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Judgment
MP-PMLA-1721/JL/2015 (U/S 35) In FPA-PMLA-582/JL/2014
This miscellaneous petition MP-PMLA/1721/JL/2015 has been filed by the appellant/applicant under Section 35 (F) of the Prevention of Money
Laundering Act, 2002 seeking review of this Tribunal’s order dated 12.12.2014 passed in FPA-PMLA-582/JLZO/2014.
The appellant/applicant (hereinafter it would be referred as applicant) had earlier preferred the appeal i.e. FPA-PMLA/582/JLZO/2014 before this
Tribunal against the order dated 2nd May, 2014 passed u/s 8(4) of the Prevention of Money Laundering Act, 2002, (hereinafter also referred as
PMLA) received by the applicant from the respondent asking the applicant to vacate the residential house no. D-5/5 DLF Phase-I, Gurgaon, Haryana,
in view of the order dated 31/03/2014 of the Adjudicating Authority passed in O.C. No. 228/2013 confirming the provisional attachment order no.
3/2013 dated 28/10/2013.
The relevant facts which led to proceedings under the PMLA against the applicant are briefly as under:
a) that the applicant and one Mr. Ranjeet Singh were friends and the applicant being in the hotel business has two/three hotels in various parts of Delhi
and outside;
b) that Ranjeet Singh owned the house which was in the name of his wife bearing No. D-5/5, DLF Phase-I, Gurgaon, Haryana and the applicant’s
brother had seven and half acre of land in village Samrala, Punjab;
c) that Ranjeet Singh also has few acres of adjoining land with the applicant in village Samrala and both had decided that Ranjeet Singh will transfer
the ownership of DLF house and the applicant would transfer the seven and half acre of land in village Samrala to Ranjeet Singh, that both parties had
agreed to the sale and purchase of the two properties, that the property in DLF was agreed to be sold to the applicant and his brother for a total sale
consideration of Rs. 3.75 crore while the applicant was to sell the Samrala land for a total sale consideration of Rs. 3 crores;
d) that since applicant and Ranjeet Singh were good friend and having trust in each other, in the month of September, 2011 the applicant paid token
money against the DLF house of Rs. 5.25 lakh and the possession of the said house was also handed over to the applicant and his family;
e) that the applicant in order to arrange funds for the purchase of the house also applied for grant of loan to Bank of India on 28.04.2012 and requisite
formalities were completed including receiving the valuation report and also legal scrutiny report done by Advocate Alok Rattan dated 03.05.2012;
f) that the applicant and Ranjit Singh decided to reduce the oral understanding into written document and accordingly an agreement to sell was
executed between Smt. Rajwant Virk W/o Sh. Ranjeet Singh Kandola R/o C-6/3, Vasant Vihar, New Delhi (since the DLF house was in the name of
Smt. Rajwant Virk) and the applicant Sh. Amanpreet Singh Gandhi and his brother Sh. Mandeep Singh Gandhi both sons of late Sh. Joginder Singh
Gandhi R/o I-99, 2nd Floor, Kirti Nagar, New Delhi, that at the time of singing of this agreement the applicant from his account No. 21394 paid the
amount of Rs. 25 lacs by cheque No. 320149 dated 28.05.2012 and Mandeep Singh paid a sum of Rs. 25 lacs from his Account No. 21392 vide
Cheque No. 366649 dated 28.05.2012, that another payment of Rs. 37,25,000/-was paid by Sh. Mandeep Singh from his A/c No. 21393 vide Cheque
No. 366657 dated 01.06.2012 in addition to Rs. 5.25 lakh paid by Mandeep Singh in cash in September, 2011 when the understanding of Sale and
purchase was arrived on that accordingly, Rajwant Kaur had received Rs. 92.5 lakh as part sale consideration and the applicant and his brother were
to pay balance of Rs. 2,82,50,000/- at the time of registration of sale deed from on or before last August, 2012;
g) that a similar agreement to sell with regard to the sale of Samrala land was entered on 29.05.2012 between Smt. Rajwant Virk and Sh. Mandeep
Singh, that at the time of signing the agreement Smt. Rajwant Kaur paid an amount of Rs. 50 lacs through RTGS dated 29.05.2012 and paid another
amount of Rs. 37.25 lacs through RTGS on 04.06.2012, that the balance sale consideration was to be paid at the time of registration of Sale Deed
from on or before last August, 2012;
h) that the FIRs were registered against Shri Ranjit Singh Kandola @ Raja Kandola S/o Shri Kewal Singh R/o Village Happowal P.S. Nanga, District
Shaheed Bhagat Singh Nagar, Punjab and since the FIR disclosed the commission of schedule offences the Enforcement Department, Jalandhar
registered an ECIR bearing No. 06/JL/2012 on 29.10.2012 and took up the investigation under Prevention of Money Laundering Act, 2002;
2(A) the following immoveable properties purchased by Smt. Rajwant Virk W/o Sh. Ranjeet Singh Kandola @ Raja Kandola in her name out of the
proceeds of crime were provisionally attached under provisional attachment order No. 03/2013 dated 28.10.2013.
