Appellate Tribunal Under PMLA Empowered To Remand Matter Back To Adjudicating Authority: J&K&L High Court

The Jammu & Kashmir High court held that the Appellate Tribunal under the Prevention of Money Laundering Act, 2002 (PMLA) possesses inherent powers to remand matters back to the Adjudicating Authority after setting aside a confirmation order, as a necessary concomitant to its appellate jurisdiction.

The Division Bench of Justices Sanjeev Kumar and Sanjay Parihar observed that “The power to remand is an important postulate of any authority exercising appellate jurisdiction… Absent such power, the power to set aside orders on technical grounds would render the appellate jurisdiction illusory.”

The core legal issue was whether section 26(4) PMLA implicitly confer remand power upon the appellate tribunal after setting aside a confirmation order under Section 8(3)?

Answering this in the affirmative, the Court reproduced Section 26(4) and emphasized that the words “pass such orders as it thinks fit” inherently include remand power. The Court noted that appellate jurisdiction across Indian statutes always carries within it an implicit ability to remand unless expressly barred.

The ruling, which marks a significant affirmation of procedural flexibility in PMLA proceedings, directly contrasts with a recent Karnataka High Court decision denying such remand powers to the Tribunal.

It underscores that without remand authority, the Tribunal's power to set aside orders on technical grounds like violations of natural justice would be rendered "illusory and ineffective."

Background

The appeals stemmed from a 2019 Enforcement Directorate (ED) provisional attachment order under Section 5 PMLA, targeting a Gurgaon property valued at approximately ₹1.64 crore, owned by appellant Sarwa Zahoor (wife of the second appellant).

The second appellant, Zahoor Ahmad Shah, a promoter of M/s Trison Farms and Construction Pvt. Ltd., was arrested by the National Investigation Agency (NIA) in 2019 for allegedly acting as a conduit for funds from Pakistan and the Pakistan High Commission in Delhi. These funds, totaling ₹1.64 crore in 2015-16, were purportedly routed to separatist elements in Kashmir, as evidenced by documents seized from the residence of one Gh. Mohd. Bhat during NIA raids.

The NIA filed OC before the Adjudicating Authority, leading to a show-cause notice. The Authority confirmed the attachment on August 26, 2019, without disclosing its "reasons to believe" under Section 8(1) PMLA, a procedural lapse cited as a natural justice violation.

The appellants appealed to the Appellate Tribunal under Section 26 PMLA and the Tribunal allowed the appeals, set aside the confirmation order for failing to communicate "reasons to believe," and remanded the matter for fresh proceedings, including issuance of a new notice affording the appellants an opportunity to respond. The Tribunal emphasized restoring procedural fairness without prejudging merits.

Case-Title: Sarwa Zahoor & Anr. vs Deputy Director, Directorate of Enforcement and another, 2025

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