This appeal challenges the constitution of the Adjudicating ...

Money laundering law tribunal's constitution upheld; 'reasons to believe' disclosure at initial stage not required.

Case Laws     Money Laundering

September 14, 2024

This appeal challenges the constitution of the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA), 2002, alleging violation of principles of natural justice. The court held that the new law governing tribunals, including the Appellate Tribunal under PMLA, has been enacted based on Supreme Court observations. While the Adjudicating Authority is required to pass reasoned orders, it operates under tight time-frames and cannot be expected to address every issue raised through miscellaneous applications. The appellant's contention that a Judicial Member must be present was rejected, as no such ratio was laid down in the cited cases. The court also clarified that the 'reasons to believe' recorded u/s 17 for search and seizure need not be provided at the initial stage, as it is an administrative process, and parties are given an opportunity for hearing before confirmation by the Adjudicating Authority. Consequently, all appeals were dismissed.

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