I. House No. D-5/5, DLF Phase-I, Gurgaon, Harayana.
II. Hotel Roop Palace, Village Tapal Majara, District Ropar, Punjab.
The provisional attachment was confirmed by the Adjudicating Authority by the order dated 31.03.2014 in OC No. 228/2013.
2(B) after confirmation of the order of provisional attachment, the appeal No. FPA-PMLA/582/JLZO/2014 was filed by the applicant against the
confirmation order dated 31.03.2014 of the Adjudicating Authority.
During the pendency of present appeal FPA-PMLA/582/JLZO/2014 this Tribunal passed a judgment dated 05/09/2014, in the case of Central Bank
of India in FPA-PMLA-285/CHN/2011, in which, this Tribunal held that in case the person is neither made defendant by the respondent, nor
Adjudicating Authority issue notice during u/s 8(1) of Prevention of Money Laundering Act, 2002 during the hearing of complaint u/s 5(5) of the
PMLA 2002, though the said person had legal and valid right to be claim in the property or any asset apart from the defendants in the complaint u/s
5(5) of the PMLA 2002, in that case, the aggrieved person should first approach the Adjudicating Authority u/s 8(2) of the PMLA 2002.
In view of the said pronouncement in the case of Central Bank of India the applicant was allowed by this Tribunal to withdraw the appeal No.
FPA-PMLA-582/JLZO/2014 vide the order dated 12.12.2014, with liberty to invoke his remedy as contemplated under proviso to Section 8(2) of the
PMLA. The order dt. 12.12.2014 is reproduced hereunder:-
“The learned counsel for the applicant on instruction seeks to withdraw the appeal.
He states that the applicant shall invoke his remedy as contemplated under proviso to Section 8(2) of PMLA without prejudice to his rights
and contentions.
This Tribunal by order dated 23.05.2014 had stayed the dispossession of the applicant from the property bearing no. D-5/5, DLF
Phaseâ€"I, Gurgaon, Haryana subject to deposit of Rs. 50,000/- per month from May, 2014. The charges for the use and occupation are to
be deposited by the applicant by 15th day of the succeeding English calendar month.
Considering the facts and circumstances, the applicant is permitted to withdraw the appeal without prejudice to his rights and contentions.
The applicant shall be free to invoke his remedy as contemplated under proviso to Section 8(2) of the PMLA Act.
In the circumstances, the interim order dated 23rd May, 2014 shall remain applicable till 31st January, 2015.
The appeal and applications are disposed off in term thereof
The applicant after withdrawal of the said appeal immediately approached the Adjudicating Authority by filing an application under proviso 2 of
Section 8 of the PMLA 2002.
