The Court upheld the decision of the Appellate Tribunal, emphasizing the comprehensive adjudicatory mechanism under the Prevention of Money Laundering Act, 2002.
In a significant ruling, the Karnataka High Court, comprising Justices D. K. Singh and T.M. Nadaf, dismissed the writ petitions filed by JSW Steel Limited against the Deputy Director, Directorate of Enforcement. The petitions challenged the Appellate Tribunal's decision to not remand the case back to the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA), 2002.
The case stems from a series of allegations against G. Janardhana Reddy and G. Lakshmi Aruna, partners of M/s. Associated Mining Company, involving illegal mining activities and the subsequent sale of iron ore to JSW Steel. The Enforcement Directorate had attached bank accounts of JSW Steel, alleging unpaid proceeds from the sale of illegally mined iron ore.
The High Court, in its judgment dated September 30, 2026, emphasized that the Appellate Tribunal's refusal to remand the matter did not constitute a violation of natural justice. The Court observed that JSW Steel was granted ample opportunity to present its case and that the Appellate Tribunal allowed the company to raise all issues on facts and law in its pending appeal.
The Court further highlighted that the principles of natural justice do not mandate a separate right to file written submissions or require that every submission be expressly recorded, provided there is meaningful consideration of the case presented.
Citing previous Supreme Court judgments, the High Court reiterated that the PMLA provides a complete adjudicatory mechanism, and interference at an interlocutory stage would undermine the statutory remedy process. The Court noted that the writ petitions were premature since the appeals before the Appellate Tribunal were still pending, and no final order had been passed.
Additionally, the Court pointed out that the Appellate Tribunal's decision did not prejudice JSW Steel, as the company retained the liberty to argue all its points before the Tribunal. The High Court found the writ petitions to be an abuse of the judicial process, intended to delay proceedings, and therefore dismissed them.
The judgment underscores the judiciary's stance on respecting statutory processes and discourages premature judicial intervention in cases where alternate remedies are available.
Bottom Line :
PMLA - Order of Appellate Tribunal refusing to remand appeal to Adjudicating Authority on alleged non-consideration of written submissions/synopsis does not amount to violation of natural justice when party had fair opportunity of hearing - Writ petition against such interlocutory order held not maintainable, particularly when statutory appeal is pending and all issues on facts and law can still be urged before Tribunal.
Statutory provision(s): Prevention of Money Laundering Act, 2002 Sections 5, 8, and 26; Constitution of India, 1950 Articles 226 and 227; Code of Criminal Procedure, 1973 Section 482.
