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Judgment
FPA-PMLA-943/KOL/2015, MP-PMLA-3135/KOL/2017 (Misc.), MP-PMLA-1791/KOL/2015 (Stay), FPA-PMLA-997/KOL/2015,
MP-PMLA-3137/KOL/2017 (Misc.), MP-PMLA-1886/KOL/2015 (Stay), FPA-PMLA-995/KOL/2015, MP-PMLA-3115/KOL/2017
(Misc.), MP-PMLA-1898/KOL/2015 (Stay), FPA-PMLA-991/KOL/2015, MP-PMLA-3136/KOL/2017 (Misc.), MP-PMLA-
1891/KOL/2015 (Stay) & FPA-PMLA-999/KOL/2015, MP-PMLA-3113/KOL/2016 (Misc.), MP-PMLA-1947/KOL/2015 (Stay)
The above named appellants has preferred these appeals under Section 26 of the Prevention of Money Laundering Act, 2002 against Order dated
15.06.2015 passed by the Adjudicating Authority in O.C. No. 409/2015 under the PML Act. Since all appeals and applications have arisen out of a
common order dated 15.06.2015 of the Adjudicating Authority in a common O.C. No. 409/2015, the same are being disposed of by this common
order.
The brief facts are that the Himanshu Kumar Lal, Joint Director, Enforcement Directorate, Govt. of India, CGO Complex, 3rd MSO Building, DF
Block, 6th Floor, Salts Lake, Kolkata Zone Office has filed the original complaint against the above mentioned appellants and one M/s Eastern
Institute for Integrated Learning in Management University, Sikkim (herein after referred to as EIILM) under section 5(5) of the PMLA, 2002. The
details of the properties are mentioned in para 2 of the impugned order.
The Respondent was investigating EIILM University, Sikkim for alleged commission of scheduled offences. During the course of such investigation
of EIILM University, the show cause notice were also issued to the Appellants in November, 2014 from the Office of Enforcement Directorate
seeking details of movable/immovable properties of Appellants.
After filing the reply the Appellants received the Provisional Attachment Order dated 09.01.2015 in connection with the enquiry carried out by the
Respondent passed for attachment of Endowment Fund/properties of Appellants.
On 03.02.2015 (in complaint being OC No. 409 of 2015) show cause notice were issued by the Adjudicating Authority calling upon the Appellants
as to why the attachment made under section 5(1) of the PML Act, 2002 be not confirmed. It was the case of the appellants that their assets both
movable and immovable do not come within the ambit of Prevention of Money Laundering Act, 2002 as the proceeds of crime are allegedly generated
by EIILM University.
It was directed by the Adjudicating Authority to the appellants herein and EIILM vide notice dated 03.02.2015 to be present before the Learned
Adjudicating Authority on 06.04.2015. One of the defendants i.e. EIILM University (i.e. Defendant No. 1) in the said OC No. 409 of 2015, had
approached the High Court of Sikkim at Gangtok by way of Writ Petition (Criminal) No. 2 of 2015 along with Crl. M. Appl. No. 18 of 2015, praying
for quashing and setting aside the show cause notice dated 3.2.2015 (common for all including the present Appellants) and the prior and subsequent
investigating proceedings of the Respondent herein who also preferred an application for interim direction for staying further proceedings in complaint
being OC No. 409 of 2015 pending before the Learned Adjudicating Authority.
The Honâ€ble High Court of Sikkim issued the notice dated 2.4.2015 and directed that “in the meanwhile, the respondents shall not take any
further steps in pursuance of notice to show cause dated 3.2.2015â€.
On 14.05.2015 when the matter was listed before the Learned Adjudicating Authority, who adjourned the matter sine die in view of the orders
passed by the Honâ€ble High Court of Sikkim.
On 05.06.2015 when the Writ Petition (Criminal) No. 2 of 2015 came before the Honâ€ble High Court of Sikkim, the counsel appearing for the
respondent in the said proceedings requested the Honâ€ble High Court of Sikkim to clarify the interim orders dated 02.04.2015 with regard as other
defendants (who are the appellants herein). The Honâ€ble Court of Sikkim clarified that the order dated 02.04.2015 was to apply only to the writ
petitioner there i.e. EIILM University (one of the defendants).
On the same day i.e. 05.06.2015, as stated in the e-mail sent by Assistant Director, Enforcement Directorate, he has been directed by the
Adjudicating Authority to inform /intimate by email dated 06.06.2015 to the appellants in the complaint OC 409 of 2015 that the hearing of the
complaint was scheduled and fixed on 8.6.2015.