5(A) During the pendency of the applicant’s application seeking remedy under proviso to Section 8(2) before the Adjudicating Authority, the
applicant approached this Tribunal by way of the instant MP being No. MP-PMLA/1721/JL/2015 for seeking review of this Tribunal’s order
dated 12.12.2014 on the following grounds:
A. that withdrawal of the appeal in view of the judgment of this Tribunal in Central Bank of India has rendered the petitioner remedy less which is
contrary to the all judicial disciplines as well as the various pronouncement of the Hon’ble Supreme Court of India;
B. that applicant had filed the appeal against the order/administrative decisions of the respondents passed u/s 8(4) of the PMLA 2002, and as per the
settled principle and the procedure followed by this Tribunal the applicant fall under the category of aggrieved person as contemplated u/s 26 of the
Act and therefore, the present appeal filed by applicant was fully maintainable;
C. that because as per the scheme of the PMLA 2002, powers of the Adjudicating Authority as well as of the Tribunal are segregated, that while the
adjudication is u/s 8, the appeals are heard by the Tribunal u/s 26 of the Act;
D. that as per section 11 there is no power vested with the Adjudicating Authority to modify or set aside its own order and once the order is passed
u/s 8(3) of the Act and the authority become functus officio;
E. that as per section 8(2), it was obligatory upon the Adjudicating Authority to issue notice to the person if the property is claimed by a person other
than a person to whom the notice has been issued; that such person also required to be given an opportunity of hearing to prove that the property in his
hand is not involved in money laundering;
F. that the order of this Tribunal making mandatory to the person who has not been heard by the Adjudicating Authority though has a legitimate claim
in the property to first approach by invoking section 8(2) of the Act by way of filing application before Adjudicating Authority has resulted into
extending power to the Adjudicating Authority which is not provided under the Act;
G. that if order of this Tribunal in Central Bank is followed it will result into empowering Adjudicating Authority to review its own order which is
otherwise completely prohibited under the scheme of the PMLA 2002 as no such power is provided under the Act;
H. that this Tribunal being an Appellate Tribunal empowered to hearing the appeal u/s 26 of the Act is to pass such order thereon as it thinks fit,
confirming, modifying or setting aside the order appealed against, meaning thereby that this Tribunal can only interfere with the order passed by the
Adjudicating Authority, or in case any aggrieved person pleads that he is not being heard and all material is not considered, in that case this Tribunal is
vested with power to set aside the order of Adjudicating Authority and remand the case back to the Adjudicating Authority for fresh hearing, as done
by the previous bench of this Tribunal in case of Deepak J.Panchal as well as in case of Sanjeev Kumar.
I. that the Judgment/Order Dated 05.09.2014, passed by this Tribunal, in case of Central Bank of India is not a binding precedent for Adjudicating
Authority since the said Judgment is beyond the Jurisdiction of Tribunal and cannot be treated as precedent by any stretch of imagination;
J. that as per the fundamental principle of Administrative Law, an Adjudicatory body, has to function within the confines of its Jurisdiction as held in
Tata Consulting Engineers V. Workmen (AIR 1981 SC 599,604), that anything done by it in excess of its Jurisdiction is Void;
and decision without jurisdiction is inoperative in eyes of law; that if Tribunal has no Jurisdiction in law to evolve a new procedure, not mandated by
the Statute, then the decision will be of no effect, that no amount of consent or acquiescence on part of the parties themselves can create jurisdiction
in Tribunal as jurisdiction is created by law, and whatever is without jurisdiction will remain so;
K. that the procedure evolved by the Tribunal, viz. after the passing the order under Section 8 (3), under PMLA, any person may exercise his right
under section 8(2), by filing an application under the latter provision, is beyond the powers of the Hon’ble Tribunal as the power to
modify/review/recall any order passed by the Tribunal, has been expressly given to the Tribunal by the legislature and no such power has been given
to the Adjudicating Authority, under PMLA by the legislature. Reliance has been placed on Rajeev Hitendra Pathak v. Achyut Kashinath Karekar,
(2011) 9 SCC 541 : (2011) 4 SCC (Civ) 781 at page 550 in which it was held
“34. On a careful analysis of the provisions of the Act, it is abundantly clear that the Tribunals are creatures of the statute and derive
their power from the express provisions of the statute. The District Forums and the State Commissions have not been given any power to set
aside ex parte orders and the power of review and the powers which have not been expressly given by the statute cannot be exercisedâ€,
that the order passed in Central Bank, is per incurium, that an order/ judgment is per incurium, when the said order ignores a binding
precedent/statute/rule, that the order passed per in curium is not binding upon the lower court/authority, that it has been held in 2009 SCC
OnLine Mad 1077 : (2009) 3 CTC 719 : (2009) 6 Mad LJ 733 in PSA Sical Terminals Limited V. Union of India.
