Before exhausting the provisions of appeal in The Prevention of Money-Laundering Act, 2002, the Petitioners cannot invoke Writ Jurisdiction: Karnataka HC [Read Judgment]

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In Noor Ahmed vs. Joint Director, the Karnataka High Court held that the Petitioners could not invoke extra-ordinary Writ Jurisdiction of the Court before exhausting the provisions of appeal provided in the Statute.

The Petitioner was working as an Executive Engineer. A case against him was registered by the Police on the basis of an investigation conducted by them relating to the amassing wealth. They were charged under Section 13(a)(c) read with Section 13(2) of the Prevention of Corruption Act, 1988 on 16.11.2010. A charge sheet was filed on 1.4.2014. Para No.8 of the schedule to the provisions of Prevention of Money Laundering Act, 2002 was amended and section 13 of the provisions of the Prevention of Corruption Act, 1988 was included in para 8 of Schedule-2 of Act, 2002.

The amended Act 2012 was gazetted on 3.1.2013. The Rule making authority framed the Rules under the PMLA 2002, only with effect from 15.12.2013 by insertion of Amendment Act, 2013 with regard to taking possession of property attached under Section 5 or frozen under Section 1(a) of section 17 of the order of confiscation.  A notice was issued to them to explain why their properties shouldn’t be attached. After giving opportunity of hearing, the Adjudicating Authority confirmed the provisional attachment order. Aggrieved, the petitioners filed Writ Petitions.

The Counsel for the petitioners argued that the respondents have failed to notice that from the law/rules to be framed under Section 73 of the Prevention of Money Laundering Act, 2002 prior to 15.2.2013 and any law made thereafter would be with relation to the amended provisions of Section 8 of the Act, 2002 only. He submitted that in the absence of any Rules existing with respect to position of law prior to 15.2.2013 having not been framed, could not have formed basis for taking action against the petitioners. Hence, it was submitted that the proceedings initiated for taking possession of the properties in which the petitioners are staying is not in accordance with the provisions of the Prevention of Money Laundering Act.

The Counsel for the respondents argued that the petitioners ought to have challenged the issuance of notice dated 5.10.2016 by the Deputy Director, Enforcement Directorate to take possession of

the schedule properties, before the Appellate Tribunal by filing an appeal as provided under the provisions of Prevention of Money Laundering Act, 2002. He further submitted that when the statute itself provides the provisions for preferring an appeal against the orders passed by the respondent-authorities, the petitioners couldn’t approach the Court by preferring the writ petitions invoking the extra-ordinary jurisdiction of the High Court.

The bench comprising Justice Budihal R.B. found that before passing the provisional order of attachment, the Adjudicating Authority had followed the due procedure of law. The Judge noted that there wasn’t any violation of the Natural Justice Principles.

“The petitioners have to challenge the same by preferring an appeal before the Appellate Tribunal and they cannot directly approach this Court by filing the writ petitions invoking the extra-ordinary jurisdiction of this Court. When the provisions of the statute itself i.e., The Prevention of Money-Laundering Act, 2002 itself provides for challenging the said orders by preferring an appeal before the appellate Tribunal, as it is rightly submitted by the learned Additional Solicitor General appearing for the respondents/authorities, the writ petitions are not maintainable, since as per Section 42 of the Prevention of Money Laundering Act, 2002, only when a person is aggrieved by the decision or order of the appellate Tribunal, such person can approach this Court by preferring an appeal.” observed the Court.

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