In the said mail the defendants in OC 409 of 2015 including the Appellants were directed to appear for the hearing of the said complaint, failing
which the complaint would be heard and decided in their absence. It is apparent that the mail was sent by the Respondent on 06.06.2015, which
happened to be a Saturday, at 10:10 PM on the official e-mail of the Appellants University.
It is a matter of record that the counsel of some of the appellants did not get the e-mail sent by the Registrar, Adjudicating Authority, PMLA due
to spelling/other problems at the end of the office of the Registrar, Adjudicating Authority.
As per record, the appellant were sent another e-mail from the office of the Adjudicating Authority on 10.06.2015, informing the Appellant that the
Adjudicating Authority had fixed the matter for 11. 06.2015 at 12:00 PM and the Appellant were directed to appear, failing which the complaint would
be decided in its absence.
It is evident that the Adjudicating Authority issued a fresh notice for hearing by giving reasonable time for appearance fixed the date of argument
on 11.06.2015.
The appellants thereafter appeared through their counsels and filed an application for recall of any order passed on 8. 06.2015 and to also grant a
weekâ€s time for filing of reply. However, Adjudicating Authority summarily dismissed the application. As per record the Learned Adjudicating
Authority did not even give any time to the Appellant to file reply and reserved orders in O.C. 409 of 2015.
One of the appellants namely, Rai Technology University, Bangalore, thereafter approached the Hon'ble High Court of Karnataka by way of writ
petition being Writ Petition No. 24563/2015 [GM-RES] challenging the action of the Learned Adjudicating Authority in not granting any opportunity to
the Appellant to file its reply and for personal hearing before passing order under Section 8(3) of the PMLA 2002 and recalling the order dated
11.06.2015 in O.C. no. 409 of 2015.
The above mentioned Writ Petition was listed before the Hon'ble High Court of Karnataka on 16.06.2015 and the Hon'ble Court was pleased to
passed an interim order:-
“Issue notice to respondents no. 1 and 3.
In the meanwhile the third respondents is directed not to pronounce or sign the order in O.C. No. 409/2015 if the same has not yet been
pronounced.â€
However apparently, prior to passing of the said order by the Hon'ble High Court of Karnataka, i.e. on 15.06.2015 the Learned Adjudicating
Authority confirmed the Provisional Attachment Order dated 09.01.2015 by passing final order in O.C. No. 409/2015.The writ petition filed being WP
No. 24563/2015 became infructuous in view of the impugned order passed by the Learned Adjudicating Authority on 15.06.2015.
The said order 15.06.2015 is the subject matter of the above mentioned appeals which has been challenged, interalia, mainly on the following
grounds:-
(a) the provisional attachment order, show cause notice, complaint and impugned order dated 15.06.2015 passed by the Learned Adjudicating
Authority is without jurisdiction and contrary to the provisions of the Act and the Rules and is bad in law as the constitution/Coram of the adjudicating
authority comprising of a single Member which is to hear the Appellants is not competent to issue Show Cause notice and decide the complaint as it
lacks jurisdiction and is in contravention of the provisions of the PML Act.
(b) Section 6 (5)(b) of the PML Act provides that one Member from the field of law has been specifically provided in view of the fact that the
functions conferred on the adjudicating authority are judicial in nature and are for the purpose of deciding lis between the parties, hence the presence
of a member having legal background becomes a sine qua non and cannot be done away with. Moreover, the adjudicating authority while exercising
its powers under the PML Act is called upon to decide questions which are intricate and complicated and pre-eminently of judicial complexion and in
such circumstances the presence of a judicial member or member having legal background is mandatory and a coram comprising of a single Member
or in absence of a Member legal/judicial would be a coram without jurisdiction or without authority in law. In the present case, a single Member Bench
is constituted to hear the appellants without authority or jurisdiction in law and such proceedings are unsustainable and the very initiation of the
proceedings before such an authority by way of issuance of the show cause notice is unsustainable.
(c) The adjudicating authority has adopted a procedure which is violative of principles of natural justice and also contrary to the provisions of the PML
Act and the Regulation of 2013. The reasonable time to file the reply was not granted rather the Adjudicating Authority was in a rush to pass order
against the principles of natural justice. The appellants were denied time to the Appellant to file reply or address arguments. Therefore the impugned
order is liable to set aside.
