Appeal preferred by ED through Assistant Director under PMLA maintainable: Calcutta HC [Read Order]

Appeal - ED - Assistant Director - PMLA - Calcutta High Court - taxscan

The Calcutta High Court held that the appeal preferred by the Enforcement Directorate (ED) through Assistant Director under Prevention of Money Laundering Act, 2002 (PMLA) is maintainable.

The Adjudicating Authority, among other things, held that the defendants therein did not commit the scheduled offences or generate proceeds of crime and hence, the complaint filed against them was dismissed and the provisional attachment order was also not confirmed. Being aggrieved by the order passed by the learned Adjudicating Authority under Section 8 of the PML Act, the Enforcement Directorate, Kolkata filed an appeal through the Assistant Director.

Mr. Ranjan Deb, the senior counsel appearing on behalf of the appellant, Nillesh Parrekh submitted that Section 26 of the PML Act provides that the Director or any person aggrieved by an order made by the learned Adjudicating Authority under the Act, might prefer an appeal to the Learned Appellate Tribunal. But, Section 48 of the PML Act specified the authorities under the Act and the Enforcement Directorate was not mentioned therein as an authority. The only authority which could file an appeal under Section 26 of the Act was a Director. In fact, the term “person” mentioned in Section 26 is defined in Section 2(s) of the said Act and it does not include the authorities of the Directorate. Therefore, the appeal preferred by the Enforcement Directorate through the Assistant Director was not maintainable.

Mr. Bhaskar Prosad Banerjee, the counsel appearing on behalf of the Enforcement Directorate, submitted as follows. The case at hand related to a defalcation of Rs. 2672 Crores and apparently involved 25 banks of which five were private ones. The Enforcement Directorate is a specialised financial investigating agency under the Department of Revenue, which enforces the provisions of PML Act. The term “Assistant Director” is defined in Section 2(c) of the said Act. It was duly authorised to act under the PML Act. According to Section 26 (1) of the said Act, the Director or any other person aggrieved by an order is entitled to file an appeal before the learned Tribunal. A harmonious construction was given in order to sub-serve the object of the said Act which was a penal statute and provided for imprisonment of the accused. The adjudication regarding properties involved in proceeds of crime had a different forum, but the said forums were only assisting preservation of proceeds of crime. The said provisions have to be read with Section 48 that specifies the authorities under the said Act.

The division bench of Justice Arijit Banerjee and Justice Jay Sengupta held that in the instant case, there is no interpretation clause present to qualify the inclusive definition. However, section 48 of the PML Act, as referred to above, squarely brings an aggrieved entity like the Enforcement Directorate within the ambit of a ‘person’ as described in section 2 (s) of the Act. Therefore, the Enforcement Directorate should be competent to file an appeal under section 26 of the PML Act.

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Nillesh Parrekh vs Assistant Director, Enforcement Directorate, Kolkata & Ors

Counsel for Appellant:   Mr. Ranjan Deb Mr. Shyamal Sarkar Mr. Rajesh Gupta

Counsel for Respondent:   Mr. Bhaskar Prosad Banerjee


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