Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1511 OF 2021
1. Mr. Naresh T. Jain
Age: 48 Years, Occupation: Chartered
Accountant, Residing at B-501, Ashok Gardens, Tokersay Jivrai Road
Sewree Mumbai – 400 015, Maharashtra
2. Mr. Naresh T. Jain
Having it’s office at Unit No. 111, Navyug Industrial Estate, TJ Road, Sweri, Mumbai – 400 015.
Through its Director Mr. Naresh Jain
3. M/s Aparajita Mercantile Pvt. Ltd
Having it’s office at Unit No. 111, Navyug Industrial Estate, TJ Road, Sweri, Mumbai – 400 015.
Through its Director Mr. Naresh Jain …Petitioners
Through the Ministry of Finance, Having it’s office at 2nd
Floor, Ayykar Bhavan, New Marine Lines, Mumbai-400 020, Maharashtra
2. Directorate of Enforcement, Zone -I
Maharashtra, Mumbai, Having it’s office at Zonal Office – I
IN
WRIT PETITION NO. 1511 OF 2021
Epitome Multitrade Pvt. Ltd. & Anr …Applicants
In the matter between
Mr. Naresh T. Jain & Ors …Petitioners
Mr. Sachin Pawar, with Mr. Dewang S. Mhatre, for the
Respondent Nos. 2 and 3.
JUDGMENT
1. Heard Mr Nishant Chothani, along with Mr Shaunak Sawant, for the Petitioners, and Mr Sachin Pawar, along with Mr Dewang S. Mhatre, learned Special Public Prosecutor, Public Prosecutor for the Respondents.
2. Rule. The Rule is made returnable immediately at the request of and with the consent of the learned Counsel for the parties. Even otherwise, by our order of 14 November 2025, we had posted this matter for final disposal at the admission stage on 21 November 2025.
3. The hearing of this Petition was expedited by the Hon’ble Supreme Court by its order dated September 03,
2021. The record shows that the matter was taken up by the Bench (Coram: G. S. Patel & Madhav Jamdar, JJ) on 6 December 2021, but was adjourned because the Advocates on record for the 2nd and 3rd Respondents had filed their leave note. Matter was directed to be listed on 10 January 2022.
4. Thereafter, the records show that the matter was listed only on 16 September 2025 before the Coordinate Bench (Coram: Suman Shyam and Manjusha Deshpande, JJ). On this date, neither the Advocates for the Petitioners nor the Advocates for the Respondents appeared. Therefore, the matter was adjourned to 14 October 2025.
5. The matter was brought before this Bench on 14 November 2025, on which date, we were informed of the Hon’ble Supreme Court’s order dated 3 September 2021 and the directions for the expeditious disposal of this Petition. Accordingly, we inquired with the learned Counsel whether they were prepared to proceed with the final hearing of this Petition. However, the learned Counsel for the Petitioner fairly indicated that the learned Counsel for the 2nd Respondent had recently been elevated to the position of Judge of this Court and, therefore, some time could be allowed to the Respondents to make alternative arrangements.
6. We requested the learned Counsel for the Petitioners to serve fresh notices upon the 1st and 2nd Respondents and posted this matter for final disposal on 21 November 2025. Mr Chothani submitted that fresh notices were indeed served upon the Respondents and proof of service was also tendered. Mr Sachin Pawar, Special Public Prosecutor, appeared on behalf of the 2nd and 3rd Respondents [the contesting respondents]. Accordingly, the matter was finally heard on 21 November 2025 and reserved for orders.
7. The Petitioner challenges the Provisional Attachment Order (PAO) dated 27 November 2020 under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) on several grounds. However, Mr Chothani, learned Counsel for the Petitioner, at the final hearing, submitted that, in terms of Sections 5(1) and 5(3) of the PMLA, the PAO ceases to have any effect after the expiry of 180 days from 27 November
2020. He submitted that the Petitioner was entitled to a declaration in this regard and for a consequential order of removing the restraints imposed by the PAO on the Petitioners’ attached properties.
8. Mr. Sachin Pawar, the learned Special Public Prosecutor, appearing inter alia for the Directorate of Enforcement (ED) however submitted that for the purpose of computing the 180 days period prescribed under Section 5 of the PMLA, this Court would have to take cognizance of the orders made by the Hon’ble Supreme Court in Suo Moto Writ Petition (C) NO. 3 of 2020 (SMWP) extending/excluding the period of limitation in respect of proceedings before the judicial or quasi-judicial authorities. He submitted that several orders were passed under this SMWP in the wake of difficulties caused by the COVID-19 pandemic. He submitted that, even before the excluded period could expire, the Petitioner secured a stay on the PAO on 19 June 2021. Mr Pawar, therefore, submitted that in terms of the third proviso to Section 5(1) of the PMLA, the impugned PAO could not be said to have ceased to have effect as contended by and on behalf of the Petitioner.
