delhi high court

Delhi High Court: In a petition filed by the petitioner challenging the impugned order dated 6-03-2023 passed by the Adjudicating Authority (respondent 1), under the Prevention of Money Laundering Act, 2002 (PMLA) by which the petitioner’s application for the right to cross-examine witnesses was rejected, Prathiba M Singh, J., permitted the petitioner to approach the Appellate Tribunal, PMLA within a period of one month.

The petitioner, Kankipati Rajesh purchased two immovable properties for a sale consideration. An FIR was lodged under the Prevention of Corruption Act, 1988 and the Petitioner was arrested by the Directorate of Enforcement (ED) (respondent 2). Pursuant to proceedings under the PMLA, a provisional attachment order was passed whereby the two properties of the Petitioner were attached. The Petitioner filed an application seeking permission to cross-examine the three persons whose statements were relied upon by the ED which was thus decided by the impugned order dated 06-03-2023.

The impugned order contains the following statements:

It is always open the accused of the alleged offenders to make more noise about the so called violation of principles of natural justice and such noise can be heard quite often in these type of matters with a view to drag the proceedings and scuttle the efforts of the authorities concerned to pin down the offenders to the crime in furtherance of the provisions of the Act. Ultimately it boils down to the fact that interference by this Authority on the ground of violation of principles of natural justice at every stage for the asking, would ultimately end in stifling the efforts of the authorities in implementing the provisions of the PMLA for which it is enacted.

The Court noted that the impugned order is appealable to the Appellate Tribunal, thus, the Court did not entertain the present writ petition and relegated the Petitioner to avail of its Appellate remedy in accordance with law.

Placing reliance on the case U.S. Awasthi v. Adjudicating Authority PMLA, 2023 SCC OnLine Del 401, the Court further noted that the use of the disconcerting language of the impugned order must be frowned upon. Repeated use of templated paragraphs, as though the principles of Natural Justice are mere rhetoric, is not permissible.

The Court warned that the present order must be treated as a warning to the Authority concerned to not use such language as extracted below in its orders, failing which, the Court would be constrained to direct action to be taken. The Court opined that the Appellate Tribunal, PMLA must ensure that Respondent 1 shall abide by the principles of natural justice as well as the observations of the Court given in Dr. U.S. Awasthi (supra).

Thus, the Court permitted the Petitioner to approach the Appellate Tribunal, PMLA within a period of one month by considering the appeal on facts as to whether the cross-examination was rightly rejected by the Respondent 1 or not.

[Kankipati Rajesh v. Adjudicating Authority, PMLA, 2023 SCC OnLine Del 2526, decided on 21-04-2023]

Advocates who appeared in this case :

Mr. Amit Khemka, Mr. Ashwani Taneja, Ms. Shreya Shandilya & Mr. Sandeep Dash, Advocates for the Petitioner;

Mr. Zoheb Hossain, Special Counsel Mr. Vivek Gurnani, Ms. Sejal Aneja, & Mr. Baibhav, Advocates for ED. Mr. Anurag Ahluwalia, (CGSC), Ms. Avshreya Pratap Singh Rudy, Advocates for R3.

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