ORDER :

(D. Bharatha Chakravarthy, J.)

(Prayer : Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Declaration, to declare that Sections 6 (2), Section 6 (3) (a) (ii) and Section 6 (5) (b) of the Prevention of Money Laundering Act, 2002, are unconstitutional for violating Article 14 of the Constitution of India.)

A. The Writ Petition :

This Writ Petition is filed to declare that the Sections 6 (2), 6 (3)(a)(ii) and 6 (5)(b) of the Prevention of Money Laundering Act, 2002 (Act No. 150 of 2003) as unconstitutional for violating Article 14 of the Constitution of India.

B. The Brief Facts:

2. The facts in brief are that a case in Cr. No.3 of 2021 was registered on the file of the Cyber Crime Police Station, Kohima, Nagaland for the alleged offenses under Sections 420, 120B of Indian Penal Code, 1860 read with Section 66 (D) of the Information Technology Act, 2000. The gist of allegations in the above case is that HPZ token, an application based token promised users, of large gains against investment by investing in mining machines for Bitcoin and other crypto currencies. The investors were assured that their invested money was being used to buy various mining machines by which crypto currencies were being mined and they were receiving or will receive gains against sale of such crypto currencies. However, the application stopped working and the investors were not allowed to withdraw the money. Total credits/debits in UPI linked accounts in relation to the case were approximately Rs. 115 crores which were transferred to various entities/individuals.

2.1. Since the offences were Schedule Offences under the Prevention of Money Laundering Act, 2002 (hereinafter 'PMLA'), upon conduct of preliminary enquiry, a case for money laundering as defined under Section 3 punishable under Section 4 of PMLA was made out and a case in ECIR No. GWZO-II/09/2022 was registered on 12.04.2022 and was taken up for investigation. Investigation revealed that a web of companies and individuals were involved in laundering the above proceeds of crime. The respondents had reason to believe that the petitioner herein, namely, Pay Perform India Private Limited and its Directors and Officers were also involved in money laundering.

2.2 Between 09.02.2023 to 11.02.2003 search was conducted in the premises of the petitioner and certain materials were seized. Bank accounts were freezed. The Directors were summoned and inquired. Subsequently an application was filed in O.A. No. 822 of 2023 before the Adjudicating Authority under PMLA for retention of the records and materials seized as per Section 17(4) of the PMLA. After recording the reasons as per Section 8(1) of the PMLA, a show cause notice dated 16.03.2023, was issued to the petitioner to file a reply.

C. The Case of the Petitioner :

3. It is at this stage, while keeping open its defence on merits to be taken up before the Adjudicating Authority, the vires of the provisions mentioned in para 1 above are challenged. It is the case of the petitioner that the Adjudicating Authority acts as a Tribunal and it has the trappings of a Court deciding the rights of the parties. It cannot be without a judicial member and thus the very constitution is illegal. The impugned provision also enables constitution of single Member Bench by which there can be a Bench without the legally qualified Member, which is per se illegal.

D. The Case of the Respondents:

4. The Writ Petition is resisted by filing a counter affidavit on behalf of the respondents. It is submitted that the members of the Indian Legal Service are qualified to be appointed as Judicial Members. The Adjudicatory Authority is not a Tribunal but is in the form of an additional internal safe guard. The Adjudicatory Authority is like the original authority under the Income Tax Act, Customs Act etc., and the deciding of lis starts only at the Appellate Tribunal, which is constituted with qualified Judicial Member. The validity of