9. Given the rival contentions, the main issue for determination in this matter is the impact of the Hon’ble Supreme Court’s orders dated 23 March 2020 and 10 January 2022, made in SMWP, on the PMLA timelines. If such orders are held to apply in the context of provisional attachment orders issued under Section 5 of the PMLA, then Mr Pawar would possibly be justified in contending that the impugned PAO has not ceased to have effect upon the expiry of 180 days from the date of its issue. However, if it is held that the Hon’ble Supreme Court’s order would not cover or apply the PAO issued under Section 5 of the PMLA, then, we would possibly have to accept Mr. Chothani’s contention that the impugned PAO which was issued on 27 November 2020 ceased to have effect upon the expiry of 180 days and consequently, would lapse by 26 May 2021.
10. The material facts for deciding the above issue in this case are few and undisputed. The impugned PAO was issued on 27 November 2020, and the 180-day period from its issuance expired on 26 May 2021. The ED filed a complaint against the Petitioner, i.e. Complaint No. 1381 of 2020, on 18 December 2020, under Section 5(5) before the adjudicating authority. On 7 January 2021, the adjudicating authority issued a show cause notice to the Petitioners, calling upon them to show cause as to why the impugned PAO and the provisional attachment imposed thereby should not be confirmed. The Petitioners filed their reply dated 21 March 2021 to such show cause notice, and on 5 April 2021, the Petitioners filed two further applications seeking “reasons to believe” and “inspection of records”.
11. On 26 May 2021, the Petitioners filed yet another application before the adjudicating authority, placing on record their contention that the impugned PAO dated 27 November 2020 ceases to have any effect upon expiry of 180 days as provided under Section 5(3) of the PMLA. A hearing was held before the adjudicating authority on 27 May 2021, on which date the Petitioners claim they were orally informed that their application regarding the lapsing of the impugned PAO was rejected. This, however, is disputed by the Respondents, who rely upon the certified copy of the order made on 27 May 2021, which records that the Petitioners applied for an adjournment and that the proceedings were adjourned to 10 June 2021.
12. This Petition was instituted on 7 June 2021. On 19 June 2021, after hearing the learned Counsel for the ED, the Coordinate Bench of this Court stayed the impugned PAO. However, no stay was granted on the adjudication proceedings pursuant to the ED’s Complaint No. 1381 of 2020 filed on 18 December 2020. The Coordinate Bench also recorded a statement on behalf of the learned Counsel for the Petitioners that pending the hearing and final disposal of this Petition, even the Petitioners shall maintain status quo in respect of the provisionally attached properties. This statement was accepted by this Court.
13. The Petitioners, aggrieved by this Court’s Interim Order dated 19 June 2021, to the extent such order had not granted any stay on the adjudication proceedings, preferred Civil Appeal No. 5128 of 2021 before the Hon’ble Supreme Court.
14. The Hon’ble Supreme Court, by its order dated 03 September 2021, disposed of this Civil Appeal by partially modifying this Court’s order dated 19 June 2021 and staying the adjudication proceedings pending final disposal of this petition. This court was requested to dispose of this Writ Petition expeditiously.
15. The Hon’ble Supreme Court, in its Order dated 03 September, 2021, clarified that all contentions available to both sides on merits were being left open and ought to be decided on their own merits and in accordance with law, “including the question whether the provisional attachment order stood lapsed by operation of law or is kept in abeyance in terms of the order dated 08 March 2021 passed by this Court in Suo-Motu Writ Petition (C) No.3 of 2000”. The Hon’ble Supreme Court further clarified that it was not expressing any opinion either way on that issue, which may be pursued by the parties before the High Court.
16. Mr. Chothani, the learned counsel for the Petitioners, submitted that the provision in Section 5(3) of the PMLA, which had provided that the provisional attachment orders would cease to have any effect after 180 days from the date of their issue, was one of the important safeguards provided to a person against the otherwise stringent provisions of the PMLA. He submitted that this was one of the reasons why the Hon’ble Supreme Court, in the case of Vijay Madanlal Chaoudhary Vs. Union of India[1] upheld the constitutional validity of the PMLA by observing that the provisional attachment order operates for a fixed duration of not more 2023 (12) SCC 1 than 180 days unless it is confirmed by the adjudicating authority.
17. Mr Chothani submitted that the scope of such a safeguard was never whittled down by the Hon’ble Supreme Court’s orders in the SMWP. He relied upon the decision of the Hon’ble Supreme Court in the case of S. Kasi Vs State thr. Inspector of Police, Samaynallur Police Station, Maduraj District[2] to explain the scope of the Hon’ble Supreme Court’s orders in the SMWP and how the Hon’ble Supreme Court has held that such orders would not extend the timeline prescribed by Section 167(2) of the Cr.PC. in the context of default bail.
18. Mr. Chothani also relied upon the decision of the Division Bench of the Calcutta High Court in the case of Directorate of Enforcement Vs. Union of India[3], in which it was held that the Hon’ble Supreme Court’s orders in SMWP would not apply to the provisional attachment orders issued under Section 5 of the PMLA, and the 180-day timeline was sacrosanct and not extendable, otherwise than on the ground created by the third proviso to Section 5(1) of the PMLA. He submitted that, to the best of his knowledge and research, the ED had not appealed the decision of the Calcutta High Court delivered on 12 December 2022.