“28. On this aspect, it is to be stated that a decision shall be construed to be sub-silentio and per incurium, if, in that case, a statute or
rule having statutory effect was not brought to the attention of the Court, which means some applicable rule of law was missed by the Court
and the Court would have decided the case differently if the material had been argued before the Court. The significance of a judgment
having been decided sub-silentio and per incurium is that it need not be followed as a precedent by a Lower Court.â€
L. that in a case where the Tribunal refused to follow a precedent, holding it per in curium, Hon’ble Supreme Court has commended the same.
The said matter is CCE & Customs v. Tikatar Industries, (2010) 13 SCC 73 at page 75
“5. In Bitumen Products (India) v. CCE [(1989) 44 ELT 504 (Tri)] while considering Item 11, which was under the old tariff, the Tribunal
took a contrary view holding that the assessee was ineligible for the exemption under the notification, as the Board's circulars were not
brought to the notice of the Tribunal for its consideration. Therefore, Bitumen case [(1989) 44 ELT 504 (Tri)] on which reliance was placed
by the learned SDR before the Tribunal, has rightly not been followed by the Tribunal in the present case.â€
M. that it has been held in 1993 SCC OnLine Mad 222 : (1996) 1 LW 42 C.G. Shanmugham V. T. Subramania Mudaliar (Died) and 4 others, that
“22. In 1985 Writ L.R 1 = 98 L.W 17, (supra), a Full Bench of this Court explained the effect of a judgment rendered in ignorance of the
provisions of a Statute, as follows:-
“While referring to the exception to the rule of stare decisis, it is observed in „Precedent in English Law‟ by Rupert Cross, 1961
Edition, at page 130, as follows:-
“No doubt any court would decline to follow a case decided by itself or any other court (even one of superior jurisdiction), if the
judgment erroneously assumed the existence or non-existence of a statute, and that assumption formed the basis of the decision. This
exception to the rule of Stare decisis is probably best regarded as an aspect of a broader qualification of the rule, namely, that courts are
not bound to follow decisions reached per incuriam.â€
The proposition that a decision per incuriam need not be followed as a binding precedent is well established. If authority is needed for this
proposition, we may refer to the decision of the Court of Appeal in Young v. Bristol Aeroplane Co. Ltd. where Lord Greane, M.R observed
as follows:-
“Where the court has construed a statute or a rule having the force of a statute, its decision stands on the same footing as any other
decision on a question of law. But where the court is satisfied that an earlier decision was given in ignorance of the terms of a statute or a
rule having the force of a statute, the position is very different. It cannot in our opinion, be right to say that in such a case the court is
entitled to disregard the statutory provision and is bound to follow a decision of its own given when that provision was not present to its
mind. Cases of this description are examples in decisions given per incuriam.â€
The Supreme Court in Jeisri v. Rajdewan has also quoted with approval the observations in Halsbury's Laws of England, Third Edition, Vol.
22, paragraph 1687, pages 799-800, which are as follows:
“The Court is not bound to follow a decision of its own if given per incuriam. A decision is given per incuriam when the court has acted
in ignorance of a previous decision of its own or of a court of a co-ordinate jurisdiction, which covered the case before it, or when it has
acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to follow, and in the latter, it is
bound by the decision of the House of Lordsâ€. (Emphasis supplied).
N. that unlike courts, quasi judicial bodies are not bound by their own decisions, it has been held in Union of India V. Kamlakshi Finance Corporation
Ltd., AIR 1992 SC 711, that the doctrine of stare decisis does not apply to a quasi judicial body that in case there is no such binding precedent, an
quasi judicial body may differ from its earlier decision if it thinks proper to do so in the circumstances of a case;
O. that the Adjudication Authority has no statutory power to review/revise its own order, that as per Section 11 (1), the power to review/revise the
order of confirmation/non-confirmation, is not provided by the statute; that it has been held in ; Financial Commissioner (Taxation), Punjab V.
