Directorate of Enforcement Vs Rajesh Kumar Agarwal (Delhi High Court)
Delhi High Court held that Section 20 stipulates a defined mechanism for the retention of seized property or records, it is imperative that such procedure is strictly followed. Thus, retention of seized property without following procedure stipulated under section 20 of PMLA is not justifiable.
Facts- The Appellant/ Directorate of Enforcement has preferred the present appeal u/s. 42 of the Prevention of Money Laundering Act, 2002, challenging the Order dated 06.02.2019 passed in FPA-PMLA-1973/DLI/2017 by the learned Appellate Tribunal (PMLA), New Delhi. By the said order, the learned AT set aside the Order dated 21.08.2017 passed by the learned Adjudicating Authority (PMLA), which had allowed Original Application No. 106/2017 dated 15.06.2017 filed u/s. 17(4) of the PMLA, seeking retention of seized properties of the Respondent.
Conclusion- A cardinal principle of statutory interpretation, as reiterated by courts time and again, is that when a statute prescribes a method to do a particular thing, it must be done in that manner alone and not otherwise. Therefore, if Section 20 stipulates a defined mechanism for the retention of seized property or records, it is imperative that such procedure is strictly followed.
As is manifest, the order does not reveal any reason being accorded for the decision to confirm the retention of the property. In our opinion, the same does not satisfy the statutory mandate and suffers from a mechanical and superficial approach, devoid of the mandatory inquiry envisaged under Sections 8(2) and 8(3). The absence of a response from the Respondent cannot absolve the learned AA of its statutory duty to independently assess the materials placed before it and determine whether the property is indeed involved in money laundering. The legislative scheme does not permit automatic confirmation or passive endorsement; it mandates active, reasoned adjudication.