19. Mr Chothani also fairly placed on record the decision of
2022 SCC OnLine CAL 3959 the Division Bench of the Delhi High Court in the case of Directorate of Enforcement Vs. Vikas WSP Ltd.4, which has taken the view contrary to that of the Calcutta High Court in the decision referred to above. However, he submitted that the Delhi High Court failed to take cognisance of the Calcutta High Court’s decision and incorrectly brushed aside the Hon’ble Supreme Court’s decision in the case of S. Kasi (supra). In fact, Mr Chothani made several submissions in support of his plea that we align with the Calcutta view rather than the Delhi view on the main issue raised in this Petition.
20. Mr. Chothani submitted that the Delhi decision records that during the period from 05 March 2000 to 28 February 2022, it was not possible for the ED to effectively function due to the COVID pandemic. He pointed out that the impugned PAO was issued by the ED on 27 November 2020; Complaint No. 1381 of 2020 was filed by the ED on 18 December 2020; a show cause notice issued by the adjudicating authority to the Petitioners on 07 January 2021, and a hearing was granted to the Petitioners on their Interim Application by the adjudicating authority on 27 May 2021. Mr Chothani submitted that, based on all this, if the ED and the adjudicating authority had no difficulty in doing all this, there was no valid reason for not abiding by the timeline specified in Section 5(3) of the PMLA. He submitted that even otherwise, based upon such contentions, statutory timelines 2025 SCC OnLine Del 6163 cannot be breached.
21. Mr. Chothani submitted that the Hon’ble Supreme Court’s orders in SWMP apply mainly to proceedings which are in the nature of interse private disputes between private litigants. They do not and were never intended to protect acts in the nature of provisional attachment orders, which are not even “proceedings”, whether judicial or quasi-judicial. He submitted that the Calcutta High Court has correctly construed the Hon’ble Supreme Court’s orders and therefore, we should also take the view which aligns with that of the Calcutta High Court.
22. Mr. Chothani submitted that the Delhi decision records that the ED had filed an application before the Hon’ble Supreme Court in SMWP to exclude the COVID period for determining the timelines in PMLA. He submitted that no relief was granted to ED though protection was granted in the context of the Arbitration and Conciliation Act,1996, Commercial Courts Act, 2015, Negotiable Instruments Act, 1881 and other laws which prescribed period(s) of limitation of instituting proceeding, outer limits (within which the Courts or the Tribunals can condone delay) and termination of proceedings. He submitted that the ED, under the principles of res-judicata or in any event principles analogous to resjudicata, was now precluded from even contending that the Hon’ble Supreme Court’s orders in SMWP protect the ED in the context of strict timelines prescribed under the PMLA.
23. Mr. Chothani submitted that the provisions of PMLA affect the Petitioners’ rights guaranteed under Article 21 of the Constitution. In any event, he submitted that attachment of the Petitioners’ property otherwise than by the procedure prescribed by the law amounts to infringement of the Petitioners’ right to property, which is now recognised as not only a constitutional right under Article 300A but also a human right. He relied on the decision in the case of State of Haryana Vs. Mukesh Kumar[5] and Hari Krishna Mandir Trust Vs. State of Maharashtra[6] to support these contentions.
24. Mr. Chothani finally submitted that no serious prejudice will be caused to the ED if the impugned PAO is declared as non-effective or lapsed, because the adjudication proceedings already initiated by ED can always continue given the law laid down by the Hon’ble Supreme Court in Kaushalya Infrastructure Development Corporation Ltd. Vs. Union of India[7]. Further, Mr. Chothani submitted that even if it is to be assumed that the Petitioners would transfer their properties which are the subject matter of the impugned PAO once it is held that the impugned PAO stands lapsed, still, considering the provisions of Section 17 of the PMLA, the ED has ample powers to trace and attach such properties from the transferees who may be found to be in possession of such properties.
25. Mr. Chothani submitted that the Legislature, being conscious that the Hon’ble Supreme Court’s orders in the SMWP would not extend the timeline prescribed under certain fiscal legislation, enacted the Taxation Other Laws (Relaxation and Amendment of Certain Provisions), Act (“TOLA”) providing certain relaxations in the context of timelines provided by some specified central enactments. He submitted that, however, PMLA is conspicuous by its absence in the TOLA. Mr Chothani submitted that this was yet another indication that the Hon’ble Supreme Court’s orders in the SMWP neither apply nor were intended to apply to the timelines provided under the PMLA.
26. For all the above reasons, Mr. Chothani submitted that the Rule in this Petition may be made absolute by declaring that the impugned PAO stands lapsed with effect from 26 May 2021 and by issuing consequential orders restraining the Respondents from acting based upon the impugned PAO.
27. Mr Sachin Pawar at the outset submitted that he adopts the reasoning in the Delhi High Court order and therefore, the grounds which persuaded the Delhi High Court to hold in favour of the ED may be taken as the ED’s arguments in opposition to the contentions raised in this Petition.