Harbhajan Singh (AIR 1996 SC 3287), that an adjudicatory body has no inherent power to review or revise which decision it has rendered itself, that it
has been further held in State Bank of India V. S. N. Goyal (2008) 8 SCC 92, that, once an adjudicatory authority makes a decision, it become final
and can only be reopened only if power of review is conferred on the authority by the statute under which it is functioning, that such power has only
been conferred by the statute by Section 35 (2) (f) upon the Appellate Tribunal PMLA and not upon the Adjudicating Authority;
P. that the order of the Appellate Tribunal in the Central Bank case (cited supra) is beyond the jurisdiction conferred by the statute upon itself, that the
interpretation of exercise of “right to be heard†before the Adjudicating Authority cannot be availed by any person after the lis before the
Authority is over and it has passed an order of confirmation/non-confirmation, that by making observation that any such person who has a vested right
in attached property to be heard before the Adjudicating Authority, can approach the Authority is beyond the four corners of the statute, that it has
been held in M.P. Waqf Board V. Subhan Shah (2006) SCC 10 SCC 696, 703-04 Para 28, that where a statute creates different authorities to
exercise their functions thereunder, each of such authority must exercise the functions within the four corners of the statute; that it has been further
held in V.K. Ashokan V. Asst. Excise Commissioner (2009) 14 SCC 85, 110 para 54, that, any action which is not within the domain of the statutory
authority would be illegal and without jurisdiction conferred by the statute.
Q. that after confirmation of the provisional attachment order the Adjudicating Authority has become functous officio in terms of the description of the
concept of functus officio by the Hon’ble Supreme Court in SBI V/s S.M. Goyal (2008) 8 SCC 92.
R. that division bench of Hon’ble High Court of Delhi in case of India Tourisms Development Cooperation Ltd. Vs Delhi Administrative and
others 207 (2014) Delhi law times 471 (DB) has held in Para 20 of the judgment that it is settled legal proposition that unless the statute/rules so permit
the review application is not maintainable in case of judicial/quasi order, that in absence of any provision of the Act granting an express power of
review it is manifest that the review could not be made and if the order is reviewed it is Ultra Virus illegal and without jurisdiction, that the power to
review is not a inherent power, it must be conferred either expressly/specifically, and in the absence of any statutory provision providing for review
entertaining an application for review or under the grab of clarification/modification/ correction is not permissible.
The Learned Counsel for the applicant has prayed for setting aside the order dated 12.12.2014 and the ex-parte order dated 31/3/2014 passed in
O.C. No. 228/2013 of the Adjudicating Authority confirming the provisional attachment order no. 3/2013 dated 28/10/2013 and remanding back the
case for fresh adjudication before the Adjudicating Authority.
The learned counsel for the respondent Mr. S.A. Saud has also stated that the Adjudicating Authority has no power to review its orders and has
concurred with the learned counsel for the applicant that the order dated 12.12.2014 of this Tribunal be reviewed.
We have heard both the parties and considered the material on record. The miscellaneous petition has raised a question of law i.e. whether the
Adjudicating Authority has any power to review its own orders and whether any order passed by this Tribunal directing the Adjudicating Authority to
hear the applicant after passing of the confirmation order is a valid order or not.
The powers of the Adjudicating Authority to adjudicate matters under PMLA flow from Section (8) of the PMLA. The relevant provisions read as
under:
8(1) “Adjudication On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17
or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under
section 3 [or is in possession of proceeds of crime], it may serve a notice of not less than thirty days on such person calling upon him to
indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-
section (1) of section 5, or, seized [or frozen] under section 17 or section 18, the evidence on which he relies and other relevant
information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in
money-laundering and confiscated by the Central Government:
Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy
of such notice shall also be served upon such other person:
Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such
property.
1) The Adjudicating Authority shall, after-
a. considering the reply, if any, to the notice issued under sub-section (1);
b. hearing the aggrieved person and the Director or any other officer authorized by him in this behalf; and
c. taking into account all relevant materials placed on record before him,
by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in
money-laundering:
Provided that if the property is claimed by a person, other than a person to whom the notice has been issued, such person shall also be
given an opportunity of being heard to prove that the property is not involved in money-laundering.
2) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order
in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or [record seized or
frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized
or frozen property] or record shall-
(a) continue during the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law
of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and]
[(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or sub-section
(2A) of section 60 by the [Special Court].]â€
From the above it is evident that section 8(1) casts a responsibility upon the Adjudicating Authority to issue a show cause notice to any person who
the Adjudicating Authority has reason to believe has committed an offence under Section 3 of PMLA or is in possession of proceeds of crime. The
first proviso of section 8(1) further requires that if any property is held by a person on behalf of any other person then a copy of such notice shall also
be served on such other person.
The second proviso to section 8(1) requires that in case the property is held by more than one person, the show cause notice shall be served to all
persons holding such property. Section 8(2) empowers the Adjudicating Authority to record a finding by an order whether all or any of the properties
referred to in the show cause notice are involved in money laundering and the proviso to sub-section (2) of section 8 lays down if the property is
claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove
that the property is not involved in money laundering. It is this proviso which casts a responsibility on the Adjudicating Authority to afford a opportunity
of hearing to any person who has not been issued a notice under section 8(1) but claims a right in the property in question.
The main question is whether this obligation has to be discharged before the order under Section 8(3) is passed or a post-decisional hearing would
suffice to meet the requirements of law. In the case of Central Bank of India (Supra) this Tribunal has taken a view that the proviso to sub-Section 2
of Section 8 speaks of only affording a opportunity of being heard to a person claiming right in the property but the timing of such hearing need not
necessarily be prior to passing of the order under Section 8(3).
In the light of said provisions, we would like to differ with the view taken by the Tribunal in the Central Bank of India as such a view would in fact
lead to review of its own orders by the Adjudicating Authority either confirming or modifying its previous orders as any hearing afforded under proviso
to sub-Section 2 of Section 8 has to necessarily result into an order. Otherwise such a hearing will have no meaning. If such a hearing is conducted
after an order under Section 8(3) has already been passed such hearing may result in order which may be at variance with the previous orders under
Section 8(3).
Such a scenario would definitely be in contradiction with the provisions of the PMLA as no such powers of review have been vested in the
Adjudicating Authority. The provisions of Section 8, (1), (2) & 3 have to be read harmoniously and a holistic view has to be taken to interpret these
provisions correctly. While Section 8(1) speaks of issue of show cause notice to the persons alleged to have committed an offence under Section (3)
and to joint holders of the property and on whose behalf the property is held by some other person, Section 8(2) read with its proviso speaks of
Principles of Natural Justice to be followed in the form of considering the reply to the show cause notice, hearing the aggrieved persons and the
complainant and also hearing any person other than a person to whom the notice has been issued, who claims a right in the property and Section 3
provides for passing an order in writing regarding confirmation of attachment. This scheme of law has no scope for segregating the proviso to Section
8(2) from Section 8(2) as well as the Section 8(3) because a hearing after the passing of the order under Section 8(3) has no meaning. The noticees
as well as any other person who claims a right in the property has to be heard before a final order of confirmation of attachment is passed so that the
submissions and pleas made by such a person are taken on record and given due consideration before arriving at a final decision by the Adjudicating
Authority.
As regards the powers of review of its own orders by the Adjudicating Authority it would be relevant to refer to Section 11 of the Prevention of
Money Laundering Act which deals with powers regarding summons to the production of documents and evidence etc of the Adjudicating Authority.
Section 11 reads as under:
“Power regarding summons, production of documents and evidences etc.
11(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:-
a) Discovery and inspection;
b) Enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and
examining him on oath;
c) Compelling the production of records;
d) Receiving evidence on affidavits;
e) Issuing commissions for examination of witnesses and documents, and
f) Any other matter which may be prescribed.
All the persons so summoned shall be bound to attend in person or through authorized agents, as the Adjudicating Authority may direct,
and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such
documents as may be required.
Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the
Indian Penal Code (45 of 1860).â€
The above section do not entrust the Adjudicating Authority with any powers of review of its own orders. Such a power cannot be enjoyed and
exercised by the Adjudicating Authority unless it is specifically provided in the law. As per the existing provisions of PMLA the Adjudicating Authority
has no powers to review its own orders. Therefore, any order passed by the Adjudicating Authority which amounts to reviewing of its own orders
would be against the provisions of PMLA and not sustainable. As regards the powers of review of its orders with the Appellate Tribunal, section 35of
the PMLA specifically provides for the same. The relevant portions of Section 35 are reproduce below:
“35(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but
shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers
to regulate its own procedure.
(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil
court under the Code of Civil Procedure, 1905 (5 of 1908) while trying a suit, in respect of the following matters, namely:-
a) Summoning and enforcing the attendance of any person and examining him on oath;
b) Requiring the discovery and production of documents;
c) Receiving evidence on affidavits;
d) Subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or
document or copy of such record or document from any office;
e) Issuing commissions for the examination of witnesses or documents;
f) Reviewing its decisions;
g) Dismissing a representation for default or deciding it ex parte;
h) Setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and
i) Any other matter, which may be, prescribed by the Central Government.â€
Clause (f) of section 35(2) empowers the Appellate Tribunal to review its decisions; however, no such power is vested in the Adjudicating
Authority under Section 11 of PMLA.
In this regard, reliance has been placed by the applicant on the judgment in the case of Rajeev Hitendra Pathak V/s Achyut Kashinath Karekar
(2011) 9SCC 541, (2011) 4SCC (CIV) 781 to bring home the point that the power of review which has not been expressly conferred by the statute
cannot be exercised by the Adjudicating Authority. The Hon’ble Supreme Court in the above case held,
“34. On a careful analysis of the provisions of the Act, it is abundantly clear that the Tribunals are creatures of the statute and derive
their power from the express provisions of the statute. The District Forums and the State Commissions have not been given any power to set
aside ex parte orders and the power of review and the powers which have not been expressly given by the statute cannot be exercised.â€
We find that the Hon’ble Supreme Court in the above said case has clearly held that Tribunals are creatures of the statute and derive their
power from express provisions of the statute and the powers which have not been expressly given by statute cannot be exercised. In the PMLA while
the Appellate Tribunal has been given the powers of review under Section 35, no such powers have been vested in the Adjudicating Authority. Thus,
Adjudicating Authority cannot exercise power of review.
It has also been pleaded by the applicant that Adjudicating Authority after confirmation of the provisional attachment order has become functus
officio due to efflux of time of 180 days, which is purely command of law and the same cannot be abrogated in the garb of Section 8(2) of PMLA. In
this regard, we find that this Tribunal had deliberated on this aspect in the Central Bank case (Supra) where in para 11 it was observed as under:
“The words of statute, proviso to section 8(2) of Act are clear and unambiguous and are reasonably susceptible to one meaning only. If
that be so, it cannot be construed to mean that the person who has not been given notice under Section 8(1) of the Act and whose property
is sought to be attached or has been attached and attachment order has been confirmed was entitled for hearing only if he had approached
the Adjudicating Authority before confirmation of the provisional attachment order. There is nothing in the Act which will demonstrate that
the Adjudicating Authority will become functus officio after confirmation of the provisional attachment order within the time stipulated
under section 5 (1) (b) of the Act. Though proviso to section 8 (2) contemplates that the hearing shall be given to the person to whom the
notice has not been given under Section 8(1). No order of the Adjudicating Authority has been brought to the notice of this Tribunal where
it has held that it would not hear a person whom the notice was not given under Section 8 (1) of the Act, after confirmation of the
provisional attachment order. No precedent of any Hon’ble High Courts or Hon’ble Supreme Court has also been relied on by any
of the parties for such an interpretation of said section.
