Abhay Nigam & Others Vs. Union of India & Others
Madhya Pradesh High Court (Division Bench (DB)- Two Judge)
WA, 483 of 2021, Judgment Date: Jun 18, 2021
Law laid down -
The Prevention of Money Laundering Act 2002 - Section 5 – Attachment of Property – The attachment order passed by Competent Authority in exercise of power under Section 5 is tentative/provisional in nature. Thus, the “reason to believe” in passing such order is also provisional in nature subject to its confirmation by the “adjudicating authority”.
Section 8 of The Prevention of Money Laundering Act 2002 – The adjudicating authority is under a statutory obligation to examine the complaint preferred under Section 5(5) of the Act and assign “reason to believe”. If adjudicating authority has “reason to believe” that any person has committed an offence, after putting him to notice, obtaining reply and hearing the aggrieved person, adjudicating authority needs to pass an order recording a finding whether all or any of properties referred in the notice are involved in money laundering.
Interpretation of statutes – The text and context both must be seen to understand and interpret a statutory provision. The scheme and object of the statute can be best understood if text and context are properly taken into account while interpreting the provision.
The Prevention of Money Laundering Act 2002- It provides 3 tiers of redressal mechanism. The attachment order passed by invoking Section 5(1) needs to be confirmed by the adjudicating authority. A further appeal is provided before appellate Tribunal. Another appeal under Section 49 is available before the High Court. In view of effective statutory mechanism available to the appellants, interference was declined. The appellant may raise all possible grounds including the ground of “discrimination” before the adjudicating authority. The adjudicating authority is directed to take into account said grounds and pass appropriate order within stipulated time.
Section 24 & 26 of the Prohibition of Benami Property Transactions Act, 1988 and Section 5 & 8 of the Prevention of Money Laundering Act, 2002 – The scheme of both the provisions compared. The legislative intent and scheme ingrained in both the provisions of said enactments appears to be pari materia. The Writ Court and Division Bench in a case dealing with Act of 1988 declined interference at the stage of issuance of attachment order and permitted the petitioner therein to raise all possible grounds before the “adjudicating authority”. Same course is followed here in the instant case.
Abhay Nigam & Others Vs. Union of India & Others