Tribunal Can Remand Cases After Setting Aside Confirmation Order: J&K High Court Clarifies Scope Of Section 26(4) PMLA Act

Clarifying the scope of appellate powers under the Prevention of Money Laundering Act, 2002 (PMLA), the Jammu and Kashmir and Ladakh High Court has held that the Appellate Tribunal's power under Section 26(4) of the Act is of wide amplitude and necessarily includes the power to remand a matter to the Adjudicating Authority as a consequential and ancillary power when an order is set aside.Upholding the Tribunal's authority to remand proceedings after setting aside a confirmation order on the ground of violation of principles of natural justice Justice Sanjeev Kumar and Justice Sanjay Parihar made it clear that the expression “pass such orders thereon as it thinks fit” in Section 26(4) cannot be read narrowly and that denying the Tribunal the power of remand would render the appellate jurisdiction ineffective, particularly in cases where orders are vitiated by procedural infirmities.Background:The appeals arose from proceedings initiated under the Prevention of Money Laundering Act, 2002, against Zahoor Ahmad Shah, a promoter of M/s Trison Farms and Construction Pvt. Ltd., who was arrested by the NIA on allegations of acting as a conduit for transferring funds allegedly received from Pakistan-linked sources to separatist elements in Kashmir. During the investigation, documents allegedly indicated receipt and distribution of illicit funds during 2015–16.Based on these allegations, the Directorate of Enforcement provisionally attached an immovable property standing in the name of Sarwa Zahoor, wife of Zahoor Ahmad Shah, though she was not named in any FIR, ECIR, or criminal complaint. The Adjudicating Authority later confirmed the provisional attachment.On appeal, the Appellate Tribunal set aside the confirmation order on the ground that the “reasons to believe” were not supplied to the appellants, thereby violating principles of natural justice, but remanded the matter to the Adjudicating Authority for fresh proceedings. The remand order was challenged before the High Court.Appearing for the appellants, Senior Advocate R.A. Jan, assisted by Advocate Shahid Habib, contended that the Appellate Tribunal, being a statutory body, possesses only those powers expressly conferred by the PMLA. It was argued that Section 26(4) authorises the Tribunal only to confirm, modify, or set aside an order, and does not permit remand. It was further submitted that the provisional attachment had a limited statutory lifespan under Section 5 of the Act and had lapsed, rendering any remand legally futile.Opposing the appeals, DSGI Tahir Shamsi, assisted by CGC Faizan Ahmad, argued that the phrase “pass such orders thereon as it thinks fit” in Section 26(4) is of wide amplitude and inherently includes the power to remand as a consequential and ancillary power. It was contended that denying such power would defeat the purpose of appellate jurisdiction, particularly where orders are set aside for breach of natural justice, and that adjudication proceedings can continue notwithstanding the lifespan of provisional attachment.Court's Analysis and Observations:After examining the statutory scheme and rival submissions, the High Court undertook a detailed analysis of Section 26 of the PMLA, particularly sub-section (4). The Bench observed that the words “may pass such orders thereon as it thinks fit” are of the widest amplitude and cannot be narrowly construed.The Court clearly held that an order of remand is not alien to appellate jurisdiction and, in fact, necessarily implies the setting aside or annulment of the order under appeal. It recorded, “The words 'pass such orders thereon as it thinks fit' are of the widest amplitude and would vest in the Appellate Tribunal powers of remand as consequential to the power to set aside the order appealed against.”Relying on Supreme Court authority, the Bench noted that an order of remand necessarily annuls the decision under appeal, and therefore, the power to remand is inherent in the power to set aside. It remarked, “The power to set aside or annul an order appealed against would necessarily carry with it the power to pass such ancillary and concomitant orders as may be necessary to give effect to the order of annulment or setting aside.”The Bench cautioned that accepting the appellants' interpretation would lead to a paradoxical situation and observed, “If the Appellate Tribunal, after setting aside an order on the ground of procedural error or technicality, is rendered powerless to remand the matter, it would allow parties to reap the fruits of such procedural lapses.”On the argument relating to lapse of the provisional attachment, the Court rejected the contention that the proceedings had become non est. It clarified that the Tribunal had only set aside the confirmation order and not quashed the adjudication proceedings themselves. It said, “The Appellate Tribunal has merely restored the proceedings to the stage at which the Adjudicating Authority had passed the confirmation order.”Placing...

Tribunal Can Remand Cases After Setting Aside Confirmation Order: J&K High Court Clarifies Scope Of Section 26(4) PMLA Act

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Tribunal Can Remand Cases After Setting Aside Confirmation Order: J&K High Court Clarifies Scope Of Section 26(4) PMLA Act

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