(d) The Adjudicating Authority ought to have decided the preliminary contentions / objections of coram non judice raised by the appellant and not
insisted in proceeding with the matter on merits and such a procedure is also contrary to settled principles of law as the issue regarding lack of
jurisdiction of an authority goes to the root of the matter and unless and until the authority has jurisdiction in law to adjudicate on a matter, it should not
have proceeded to decide upon the merits of the matter. The act of the adjudicating authority was whimsical even no time was granted to inspect the
record of the adjudicating authority.
(e) The Learned Adjudicating Authority failed to appreciate that the action of the respondent in attaching the land sold by the sponsoring body of the
Appellant as well as the consideration received by it and invested in the endowment fund of the Appellants amounts to double attachment of properties
which is not contemplated under the provisions of the act and violates the provisions of law and violates the fundamental rights of the appellant. The
Learned Adjudicating Authority has failed to appreciate that the action of entering into an agreement to sell does not constitute a crime falling within
the ambit of scheduled offences under the PML Act, 2002.
(f) The Learned Adjudicating Authority has failed to appreciate that money received by the sponsoring body of the Appellant from the legitimate sale
of land and building cannot be termed as a “proceeds of crime†in the hands of Appellant instead it is the assets in the hands of EIILM University
procured from the alleged proceeds of crime which are to be treated as “proceeds of crime†as defined under the Section 2(1)(u) of the
Prevention of Money Laundering Act, 2002. Thus the impugned order being bad in law†ought to be set aside.
The said impugned order was also challenged on merits. Such details are mentioned in the grounds of appeal.
Notice in the appeal was issued on 12.08.2015. The appeal was pending before this Tribunal.
During the pendency of appeal, in the meanwhile on 22.09.2015, the final judgment was delivered by the Honâ€ble High Court of Sikkim Gangtok
in W.P. (Crl) No.-02/2015 which was filed by defendant no. 1 in OC i.e. EIIL in Management University, allowing the petition by passing the
following directions:-
Para 19 of the Judgment passed by the Honâ€ble Court where the following directions were issued is re-produced here under:-
“(i) The Respondent No.l shall take appropriate steps with the concerned authorities of the Central Government for appointment of the Judicial
Member of the Adjudicating Authority urgently within a period of 3 (three) months and not later than that;
(ii) On appointment of the Judicial Member, the Chairman of the Adjudicating Authority shall constitute the Bench consisting of a Judicial Member
keeping in view the observations made above having regard to the nature of the lis and the anxiety expressed by the Petitioner- University.
(iii) Soon after it is constituted, the Bench shall then issue notice upon the Petitioner-University and the Petitioner- University shall appear before the
Bench and place before it all grievances expressed in the Petition; and
(iv) Since the proceedings before the Adjudicating Authority was stayed by this Court by order dated 02-04-2015, the period of attachment prescribed
under Sub-Section (1) of Section 5 shall exclude the period spent during the pendency of the case before this Courtâ€.
On 07.09.2015, Judicial Member was appointed, who alongwith Chairman heard the said matter and confirmed the provision attachment by order
dated 01.12.2015. The same was challenged before us by filing of an appeal 1184/2016 in which notice has been issued. The next date in the said
appeal is fixed for 06.04.2017.
Subsequent to the said judgment, all the appellants have filed an application for direction for remanding back the matter to the Ld. Adjudicating
Authority for fresh consideration by a coram consisting with the Judicial Member in view of judgment delivered by the Honâ€ble High Court. It is also
alleged in the application that impugned order has been passed by the coram of the Ld. Adjudicating Authority which is not consisting with a Judicial
Members in terms of section 6(2) of the PMLA, 2002 and a bare reading of sections 6, 8 and 11 of the PMLA read with Regulations 21 and 22,
would reveal that the Ld. Adjudicating Authority discharges judicial functions exercising judicial powers.
Thus, it is incumbent that its coram should be consisted with a judicial member. Copy of the judgment was also enclosed alongwith the respective
applications where it is mentioned that as the Honâ€ble High Court of Sikkim has directed the appropriate Ministry to appoint judicial member in the
coram of the Ld. Adjudicating Authority and soon after constitution of bench consisting of a judicial member and the Ld. Adjudicating Authority to
issue notice to the petitioner therein, it is prayed in the application that in view of the above said judgment passed by the Honâ€ble High Court of
Sikkim, the instant matter may kindly be remanded back to the Ld. Adjudicating Authority for fresh consideration by a coram consisting with a judicial
member.
The prayer made in the application is strongly opposed on behalf of the respondent. In reply it is stated that the contention of the petitioner is not
correct as the Prevention of Money Laundering Act, being a special act, there is no such provision of fulfillment of corum of the Adjudicating
Authority while adjudicating a case in terms of section 8 of the Prevention of Money Laundering, 2002.
