In a major ruling, the Telangana High Court (HC) held that period extended by Court during Prevention of Money Laundering Act, 2002 ( PMLA ) Proceedings shall be excluded to compute 180 Days for provisional attachment.
The writ petition has been filed under Article 226 of the Constitution of India to issue a direction to grant extension of time to the petitioners to prepare a reply to the show cause notice, for a further period of two months and consequently exclude two-month period from the computation of 180 days under Section 5(3) of the Prevention of Money Laundering Act, 2002.
The allegation against M/s Karvy Stock Broking Limited, the petitioner is that they have not repaid loans which are classified as fraud accounts.During the course of investigation, Provisional Attachment Order under Section 5(1) of the Act was issued for attaching various properties.The petitioners filed a writ petition seeking extension of time to submit reply to the show cause notice and the Court, granted extension of one month time to the petitioners to prepare a reply.
The said one month time got expired, and the petitioners filed the writ petition seeking extension of two months’ time to submit the reply to the said show cause notice and also to exclude the said two months’ time from the computation of 180 days under Section 5(3) of PMLA.
The said two months’ time also got expired and the petitioners filed a writ petition to set aside the Show Cause Notice.
The Counsel for the appellant submitted that the petitioners sought extension of further period of two months to submit reply to the show cause notice which is not deliberate. No prejudice would be caused to the respondents if the provisional attachment made by the respondents is continued during the said period and the same is excluded from the computation of 180 days period under Section 5(3) of PMLA.
The Bench of Justice K Lakshman observed that “This Writ Petition is disposed of granting two months’ time from today to the petitioners to submit their explanation/reply to the show cause notice and it is relevant to note that for the purpose of computing the period of 180 days, the period which was extended by this Court for submitting reply is excluded as per third proviso to Section 5(1) of PMLA.”
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