Is Member From Field Of Law In Adjudicating Authority Under PMLA A Judicial Member: Sikkim HC Dismisses ED's Plea For Clarification Filed After 8 Years

The Sikkim High Court has dismissed an application filed by the Enforcement Directorate seeking clarification of a judgment passed by the Court in the year 2015 directing the Directorate of Enforcement to take appropriate steps for the appointment of Judicial Member of the Adjudicating Authority urgently. While dismissing the application filed in the year 2022, the Court held that it cannot use its power under Section 482 Cr.P.C. to "come to aid a litigant to abuse the process of administration of justice".

The original writ petition (criminal) was filed by the Vice Chancellor of EIILM (Eastern Institute for Integrated Learning in Management University) praying for setting aside a show cause notice dated issued by the Adjudicating Authority under the PMLA Act.

A Single Bench of Justice Bhaskar Raj Pradhan held, “Even if this Court was to consider the application for modification/clarification as one filed under Section 482 Cr.P.C. which is the inherent power of this Court to prevent abuse of the process of any Court or otherwise to secure the ends of justice it cannot come to aid a litigant to abuse the process of administration of justice.”

The Bench said that the Supreme Court in numerous judgments has held very clearly that the practice of filing an application for modification/clarification of the judgment rendered must be deprecated as in actuality what it seeks is a review or revision of the judgment which is not permissible.

Advocate Shakeel Ahmed appeared on behalf of the original petitioner while Deputy Solicitor General of India Sangita Pradhan appeared on behalf of the original respondents, the present applicants.

In this case, a judgment was rendered by a Single Judge in a plea filed by the EIILM University against the Joint Director and the Enforcement Officer, Directorate of Enforcement, Government of India, and the Registrar/Administrative Officer, Adjudicating Authority. EIILM University had prayed for setting aside the show cause notice issued by the Adjudicating Authority under sub-section (1) of Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) and the subsequent proceedings consequential thereto.

The principal ground seeking to quash the show cause notice under PMLA by the Adjudicating Authority was that it was issued by a Bench constituted under clause (b) of sub-section (5) of Section 6 of the PMLA which did not have a Judicial Member. The petitioner prayed for clarification as to whether Member (Judicial) and Member from the field of Law of the Adjudicating Authority under Section 6 (3) (a) (ii) of PMLA are the same.

The High Court after hearing the contentions of the counsel noted, “It is settled law that the extraordinary power under section 482 have to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself.”

The Court said that the application for modification/clarification is evidently a device to persuade the court to revisit, reopen, and reverse the judgment which is clearly impermissible.

“It was open for the applicant to have preferred a review petition before the learned Single Judge or an appeal before the Division Bench of this Court or even a Special Leave Petition before the Supreme Court against the judgment dated 22.09.2015 within the prescribed time if they were not satisfied with it. However, the applicant chose not to do so for almost eight years. The application in fact states that it sought to comply with the judgment dated 22.09.2015”, also noted the Court.

Accordingly, the Court dismissed the plea.

Cause Title- Eastern Institute for Integrated Learning in Management University v. The Joint Director, Directorate of Enforcement & Ors.

Click here to read/download the Judgment