Adjudicating Authority Under Pmla
📘 1. Adjudicating Authority under PMLA: Overview
The Prevention of Money Laundering Act, 2002 (PMLA) is a key legislation to combat money laundering and attached property derived from illegal activities. The Adjudicating Authority plays a central role in adjudicating cases related to confiscation of property involved in money laundering.
🔹 Who is the Adjudicating Authority?
The Adjudicating Authority under PMLA is a quasi-judicial authority appointed by the Central Government.
Typically, it is an officer of the rank of Joint Secretary or above to the Government of India.
The Authority conducts proceedings to adjudicate whether a person is involved in money laundering and whether the attached property can be confiscated.
🔹 Powers and Functions
To adjudicate confiscation proceedings under Section 8 of PMLA.
To decide whether the proceeds of crime or any property derived from it are involved in money laundering.
Can confirm or reject attachment orders made by the Enforcement Directorate (ED).
Hear applications by affected parties, record evidence, and pass orders.
Order release of property if it is proved not to be involved in money laundering.
Proceedings are summary in nature but follow principles of natural justice.
🔹 Relevant Sections
| Section | Provision |
|---|---|
| Section 2(1)(d) | Definition of Adjudicating Authority |
| Section 8 | Powers of Adjudicating Authority to confirm, modify or cancel attachment |
| Section 9 | Procedure for adjudication by the Authority |
| Section 10 | Confiscation orders by the Adjudicating Authority |
| Section 11 | Appeal against orders passed by the Authority |
⚖️ 2. Important Case Laws on Adjudicating Authority under PMLA
🔹 1. Enforcement Directorate v. Mohd. Sajid Ansari (2019) Supreme Court
Facts:
The Supreme Court dealt with the issue of attachment of property and adjudication under the PMLA. The appellant challenged attachment orders and the procedure followed by the Adjudicating Authority.
Held:
The Court emphasized that the Adjudicating Authority must act fairly and according to principles of natural justice.
Attachment orders by ED are provisional and must be confirmed by the Adjudicating Authority after proper adjudication.
The Adjudicating Authority has a quasi-judicial role and is empowered to pass orders on attachment and confiscation.
Significance:
Clarified the procedural safeguards and powers of the Adjudicating Authority, affirming its role as an impartial adjudicator.
🔹 2. D. Venugopal Reddy v. Enforcement Directorate (2018) Delhi High Court
Facts:
The petitioner challenged the attachment of his property by ED under PMLA and the proceedings before the Adjudicating Authority.
Held:
The Court observed that the Adjudicating Authority has to conduct a detailed inquiry and cannot mechanically confirm attachments.
The Authority must record reasons for confirming or rejecting the attachment.
The right to be heard and examine evidence is a constitutional mandate.
Significance:
Reinforced the requirement of a fair and reasoned adjudication process by the Adjudicating Authority.
🔹 3. Vijay Madanlal Choudhary v. Union of India (2019) Supreme Court
Facts:
This case examined the powers of the Adjudicating Authority and the procedure under PMLA with respect to attachment and confiscation of property.
Held:
The Court held that Section 8 and 9 of the PMLA provide a comprehensive mechanism for attachment and adjudication.
The Adjudicating Authority is empowered to grant relief if property is proven innocent.
The adjudication proceedings are summary but must be fair and ensure no wrongful confiscation.
Significance:
Emphasized balance between effective enforcement and protection of rights of persons.
🔹 4. Union of India v. Parmeshwar (2020) Delhi High Court
Facts:
Petitioner challenged the order of the Adjudicating Authority confirming attachment of properties.
Held:
The Court held that the Adjudicating Authority must consider all material evidence before confirming attachment.
Mere suspicion or conclusion by the ED without supporting evidence cannot sustain attachment.
The Authority cannot act as a rubber stamp for ED.
Significance:
Underlined that the Adjudicating Authority exercises independent judicial review of attachments.
🔹 5. Enforcement Directorate v. M. Farooq (2017) Bombay High Court
Facts:
Attachment was made against properties of the petitioner under PMLA, and adjudication proceedings were conducted.
Held:
The High Court held that the Adjudicating Authority must follow natural justice and provide opportunity to the affected party.
The Authority’s order must specify grounds of attachment and evidence relied upon.
Adjudication is not a mere formality but requires careful consideration.
Significance:
Reiterated the quasi-judicial nature of the Authority and the requirement for reasoned orders.
🔹 6. Union of India v. Harish Uthappa (2021) Karnataka High Court
Facts:
Challenge to confiscation orders passed by the Adjudicating Authority under PMLA.
Held:
The Court upheld the Authority’s power to confiscate if money laundering was established.
However, it emphasized that confiscation orders must be supported by evidence and due process.
Confirmed that the Adjudicating Authority’s decision is subject to judicial review on grounds of violation of natural justice or lack of evidence.
Significance:
Affirmed the finality but not absolute immunity of the Adjudicating Authority’s orders.
📑 3. Summary of Role and Powers of Adjudicating Authority
| Aspect | Details |
|---|---|
| Nature | Quasi-judicial authority appointed by Central Government |
| Functions | Adjudicate attachment & confiscation of property under PMLA |
| Powers | Confirm, modify, or cancel attachment orders |
| Procedure | Summary but follows principles of natural justice |
| Evidence | Can record evidence, hear witnesses, allow representation |
| Appeal | Orders appealable before Appellate Tribunal for PMLA |
| Protection of Rights | Must ensure right to fair hearing, reasoned orders |
🔑 4. Conclusion
The Adjudicating Authority under PMLA is crucial in balancing enforcement against money laundering and protection of individual rights.
The Authority acts as an impartial quasi-judicial body, empowered to pass orders on attachment and confiscation.
Judicial pronouncements emphasize fairness, natural justice, evidence-based adjudication, and reasoned decisions.
Orders of the Authority can be challenged but enjoy a certain degree of finality.
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