Supreme Court Directions Extending Limitation Period During COVID Apply To Attachment Proceedings Under PMLA: Delhi High Court

The Delhi High Court has ruled that the suo motu directions of the Supreme Court extending limitation periods in light of COVID-19 pandemic also apply to adjudication process and confirmation of attachment of properties under Section 8 of the PMLA.A division bench comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar said:“…it is evident that the orders of the Hon'ble Supreme Court in In re: Cognizance for Extension of Limitation (supra) were intended to extend limitation periods prescribed under all general and special laws in relation to judicial and quasi-judicial proceedings, whether such limitation was condonable or not. Consequently, in the absence of any express exclusion, these directions would squarely apply to proceedings under the PMLA, including the limitation period prescribed for adjudication under Section 8 by the learned Adjudicating Authority, which indisputably exercises quasi-judicial functions.”The Court observed that the pandemic was an unprecedented event in recent human history and thus, the relaxations granted by the Supreme Court cannot be exploited by authorities to claim undue advantage in normal circumstances.The Bench held that under Section 8 of the PMLA, the Adjudicating Authority exercises a quasi-judicial function, as it determines questions affecting valuable rights in property. It said that the Authority is bound to act judicially by ensuring notice, hearing, evaluation of evidence, and reasoned decision-making, adding that its role is not administrative or executive but quasi-judicial in nature.The Court was dealing with an LPA filed by ED against a single judge order and a writ petition filed by an entity against a Provisional Attachment Order. The question which arose for consideration of the Court was whether, in light of COVID-19 pandemic, the orders passed by the Supreme Court in “In re: Cognizance for Extension of Limitation”, extending limitation periods, would also apply to proceedings under Section 5 of the PMLA, which mandates that a provisional attachment must be confirmed within a maximum period of 180 days by the learned Adjudicating Authority under Section 8(3) of the PMLA?Disposing of the pleas, the Bench observed that the intent behind the suo motu directions of the Supreme Court extending limitation periods was to safeguard the rights of litigants, including the government, by ensuring that limitation periods prescribed under general law as well as under special statutes were not prejudicially affected due to the pandemic. Analyzing statutory provisions of PMLA, the Court said that provisional attachment's purpose is to ensure that any proceeds of crime in the hands of any person are not dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. “The provisional attachment, thus, is the enabler for the exercise of the adjudication under Section 8, being the first step in what we have held is a two-step procedure in respect of proceedings for attachment (provisional and confirmatory),” the Court said. “Thus, the provisions of Section 8 are triggered almost immediately upon the event of a provisional attachment under Section 5(1) and upon the receipt of the procedural complaint under Section 5(5); the provisions of Section 8 are rendered operational and are the immediate point of contact post the provisional attachment,” it added. Further, the Bench ruled that the Adjudicating Authority under PMLA is not a mere extension of ED's functioning but an independent, expert, statutory forum vested with the solemn responsibility of scrutinising the agency's action.The Court found merit in ED's contention that once the agency files a complaint before the Adjudicating Authority within the prescribed period of 30 days under Section 5(5) of the PMLA, the responsibility for further proceedings squarely shifts to the Authority, which is statutorily mandated to conclude the matter within 180 days.“If, due to extraordinary circumstances, that of the Covid-19 pandemic, the learned Adjudicating Authority is unable to complete the adjudication within the stipulated period, the ED, being merely a party to those proceedings, cannot be made to suffer adverse consequences for a delay beyond its control. In such circumstances, the well-established principle of ―actus curiae neminem gravabit - that no person should be prejudiced by an act of the court, applies with full force,” the Court said.While the Court allowed ED's plea and set aside the single judge's order, it dismissed another clubbed petition filed by petitioner entity.Title: DIRECTORATE OF ENFORCEMENT & ANR v. M/S VIKAS WSP LTD & ORS & other connected matterCitation: 2025 LiveLaw (Del) 1191Click Here To Read Order

Supreme Court Directions Extending Limitation Period During COVID Apply To Attachment Proceedings Under PMLA: Delhi High Court

Nupur Thapliyal

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Nupur Thapliyal

Supreme Court Directions Extending Limitation Period During COVID Apply To Attachment Proceedings Under PMLA: Delhi High Court

Nupur Thapliyal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Nupur Thapliyal

This is a premium content
Available exclusively to
Our subscribers