The main legal point established in the judgment is the appealability of orders rejecting applications for cross-examination under the PMLA and the importance of adherence to principles of natural justice.

JUDGMENT :

Prathiba M. Singh, J.

This hearing has been done through hybrid mode.

2. The present writ petition has been filed challenging the impugned order dated 6th March, 2023 passed by the Respondent No.1 - Adjudicating Authority, under the Prevention of Money Laundering Act, 2002 (PMLA) by which the Petitioner's application for right to cross examine witnesses has been rejected.

3. The brief background of this petition is that the Petitioner - Kankipati Rajesh had purchased two immovable properties in Surat, Gujarat for a particular sale consideration. An FIR was lodged under the Prevention of Corruption Act, 1988 and proceedings from the same are pending trial in Ahmedabad. The Petitioner was arrested, thereafter, by the CBI in RC No. 221/2023/E0018. The Petitioner was again arrested by the Respondent No. 2 - Directorate of Enforcement (ED) on 6th August, 2022 and proceedings under PMLA were commenced by the ED. The Petitioner was subsequently granted bail.

4. Pursuant to proceedings under the PMLA, Provisional attachment order was passed on 3rd October, 2022 by the Respondent No. 1 whereby the two properties of the Petitioner were attached. In the said proceedings before the Adjudicating Authority, the Petitioner filed an application seeking permission to cross-examine the three persons whose statements were relied upon by the ED. The said application was decided by the impugned order dated 6th March, 2023. The operative portion of the impugned order reads as under:

“5. Having perused the contents of the submissions of the defendant, it is evident the fact and circumstances of the case leading to the attachment has been brought on record by the Complainant along with there lied up on documents which has been adversely used against the defendant and have been confronted to the defendant. These documents admittedly have been disclosed to the defendants who have been given the liberty to dispute and refute as these findings are based on material which forms part of the Original Complaint and relied up on documents. Moreover, the disclosure of the documents to the Appellants and the opportunity given to rebut and explain the same is a substantial compliance with the principle of natural justice that being so there is and can be no prejudice to the Appellant nor is any demonstrated by the Appellant before the bench. Regarding the cross examination of Shri Jigar Hirjibhai Dudhat, whose statement has been recorded, and a copy also been provided, the opportunity has been given to the defendant to rebut and explain the same. If there is a deficiency in the argument of the Complainant solely based on the statement without any corroborative evidence, the Defendant is at liberty to highlight in course of argument/by way of written submission. Similarly, if no questions have been asked from Shri Vallah bhai Mavji bhai Khunt and Kanti bhai Shamji bhai Ramani regarding their presence while finalizing the deal under reference, it may be pointed out in the written submission refuting the inference drawn on the basis of statement of a single partner. However, the Defendant has himself admitted that Shri Jigar Dudhat was holding the power of attorney on behalf of other partners and he only had handled the sale of property at silver business point. In the background of aforesaid facts, the refusal to permit the cross examination of the aforesaid two persons along with Shri Jigar Dudhat cannot on the principle of Evidence Act facts be found fault with.

6. Further, here the limited question is with reference to investment in the property indicating the source of income earning or assets out of which or by means of which the defendants have acquired the property attached under sub section (1) of section 5 of the Prevention of Money Laundering Act (15 of 2003) 2002 the evidence on which the defendant rely and other relevant information and particulars and show cause why all or any of such property should not be declared to be the properties involved i