2 weeks Ago
Bengaluru: Citing non-compliance with the provisions of Prevention of Money Laundering Act (PMLA), Karnataka high court has quashed the provisional attachment order issued by the Directorate of Enforcement (ED) concerning persons associated with Vikram Investments . In 2018, following complaints by investors over non-refund of their money, a cheating case was registered against Vikram Investments. Based on this, ED registered a money-laundering case, and a provisional attachment dated Nov 2, 2021, was passed, whereby the properties of the petitioners, Prahlad and others, were attached by the agency, invoking its power under Section 5 (1) of PMLA, 2002.
Challenging the same, the petitioners argued that except for issuing a show-cause notice in 2022, no orders were passed by the competent authority confirming the provisional attachment order, even though the outer limit for it was 180 days. On the other hand, ED submitted that because of the Covid-19 pandemic, limitation was in existence from March 24, 2020, till Oct 21, 2021, in terms of orders passed by the Supreme Court, and the same should be extended to them in the case on hand. After perusing the provisions of PMLA, Justice M Nagaprasanna pointed out that Section 5 (1)(b) of the Act itself mandates that the provisional attachment would be effective only for a period of 180 days from the date of order.
"This is not a limitation for filing a case or otherwise to a litigant, it is the period of validation. If the order isn't passed within 180 days, the statute itself would mandate that the order would be a nullity, and the order which is in nullity can't be given a breather by extending the limitation period, as was done by the apex court during the Covid pandemic," the judge further said..