It is stated that one member officiating as Adjudicating Authority can function singly while adjudicating the case as per provision of the Prevention
of Money Laundering Act, 2002. It is also stated in the reply that the Adjudicating Authority can function even in the case where there is no judicial
member included in the Adjudicating Authority which is obviously a quasi Judicial Authority.
It is undisputed fact the impugned order has been passed by the Ld. Adjudicating Authority consisting by Ld. Single Member who is not a judicial
member.
It is also undisputed fact that ECIRs No. KLZO/01/2014 and O.C. No. 409/2015 in the present appeals was also the subject matter of writ petition
02/2015 filed by one of the defendants i.e. EIIL who had challenged the Show Cause Notice (after passing the order of provisional attachment). The
said petitioner in Cr. W.P was defendant no. 1 in the same O.C. and ECIRS.
It is not disputed by the respondent that the judgment passed by the Sikkim High Court was not challenged in higher court by the respondent.
It is also admitted position that the said judgment has been acted upon by the respondent.
As far as the argument of the respondent at the time of hearing in the application is concerned to the effect that the member as per the scheme of
the Act was/is empowered to hear the matter on behalf of Adjudicating Authority, we do not wish to express any opinion being larger issue which is
also raised in many appeals. The said would be considered as and when the said pending appeals are heard. Till that time we do not wish to pass the
order in “remâ€. At present, we are concerned with the legal issue only in relation to these pending appeals.
Admittedly, the Honâ€ble High Court in para 6 has specifically come to the conclusion that the important legal issues are involved in the matter
wherein the present appellants were the defendants in the same O.C. At present we are concerned only in relation to these appeals wherein one of
the defendant in common O.C. had challenged the show cause notice in which the following findings have been arrived:-
“13. In my considered opinion, what emerges from the above with certainty is that in a case where serious questions of law and fact
arise, as in the present case, it is essential that one of the Members of the Bench constituted under Clause (b) of Sub-Section (5) of Section 6
of PMLA by the Chairperson of the Adjudicating Authority should be a Judicial Member as he “with his judicial experience would, by
virtue of his specialised knowledge, would be better equipped to dispense with speedy and efficient justiceâ€. This appears to be import of
the words ""as the Chairperson of the Adjudicating Authority may deem fit"".
It is an admitted position that the post of a Judicial Member under Respondent No.3 is still lying vacant and that the impugned show
cause notice was issued and the order under challenge passed in the absence of such a Member. Apart from what have been observed
earlier, in a proceeding of the present kind, where orders were passed ex parte by the Adjudicating Authority in the absence of the
Petitioner-University, it would have been essential for a Judicial Member to be part of the Bench considering the nature of the lis before it
to ensure that the orders are passed in satisfaction of all the principles relevant and acceptable in law. Prima facie, therefore, I am of the
view that the order does not appear to pass the muster of the law laid down in Tamil Nadu Generation and Distribution Corporation Limited
(supra).
Having observed as above, I am, however, not inclined to quash the proceedings at this stage for the reasons that follow hereafter.
The Petitioner-University, apart from showing technical flaws in the constitution of the Bench, concededly has been unable to place
anything before this Court to indicate that they have been prejudiced in any manner. It is also conceded that the Petitioner- University has
not yet responded to the show cause notice. Under such circumstances, I am of the considered opinion that it would be appropriate for the
Petitioner-University to approach the Adjudicating Authority first and place all his grievances before it.â€
In view of said circumstances and similar situated appellants herein, we do not agree with the argument of Mr. Matta addressed on behalf of the
respondent that the Judgment given by the Honâ€ble Sikkim High Court (despite of common O.C) should not be looked into. It is not denied by Mr
Matta that the present appellants are parties in the same O.C. and are placed in the same position. We are of the considered opinion that after final
judgment, the same is binding upon this Tribunal particularly once the appellants appeals arose from the same ECIR No. KLZO/01/2014 and same
O.C.
Even on parity, similar directions are to be passed. When the present appeals were filed, the judgment was awaited which has been delivered
during the pendency of appeals.
The Officer who passed the impugned common order is not Judicial Members. The Judicial Member was appointed after the judgment was
delivered. In the present appeals similar grounds are taken which were taken in writ petition by one of the defendant regarding validity of the
constitution of Bench
The respondent is also not correct while making the submissions that as per direction issued on 05.06.2015 by the High Court, the similarly situated
defendants cannot derive any benefit of the final judgment as the Adjudicating Authority had heard the matters on the basis of direction of the High
Court. The said arguments have no force as the fact of the matter is that the final judgment was passed in 22nd September, 2015. The impugned
common order was passed in 15th June, 2015 during the pendency of the writ-petition.
