Remanded

FPA-PMLA-871/KOL/2015 of Malvika Foundation v/s The Deputy Director Directorate of Enforcement, Kolkata

ATFP15 Jun 2017FPA-PMLA-871/KOL/2015

Case brief

AI extract

What is this about?

The Tribunal held that the impugned order was without jurisdiction as it was passed by a Bench that did not include a Judicial Member, contravening High Court directions interpreting Section 6 of the PMLA. The appeals were set aside and remanded.

What did the court decide?

Impugned orders dated 01.12.2015 and 03.03.2015 set aside and appeals remanded to Adjudicating Authority for urgent hearing on merit by a Bench including a Judicial Member.

FPA-PMLA-871/KOL/2015 of Malvika Foundation v/s The… — Civil Procedure and Limitation | ATFP (2017)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of Decision: 15.06.2017

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(1) MP-PMLA-2360/KOL/2016 (Stay) FPA-PMLA-1184/KOL/2016

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Eastern Institute for Integrated	…	Appellant/Applicant
Learning in Management University
Versus
The Deputy Director Directorate of Enforcement, Kolkata	…	Respondent
Advocates/Authorized Representative	s who	appeared
For the appellant :	Shri	Shakeel Ahmed, Advocate
For the respondent :	Shri	N.K. Matta, Advocate
(2) MP-PMLA-1637/KOL/2015 (Stay) FPA-PMLA-863/KOL/2015
Eastern Institute for Integrated Learning in Management University	…	Appellant/Applicant
Versus
The Deputy Director Directorate of Enforcement, Kolkata	…	Respondent
Advocates/Authorized Representatives who	appea	red
For the appellant :	Shri	Shakeel Ahmed, Advocate
For the respondent :	Shri	N.K. Matta, Advocate
(3) MP-PMLA-3134/KOL/2017 (Misc.) MP-PMLA-2973/KOL/2016 (Misc.) FPA-PMLA-869/KOL/2015
M/s Integrated Institute of Excellence S	ociety …	Appellant/Applicant
Versus
The Deputy Director
Directorate of Enforcement, Kolkata	…	Respondent

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 1 of 20

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Pradeep Purohit, Advocate For the respondent : Shri N.K. Matta, Advocate

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(4) MP-PMLA-3027/KOL/2015 (Misc.) FPA-PMLA-886/KOL/2015 National Centre for Internship & Studies … Appellant/Applicant Versus The Deputy Director Directorate of Enforcement, Kolkata … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant :	Shri Prakash Yadav, Advocate Sh Abhay Dutt Verma, Advocate
For the respondent :	Shri N.K. Matta, Advocate
(5) FPA-PMLA-871/KOL/2015
Malvika Foundation	… Appellant/Applicant
Versus
The Deputy Director Directorate of Enforcement, Kolkata	… Respondent
Advocates/Authorized Representatives who	appeared
For the appellant :	Shri Shakeel Ahmed, Advocate
For the respondent :	Shri N.K. Matta, Advocate
(6) MP-PMLA-3119/KOL/2017 (Misc.) FPA-PMLA-866/KOL/2015
Rai Foundation & Anr.	… Appellants/Applicants
Versus
The Deputy Director Directorate of Enforcement, Kolkata	… Respondent
Advocates/Authorized Representatives who	appeared
For the appellant : Shri Ms.	P.R. Singh, Advocate Chitra Sharma, Advocate
For the respondent : Shri	N.K. Matta, Advocate
FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015	Page 2 of 20

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Page 2 of 20

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CORAM JUSTICE MANMOHAN SINGH

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: CHAIRMAN

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JUDGEMENT

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FPA-PMLA-1184/KOL/2016, FPA-PMLA-863/KOL/2015, FPA-PMLA869/KOL/2015, FPA-PMLA-886/KOL/2015, FPA-PMLA871/KOL/2015 & FPA-PMLA-866/KOL/2015

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The appellant as shown as serial no. 1 has filed the appeal against the order dated 1^st December, 2015 passed by the Adjudicating Authority in O.C. No. 409/2015. The appeal referred in serial no. 2 to 6 are filed against the order dated 3^rd March, 2015 passed by the Adjudicating Authority in O.C. No. 381/2014. I propose to decide these appeals with the single order as the allegations and cause of action against in both O.C. No. 409 and O.C. No. 381/2014 substantially similar.

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When the matter is taken up today, the learned counsel for all the appellants in the have referred the final judgment dated 22^nd September, 2015 passed by the Hon‟ble High Court Sikkim, Gangtok in Criminal Writ Petition No. 02/2015 as well as our earlier order passed on 9^th March, 2017.

