Supreme Court: Can PMLA authority confirm attachment orders without judicial member on board?

Justice Bagchi asked Additional Solicitor General Anil Kaushik, who appeared for the ED, how there would be proper application of mind in such a scenario.

The Supreme Court on Tuesday asked whether there would be proper application of mind if only one member sits on the Adjudicating Authority (AA) bench confirming orders of attachment made by the Enforcement Directorate under the Prevention of Money Laundering Act, given the workload.

A three-judge bench presided over by Chief Justice of India Surya Kant posed the query as it reserved its decision on whether the AA can confirm confiscation of assets without a judicial member on board and whether it can sit as a single-member bench.

With the petitioners contending that only a small proportion of the cases booked by the ED is sent for trial while attachments would have applied in all booked cases, the bench, also comprising Justices Joymalya Bagchi and V Mohana, asked the agency to furnish data in this regard.

Appearing for the petitioners, Senior Advocate Vikram Chaudhri contended that the AA is performing a quasi-judicial function and not an administrative one as it has to decide a provisional attachment within 180 days.

He submitted that under the Act, the Adjudicating Authority should consist of the chairperson and 2 other members.

Chaudhri said when the SC rendered its decision in the Vijay Madanlal Chaudhary case, in which it upheld ED’s powers under the Act, the court noted that the AAs are three-member bodies headed by a district judge. He said the presence of a judicial member is a must and added that a single member had been functioning as AA for a long time and it was only recently that another member (law) was included.

The senior counsel also pointed out that the Act permits the AA to sit in benches comprising 1 or 2 members.

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Senior Advocate Gopal Sankaranarayanan, also appearing for the petitioners, said as per the agency’s own data, only 60 of the 8,851 cases initiated by ED during a specific period went to trial, whereas the provisions relating to attachment of property etc. would have applied in all the 8,851 cases. This would mean civil consequences in all those cases would remain for decades without them even going to trial, he said.

Justice Bagchi asked Additional Solicitor General Anil Kaushik, who appeared for the ED, how there would be proper application of mind in such a scenario.

“We are looking at a law which requires application of mind by one Tribunal in 3,000 cases in 6 months…what is happening Mr Kaushik is if law leaves a gap, then because of draconian nature, it gives a (180 days) timeline…Can you imagine the pressure which is being put on a Tribunal comprising of whatever 3, 2, or 1 member…to look into 3,000 or 5,000 cases within 6 months? Will there be a real application of mind? Or just signing on dotted lines,” Justice Bagchi asked.