The Calcutta High Court held that the adjudicating authority does not become functus officio on expiry of 180 days from the order of provisional attachment unless such order is confirmed Prevention of Money Laundering Act (PMLA).
On the basis of a complaint made by Pranav Kumar, the then Zonal Head, UCO Bank an FIR was registered by CBI. A charge-sheet was filed before the competent Court against the petitioner, Fairdeal Supplies Pvt. Ltd. and its directors for offences under Section 120- B read with Sections 406 and 420 of the Indian Penal Code. As Sections 120B, 406 and 420 of IPC are scheduled offence as defined under Section 2 (1) (y) of the Prevention of Money Laundering Act, 2002 (PMLA) an investigation under PMLA was initiated by recording an Enforcement Case Information Report against the petitioner and its Directors for alleged commission of offence under Section 3 which is punishable under Section 4 of PMLA. The directors of the petitioner have, however, not joined the writ petition as petitioners. The petitioner claims to be an authorized signatory.
It was submitted on behalf of the petitioners that the petitioners intended to withdraw the writ petition as the order of provisional attachment had lapsed with the expiry of 180 days in view of the provisions of Section 5 (1) (b) of the PMLA.
The petitioners’ prayer was opposed by the respondents authority and as such the matter was adjourned. The petitioners prayer for withdrawal of the writ petition on the ground that the order of provisional attachment had expired by efflux of time under the provisions of Section 5(1)(b) was again opposed by respondents on the ground that the order of provisional attachment according to the said respondents did not expire by efflux of time.
The petitioners have filed this instant application as a portion of the order dated 26th march, 2021 has been according to the petitioners misused by the respondents authority to proceed with the adjudication under Sections 8(1), 8(2) and 8(3) of PMLA.
The Single Judge Bench of Justice Arindam Mukherjee said that the stipulation in Section 5(3) on a conjoint reading of the said section along with Section-8(2) also does not indicate any timeframe. However, on expiry of 180 days the order of provisional attachment losses its validity unless confirmed prior to expiry of such 180 days. Thus, an adjudication pursuant to a complaint under Section 5(5) of PMLA if not completed before expiry of 180 days from the date of passing of the order of provisional attachment the said order of provisional attachment at the highest cannot be confirmed under Section 8(3) if the Adjudicating Authority finds that the property is involved in money-laundering.
“I have already held that the Adjudicating Authority does not become functus officio on expiry of the period of 180 days from the passing of the order of provisional attachment unless such order is confirmed under Section 8(3) in view of the provisions of Section 5(3) of the PMLA, the Adjudicating Authority in the instant case, is, free to proceed with the Complaint Case being Complaint no. 1262 of 2020 till the Section 8(2) stage i.e., to give a finding whether the property is involved in money-laundering or not,” the court said.Subscribe Taxscan AdFree to view the Judgment
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