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They submit that the directions passed by the court in said judgment have not been complied with by the Adjudicating Authority in passing the impugned order dated 01.12.2015. the said judgment would also directly apply to the appeal No. FPA-PMLA-863/KOL/2015, FPAPMLA-869/KOL/2015, FPA-PMLA-886/KOL/2015, FPA-PMLA871/KOL/2015, FPA-PMLA-866/KOL/2015 in O.C. No. -381/2014.

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 3 of 20

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On 9^th March, 2017 this tribunal allowed the five appeals wherein the similar issue about of judgment delivered by the Hon‟ble Sikkim High Court was argued which was considered and decided by setting aside the impugned common order dated 15.06.2015. The details of the said appeals are given as under:-

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In FPA-PMLA-943/KOL/2015, FPA-PMLA997/KOL/2015, FPA-PMLA-995/KOL/2015, FPA-PMLA991/KOL/2015 & FPA-PMLA-949/KOL/2015 the said appeals filed against the order dated 15^th June, 2015 passed in O.C. No. 409/2015 (hereinafter these appellants in the above mentioned appeal would be referred as other defendants).

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When these appeals were pending, all appellants filed fresh application to set-aside the impugned order dated 15.06.2015 in view of judgment passed. The prayer was made in the application was 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 coram of the Adjudicating Authority while adjudicating a case in terms of section 8 of the Prevention of Money Laundering, 2002.

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The said appeals no. FPA-PMLA-943,997,995, 991 and 999/2015, were allowed by order dated 09.03.2017 in view of the judgment passed by Sikkim High Court on 22.09.2015 by holding that common impugned order dated 15.06.2015 was passed without jurisdiction passed in O.C. No. 409/2015.

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The appellant of in appeal no. 1184/2016 (herein) i.e. EIILM University was the 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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 4 of 20

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(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.

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5.1. The Hon‟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 3.2.2015”. 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 Hon‟ble High Court of Sikkim.

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5.2 On 05.06.2015 when the Writ Petition (Criminal) No. 2 of 2015 came before the Hon‟ble High Court of Sikkim, the counsel appearing for the respondent in the said proceedings requested the Hon‟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 Hon‟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 the defendants no. 1 in the matter and appellant herein.

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5.3. On the same day i.e. 05.06.2015, in the e-mail sent by Assistant Director, Enforcement Directorate, intimating to all the appellants i.e. Jharkhand Rai University, Rai Technology University, Malvika Foundation, Integrated Institute of Excellence Society, Eastern Institute FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015 Page 5 of 20

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for Integrated Learning in Management that the hearing of the complaint was scheduled and fixed on 8.6.2015. In the said mail the „other defendants‟ were directed to appear for the hearing of the said complaint, failing which the complaint would be heard and decided in their absence. 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. The counsel of „other defendants‟ did not get the e-mail sent by the Registrar, Adjudicating Authority, PMLA due to some problems at the end of the office of the Registrar, Adjudicating Authority.

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5.4 The “other defendants” thereafter appeared through their counsels and filed an application for recall of any order passed on 08.06.2015 and to also grant a week‟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 “other defendant” to file reply and reserved orders in O.C. 409 of 2015.

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5.5. One of the parties from “other defendant” namely, Rai Technology University, Bangalore, 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 “said documents” 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.

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 6 of 20

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5.6. The said 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:-

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“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.”

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5.7. 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.

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5.8. On the same day i.e. 05.06.2015, in the e-mail sent by Assistant Director, Enforcement Directorate, intimating to all the appellants i.e. Jharkhand Rai University, Rai Technology University, Malvika Foundation, Integrated Institute of Excellence Society, Eastern Institute for Integrated Learning in Management that the hearing of the complaint was scheduled and fixed on 8.6.2015. In the said mail the „other defendants‟ were directed to appear for the hearing of the said complaint, failing which the complaint would be heard and decided in their absence. 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. The counsel of „other defendants‟ did not get the e-mail sent by the Registrar, Adjudicating Authority, PMLA due to some problems at the end of the office of the Registrar, Adjudicating Authority.

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 7 of 20

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By order dated 15.06.2015, the Adjudicating Authority confirmed the provisional attachment order passed in O.C. No. 409/2015.

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The said “other defendants” in the same O.C. No.-409/2015 thereafter filed appeals FPA-PMLA-943/KOL/2015, FPA-PMLA997/KOL/2015, FPA-PMLA-995/KOL/2015, FPA-PMLA-991/KOL/2015 & FPA-PMLA-999/KOL/2015 against the impugned order dated 15.06.2015, interalia, mainly on the following grounds:-

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(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.

