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2025 Supreme(Online)(ATFP) 292
APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI (1) MP-PMLA-13111/IDR/2023 (Exem.)
MP-PMLA-13109/IDR/2023 (Stay)
FPA-PMLA-6502/IDR/2023 Smt. Manjri Choudhary … Appellant (2) MP-PMLA-504/IDR/2024 (A.D.) MP-PMLA-13189/IDR/2023 (Misc.)
MP-PMLA-10640/IDR/2022 (Exem.)
FPA-PMLA-5317/IDR/2022 Vijay Choudhary … Appellant (3) MP-PMLA-10646/IDR/2022 (Exem.)
FPA-PMLA-5319/IDR/2022 M/s. Zoom Realty Projects Pvt. Ltd. … Appellant Versus The Deputy Director, Directorate of Enforcement, Indore … Respondent Advocates/Authorized Representatives who appeared For the Appellant : Shri Akhil Kumar, Chetan Pathak, Advocates For the Respondent : Shri Abhimanyu Kaul, Advocate CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER
The confirmation of provisional attachment orders under the Prevention of Money Laundering Act must adhere to a 180-day limit, excluding delays due to Covid-19 as per the Supreme Court's directives.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 5(1), 5(3), 8(3) - Provisional attachment order - Challenge to confirmation of provisional attachment order following expiry of 180 days without confirmation under section 5(3) - Provisional order ceases after 180 days unless confirmed, but Covid-19 period excluded per Apex Court rulings - Adjudicating Authority's decision affirmed due to proper adherence to statutory timelines. (Paras 1, 4, 9, 10, 12, 13, 18, 19)
(B) Jurisdiction of court - The court clarified that timelines set by legislations for provisional attachment are mandatory, but relevant periods impacted by extraordinary circumstances like the Covid-19 pandemic can be excluded. (Paras 10, 11, 35)
(C) Legal Principle - The provisions under the PMLA ensure that property can only be attached for a maximum of 180 days without a subsequent confirming order, establishing essential procedural safeguards against deprivation of property. (Paras 8, 9, 12, 18)
(D) Recognition of Prior Attachment - The attachment of properties cannot be repeated if already under another attachment order, maintaining the substance of existing legal encumbrances. (Paras 12, 19)
Facts of the case:
The appellants' challenge concerned the confirmation of a provisional attachment order which was allegedly confirmed after the legally mandated 180-day period from initial attachment, during which properties were already encumbered from a previous order.
Issues: The main issues addressed were the confirmation of the provisional attachment within the stipulated timeframe and the validity of reattaching properties already under a prior attachment order.
Findings of Court:
The Tribunal determined that the authority acted within legal bounds by confirming the attachment order despite the lapse of 180 days, considering the Covid-19 delays as exempting circumstances.
Ratio Decidendi: The court held that while the 180-day confirmation requirement is strictly observed, extraordinary circumstances necessitate consideration for exclusion of certain periods, specifically due to the delays attributed to the Covid-19 pandemic.
Result: Appeals disposed with clarifications.
ORDER
29.04.2025
By this appeal, a challenge has been made under section 26 of the Prevention of Money Laundering Act , 2002 (in short, the Act of 2002) to the order dated 22.12.2021 passed by the Adjudicating Authority confirming the provisional attachment order dated 2nd February, 2021.
2. It is a case where the CBI and the bank Security & Fraud Cell, New Delhi Economic Offences Wing (CBI) Mumbai registered FIR and filed charge sheet against M/s Zoom Developers Private Limited, Vijay Choudhary and B.L. Kejriwal, being the Directors of the Company and Sharad Kabra being the Company Secretary. The FIR was involving others also as an accused along with M/s Zoom Developers Private Limited. The allegation against the appellant Company was causing wrongful losses as many as 26 banks and therefore the FIR was filed by those financial institutions from time to time.
3. The learned counsel for the appellants submitted that they are pressing the appeal purely on legal issues thus, would not refer to the facts other than relevant for the consideration of two issues out of many given in the written arguments on 29.04.2025.
4. The counsel for the appellants pressed the appeal on following two grounds:-
Issue No. 1
5. The provisional attachment order was passed on 02.02.2021 while it was confirmed by Adjudicating Authority vide its order 22nd December, 2021 after a period of 180 days. A provisional attachment order has a life of 180 days unless confirmed by the Adjudicating Authority within the period given above and otherwise as per section 5 (3) of the Act of 2002, it would cease to exist.
Issue No. 2
6. The four properties attached vide the PAO on 2nd February, 2021 were already under attachment in pursuance to the earlier attachment order. Once the properties were under attachment under the OC number 514/2016, it could not have been subjected to the attachment again.
7. On the aforesaid two grounds, the appeal was pressed leaving all other grounds given in the written arguments submitted during the course of the arguments.
8. Elaborating the arguments in reference to first issue, the learned counsel submitted that provisional attachment order number 01/21, dated 02.02.2021 was having life of 180 days unless confirmed by the Adjudicating Authority within the period aforesaid as per section 5 (1) (b) of the Act of 2002.
9. As per section 5 (3) of the Act of 2002 every order of attachment under sub section 1 of section 5 shall cease to exist after the expiry of the period of 180 days unless confirmed under section 8 (3) of the Act of 2002. In the instant case, the order of confirmation by the Adjudicating Authority is subsequent to the period of 180 days, thus it should cease to exist.
10. The legal issue aforesaid was contested by the respondent. It was submitted that the appellant has raised the argument regarding delay in passing of the order by the Adjudicating Authority to confirm the provisional attachment order ignoring the period of Covid-19 and Judgement of the Apex Court to exclude the period of Covid-19 which is not only for the purpose of limitation to pursue the litigation but even for termination of proceedings. The order for it was passed on 10th January, 2022 in Suo Moto petition 03/20 where exclusion of the period for termination of proceedings was given from 15th March 2020 till 28th February 2022. If the period aforesaid is excluded, the Adjudicating Authority passed the order well within the period rather despite adverse situation of Covid-19, the Adjudicating Authority completed the proceedings and passed the order during adverse condition and therefore the impugned order should not be declared to have lapsed.
11. We have considered the rival submission and find that issue raised by the appellant has been settled by the various High Court and referring to a “celebrated Judgement of Telangana High Court”, this Tribunal also passed a detailed order holding that the provisional attachment order would not cease to exist if delay was a