It is wrong to suggest on behalf of the respondent that the said judgment is to be ignored as far as the present appellants are concerned. There is
no logic of the said argument. In a way, the respondent is insisting that the effect of judgment given by the Honâ€ble Court should not be given to
these appeals filed by the defendants who were parties to the same O.C. The said arguments are wholly misconceived and we must remind the
respondent that ignoring of binding judgment amount to indiscipline and improper conduct as the judgment was passed after hearing the parties. Thus,
the appellants are entitled to get the relief claimed in the application on the ground of parity.
We are of the considered view that once the final judgment is passed, all the interim orders passed merged with final outcome of the Judgment as
per settled law. The impugned order passed on 15th June, 2015, is liable to be set-aside as the Sikkim High Court, judgment has attained its finality.
We totally agree with the legal proposition referred in para 3, 7-12 of the Judgment delivered by the Sikkim High Court. The same are reproduced
hereunder:-
“3. At the time of arguments, Mr. Shakeel Ahmed, Learned Counsel for the Petitioner-University, re-emphasised the aforesaid proposition
and urged that such was the intention of the Legislature can be clearly made out from Sub-Sections (2) and (3) of Section 6 of the PMLA.
On this, he would refer to L. Chandra Kumar VS. Union of India and Others (1997) 3 SCC 26 1Union of India VS. R. Gandhi, President,
Madras Bar Association (2010) 11 SCC 1 and Tamil Nadu Generation and Distribution Corporation Limited VS. PPN Power Generating
Company Private Limited : (2014) 11 SCC 53.
On a bare reading of Section 6 and Sub-Sections thereunder, I find substance in the submission of the Learned Central Government
Counsel that there is no mandate that a Bench to be constituted by the Chairperson of the Adjudicating Authority under Sub- Section (5) of
Section 6, must necessarily have one Member who is a Judicial Member. Sub-Sections (1) and (2) of Section 6 prescribes the constitution
and composition of the Adjudicating Authority. Sub-Section (3) of Section 6 prescribes the eligibility conditions for persons to be appointed
as the Members of the Adjudicating Authority. We may reproduce below Sub- Sections (1), (2) and (3) and Clauses (a) and (b) of Sub-
Section (5) of Section 6 of the PMLAâ€
“6. Adjudicating Authorities, composition, powers, etc.-
(l) The Central Government shall, by notification, appoint [an Adjudicating Authority] to exercise jurisdiction, powers and authority
conferred by or under this Act.
(2) An Adjudicating Authority shall consist of a Chairperson and two other Members:
Provided that one Member each shall be a person having experience in the field of law, administration, finance or accountancy.
(3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority,â€
(a) in the field of law, unless heâ€
(i) is qualified for appointment as District Judge;
or
(ii) has been a member of the Indian Legal Service and has held a post in Grade I of that service;
(b) in the field of finance, accountancy or administration unless he possesses such qualifications, as may be prescribed.
…………………………………………………………………..
(5) Subject to the provisions of this Act,â€
(a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;
(b) a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two Members as the Chairperson of the
Adjudicating Authority may deem fit;
Sub-Section (5) of Section 6 clearly sets out the jurisdiction of the Adjudicating Authority to be exercised by Benches. Clause (b) of Sub-
Section (5) specifically prescribes the strength of an Adjudicating Authority which the Chairperson shall constitute as he may deem fit. To
this extent, I have no hesitation in concurring with the submission of the Learned Central Government Counsel.
However, on a deeper consideration of the provision, it would appear that the constitution of the Bench by the Chairperson under Clause
(b) of Sub- Section (5) of Section 6, would depend upon the nature of the lis to be decided. This would be apparent from the very words
used in Clause (b) of Sub-Section (5) of Section 6 whereby it provides that a “Bench†may be constituted “as the Chairperson of the
Adjudicating Authority may deem fitâ€. This provision, in my view, is quite distinct from Sub-Section (3) of Section 6 as it is quite obviously
an omnibus provision prescribing the composition of the “Adjudicating Authorityâ€.
In Tamil Nadu Generation and Distribution Corporation Limited (supra) in which reliance was placed UponK ihoto Hollohan VS.
