Authorized Officer Not To Await Expiry Of Appeal Period To Take Over Possession Of Attached Property U/S 8(4) PMLA: J&K&L High Court

Justice Sanjeev Kumar thus declined to quash eviction notice against a broker in a fake arms license case being investigated under the Prevention of Money Laundering Act, 2002.

The court dismissed a plea of Syed Akeel Shah, who had challenged the eviction notice issued by Directorate of Enforcement, Sub Zonal Office, Jammu on September, 23, 2022 under Section 8(4) of the Act.

The petitioner in his plea had assailed the eviction notice on the ground that order of attachment of the subject property confirmed by the Adjudicating Authority under Section 8(3) of the PMLA of 2002 is appealable before the Appellate Tribunal under Section 26 of the Act, within a period of 45 days. However, the the impugned eviction notice provided only ten days time to the petitioner to vacate the subject property, and in case the eviction notice is given effect to before the petitioner is in a position to avail the remedy of appeal, the appeal, even if preferred within limitation, would be rendered otiose.

The moot question that sought adjudication from the bench was whether the Director or any other officer authorized by him is entitled to take possession of the property attached under Section 5 or frozen under Section 17(1-A) after 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.

The bench observed that a conjoint reading of Section 8 of the Act and Rule 5(2) of the Rules of 2013, clearly reveals that under Section 8(4), the authorized officer is empowered to forthwith take possession of the property attached under Section 5 but before doing so, he is enjoined by Rule 5(2) of the Rules of 2013 to give ten days notice to the owner/occupier of the attached property to vacate it.

It is, thus, beyond any pale of doubt that the moment the provisional order of attachment of the property made under Section 5(1) is confirmed by the Adjudicating Authority after following the prescribed procedure under Section 8, authorized officer is competent to take over the possession of the attached property, the bench underscored.

Explaining the matter the bench also took recourse to the Supreme Court judgement in Vijay Madanlal Choudhary and others v. Union of India and others, 2002 and observed that there is hardly any scope for the argument that Section 8(4) cannot be resorted without first waiting for the expiry of limitation provided for filing appeal under Section 26 of the Act.

Expounding further, the bench observed that it did not find any absurdity or incongruity between Section 8 and Section 26 of the PMLA.

"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 court underscored that needless to say that in case Appellate Tribunal stays the order of confirmation of provisional attachment made by the Adjudicating Authority under Section 8(3) of the Act, the order or notice of eviction issued by the authorized officer under Rule 5(2) shall become ineffective.

Dismissing the plea, the court said that it is not required to resort to the principles of statutory interpretation to construe and understand the otherwise plain, clear and unambiguous provisions of Section 8 and the Rule 5(2).

Case Title : Syed Akeel Shah Vs Directorate of Enforcement & Ors.

Citation : 2022 LiveLaw (JKL) 186

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