India: Prevention Of Money Laundering Act, 2002: Appellate Jurisdiction

Last Updated: 4 May 2017
Article by Pranshu Goel

By now yourselves will agree that the Act is a special Law and a self-contained code intended to address the increasing scourge of money laundering and provides for attachment of property derived from or involved in money laundering and prosecution of those involved directly or indirectly in the process or activities of money laundering.

In the Article titled 'Consequences of Offence under Prevention of Money Laundering Act, 2002: The Draconian Mandate', the Author did elucidate on the draconian provisions of the Prevention of Money Laundering Act, 2002 ('Act'). Vide this Article, the Author has discussed the appellate remedies enshrined under the Act against such consequences.

The Act provides for separate provisions pertaining to attachment and confiscation of property; and a separate procedure for adjudging an offence under the Act. Though, the Act provides for a well laid appellate remedy against the attachment of the property, it also lays down the aspect of a Special Court for the trial of the scheduled offence along with the offence under the Act. However, procedure regarding any appeal against the order of the Special Court is prescribed to be governed by the Criminal Procedure Code.

The procedure is explained via following pictorial representation.

With the backdrop of the above provisions, it is pertinent to note that the aggrieved party can proceed for appeal to the Tribunal, High Court and Supreme Court, only with respect to attachment or confiscation of tainted property, being proceeds from crime. The Act does not specifically prescribe for any recourse against the order of the Special Courts and refers to the provisions of the Code of Criminal Procure, 1973 for any appeal and revision of the order of the Special Court.

As highlighted in the earlier Article, the Act empowers the Director to attach and confiscate the tainted property suo-moto, for a maximum period of 180 days, provided that he has reasons to believe that the property has been acquired out of criminal proceeds of a scheduled offence.

Although, the very purpose of the provisions of provisional attachment is to curb concealment, transfer or dealing of the proceeds of crime to frustrate proceedings under the Act, appellate remedies are also provided under the Act to keep a check against such severe powers of the enforcement directorate.

As already discussed earlier, the Director or any other officer who provisionally attaches the property under the provisions of the proposed Act is mandatorily required to file a complaint before the adjudicating authority within a period of 30 days from such attachment. Going further, the Adjudicating authority shall serve a notice of minimum thirty days under section 8 of the Act, on the affected person requiring him to indicate the sources of his income, earnings or assets by which he has acquired such attached property and to show cause as to why such seized properties do not reflect criminal proceeds and hence shall not be confiscated by the Central Government. The Adjudicating Authority considering th reply of the person aggrieved, the Director, any other officer, and taking into consideration all the relevant materials, documentation and evidences placed on record, shall decide whether the property is involved in money laundering or not.

On affirmation by the Adjudication Authority, the property shall be attached and the possession of the same shall be taken over by the Enforcement Directorate, till the conclusion of the trial of an offence. However, if the Adjudicating Authority decides otherwise, the attachment order shall be revoked, subject to decision of the Appellate Tribunal.

Section 26 of the Act allows the Director or any person aggrieved in respect of an order passed by the Adjudicating Authority to prefer an appeal before the Appellate Tribunal within a period of 45 days or otherwise from the receipt of such order of the Adjudicating Authority.

Since, my fellow colleague in his Article has already discussed in detail the appellate remedy before the Hon'ble Money Laundering Appellate Tribunal, I shall throw some light on the provisions pertaining to the remedy from the Hon'ble High Court and Supreme Court in this regard.

Appeal to High Court

Section 42 of the Act provides that an appeal can be made before the Hon'ble High Court by an aggrieved person, against any decision or order passed by the Appellate Tribunal pertaining to attachment of the property. Although, appeal should be filed within a period of sixty days of communication of such decision or order, the High Court may entertain an Appeal beyond a period of 60 days if it is satisfied that the Appellant was prevented by sufficient cause from filing the Appeal within the said period.

