Directorate of Enforcement Vs PC Financial Services Private Limited & Anr. (Delhi High Court)
Delhi High Court held that High Court had disposed of the Letters Patent Appeal as the Appellate Tribunal was not functional, however, order was passed when the Appellate Tribunal became functional. Accordingly, the order passed in LPA will not come in the way of the parties as an equally efficacious alternative remedy available before the Appellate Tribunal.
Facts- The appellant Directorate of Enforcement is investigating a number of Non-Banking Financial Companies (NBFCs) and Fintech Companies under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). In exercise of the powers conferred under the PMLA, the appellant seized an amount of Rs.106,93,84,385/- vide seizure order dated 26.08.2021 [later corrected as Rs.87,84,26,805/-] and an amount of approximately Rs.51,22,88,087/- u/s. 37A(1) of Foreign Exchange Management Act, 1999 (FEMA).
Post various Writ and Special Leave Petition, an amount of Rs.15,35,45,317/- and also Rs.25,00,00,000/- was directed to be released.
The appellant later on filed a complaint dated 21.06.2022 under Section 16(3) of the FEMA before the Adjudicating Authority against the respondent No.1 company and the other Notices praying for penalization of the Notices and for confiscation of the seized properties of Rs.252,36,23,862/-.
It is pertinent to note that the order dated 31.05.2022 granting release of additional amount of Rs.25,00,00,000/- was challenged before this Court in Letters Patent Appeal, i.e. LPA No.487/2022. This court has disposed of the said LPA because at the relevant point of time, the Appellate Tribunal was not functional. However, the appellant has vehemently argued before this Court that once the Tribunal has become functional, the order passed in LPA will not come in the way of the parties as an appeal was already pending on the date when the order was passed keeping in view the equally efficacious alternative remedies available to respondent no. 1.
Conclusion- There is an equally efficacious remedy available under Section 26 of the PMLA and the High Court is an Appellate Authority above the Appellate Authority by virtue of Section 42 of the PMLA. Hence as the Appellate Authority is very much functional, the matter deserves to be heard by the Appellate Authority only. It is true that the High Court can certainly exercise its discretion keeping in view the peculiar facts & circumstances of the case to decide a matter even if alternative remedy is available.
In the considered opinion of this Court, in the present case, there is an equally efficacious alternative remedy available before the Appellate Tribunal and the Tribunal is very much functional, the matter deserves to be heard before the Tribunal and, therefore, the Tribunal is requested to decide the appeal at an early date.
FULL TEXT OF JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present appeal is arising out of order dated 13.09.2022 passed by the learned Single Judge in W.P.(C.) No.8514/2022 titled PC Financial Services Private Limited Vs. Directorate of Enforcement & Another.
2. The facts of the case reveal that the appellant Directorate of Enforcement is investigating a number of Non-Banking Financial Companies (NBFCs) and Fin tech Companies under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). In exercise of the powers conferred under the PMLA, the appellant seized an amount of 106,93,84,385/- (Rupees One Hundred and Six Cores Ninety Three Lakhs Eighty Four Thousand Three Hundred Eighty Five only) vide seizure order dated 26.08.2021 [later corrected as Rs.87,84,26,805/- (Rupees Eighty Seven Cores Eighty Four Lakhs Twenty Six Thousand Eight Hundred and Five Only)] vide letter dated 12.10.2021 to Commissioner of Customs (Appeals-I), and an amount of approximately Rs.5 1,22,88,087/- (Rupees Fifty One Cores and Twenty Two Lakhs Eighty Eight Thousand and Eighty Seven Only) under Section 37A(1) of Foreign Exchange Management Act, 1999 (FEMA) vide Seizure Orders dated 26.08.2021, 30.09.2021 and 15.12.2001.
3. The respondent No.1 company preferred a Writ Petition 36212/2021 before the High Court of Telangana praying for quashment of the impugned Seizure Orders and directing release of the properties which have been seized, and the learned Single Judge vide order dated 11.02.2022 passed in the said writ petition, i.e. W.P.(C.) No. 36212/2021 directed release of Rs.15,35,45,3 17/- (Rupees Fifteen Cores Thirty Five Lakhs forty Five Thousand Three Hundred and Seventeen Only).
4. An appeal was preferred before the Division Bench of the High Court of Telangana, i.e. Writ Appeal No.87/2022 titled Directorate of Enforcement Vs. PC Financial Services Private Limited & Others, and the Division Bench by an order dated 25.02.2022 has set aside the order dated 11.02.2022 passed by the learned Single Judge.
5. The respondent No.1 company preferred a Special Leave Petition, i.e. SLP (Civil) No.7551/2022 titled PC Financial Services Private Limited Vs. Union of India & Others, and the Hon’ble Supreme Court by an order dated 05.2022 passed in the said SLP directed release of the funds of Rs.15,35,45,317/- (Rupees Fifteen Cores Thirty Five Lakhs forty Five Thousand Three Hundred and Seventeen Only).
6. It is pertinent to note that subsequently respondent No.1 filed a writ petition before this Court (High Court of Delhi), i.e. W.P.(C.) No. 85 14/2022 on 25.05.2022 and the learned Single Judge vide order dated 05.2022 has directed release of an additional amount of Rs.25,00,00,000/- (Rupees Twenty Five Cores Only) to respondent No.1 company. An interim application was preferred by the Directorate of Enforcement before the Hon’ble Supreme Court on 24.06.2022 challenging the grant of additional relief to the respondent No.1, however, the same was dismissed.
7. The appellant later on filed a complaint dated 21.06.2022 under Section 16(3) of the FEMA before the Adjudicating Authority against the respondent No.1 company and the other Notices praying for penalization of the Notices and for confiscation of the seized properties of Rs.252,36,23,862/- (Rupees Two Hundred and Fifty Two Cores Thirty Six Lakhs Twenty Three Thousand Eight Hundred and Sixty Two Only).
8. It is pertinent to note that the order dated 31.05.2022 granting release of additional amount of Rs.25,00,00,000/- (Rupees Twenty Five Cores Only) was challenged before this Court in Letters Patent Appeal, i.e. LPA No.487/2022. This Court has disposed of the said LPA because at the relevant point of time, the Appellate Tribunal was not functional, and the order dated 24.08.2022 passed by this Court is reproduced as under:
“CM APPL. 3 6656/2022 (Exemption)
Allowed, subject to all just exceptions.
LPA 487/2022 & CM APPLs. 36655/2022 & 3665 7/2022
