Introduction
The Hon’ble High Court of Punjab and Haryana at Chandigarh, in the case of Union of Bank of India v. Assistant Director, Directorate of Enforcement[i], ruled that revision petitions are maintainable in cases where an order for confiscation of property is passed under s. 8(7) of the Prevention of Money Laundering Act, 2002 (‘PMLA’).
Factual Background
The Union of Bank of India (‘petitioner’) granted credit facilities to ABW Infrastructure Ltd. As a result, the property at 22 Farmhouse Land in Village Rajokri Tehsil, Vasant Vihar, New Delhi, was mortgaged to the petitioner Bank.
The Enforcement Directorate (ED) filed a criminal complaint against Atul Bansal, Sonal Bansal, ABW Infrastructure Ltd, and its group companies for allegedly purchasing acres of land under false names and concealing proceeds of crime related to the sale of licenses derived by ABW Group in connivance with Government officers.
As a result, the Special Judge, PMLA (Haryana) at Panchkula, in Directorate of Enforcement v. Atul Bansal & Ors.[ii], passed an order confiscating the above-mortgaged property under s. 8(7) of the PMLA.
Hence, the petitioner filed the present petition under s. 47 of the PMLA, read with s. 397 of the Criminal Procedure Code, 1973.
Issues
Whether the order passed by the Special Judge, PMLA, Panchkula is an interlocutory order or not?
Whether a revision petition is maintainable against such an order?
Held
The Court observed that an order for confiscation of property determines the rights of interim custody until the trial is concluded, so it is not an interlocutory order.
Hence, the High Court held that the revision petition filed by the petitioner in the present case was maintainable.
The High Court referred to s. 8 of the PMLA alongside rs. 3 and 3A of the Prevention of Money Laundering (Restoration of Confiscated Property) Rules, 2016 (‘PMLA Rules’), called out the difference between the two in their applicability. While r. 3 of the PMLA Rules applies only to cases under s. 8(5) of the PMLA, where on the conclusion of the trial, the offence of money laundering is made out, and an order of confiscation of property is passed, r. 3A of the PMLA Rules applies where the charges have been framed, and an application is made to restore the attached property.
The Court also reiterated that since an interlocutory order is temporary in nature and does not determine the rights of the parties, revision petitions are not applicable to such orders. However, in the present case, the confiscation order was held to be final in nature.
Our Analysis
The High Court's decision established that the order related to the confiscation of property under s. 8(7) of the PMLA is not interlocutory as it affects the substantive rights of the parties. Relying on various judicial precedents, the Court provided a pathway for redress via revision petitions in property confiscation cases under the PMLA.
This ruling creates a precedent that will impact many subsequent cases. It may open the door for further orders under the PMLA regarding the confiscation of property to be challenged by revision petitions. Further, this ruling can also be seen as striking a balance between ensuring swift action against money laundering and protecting the rights of the accused.
End Notes
[i] CRR-476-2024 (O&M) dated 30.07.2024.
[ii] COMA/35/2018.
Authored by Ritik Kumar Jha, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.