JUDGEMENT OF THE HON’BLE HIGH COURT OF DELHI IN THE CASE TITLED “ABDULLAH ALI BALSHARAF & ANR VS. DIRECTORATE OF ENFORCEMENT & ORS, (2019) 01 DEL CK 0039” CONCERNING OFFENCES UNDER PREVENTION OF MONEY LAUNDERING ACT

 

Abdullah Ali Balsharaf & Anr vs. Directorate Of Enforcement & Ors, (2019) 01 DEL CK 0039

PARA NO. 52,64,67 & 68

52. It is also relevant to note that in either case – the order of provisional attachment of any property under section 5(1) of the PMLA or an order of seizure of any property – has a limited life. The order of provisional attachment cannot extend beyond the period of one hundred and eighty days. Further, in terms of Section 5(5) of the PMLA, a Director or any officer who provisionally attaches a property is required to make a complaint to the Adjudicating Authority within a period of thirty days from such attachment. Similarly, where an order of seizure of property or freezing any property has been passed under Section 17(1) or Section 17(1A) of the PMLA, the concerned officer is required to make an application in terms of Section 17(4) of the PMLA, before the Adjudicating Authority for extending the time for retention of the property so seized.

64. Powers of seizure of properties is a draconian power. Grant of such authoritarian and drastic powers, without commensurate checks and balances, would militate against the principle of rule of law engrafted in the constitution of India. A police officer does not possess unfettered rights to freeze any asset without the same being reported immediately to a Magistrate. The party aggrieved, thus, has immediate recourse in respect of the said action of freezing the property. As observed above, the scheme of provisional attachment or seizure of a property, as contemplated under the provisions of the PMLA is materially different. The PMLA has separate checks and balances to ensure that such powers are exercised in aid of the object of confiscating or vesting such proceeds of crime with the Government. The power to provisionally attach or seize or freeze a property can be exercised only (a) if the specified officer has material in his possession, which provides him reason to believe that the property sought to be attached or seized is proceeds of crime or related to a crime; and (b) after recording the reasons in writing.

67. Mr Singh had contended on behalf of the Enforcement Directorate that the PMLA does not contain any provision regarding seizure on mere suspicion, therefore the power to make such seizure can be drawn from Section 102 of Cr.P.C. He contended that the provisions of Section 102(1) of Cr.P.C. are, therefore, not inconsistent with the provisions of the PMLA with regard to seizure of property. The said contention is unmerited. The question whether an enactment is repugnant to another is not determined on whether two provisions can be simultaneously obeyed but is determined in the context of the scheme of the legislative enactment. The question to be asked is whether the schemes of the two enactments can subsist and be implemented simultaneously. It is apparent that the scheme of effecting provisional attachment and seizure of property under the PMLA is wholly inconsistent with the one as enacted under the Cr.P.C. 68. In Innoventive Industries Ltd. v. ICICI Bank and Anr.: (2017) 08 SC CK 0137, the Supreme Court had examined the question of repugnancy between two enactments, namely, the Maharashtra Relief Undertakings (Special Provisions Act), 1958 and the Insolvency and Bankruptcy Code, 2016 in the perspective of the Constitution of India. The Supreme Court had referred to various decisions and culled out the principles with regard to repugnancy between two enactments. Although the decision was rendered in an altogether different context – whether the provisions of the central legislation would override a state enactment – the principles of inconsistency between two enactments as noticed by the Supreme Court would be equally applicable to determine whether the provisions of Section 102 Cr.P.C. are inconsistent with the provisions of the PMLA. In that case, the Supreme Court has referred to various decisions to set out the principles on the anvil of which the question whether two enactments are inconsistent are to be tested.