Zachillhu and Others I 1992 Supp (2) see 651, it has been held as under:-
“59. In view of the aforesaid categorical statement of law, we would accept the submission of Mr Nariman that the tribunal such as the
State Commission in deciding a lis, between the appellant and the respondent discharges judicial functions and exercises judicial power to
the State. It exercises judicial functions of far-reaching effect. Therefore, in our opinion, Mr Nariman is correct in his submission that it
must have essential trapping of the court. This can only be achieved by the presence of one or more judicial members in the State
Commission which is called upon to decide complicated contractual or civil issues which would normally have been decided by a civil court.
Not only the decisions of the State Commission have far reaching consequences, they are final and binding between the parties, subject, of
course, to judicial review.
The passage in Kihoto Hollohan (supra) relied upon to arrive at the above finding is found reproduced in paragraph 58 of the Tamil
Nadu Generation and Distribution Corporation Limited (supra) which we may also reproduce below:-
“58. Again in para 99, it is observed as follows: (Kihoto Hollohan case, SCC p.707)
“99. Where there is a lisâ€"an affirmation by one party and denial by anotherâ€"and the dispute necessarily involves a decision on the
rights and obligations of the parties to it and the authority is called upon to decide it, there is an exercise of judicial power. That authority
is called a Tribunal, if it does not have all the trappings of a Court. In Associated Cement Companies Ltd. v. P.N. Sharma this Court said:
(AIR p. 1606, para 33 : SCR pp. 386-87
“33... The main and the basic test, however, is whether the adjudicating power which a particular authority is empowered to exercise,
has been conferred on it by a statute and can be described as a part of the State's inherent power exercised in discharging its judicial
function. Applying this test, there can be no doubt that the power which the State Government exercises under Rule 6(5) and Rule 6(6) is a
part of the State's judicial power. ... There is, in that sense, a lis; there is affirmation by one party and denial by another, and the dispute
necessarily involves the rights and obligations of the parties to it. The order which the State Government ultimately passes is described as its
decision and it is made final and binding.â€
In L. Chandra Kumar (supra), it has been held that â€
“95................................... It must be remembered that the setting up of these Tribunals is founded on the premise that specialist bodies
comprising both trained administrators and those with judicial experience would, by virtue of their specialised knowledge, be better
equipped to dispense speedy and efficient justice. It was expected that a judicious mix of Judicial Members and those with grassroot
experience would best serve this purpose. To hold that the Tribunal should consist only of Judicial Members would attack the primary basis
of the theory pursuant to which they have been constituted. Since the Selection Committee is now headed by a Judge of the Supreme Court,
nominated by the Chief Justice of India, we have reason to believe that the Committee would take care to ensure that Administrative
Members are chosen from amongst those who have some background to deal With such cases.â€
Even otherwise, we are surprised to note that on 5th June, 2015 when it was clarified by Honâ€ble High Court, the hearing was fixed on
08.06.2015, Monday, despite the 6th June being Saturday. The notice was issued by E-mail. At the request of the appellant, the matter was adjourned
to 11th June, 2015. On 11th June, 2015 the application was filed for re-call of order dated 8th June, 2015 and also to file the reply within one week,
however no time was granted. The application was dismissed in limine and on the other hand the matter were reserved by the Adjudicating Authority.
Left with no option, the appellants aggrieved by the said order dated 11th June, 2015 filed the writ petition before Honâ€ble High Court of Karnataka
on 16th June, 2015 for recalling of order who passed interim order directed not to pronounce and sign the order in O.C. No. 409/2005 if the same has
not been pronounced. However, the Adjudicating Authority passed the impugned on 15th June, 2015. Admittedly the officer who have passed the
impugned order is not the Judicial officer. We are of the view that the proceedings conducted in violation of principles of natural justice and contrary
to the PMLA and Regulation Act, 2013. The appellants were only asking for one week time to file the reply, however the said request was refused.
We are of view that once it is held by the Honâ€ble Court that the hearing officer was not a judicial Member and was not competent to decide the
matter of a party who was one of the defendant in the common OC, the said final judgment has to be applied in favour of other defendants also who
are parties to the same OC.
For the reasons stated above, all the appeals are allowed. The impugned order is set-aside on the ground of parity only and however not on merit.
The appellants are granted four weeks to file reply to the show cause notice if already not filed. The Adjudicating Authority thereafter shall decide the
matters on merit on all the grounds raised by the appellants within the periods of three months from today.
As far as attachment of properties are concerned, the same shall continue. Appeals and Misc. applications are disposed off accordingly.
No costs.