28. Mr Sachin Pawar submitted that during the COVID pandemic, it was impossible for the ED to function effectively. He submitted that the position of ED was not different from that of private litigants when it came to compliance with laws of limitation, etc. He submitted that the logic behind granting relaxation and exclusions to private litigants should equally apply to public authorities such as the ED. He submitted that, on proper construction of the Hon’ble Supreme Court’s orders, they apply to the timelines under the PMLA. He submitted that the Calcutta view does not correctly appreciate this crucial aspect and therefore, the Delhi view should be preferred.
29. Mr Pawar finally submitted that there should be no linkage between the impugned PAO and the pending adjudication proceedings. He submitted that the decision of the Hon’ble Supreme Court in Kaushalya Infrastructure (supra) was clear on this aspect, and the same was also followed by the Calcutta High Court in the very decision upon which the Petitioners rely.
30. For all the above reasons, including the reasons reflected in the decision of the Delhi High Court, Mr Pawar submitted that this Petition may be dismissed and the Rule therein discharged.
31. The rival contentions now fall for our determination.
32. At the very outset, to appreciate the rival contentions, a reference is necessary to the provisions of Section 5 of the PMLA, which reads as follows: - “5. Attachment of property involved in money-laundering.− (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that— (a) any person is in possession of any proceeds of crime; and; (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period excedding one hundred and eighty days from the dat of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned inthat Schedule, before a Magistrate or Court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corrosponding law of any other country: Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act:] [Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.] (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, alongwith the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under [sub-section (3)] of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation. For the purposes of this sub-section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.”
33. The issue of constitutional validity of the PMLA, which would include the provision in Section 5 of the PMLA, was considered by the Hon’ble Supreme Court in Vijay Chaudhary (supra). In the specific context of Section 5(1) of the PMLA, the Hon’ble Supreme Court reasoned that the legislature had provided that several safeguards, based upon which it could not be concluded that any excessive or arbitrary powers were vested in the ED officials to attach properties.
34. The Hon’ble Supreme Court specifically noted that the provisional order of attachment operates for a fixed duration not exceeding 180 days from the date of the order, and that this was one of the safeguards provided in the PMLA itself. Further, the third proviso in Section 5(1) of the PMLA was another safeguard introduced by Act 13 of 2018 regarding the reckoning of the 180-day period, thereby providing for a fixed tenure for the provisional attachment order. The Court noted that before the expiry of the statutory period relating to the provisional attachment order, the Director or any other officer not below the rank of Deputy Director immediately after attachment under sub-Section (1) was obliged to forward a copy of the provisional attachment order to the three member adjudicating authority appointed under Section 6(1), headed by, amongst others, a person qualified for appointment as a District Judge, in a sealed envelope. The Court noted that this ensures fairness in the action and the accountability of the authority that passed the provisional attachment order.
35. The Hon’ble Supreme Court also referred to yet another important safeguard in Section 5(3) of the PMLA, which provides that the provisional attachment order ceases to operate on the date of an order passed by the adjudicating authority under Section 8(3) or the expiry of the period specified in sub-Section (1), i.e., the period of 180 days, whichever is earlier. Additionally, under Section 5(5), the authorised officer was obliged to file a complaint before the adjudicating authority within 30 days of the provisional attachment.
36. The Hon’ble Supreme Court also clarified that an order passed under Section 5(1) of PMLA is only provisional. The duration of this provisional attachment order, issued under Section 5(1), is limited to 180 days, subject to confirmation by an independent adjudicating authority. Based on this, the Hon’ble Supreme Court concluded that adequate safeguards have been put in place as a prerequisite for exercising the powers of emergency attachment in the form of provisional attachment. These considerations influenced the Hon’ble Supreme Court's decision to uphold the constitutionality of various provisions of the PMLA, including Section 5, which pertains to provisional attachment.
37. The provisions of Section 5 of the PMAL are quite clear. Section 5(1) empowers the authorised officer, by an order in writing, to provisionally attach such property for a period not exceeding 180 days from the date of the order in such manner as may be prescribed. The Third Proviso to Section 5(1) provides that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section are stayed by the High Court shall be excluded, and a further period not exceeding thirty days from the date of the order of vacation of such stay order shall be counted. Thus, the manner of computation of the period of 180 days or the period that could be excluded for computing this period of 180 days has also been specified by the legislature in the Third Proviso to Section 5(1) of the PMLA.
38. As if, providing for the maximum ceiling of 180 days, as expressed in the negative form: “not exceeding one hundred and eighty days from the date of the order……..” was not enough, the legislature in Section 5(3) has provided that every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under subsection (3) of Section 8, whichever is earlier. Thus, the legislature has not only provided that the provisional attachment order made under Section 5 shall not operate for a period exceeding 180 days from the date of the order, but further, the legislature has provided the consequences of what is to happen after 180 days from the date of the issuance of the provisional attachment order. Section 5(3), as noted above, provides that such provisional attachment order “shall cease to have effect” unless, of course, it is confirmed in the meanwhile by the adjudicating authority under Section 8(3).