Director or the person whose property is attached, whosoever is aggrieved by the order of the Hon'ble Tribunal can appeal before the Hon'ble High Court against the order of the Tribunal. In such a scenario, the jurisdiction of the High Court shall depend on the area in which the aggrieved party ordinarily resides or carries on business or personally works for gain; and in a scenario where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.

In view of the scheme of the Act, the Appeal to the Hon'ble High Court is the Second Appeal, the first being to the Appellate Tribunal against the order passed by the Adjudicating Authority.

Although, the Second Appeal, unlike many other statues is not restricted in its scope to the "Question of Law" but extends to the "Question of fact" as well1, however, it is also an established fact that while determining whether the Question of Law arising in a case is a substantial one, the general rule is that the High Court will not interfere with the concurrent findings of the Courts2 below unless the order appealed is not based on any evidence, or on misreading of evidence, wrong inferences, ignored evidences and facts etc.

Thus, in an appeal against the judgment of the Hon'ble Tribunal, Prevention of Money Laundering, the High Court, generally, is not required to go into the question of fact or appreciation of evidence, however, if it is apparent that certain evidences, information etc. was not considered or misconstrued etc., Hon'ble High Court may apart from 'question of law' can also consider the 'question of fact'.

Writ Jurisdiction

Albeit, the Act lays down a formal procedure for appeal against the decision of the Adjudicating Authority pertaining to attachment of the property, being proceeds of crime, the Hon'ble High Court may entertain Writ petitions, even though an alternate remedy by way of normal forum of hierarchy of Tribunal and Courts is available.

However, Hon'ble High Courts shall entertain the Writ petitions and exercise their discretionary powers as provided in terms of Article 226 of the Constitution of India, only in exceptional circumstances, where either the Adjudicating Authority acted without jurisdiction or there was violation of the principles of Natural Justice. In the recent decision of the Hon'ble High Court of Delhi in the case of Rose Valley Hotels and Entertainments Limited v. Secretary, Department of Revenue, Ministry of Finance3 , while entertaining a writ petition filed against the confiscation order passed by the Adjudicating Authority, relied on the decision of the Hon'ble Supreme Court in the case of Whirlpool Corpn. v. Registrar of Trade Marks4 , wherein, the Supreme Court laid down the triple test for entertaining a writ petition despite availability of the remedy of an appeal in contractual matters i.e., firstly if the action of the respondent is illegal and without jurisdiction, secondly if the principles of natural justice have been violated and thirdly if the petitioner's fundamental rights have been violated.

In the case of Barik Biswas vs Union of India & Ors., Hon'ble High Court of Delhi also dismissed the writ petition and held that "the action of coming to this Court is premature and therefore, this Court is of the view that since the petitioners have effective and efficacious remedy under PMLA, necessitating institution of the petition by invoking extraordinary jurisdiction of this Court is not appropriate at this stage. If this Court were to enter into the merits of this case at this stage, it would amount to scuttling the statutorily engrafted mechanism i.e. PMLA."

However, the Hon'ble High Court of Madras in the case of A.Kamarunnisa Ghori and Others5 , accepted the Writ Petition on a limited point, where the Enforcement Directorate and Adjudicating Authority interpreted the law in a way different from the view point of the Hon'ble Court. Against the argument of presence of alternate remedy, the Hon'ble Court held that "in view of the fact that the order of the Appellate Tribunal is ultimately subject to an appeal to this Court under Section 42 of the Act. By the time the petitioners go before the Appellate Authority and thereafter come up before this Court under Section 42, the petitioners would have long lost possession of their properties" and hence prejudiced.

The recent judicial pronouncements, highlight that although, the Hon'ble High Courts are not accepting the Writ Petitions pertaining to attachment of properties, since an alternate remedy is available under the law, however, if the authorities act in an preconceived, arbitrary manner without giving due regard to the evidences on record and the principles of natural justice, Hon'ble Court may act upon its discretionary power under Article 226 of the Act. The decision of the Hon'ble High Court shall also depend upon the type of the writ application, being Habeas Corpus, Mandamus, Certiorari, Prohibition and Quo-Warranto.

