The Appellate Tribunal, namely SAFEMA, New Delhi, clarified that it is not conferred with powers to release properties attached by the prosecution in money laundering cases. The tribunal further directed claimants to seek appropriate remedies before the special court.
The recent ruling cautioned property owners to raise the plea and contest the issue of attachment before the special court, as the Appellate Tribunal, in reference to this judgment, categorically found that it does not have the original jurisdiction to release attached properties. In this judgment, the tribunal analyzed the provisions of PMLA, 2002, specifically Sections 8 and 35 of the PMLA, 2002. Furthermore, the tribunal also analyzed the judgment in the Pulkit Garg Case.
Case Details:
Ara Properties & Others versus The Deputy Director, Directorate of Enforcement, Mumbai (MP-PMLA-12802/MUM/2023 (Misc.)) By Munishwar Nath Bhandari: Chairman & Shri Balesh Kumarrder.
Date: 25.07.2024.
Short Summary:
It appears that the properties of the appellant, Ara Properties Pvt Limited, were attached by enforcement agencies. The attachment was challenged by the appellant before the Special Court by filing an application to release the attached properties. However, it is seen that the application was not pursued further by the appellant in the Special Court.
The Special Court also did not render its observations on the above matter. Under these circumstances, the appellant filed applications before the Appellate Tribunal seeking to set aside the attachment order and consequently release those properties. While seeking such a prayer, the appellant heavily relied on the judgment of the same tribunal in the case of Pulkit Garg & Ors. vs. Deputy Director, Directorate of Enforcement, Delhi dated 16.03.2023.
Per contra, the respondent vehemently contended that the Appellate Tribunal does not have jurisdiction to release the attached properties and stressed that such rights are only vested with the Special Court under Section 8 of the PMLA, 2002. While the contentions stood so, the Appellate Tribunal analyzed the provisions of the PMLA, 2002. The findings of the Appellate Tribunal are as follows
1. Section 8(7) of the Act specifically empowers the Special Court to release attached properties.
2. In terms of Section 35 of the Act, the Appellate Tribunal is not vested with the power to release properties. In its absence, releasing any properties would usurp the powers of the Special Court.
3. The tribunal noted that it does have the power to release property when the Special Court has rendered its findings on the conviction or acquittal of the accused. (This is where clarity is not prvided)
4. The Pulkit Garg case is a per incuriam case and is not binding.
5. Sections 35(1) & (2) do not vest the Appellate Tribunal with the power to release attached property. They merely state that the tribunal can regulate its own affairs as a civil court, which cannot be presumed to mean it can act like a civil court.
Based on the above discussion, the tribunal dismissed the application filed by the appellant and granted liberty to the appellant to contest this issue before the Special Court.
FAQ
Under what scenarios does the Appellate Tribunal have the power to release attached properties?, and under what scenarios does it not have such powers?
A. In our opinion, this judgment may seem to lack some clarity. However, upon deeper analysis, we can conclude that the judgment is applicable when a new plea for releasing property attached by enforcement agencies is raised for the first time before the Appellate Tribunal. In such circumstances, it is clear that the Appellate Tribunal is not vested with the original jurisdiction to release such attachments. However, when an order against the findings of the Special Court is appealed before the Appellate Tribunal, it is vested with the jurisdiction to release such attached properties. (Kindly refer to sections 9 and 10 of the order for clarity).
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