39. The ED, however, relies on the orders issued by the Hon’ble Supreme Court in SMWP, particularly the final order dated 10 January 2022 by which the SMWP was disposed of, to argue that it is this order that excludes the period from 15 March 2020 to 28 February 2022 when calculating the 180day period prescribed under Section 5 of the PMLA.
40. To appreciate the ED’s contention, we transcribe the order dated 10 January 2022 herein below for the convenience of reference: - “1. In March, 2020, this Court took Suo Motu cognizance of the difficulties that might be faced by the litigants in filing petitions/ applications/ suits/ appeals/ all other quasi proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central and/or State) due to the outbreak of the COVID-19 pandemic.
2. On 23.03.2020, this Court directed extension of the period of limitation in all proceedings before Courts/Tribunals including this Court w.e.f. 15.03.2020 till further orders. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021.
3. Thereafter, due to a second surge in COVID19 cases, the Supreme Court Advocates on Record Association (SCAORA) intervened in the Suo Motu proceedings by filing Miscellaneous Application No. 665 of 2021 seeking restoration of the order dated 23.03.2020 relaxing limitation. The aforesaid Miscellaneous Application No.665 of 2021 was disposed of by this Court vide Order dated 23.09.2021, wherein this Court extended the period of limitation in all proceedings before the Courts/Tribunals including this Court w.e.f 15.03.2020 till 02.10.2021.
4. The present Miscellaneous Application has been filed by the Supreme Court Advocates on Record Association in the context of the spread of the new variant of the COVID1-9 and the drastic surge in the number of COVID cases across the country. Considering the prevailing conditions, the applicants are seeking the following: i. allow the present application by restoring the order dated 23.03.2020 passed by this Hon'ble Court in Suo Motu Writ Petition (C) NO. 3 of 2020; and ii. allow the present application by restoring the order dated 27.04.2021 passed by this Hon'ble Court in M.A. no. 665 of 2021 in Suo Motu Writ Petition (C) NO. 3 of 2020; and iii. pass such other order or orders as this Hon'ble Court may deem fit and proper.
5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from
15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
6. As prayed for by learned Senior Counsel, M.A. No.29 of 2022 is dismissed as withdrawn.”
41. Admittedly, para 5(IV) of the Hon’ble Supreme Court’s order dated 10 January 2022, on which Mr Pawar placed significant emphasis, does not mention PMLA. Instead, it refers to specific provisions of the Arbitration and Conciliation Act, 1996, the Commercial Courts Act, 2015, and the Negotiable Instruments Act, 1881. Even these provisions relate to initiating proceedings, setting outer limits for court or tribunal discretion regarding delay, and terminating proceedings.
42. Since the final order dated 10 January 2022 refers to certain specific provisions of the specified Acts but does not mention any provisions in PMLA, it is difficult to accept Mr Pawar’s contention that the final order would govern the PMLA timelines as well. Furthermore, in the context of a reference to “other laws”, the Hon’ble Supreme Court, in S. Kasi (Supra), has clarified that these are laws which specify period(s) of limitation for initiating proceedings, outer limits (within which the court or tribunal can condone delay), and termination of proceedings. The provisions in Section 5 (1) of the PMLA do not fall into any of these categories.
43. The Hon’ble Supreme Court, in paragraph 18, on analysing the various orders made in SMWP, explained that extensions or exclusions were mainly granted for filing petitions/applications/suits/ appeals and all other proceedings indicated in the orders themselves primarily for two reasons: -
18.1. The situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that are being faced by the litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed.
18.2. To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective courts/tribunals across the country including this Court.
44. The Hon’ble Supreme Court explained that the limitation for filing petitions/applications/suits/appeals/ all other proceedings was extended to obviate lawyers/litigants from coming physically to file such proceedings in respective courts/tribunals. The order was passed to protect the litigants/lawyers whose petitions/applications/suits/appeals, and all other proceedings, would become time-barred, as they were unable to physically come to file such proceedings. The order was for the benefit of the litigants who have to seek a remedy in law under the applicable statute to enforce a right. The law of limitation bars the remedy but not the right. When this Court passed the above order extending the limitation for filing petitions/applications/suits/appeals/all other proceedings, the order was intended to benefit those who have to seek a remedy or whose remedies may be barred by time because they were unable to come in person to file such proceedings.
45. In the context of Section 167 of the Cr. P.C., which inter alia states that an indefeasible right to default bail accrues if no charge-sheet is filed within the period specified under that section before a competent Court of Law, an issue was raised regarding the applicability of the orders made in Suo-Motu Writ Petition (SMWP) in the case of S. Kasi (supra). The State argued that the orders in the SMWP would exclude the specified period during the COVID pandemic when calculating the period prescribed under Section 167 of Cr.PC. After a detailed examination of the various orders issued in SMWP alongside the provisions of Section 167 of Cr.PC., the Hon’ble Supreme Court ruled that the orders in the SMWP would not exclude, extend, or modify the timelines set under Section 167 of Cr.PC.
