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TMI Blog2008 (9) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... hekharan, Satyakam, Vikas Sharma and Dinesh Kr. Garg for the Respondent. JUDGMENT P. Sathasivam, J. - Ms. Pareena Swarup, member of the Bar, has filed this writ petition under Article 32 of the Constitution of India by way of Public Interest Litigation seeking to declare various sections of the Prevention of Money Laundering Act, 2002 such as section 6 which deals with adjudicating authorities, composition, powers, etc., section 25 which deals with the establishment of Appellate Tribunal, section 27 which deals with composition, etc., of the Appellate Tribunal, section 28 which deals with qualifications for appointment of Chairperson and Members of the Appellate Tribunal, section 32 which deals with resignation and removal, section 40 which deals with members, etc., as ultra vires of articles 14, 19(1)( g ), 21, 50, 323B of the Constitution of India. It is also pleaded that these provisions are in breach of scheme of the Constitutional provisions and power of judiciary. 2. Brief facts in a nutshell are : The Prevention of Money Laundering Act, 2002 (hereinafter referred to as "the Act") was introduced for providing punishment for offence of money laundering. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he abovesaid provisions which are inconsistent with the separation of power and interference with the judicial functioning of the Tribunal as ultra vires of the Constitution of India. 4. The respondent-Union of India has filed counter affidavit repudiating the claim of the petitioner. The Department highlighted that the impugned Act has not ousted the jurisdiction of any Courts and sufficient safeguards are provided in the appointment of officers of the Adjudicating Authorities, Members and Chairperson of the Appellate Tribunal. 5. We have carefully verified the provisions of the Act and the Rules, particularly, relating to Constitution and selection of Adjudicating Authorities, Members and Chairperson of the Appellate Tribunal. Considering the stand taken by the petitioner with reference to those provisions, we requested Mr. K.K. Venugopal, learned senior counsel, to assist the Court. Pursuant to the suggestion made by the Court, Mr. K.K. Venugopal and Mr. Gopal Subramaniam, learned Additional Solicitor General, discussed the above issues and by consensus submitted certain proposals. 6. The petitioner has highlighted the following defects in the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to see that they are not in breach of basic constitutional scheme of separation of powers and independence of the judicial function. We agree with the apprehension of the petitioner that the provisions of Prevention of the Money Laundering Act are so provided that there may not be independent judiciary to decide the cases under the Act but the Members and the Chairperson to be selected by the Selection Committee headed by Revenue Secretary. It is to be noted that this Court in the case of L. Chandra Kumar v. Union of India [1997] 3 SCC 261 has laid down that power of judicial review over legislative action vested in the High Courts under Article 226 as well as in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution constituting part of the its structure. The Constitution guarantees free and independent judiciary and the constitutional scheme of separation of powers can be easily and seriously undermined, if the Legislatures were to divest the regular courts of their jurisdiction in all matters, entrust the same to the newly created Tribunals which are not entitled to protection similar to the constitutional protection afforded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting wing of a corporation for a like period." Action completed. Amended Rule as per Annexure A. 2. Rule 4 of Appellate Tribunal Rules, 2007 which provided for Method of Appointment of Chairperson do not give adequate control to Judiciary. Rule 4 of Appellate Tribunal Rules, 2007 has been amended to unambiguously provide that the appointment of Chairperson shall be made on the recommendation of the Chief Justice of India. Action completed. Amended Rule as per Annexure B. 3. Rule 6(1) of Appellate Tribunal Rules, 2007 which defines the Selection Committee for recommending appointment of Members of the Tribunal, would undermine the constitutional scheme of separation of powers between judiciary and executives. Rule 6(1) of Appellate Tribunal Rules, 2007 has been amended to provide that the Chairperson of Appellate Tribunal is appointed on the recommendation of the CJI and the composition of the Selection Committee to select Members of the Tribunal has been amended to provide for a Judge of the Supreme Court, nominated by the Chief Justice of India, to be the Chairperson of the Selection Committee. Action completed. Amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed. The Chairperson of the Adjudicating Authority should be the Legal member. 1.Persons qualified to be a district Judge are treated at par with District Judges for the purposes of qualification for appointment as member in ATFE under FEMA; as President of District Forum under Consumer Protection Act, 1986 etc. The eligibility criterion, for appointment as a District Judge, provided in the Constitution of India under Article 233(2), is that the person should have been an advocate "for not less than seven years". 2. PMLA is a specialized and new Act and District Judges may not be available with experience in related issues whereas Advocates or officers of Indian Legal Service, who are eligible to be District Judges, may often have greater knowledge of its provisions and working. 3. The Adjudicating Authority is a body of experts from diffe-rent fields to adjudicate on the issue of confirmation of provisional attachment of property involved in money laundering. The functions of Adjudicating Authority are civil in nature to the extent that it does not decide on the criminality of the offence nor does it have power to levy penalties or impose punishment. 4. Adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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