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The Karnataka High Court has ruled that a Prevention of Money Laundering Act (PMLA) appellate tribunal cannot send back an attachment order to be reconsidered by the original adjudicating authority. The order was passed on September 25 by a division bench consisting of Justices D K Singh and Venkatesh Naik, and was recently made publicly available.
In this case, the order was passed after the Enforcement Directorate (ED) had approached the Karnataka High Court against an earlier judgment of the appellate tribunal. In the original attachment order in the matter, mutual funds and bank deposits to the tune of Rs 21,38,66,041 had been attached by the adjudicating authority. The tribunal had sent this attachment order back to the adjudicating authority for fresh consideration, stating that it had not applied its mind to the order or cited any legally cogent reasons.
The counsel for the ED argued that a tribunal did not have such powers. He stated that the powers of a tribunal would have to be included in the relevant statute. He further argued that while the tribunal did have the power to set aside or modify an order, it could not send it back either for fresh consideration. The opposing counsel argued that returning the order back was equivalent to setting it aside.
The court agreed with the ED counsel on the question of the tribunal’s powers and observed, “Tribunal is creation of the Statute and it exercises limited power as conferred on it, by the Statute. There is no inherent power in a Tribunal, inasmuch as the Tribunal is not a regular Court. If the Statute does not confer a power of remand, and there is no inherent power vested in the Tribunal, it cannot remand the matter back to the Adjudicating Authority unless it is specifically provided in the Statute.”
Having made these observations, the high court set aside the appellate tribunal’s order and directed it to consider the matter afresh.