46. The Hon’ble Supreme Court expressly rejected the State’s contention that the order dated 23 March 2020 passed in SMWP had extended the period for filing a charge-sheet by the police as contemplated under Section 167(2) of Cr.PC. by observing:- “the order dated 23-3-2020[2] cannot be read to mean that it ever intended to extend the period of filing charge-sheet by police as contemplated under Section 167(2) CrPC. The investigating officer could have submitted/filed the charge-sheet before the (Incharge) Magistrate. Therefore, even during the Lockdown and as has been done in so many cases the charge-sheet could have been filed/submitted before the Magistrate (Incharge) and the investigating officer was not precluded from filing/submitting the charge-sheet even within the stipulated period before the Magistrate (Incharge)”.
47. The Hon’ble Supreme Court held that if the interpretation suggested by the State and which was even accepted by the learned Single Judge of the Madras High Court were to be taken to its logical conclusion, owing to difficulties and the current pandemic, police may also not produce an accused within 24 hours before the Magistrate's Court as required by Section 57 Cr. PC. 1973. The Court observed that the provisions of Sections 57 and 167 are supplementary and recognise the right to personal liberty enshrined in the Constitution of India.
48. The Hon’ble Supreme Court categorically held that its order dated 23-3-2020 was never intended to restrict any provision of the Code of Criminal Procedure or any other enacted law protecting personal liberty. The prosecution's right to file a charge-sheet even after 60 or 90 days is not barred. They may still submit a charge-sheet after this period, but if they do not, they cannot detain an accused beyond that time when the accused requests the court to release them for non-filing of the charge-sheet within the prescribed period. The prosecution's right to investigate and submit a chargesheet is not equivalent to the constitutional right to liberty under Article 21 or other statutes, including Section 167 Cr.PC.
49. Mr Pawar, however, relied on the decision of the Delhi High Court and submitted that the decision in S. Kasi (supra) was distinguishable because it dealt with the right of personal liberty guaranteed under Article 21 of the Constitution. He submitted that in the present case, there was no question of the Petitioner’s liberty being curtailed and therefore, the strict and narrow interpretation adopted by the Hon’ble Supreme Court in the case of S. Kasi (supra) ought not to be applied to the provisions of the PMLA.
50. The attempt to distinguish the decision and the strong observations in S. Kasi (supra) does not commend to us. Even the PMLA contains drastic provisions impacting personal liberty. In any event, even if Mr Pawar’s argument that Section 5 of the PMLA is concerned only with ‘property rights’, is to be accepted, we cannot forget that, under our Constitutional scheme, interference with a person's property rights must be authorised and in accordance with the law.
51. In Mukesh Kumar (supra), the Hon’ble Supreme Court held that the right to property is now recognised not only as a constitutional or statutory right but also as a human right. Human rights have historically been viewed within the scope of individual rights, such as the right to health, livelihood, shelter, and employment. However, these rights are now acquiring a multifaceted dimension. The right to property is also regarded as an integral part of this expanded dimension.
52. Similarly, in Harikrushna Mandir Trust (supra), the Hon’ble Supreme Court, while reaffirming that the right to property is a constitutional and human right, held that the “power to deprive a person of property must be expressly provided for and the same cannot be implied”. Therefore, the decision and the strong observations in S. Kasi (supra) cannot simply be dismissed as suggested by Mr Sachin Pawar on behalf of the E.D. The distinction proposed by Mr Pawar is one without substantial difference.
53. Besides, in S. Kasi (supra), the Hon’ble Supreme Court explains the scope and import of its orders in the SMWP. Such an explanation binds us, and we cannot say that it must be restricted to the interpretation of provisions in Section 167 of the Cr.PC alone or, at best, extended to other legislations concerning the right to liberty as guaranteed by Article 21 of the Constitution. Mr Sachin Pawar’s contention that the wide interpretation adopted by the Hon’ble Supreme Court in S. Kasi (supra) should not be extended to legislation like the PMLA, therefore, does not commend to us. Based upon such distinction, we do not think that it is open to us not to follow the binding precedent in S. Kasi (supra) under the guise of distinguishing the same.
54. The Court orders are not to be interpreted like statutes. They must be construed or understood in the context in which they were made, with due but not undue emphasis on the text. In the present case, however, the context and the text do not admit of the rather strained construction proposed by Mr Pawar. Besides, these very orders have been explained in detail by the Hon’ble Supreme Court itself, and such an explanation binds us. The reasoning of the Calcutta High Court aligns with the reasoning of the Hon’ble Supreme Court itself in S. Kasi (supra) in the context of the orders made under SMWP. Such orders were made to help litigants across the country tide over the difficulties they faced in filing Petitions/Applications/Suits/Appeals or other proceedings within the prescribed period of limitation. This relaxation or protection was extended not only to Courts but also to proceedings before judicial or quasi-judicial authorities.
