W.P. (Cri.) No. 2 of 2015. Case: Eastern Institute for Integrated Learning in Management University, West Sikkim Vs Joint Director, Directorate of Enforcement, Government of India, Kolkata and Ors.. Sikkim High Court

Case NumberW.P. (Cri.) No. 2 of 2015
CounselFor Petitioner: Shakeel Ahmed, Ms. Chitra Sharma, Yogesh Kumar Sharma, S. P. Bhutia, Advs. and For Respondents: Karma Thinlay Namgyal, Central Government Adv., Thinlay Dorjee Bhutia, Banibrata Dutta, Assistant Director, Advs.
JudgesS. P. Wangdi, J.
IssuePrevention of Money Laundering Act (15 of 2003) - Section 6(1)(2)(3)(5)(a)(b); Criminal Procedure Code (2 of 1974) - Section 482
Citation2016 CriLJ 526
Judgement DateSeptember 22, 2015
CourtSikkim High Court


  1. In this Writ Petition, the Petitioner, namely, Eastern Institute for Integrated Learning in Management University, seeks to quash and set aside the show cause notice dated 03-02-2015, Annexure P/2, issued by the Respondent No.3 under sub-section (1) of Section 5 of the Prevention of Money-Laundering Act, 2002 (for short "PMLA") and the subsequent proceedings consequential thereto.

  2. Shorn of all details, the principal ground seeking to quash the impugned show cause notice issued under Section 8 of the PMLA by the Respondent No.3 is that it was issued by a Bench of the Adjudicating Authority constituted under Clause (b) of sub-section (5) of Section 6 of the PMLA which did not have a Judicial Member. As per the Petitioner-University, a bare reading of Sections 6, 8 and 11 of PMLA read with Regulations 21 and 22, would reveal that the Respondent No.3 discharges judicial function exercising judicial powers. As a judicial mechanism under PMLA, the Respondent No.3 is vested with the powers of a Civil Court as provided under the Code of Civil Procedure, 1908, in matters enumerated under Section 11 of the PMLA and Regulations 21 and 22. Thus, the proceedings before the Respondent No.3 are deemed to be judicial proceedings within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860, and, therefore, such proceedings by natural corollary ought to have the trappings of a Court which can only be achieved by the presence of a Judicial Member. As per the Petitioner-University, this was all the more essential considering the far-reaching consequences that would flow from the adjudication of the Respondent No.3 having regard to the serious charge of the Enforcement Directorate against the Petitioner-University. The case of the Petitioner-University is that due to impugned order of attachment passed as a consequence of the show cause notice, has caused the University immense hardship firstly, because the Petitioner-University was deprived of an opportunity of hearing and secondly, that the order having been passed ex parte was de- hors judicial consideration as the Bench which passed the order did not have a Judicial Member.

  3. At the time of arguments, Mr. Shakeel Ahmed, Learned Counsel for the Petitioner-University, re-emphasised the aforesaid proposition and urged that such was the intention of the Legislature can be clearly made out from sub-sections (2) and (3) of Section 6 of the PMLA. On this, he would refer to L. Chandra Kumar v. Union of India and others (1997) 3 SCC 261: (AIR 1997 SC 1125); Union of India v. R. Gandhi, President, Madras Bar Association (2010) 11 SCC 1 and Tamil Nadu Generation and Distribution Corporation Limited v. PPN Power Generating Company Private Limited (2014) 11 SCC 53.

  4. It was the submission of Mr. Ahmed that Clause (b) of sub-section (5) of Section 6 read conjointly with sub-section (3) of Section 6 of the PMLA, would necessarily require every Bench constituted should have one Member who is a Judicial Member. He submits that presently the post of the Judicial Member is lying vacant and the Central Government has not bothered to fill up that post for a very long time. The show cause notice and the subsequent proceedings having thus been issued by and conducted by a Bench which did not consist of a Judicial Member, were rendered invalid and unsustainable in law.

  5. Mr. Karma Thinlay Namgyal, Learned Central Government Counsel, appearing on behalf of...

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