Provisional Attachment Order ceases to have validity after Expiry of 180 days under PMLA: Calcutta High Court [Read Order]

Provisional Attachment Order - PMLA - Calcutta High Court - Taxscan

The Calcutta High Court held that the provisional attachment order ceases to have validity after the expiry of 180 days under the Prevention of Money Laundering Act (PMLA).

The petitioner, Gobindo Das has challenged the impugned Provisional Attachment Order passed by the Deputy Director, Enforcement Directorate attaching his bank accounts in question under Section 5 (1) of The Prevention of Money Laundering Act, 2002 on the ground that the validity of the said impugned Provisional Attachment Order has lost its force and ceased to have any validity under Section 5 (3) of the aforesaid Act after the expiry of 180 days on 9th June 2021 and in view of the fact that the adjudicating authority has not passed any formal order on or before 9th June 2021 under Section 8(3) for confirmation or further extension of the aforesaid impugned Provisional Attachment Order dated 11th December 2020.

The petitioner contended that after the expiry of 180 days from the date of the aforesaid attachment order, Respondent has become functus officio, and further there is no provision under the aforesaid Act for an automatic or deemed extension of the Provisional Attachment Order under Section 5 (1) of the aforesaid Act. Petitioner is aggrieved by the action of the respondent in not allowing him to operate his bank account in question even after the expiry of the validity of the aforesaid order of provisional attachment.

On the other hand, ​​Enforcement Authorities opposing the Writ Petition and defending the action of the Respondent authority in not allowing the Writ Petitioner to operate the bank accounts in question contends that even without passing any formal order of confirmation or further extension under Section 8 (3) of the Act after the expiry of 180 days of validity of the aforesaid impugned Provisional Attachment Order, the aforesaid impugned Provisional Attachment Order automatically should be deemed to have been extended by claiming benefit of the order of the Hon’ble Supreme Court dated 23rd March, 2020 in Suo moto Writ Petition (Civil) No. 3 of 2020 Re-cognizance For Extension Of Limitation which was extended from time to time and lastly on 27th April, 2021 where the Hon’ble Supreme Court in view of the steep rise in Covid-19 Virus cases engulfing the entire nation and the extraordinary situation caused by the outburst of Covid-19 Virus resulting difficulties by the litigants and advocates in filing petitions/applications/suits/appeals and all other proceeding irrespective of period of limitation prescribed in general or special law extended a period of limitation until further orders.

The single bench of Justice Md. Nizamuddin held that the Adjudicating authority cannot be called a litigant or advocate or a quasi-judicial authority and cannot take the benefit of the order of the Hon’ble Supreme court passed in Suo moto Writ Petition (Civil) No. 3 of 2020 by taking the stand that on the expiry of the validity of the said provisional attachment order after 180 days under Section 5 (3) of the aforesaid Act, the same would be deemed to have been extended automatically by virtue of the aforesaid order of the Hon’ble Supreme Court when he was not required to pass any formal order of extension of the same under Section 8 (3) of the PMLA.

“I am of the considered opinion that such stand of the Respondent No. 2 is legally not sustainable since the impugned order of provisional attachment of bank accounts and postal accounts in the question of the petitioner, dated 11th December 2019, which has expired its validity on 9th June 2021, has no force after expiry of 180 days from the date of passing of such order in view of not passing any formal order under Section 8 (3) of the said Act extending the validity of the same by the Respondent No. 2 and the action of Respondent No. 3 is not allowing the petitioner to operate its bank and postal accounts in question after the expiry of the period validity of 180 days from the date of the order passed under Section 5 (1) of the aforesaid Act, such action of the Respondent Enforcement authority, is arbitrary and illegal,” the court said.

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