55. The issuance of a provisional attachment order, at least prima facie, would be an administrative act. However, even if we were to hold that such an act has some quasi-judicial underpinnings, simply because the adjudication proceedings before the adjudicating authority would amount to quasijudicial proceedings, still, from the language and tenor of the orders, we do not think that they could be made to apply to exclude the time-limits prescribed under PMLA regarding the shelf-life of a provisional attachment order.
56. The ED, aware that the orders in SMWP would not affect the PMLA timelines, attempted to have them altered or, at least, clarified, to make them applicable to the PMLA timelines. As recorded in paragraphs 68, 72 and 73 of the Delhi High Court’s decision in Vikas WPS Ltd. (supra), the ED had in fact filed an interlocutory application, i.e. Interim Application No.91204 of 2020 in the SMWP “seeking clarification regarding PMLA time-lines”. Admittedly, no relief was granted to ED in any of the orders made in the SMWP, including the final order dated 10 January 2022.
57. Mr Sachin Pawar, however, submitted that the above circumstance is irrelevant or insignificant because there is no record of the Hon’ble Supreme Court specifically rejecting the relief applied for by the ED in Interim Application No.91204 of 2020. He submitted that, on such a basis, even the Delhi High Court, correctly, attached no significance to the disposal of the ED’s Interim Application No. 91204 of 2020 vide the final order dated 10 January 2022.
58. In our opinion, the disposal of ED’s Interim Application No.91204 of 2022 without granting the ED any relief or without issuing any clarification whether the orders made in SMWP would apply to the PMLA timelines cannot be held to be irrelevant or insignificant as contended by Mr Sachin Pawar. Although the provisions of the CPC do not apply to proceedings before the Hon’ble Supreme Court, it is not as if the principles of res judicata or other such principles, which have their foundation in public interest, are completely excluded. Explanation-V to Section 11 of the CPC, dealing with the principle of res judicata, provides that any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purposes of this section, be deemed to have been refused.
59. In any event, the fact that the ED felt it necessary to apply for an alteration or clarification of the SMWP orders extending the PML timelines, and that such an attempt was unsuccessful, cannot be dismissed as an irrelevant circumstance. The ED must not be permitted to achieve the same outcome indirectly through this Court after its direct attempt before the Hon’ble Supreme Court failed.
60. Mr Sachin Pawar relied on the reasoning adopted by the Delhi High Court to submit that during the COVID pandemic period, it was impossible for the E.D. officials to function. Therefore, it was only logical that the protection granted to the litigants should also be extended to the E.D. and its officials. In S. Kasi (supra), the Hon’ble Supreme Court rejected an almost identical argument on behalf of the State.
61. Moreover, in this case, the record clearly shows that from 15 March 2020 to 28 February 2022, during the COVID period as specified in the orders made in SMWP, the E.D., the officials, and even the adjudicating authority faced no difficulties whatsoever for issuing the impugned PAO on 27 November 2020 under Section 5(1) of the PMLA; filing Complaint No. 138 of 2020 dated 18 December 2020 against the Petitioners under Section 5(5) of the PMLA before the Adjudicating Authority; issuing a show-cause notice under Section 8 of the PMLA to the Petitioners on 07 January 2021. Similarly, even the adjudicating authority, on 27 May 2021, heard the Petitioners on its plea to declare the impugned PAO as having lapsed with effect from 26 May 2021. Thus, the contention about any physical impossibility or insurmountable difficulties holds no water, at least in the facts of the present case.
62. Although we recognise that the facts in this case generally should not influence our decision-making regarding whether the orders of the Hon’ble Supreme Court in SMWP apply to or affect the timelines under PMLA, we have referenced them solely because Mr. Pawar, relying on some observations from the Delhi High Court decision, argued that it was practically impossible for the ED or its officials to act during the COVID pandemic period. The ED has provided no record to support this claim, and the facts of the present case contradict any assertion of impossibility or disproportionate disadvantage.
63. Mr. Chothani’s reference to the provisions of TOLA is also relevant. If Mr. Pawar’s argument that the orders made by the Hon’ble Supreme Court in SMWP would apply to all adjudicatory authorities, including the tax authorities and the PMLA authorities, were correct, then perhaps there was no need to issue an Ordinance followed by enacting TOLA to provide certain relaxations in timelines specified under eight statutes, including laws related to Benami properties or black money, etc. The lack of any reference to PMLA in TOLA, therefore, cannot be deemed insignificant.
64. As noted in Vijay Chaudhary (Supra), the shelf-life of a provisional attachment order being 180 days or the requirement of having it confirmed by the adjudicating authority within that period are some of the crucial and vital safeguards considered by the Hon’ble Supreme Court for repelling the challenge to the Constitutional validity of the PMLA in general and section 5 of the PMLA in particular. Such crucial and vital safeguards cannot be whittled down in the absence of any legislative or, at least, quasi-legislative instruments, such as the Ordinance to relax or extend the timelines in certain specified fiscal legislations/TOLA, or the Orders made by the Hon’ble Supreme Court exercising its plenary jurisdiction, inter alia under Article 142 of the Constitution.
