Jurisdiction to proceed u/s 8(4) of PMLA shall be established when order of attachment by AA is passed: HC

Case Details: Syed Akeel Shah v. Directorate of Enforcement - [2022] 145 taxmann.com 532 (Jammu & Kashmir and Ladakh)

Judiciary and Counsel Details

• • Ali Mohammad Magrey, C.J. & Sanjay Dhar, J.
  • Syed Faisal Qadri, Sr. Adv. & Salih Pirzada, Adv. for the Appellant.
  • T.M. Shamsi, DSGI for the Respondent.

Facts of the Case

In the instant case, the appellants had purchased the immovable property, and the source of payments used for purchasing land and raising construction over land was illegal funds, which they had received in lieu of issuance of arms licences.

A provisional attachment order of aforesaid properties was issued by the competent authority, which was subsequently confirmed.

After passing of the aforesaid order of confirmation of provisional attachment in terms of section 8(3) by Adjudicating Authority, notice was issued under section 8(4) directing appellants to vacate attached properties within ten days of receipt of the notice.

On writ petition challenging said notice, Writ Court held that Director or authorized officer was not bound to wait till expiry of period of limitation for filing appeal for purpose of taking action in terms of section 8(4).

The question that arose before the Court was whether jurisdiction to proceed under section 8(4) would come into play immediately upon passing of order of attachment by Adjudicating Authority?

High Court Held

The High Court affirmed that jurisdiction to proceed under section 8(4) would come into play immediately upon passing of order of attachment by Adjudicating Authority.

The Court held that there is no scope to interpret provisions contained in section 8(4) and section 26 and rule 5(2) of 2013 Rules to hold that for taking action under section 8(4), authorized officer has to await expiry of period of limitation i.e., 45 days.

The Court held that the order of confirmation of attachment passed by Adjudicating Authority is just like a decree of a civil court, which becomes executable moment it is drawn.

The Court further held that just like execution of a decree of civil court is not to await period of limitation for filing an appeal before the Appellate Court, similarly an order passed under section 8(3) is to be acted upon immediately and it cannot await expiry of period of limitation for filing appeal against said order. The Court concluded that the findings of Writ Court being well reasoned could not have been interfered with.

List of Cases Reviewed

• • Order passed by Writ Court in WP(C) No. 2269 and 2270/2022 dated 18-10-2022 (para 11) affirmed.
  • Vijay Mandal Choudhary v. Union of India [2022] 140 taxmann.com 610 (SC)/2022 Line Law (SC) 633 (para 12) followed.

List of Cases Referred to

• • Vijay Mandal Choudhary v. Union of India [2022] 140 taxmann.com 610 (SC)/2022 Live Law (SC) 633 (para 8).