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(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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015 Page 8 of 20

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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.

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(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.

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(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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 9 of 20

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the adjudicating authority was whimsical even no time was granted to inspect the record of the adjudicating authority.

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(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.

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(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.

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As already mentioned, the appeals filed by “other defendants” in O.C. No. 409/2015 were allowed by this tribunal by order dated

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 10 of 20

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09.03.2017 by setting aside the order dated 15.06.2015 as already mentioned earlier.

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It is pertinent to mention here that during the hearing of those appeals filed by the „other defendants‟, an impression was given to us that two weeks before the judgment recorded by the Sikkim High Court, on 22.09.2015 the judicial member was appointed on 07.09.2015, however at the time of hearing of present appeals, it has come to the my notice that as a matter of fact Judicial Member (legal) was appointed and not the Judicial Member as directed by the Hon‟ble Court even as of today I have been informed no appointment of Judicial Member has been made.

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As already mentioned on 22.09.2015, the final judgment was delivered by the Hon‟ble High Court of Sikkim Gangtok in W.P. (Crl) No.02/2015 passed in the writ-petition filed by present appellant i.e. EIIL in Management University the appellant in appeal No. FPA-PMLA1186/KOL/2016.

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The court has allowed the petition by passing the following directions mentioned in para 19 of the Judgment. The same are reproduced here under:-

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“(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;

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(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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 11 of 20

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above having regard to the nature of the lis and the anxiety expressed by the Petitioner- University.

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(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

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(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 Court”.

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The impugned order dated 01.12.2015 was passed by the Chairman and Member (Legal). None of them was/is Judicial Member. The Chairman who heard the matter is not a Judicial Member and other officer was appointed as Member (legal) on 07.09.2015 two weeks prior to the judgment delivered by the Hon‟ble High Court.

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The Hon‟ble High Court in the criminal writ petition after hearing the 7-14 have discussed the facts in the matte as well as law on the subject. It is necessary to reproduce the said paras:-

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7. 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. SubSection (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 PMLA—

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“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.

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(2) An Adjudicating Authority shall consist of a Chairperson and two other Members:

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 12 of 20

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Provided that one Member each shall be a person having experience in the field of law, administration, finance or accountancy.

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(3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority,—

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(a) in the field of law, unless he—

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(i) is qualified for appointment as District Judge; or

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(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.

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(5) Subject to the provisions of this Act,—

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(a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;

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(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;

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8. 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.

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9. 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 fit”. 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 Authority”.

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10. In Tamil Nadu Generation and Distribution Corporation Limited (supra) in which reliance was placed Upon Kihoto Hollohan VS. Zachillhu and Others I 1992 Supp (2) see 651, it has been held as under:-

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“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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 13 of 20

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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."

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11. 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:-

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“58. Again in para 99, it is observed as follows: (Kihoto Hollohan case, SCC p.707)

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“99. Where there is a lis—an affirmation by one party and denial by another—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

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“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.”

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12. In L. Chandra Kumar (supra), it has been held that —

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“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

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 14 of 20

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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.”

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“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 SubSection (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 justice”. This appears to be import of the words “as the Chairperson of the Adjudicating Authority may deem fit”.

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14. 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 PetitionerUniversity, 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)”.

¶104

It appears from the judgment passed by the Hon‟ble Court that High Court was concerned about the seriousness of the matter and it was observed that since important legal issues are involved therefore, it would be appropriate that the matter may be decided by Judicial Member. The said judgment was not challenged by the respondent.

¶105

The impugned order was passed dated 01.12.2015 was passed after passing the final judgment of the Hon‟ble High Court. The order was passed by the Chairman (who is not the Judicial Member and even does not have qualification to become Member (legal) and Judicial-Member.

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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Page 15 of 20

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As per section 6, the Member (legal) can be eligible/qualified to be a District judge as he had been an advocate for more than 10 years but the Member (legal) was not appointed a Judicial Member of the Adjudicating Authority on 07.09.2015. Being a Member (legal) he may be having the experience as an advocate for than 10 years and has all qualification to become Judicial Member but fact of the matter is that he was meely appointed as Member (legal) within the meaning of Section 6 (3)(a)(ii). His appointment was not made under Section 6 (3)(a).