65. Thus, in effect, we agree with the reasoning of the Calcutta High Court in preference to the reasoning of the Delhi High Court. Incidentally, we note that, though not bound to do so, the Delhi High Court has not even considered the Calcutta High Court's decision, which was delivered almost three years earlier. Besides, there is nothing to show that the decision of the Calcutta High Court was ever challenged by the ED or the Union of India and if so, the fate of such a challenge. At least Mr Pawar was unable to make any statement in this regard.
66. Accordingly, we declare that the impugned PAO dated 27 November 2020 has ceased to have any effect after 180 days, i.e., from 26 May 2021, under Section 5(1), read with Section 5(3), of the PMLA. As the impugned PAO (which has since lapsed) is now of no effect, none of the Respondents can continue to detain the Petitioners’ properties, which are the subject of the impugned PAO. The attachment is therefore declared to have been lifted and to have been without legal effect from 26 May 2021. The Respondents are restrained from taking any action pursuant to the impugned PAO, which has expired or ceased to be effective from 26 May 2021. A writ is issued to that effect.
67. However, we note and add that the above relief will not in any way affect the adjudication proceedings pending before the adjudication authorities under Section 8 of the PMLA. This was fairly conceded by Mr Chothani, the learned Counsel for the Petitioner. Even apart from such a concession, we recognise that this would be the position, given the decision of the Hon’ble Supreme Court in Kaushalya Infrastructure (supra). Accordingly, we vacate the stay on the adjudication proceedings against the Petitioners, leaving it open for the parties to argue all permissible contentions therein.
68. In Kaushalya Infrastructure (supra), the Hon’ble Supreme Court was considering the argument that a provisional attachment order triggered the adjudication proceedings, and as the provisional attachment order was set aside by the High Court, no adjudication proceedings can be continued further against the Petitioner. The Hon’ble Supreme Court rejected such a contention by observing as follows: - “4. Going by the scheme of Sections 5 and 8 PMLA, we have no hesitation in observing that the aforenoted argument is misplaced. The fact that the petitioner has succeeded before the High Court, does not per se result in nullifying the adjudication proceedings, which, nevertheless, can proceed and need to be taken to its logical end by the adjudicating authority in accordance with law.
5. The satisfaction to be recorded by the authorised officer in terms of Section 5 PMLA is in two respects. The first is that the property in question had been acquired through proceeds of crime and involved in an offence of money laundering; and the second satisfaction specific in terms of Section 5(1) of the Act is that the owner/occupant of the property, who is in possession, is likely to conceal, transfer or deal with the same in any manner. This satisfaction is recorded for the purpose of interim arrangement during the pendency of the adjudication proceedings for securing the property in question. The adjudication on the other hand, gets triggered after the complaint under Section 5(5) is filed before the adjudicating authority or on an application under Sections 17(4) and also 18(10) of the Act. There is no express provision in the Act, at least brought to our notice, to indicate that once complaint is filed before the adjudicating authority, the authorised officer is prevented from passing a provisional attachment order under Section 5(1) of the Act. As a matter of fact, the power to provisionally attach tainted property is only of the authorised officer upon being satisfied about the existence of circumstances referred to in Section 5(1). The adjudication under Section 8 entails finally in confiscation of the tainted property or release thereof.
6. In other words, the fact that the petitioner has succeeded in persuading the High Court to quash the provisional attachment order passed by the appropriate authority under Section 5(1) of the Act, will in no way impact the b adjudication process initiated before the adjudicating authority, which must proceed on its own merits in accordance with law.
7. In our opinion, therefore, the challenge to the order as passed by the High Court to send back the matter to the appropriate authority to pass a fresh order, if so advised, is unexceptionable. For…..”
69. Similarly, we record Mr Chothani’s submission that the grant of relief in the above terms to the Petitioners will not prejudice the interest of the ED because Section 17 of the PMLA empowers the ED officials to proceed against the persons in possession of any properties related to the crime. Therefore, even if the attachment orders are declared as having ceased to have any effect and the Petitioners embark upon the (mis) adventure to transfer the same during the pendency of the adjudication proceedings, it is not as if the ED would be denuded of its remedy to go against such properties, even though they may be in the hands of the transferees.
70. For all the above reasons, we make the Rule absolute in this Petition by declaring that the impugned PAO dated 27 November 2020 has ceased to have any effect after 180 days, i.e., from 26 May 2021, under Section 5(1), read with Section 5(3), of the PMLA. The Respondents are restrained from taking any action pursuant to the impugned PAO, which has since expired or ceased to be effective from 26 May 2021. A writ is issued to that effect.
71. However, as discussed in paragraphs 67 and 68 above, notwithstanding the lapsing of the impugned PAO, the adjudication proceedings before the adjudicating authority would be competent, and therefore, we vacate the stay on the adjudication proceedings against the Petitioners. Such proceedings must now be disposed of in accordance with the law and on their own merits. All contentions of all parties on the merits of such proceedings are left open.
72. This Petition and the Interim Application therein are disposed of in the above terms. However, there shall be no order for costs. All concerned must act on an authenticated copy of this order. (Advait M. Sethna, J.) (M.S. Sonak, J.)