay and Madras High Courts to support their argument for delaying eviction until the appeal period lapses.

The court noted that the Director or authorized officer could provisionally attach properties under Section 5(1) if there is reason to believe that proceeds of crime are likely to be concealed or transferred. Section 8(4) allows the officer to take possession of the property after the attachment is confirmed, but Rule 5(2) mandates a ten-day notice before eviction.

The court emphasized that the legal position is clear: the authorized officer can take possession after serving a ten-day notice, and the aggrieved party has 45 days to appeal. If the appeal is filed and the Appellate Tribunal stays the order, the eviction proceedings would halt.

3. Applicability and Interpretation of Relevant Case Laws and Judgments:

The court referred to the Supreme Court's judgment in Vijay Madanlal Choudhary, which clarified that Section 8(4) should be invoked only in exceptional situations. The mere confirmation of the attachment does not automatically warrant eviction; the peculiar facts of each case should be considered.

The court distinguished the Madras High Court's judgment in B. Kamalam, which suggested that eviction should not occur before the appeal period expires. The court found this judgment lacked detailed reasoning and was decided without a proper debate on the issue. The Bombay and Delhi High Courts' judgments in Arun Kumar Saha and Bliss Abode Private Limited were also distinguished as they were based on specific facts and did not establish a general legal principle.

The court underscored the principle of statutory interpretation, emphasizing that the judiciary should not rewrite statutes. The court must interpret the law as it is, without adding or subtracting from the statute's plain language. The court found no ambiguity in Section 8(4) or Rule 5(2) and concluded that the provisions must be given effect as written.

Conclusion:

The petition was dismissed, affirming the legality of the eviction notice and the interpretation that the authorized officer can take possession of the attached property after serving a ten-day notice, even within the 45-day appeal period. The court upheld the statutory provisions and emphasized the importance of adhering to the clear language of the law.