With due regard we would like to differ with the above views as in the absence of any express provisions under the PMLA vesting powers of
review in the Adjudicating Authority, any order passed after issuance of the confirmation order under Section 8(3) would be contrary to the law. The
Hon’ble Supreme Court has held and described the functus officio in SBI V/s S.M. Goyal (2008) 8SCC 92 as under:
“26. It is true that once an authority exercising quasi-judicial power takes a final decision, it cannot review its decision unless the
relevant statute or rules permit such review. But the question is as to at what stage an authority becomes functus officio in regard to an
order made by him. P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn., Vol. 2, pp. 1946-47) gives the following illustrative definition
of the term “functus officioâ€:
“Thus a judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision.â€
Black's Law Dictionary (6th Edn., p. 673) gives its meaning as follows:
“Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority.â€
We may first refer to the position with reference to civil courts. Order 20 of the Code of Civil Procedure deals with judgment and
decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the court, after the case has been heard, shall
pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be
pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders.
Sub-rule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is specially
empowered (sic by the High Court) in this behalf]. The proviso thereto provides that where the judgment is pronounced by dictation in open
court, the transcript of the judgment so pronounced shall, after making such corrections as may be necessary, be signed by the Judge, bear
the date on which it was pronounced and form a part of the record. Rule 3 provides that the judgment shall be dated and signed by the
Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by
Section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is
dictated in open court, that itself amounts to pronouncement. But even after such pronouncement by open court dictation, the Judge can
make corrections before signing and dating the judgment. Therefore, a Judge becomes functus officio when he pronounces, signs and dates
the judgment (subject to Section 152 and power of review). The position is different with reference to quasi-judicial authorities. While some
quasi-judicial tribunals fix a day for pronouncement and pronounce their orders on the day fixed, many quasi-judicial authorities do not
pronounce their orders. Some publish or notify their orders. Some prepare and sign the orders and communicate the same to the party
concerned. A quasi-judicial authority will become functus officio only when its order is pronounced, or published/notified or communicated
(put in the course of transmission) to the party concerned. When an order is made in an office noting in a file but is not pronounced,
published or communicated, nothing prevents the authority from correcting it or altering it for valid reasons. But once the order is
pronounced or published or notified or communicated, the authority will become functus officio. The order dated 18-1-1995 made on an
office note, was neither pronounced, nor published/notified nor communicated. Therefore, it cannot be said that the appointing authority
became functus officio when it signed the note dated 18-1-1995.â€
In the instant case after publication and communication of the confirmation order dated 11.03.2014 to the parties concerned the Adjudicating
Authority became functus officio and hence was not empowered or entitled to review its own orders, that too when there are no express provisions
for such a review by the Adjudicating Authority in the PMLA. But the Appellate Tribunal can exercise its power of review as per scheme of the Act.
In view of the above, we are of the view that the order dated 12.12.2014 of this Tribunal allowing the applicant to invoke his remedy before the
Adjudicating Authority as contemplated under proviso to section 8(2) of PMLA needs to be reviewed.
Therefore, in terms of the powers vested in this Tribunal under section 35(2) of the PMLA we review the order dated 12.12.2014 of this Tribunal
and pass the following order:
I. Order of confirmation dated 31.03.2014 in OC No. 228/2013 in so far as it pertains to house No. D-5/5 DLF Phase-I, Gurgaon, Haryana is set aside
and the matter is remanded back to the Adjudicating Authority for deciding the matter afresh after giving an opportunity of being heard to the
applicant in terms of proviso to section 8(2) and also the other defendants in OC No. 228/2013.
II. The Adjudicating Authority shall fix a date of hearing not beyond 45 days from the date of receipt of this order. The applicant and the defendants in
OC No. 228/2013 shall appear before the Adjudicating Authority on the date fixed by the Adjudicating Authority for hearing. The Adjudicating
Authority shall pass its order in remand proceedings within 45 days of the date of hearing.
III. The applicant and the defendants in OC No. 228/2013 shall not sell, dispose of, alienate or create any third party interest in the property viz. D-5/5,
DLF Phase-I, Gurgaon, Haryana during the pendency of remand proceedings before the Adjudicating Authority and the provisional attachment order
No. 03/2013 dated 28.10.2013 in ECIR/06/JLZO/2012 shall remain alive. The applicant shall also continue to deposit charges for use and occupation
of the said property @ of Rs. 50,000 per month to be deposited by 15th date of the next English calendar month.
IV. This order has been passed on a question of law itself and we are not expressing any opinion on the merits of the case.