¶109

The Judicial Member as per Section 6(3)(a) mean District Judge. The Government has not appointed the Judical Member in view of directions issued by the High Court. I am also not aware as to whether the Government was informed about the said directions. There is no force in the argument of the learned counsel for the respondent that at the strength of section 6, Member (legal) could have heard the matter in view of directions issued by the Hon‟ble Court.

¶110

While passing the final judgment in the said criminal writ-petition, in para 17 observation were made. The extract of the order passed by the Hon‟ble High Court of Sikkim reads as under:

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“ 17. However, in order to allay the apprehensions expressed by the Petitioner-University, it would be sufficient to direct the Respondent No. 1 to first take up with the appropriate Ministry for appointment of a Judicial member under Clause (a) of Sub-Section (3) of Section 6. As expressed in Tamil Nadu Generation and Distribution Corporation Ltd. (supra), the matters need to be considered with grave urgency by the appropriate Central Authority.”

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At present this tribunal does not wish to give any opinion with regard to argument addressed by the Counsel for the respondent that the member as per the scheme of the Act was/is empowered to hear the

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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matter on behalf of Adjudicating Authority. Infact the same issue has been raised in many appeals pending before this Tribunal and the same would be considered as and when the said pending appeals are heard.

¶116

It appears that the impugned order dated 1^st December, 2015 the same has not been passed by the Judicial Member. The learned counsel for the appellants submit that even as of today the Judicial Member has not been appointed except after filing the writ petition Member (legal) has been appointed. It is evident that the directions issued by the Hon‟ble High Court of Sikkim, Gangtok dated 22^nd September, 2015 are not complied with. The impugned order has not been passed by the Judicial Member despite of directions issued by the Hon‟ble High Court. No doubt the Member (legal) may be having the qualifications to become Judicial Member, but facts remains that his appointment was not made for as Judicial Member and this tribunal is bound to the respect the judgment and directions issued in the criminal writ-petition.

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I am also not expressing my final opinion with regard to interpretation of 6 of the Act. I am only concerned here with regard to compliance of direction issued by the High Court in these matter. The only concerned is with the compliance of judgment delivered by the Hon‟ble High Court. I am of the view that the direction issued by the High Court could not be ignored as the same are clear. The different interpretation cannot be given as suggested by the counsel for respondent. The subject of dispute has to be determined as per direction.

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As far as merit of the case is concerned, no opinion is being expressed in the above mentioned appeals nor forming any opinion about

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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the capability of the officers who have the impugned order dated 01.12.2015.

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It is settled law if any order is without jurisdiction, the same is nullity and its validity could be set up even in the collateral proceedings. It is clear that directions have been passed by the Sikkim High Court, have not been complied with impugned order has been without jurisdiction as the impugned order has not been decided by the Judicial Member. Thus the impugned order dated 01.12.2015 is liable to be setaside on the ground that it has been passed by officers of the Authority without jurisdiction.

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Once it is clear that none of the hearing officer was a Judicial Member, within the mandate of judgment of the High Court. The passing of order dated 01.12.2015 was without jurisdiction. Therefore, the said order dated 01.12.2015 is not sustainable in the eyes of law.

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The other appeals no. FPA-PMLA-863/KOL/2015, FPA-PMLA869/KOL/2015, FPA-PMLA-866/KOL/2015, FPA-PMLA-871/KOL/2015 & FPA-PMLA-886/KOL/2015 are concerned since the ECIR is the same in all the matter, most of the allegations are similar and in view of order already passed on 9^th March, 2017 in appeal no. FPA-PMLA943/KOL/2015, FPA-PMLA-997/KOL/2015 FPA-PMLA-995/KOL/2015, FPA-PMLA-991/KOL/2015 & FPA-PMLA-999/KOL/2015 the impugned order dated 3^rd March, 2016 passed by Single Member who is neither the Judicial Member or Judicial Legal is set-aside as the same principles would apply in all set of appeals.

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FPA-PMLA-1184,863, 866 869, 871 & 886/KOL/2015

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For sake of repetition, the following directions were passed by the High Court:-

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“(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;

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(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.

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(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

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(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 Court”.

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The said directions are binding to the tribunal as well as Adjudicating Authority. The respondent is to take the necessary steps accordingly and therefore OCs‟ 381/2014 and 409/2015 is to be decided on urgent basis on merit after hearing both sides with regard to confirmation of provisional attachment order. Till such time, the matters are decided (as per directions issued by the Hon‟ble High Court) the order of provisional attachment shall continue. The above said appeals are remanded-back accordingly to the Adjudicating Authority by setting aside the impugned orders dated 01.12.2015 and 03.03.2015. All pending applications in the above mentioned appeals are also disposed of.

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