Take Expeditious Steps For Appointing Chairperson, Other Members Of PMLA Appellate Authority: Delhi High Court To Centre

The Delhi High Court has directed the Union Government to take expeditious steps for appointing Chairperson and other members of the Appellate Authority under Prevention of Money Laundering Act, 2002 (PMLA) within eight weeks.

Taking judicial notice of the fact that there are a “large volume of cases” pending under PMLA, Justice Prathiba M Singh said that there is a “dire need” for constitution of multiple benches.

The court was hearing a plea moved by M/S Gold Croft Properties Private Limited challenging an order passed by the Authority on January 25 rejecting its application seeking transfer of PMLA proceedings to a bench consisting of two members under Section 6(7) of the enactment.

Section 6(7) of PMLA states that if at any stage of hearing of any case, it appears to the Chairperson or a member that the case is of such a nature that it ought to be heard by a bench consisting of two members, the same may be transferred or referred for transfer to such bench as the Chairperson may deem fit.

The court said a perusal of the provision would show that it is only at the time of hearing in any matter, if the Chairperson or a member feels that the matter or case is such a nature that it ought to be heard by a Bench of two members, then the Chairperson may assign a two-member Bench for hearing of the said order. 

"In the present case, there has been no opinion expressed by the Adjudicating Authority to the effect that the matter is so complex so as to require a two-member Bench. The Petitioner in this case has moved an application seeking constitution of two-member Bench, the maintainability of which itself could be suspect inasmuch as there has been no opinion expressed by any member of the A that such a Bench is required," it added.

Observing that the proceedings under PMLA in general are of such a nature that they involve analysis of both accounts and finances, the court held that it cannot be said that a bench consisting of one member cannot adjudicate the dispute until and unless a special case is made out for transfer to a bench of two members.

“A bare perusal of the relevant provision, Section 6(7) of the PMLA would itself reveal that it does not contemplate an application being moved by a party to seek constitution of two-member Bench. If such applications are permitted, it may lead to a situation that in every case, the concerned parties/entity would move an application for constitution of such a Bench merely to delay proceedings,” the court said.

On facts of the case, Justice Singh said that there was no opinion expressed by the Authority that the matter is so complex as to require a two-member bench.

“The Adjudicating Authority has rejected the application filed by the Petitioner and the matter is now stated to be for final hearing before the Adjudicating Authority. In such a situation, this Court is of the view that an application under Section 6 and 7 would not even be maintainable,” it said.

The court said even if the said order of the Adjudicating Authority is to be challenged, an appeal under Section 26 would be the appropriate remedy and not a writ petition.

"There are no grounds that have been raised in this case for exercise of the extraordinary writ jurisdiction under Article 226," it said.

Title: M/S GOLD CROFT PROPERTIES PVT. LTD. v. DIRECTORATE OF ENFORCEMENT

Citation: 2023 LiveLaw (Del) 187

Click Here To Read Order