Special Courts

Scheme of the Act, provides power to a Special Court for trial of offence of Money Laundering as provided in Section 3 read with Section 4 of the Act. Special Court is nothing but Courts of Session which are designated as a Special Court for the purposes of such Act by the Central Government in consultation with the Chief Justice of High Court.

By virtue of Section 44 of the Act, the Special Court is entitled to try the offences under Section 3 read with Section 4 of the Prevention of Money Laundering Act as well as the connected scheduled offences. Thus, the Special Court shall undertake the trial of the Scheduled Offence along with the offence under the Act.

Shorn of all embellishment, the special Court is a court of original criminal jurisdiction and to make it functionally oriented some powers are conferred by the statute. It has to function as a court of original Criminal jurisdiction not being bound by the terminological status description of magistrates or a Court of Sessions except those specifically conferred and specifically denied. Under the Code, it will enjoy all powers which a Court of original criminal jurisdiction enjoys save and except the ones specifically denied.6 The Court has to be treated as a Court of original criminal jurisdiction and shall have all the powers as any Court of original criminal jurisdiction has under the Criminal Procedure Code except those specifically denied. This clause provides that the offences punishable under this Act shall be tried only by the Special Court.

The Special Judge empowered under this Act, can try offences under the Prevention of Money Laundering Act along with Scheduled Offences. The said power of the Special Court to try an offence under the PMLA along with the scheduled offence was upheld by Jharkhand High Court in one of the matter7 while discussing the provisions of Section 44 of the Act.

The Court which has taken cognizance of the scheduled offence, being a Court other than the Special Court which has taken cognizance of the complaint of the offence of money laundering, is enabled on an application by the authority to commit the case related to the scheduled offence to the Special Court. Upon the receipt of the case, the Special Court is mandatorily required to proceed to deal with the case from the stage at which it was committed.

Furthermore, the provisions of Section 47 of the Act provide for the appellate and revisionary remedy. In terms of the provision of Section 47 of the Act, the aggrieved party can avail the remedy of appeal to the High Court and the Supreme Court respectively against the orders of the Special Court, in terms of the powers and procedure laid down by Chapter XXIX or Chapter XXX of the Code of Criminal Procedure, 1973.

Thus, instead of providing a specific procedure, as laid down for the attachment orders passed by the Adjudicating Authority, the Act provides for the procedure laid down under the Code of Criminal Procedure, 1973 for appeal against the order of the Special Court.


Although, the Act provides for the concept of Special Courts for the trial of the offences alleged under any of the Scheduled Offences as well as the offences under the Prevention of Money Laundering Act, 2002, to speed up the trial and disposal of the abundant cases pending in multiple forums. However, in a country, where several matters are pending before different judicial forums for number of years, a parallel set of litigation, pertaining to the attachment and taking possession of the property, the fate of which depends entirely upon the decision of the Special Court, seems wastage of the precious time of the courts.


1 Under the scheme of the Income Tax Act, 1961 first appeal is before the Hon'ble Commissioner of Income Tax(Appeals) and Second appeal is before the Hon'ble Income Tax Appellate Tribunal. Appeal before the Appellate Tribunal, being the second appeal is on the question of law as well as facts.

2 Radha Mohan Lakhotia v. Deputy Director, Prevention of Money Laundering (Amendment) Act, 2010 (5) Bom.CR. 625

3 [2015] 60 427 (Delhi)/[2015] 131 SCL 749 (Delhi)

4 [1998] 8 SCC 1

5 WP No. 1912, 2870,13421 and 22062 of 2011

6 A. R. Antulay v. R.S. Nayak & Anr. (1984) 2 SCC 500

7 Hari Narayan Rai v. State of Jharkhand- 2010 Lawsuit (Jharkhand) 448 dt. 05.04.2010

This article was first published in the April, 2017 issue of the monthly journal published by The Chamber of Tax Consultants

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Pranshu Goel
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions