Jammu and Kashmir High Court Upholds Appellate Tribunal's Power to Remand in Money Laundering Case

Court Confirms Tribunal's Authority to Remand Cases Back to Adjudicating Authority for Fresh Proceedings under PMLA, 2002

In a landmark decision, the Jammu and Kashmir High Court in Srinagar upheld the Appellate Tribunal's power to remand cases back to the Adjudicating Authority under the Prevention of Money Laundering Act, 2002 (PMLA). This ruling came in the appeal filed by Sarwa Zahoor and others against the Deputy Director of the Directorate of Enforcement, challenging the Tribunal's decision to remand the matter for fresh adjudication.

The case involved M/S Trison Farms and Construction, a company linked to alleged illegal funds transfer from Pakistan to separatist groups in Kashmir. The Directorate of Enforcement had provisionally attached properties under the PMLA, leading to subsequent legal battles.

The appellants argued that the Appellate Tribunal lacked the jurisdiction to remand cases, asserting that its powers were limited to confirming, modifying, or setting aside orders. However, the High Court, led by Justices Sanjeev Kumar and Sanjay Parihar, disagreed, highlighting that the Tribunal's powers to "pass such orders as it thinks fit" inherently included the authority to remand cases.

Citing judgments from the Supreme Court and other High Courts, the bench emphasized that remand powers are essential to ensure justice, especially in cases of procedural errors or breaches of natural justice. The court noted that without such powers, the Tribunal would be unable to effectively rectify procedural injustices.

The High Court also addressed concerns about the lifespan of provisional attachment orders, clarifying that adjudication proceedings could continue even if such orders expired, as long as the proceedings themselves were not nullified.

Ultimately, the appeals by Sarwa Zahoor and others were dismissed, upholding the Tribunal's decision to allow for fresh proceedings. This ruling reinforces the Tribunal's role in ensuring fair and comprehensive adjudication under the PMLA framework.

Bottom Line:

The appellate tribunal under Section 26(4) of the Prevention of Money Laundering Act, 2002, has the inherent power to remand a matter back to the adjudicating authority as a necessary concomitant to the power to annul or set aside an order appealed against.

Statutory provision(s): Prevention of Money Laundering Act, 2002 - Sections 5, 8, 26

Sarwa Zahoor v. Deputy Director, Directorate of Enforcement, (Jammu And Kashmir)(Srinagar)(DB) : Law Finder Doc Id # 2811407