PMLA Tribunal Lacks Statutory Power to Remand Matters to Adjudicating Authority for Fresh Consideration of Attachment Orders: Karnataka High Court
Safiya Malik
The High Court of Karnataka, Division Bench of Justice D.K. Singh and Justice Venkatesh Naik T held that the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has no power to remit a matter to the Adjudicating Authority for fresh consideration of an order confirming a provisional attachment. Allowing the Enforcement Directorate’s appeal, the Court clarified that the Tribunal, being a creation of statute, exercises only the powers conferred by it and possesses no inherent authority as a regular court. It observed that unless the statute specifically provides for remand, such power cannot be assumed, in a case concerning attachment of over Rs. 21 crore linked to alleged money laundering.
The appeal arose from proceedings initiated under Section 42 of the Prevention of Money Laundering Act, 2002, by the Joint Director, Directorate of Enforcement, Bengaluru Zonal Office. The ED challenged the order dated September 11, 2019, of the Appellate Tribunal (PMLA), New Delhi, which had set aside the Adjudicating Authority’s confirmation of a provisional attachment order and remanded the matter for fresh adjudication. The Adjudicating Authority had earlier, on October 11, 2017, confirmed the provisional attachment of mutual funds and bank accounts amounting to Rs. 21,38,66,041 belonging to M/s Devas Multimedia Pvt. Ltd. The Tribunal held that the Adjudicating Authority had failed to assign cogent reasons and had not independently applied its mind.
The Directorate of Enforcement contended before the High Court that the Tribunal had exceeded its statutory authority. It was argued that under Section 26(4) of the PMLA, the Appellate Tribunal could only confirm, modify, or set aside an order but had no express power to remand matters. The counsel cited the Supreme Court judgment in MIL India Ltd. v. Commissioner of Central Excise, Noida (2007) 3 SCC 533, to state that when a statute does not expressly grant a power of remand, such power cannot be implied or exercised inherently.
The ED further contended that remanding the matter would nullify the effect of the attachment order, allowing the attached assets to be dissipated, which would defeat the purpose of the PMLA. Reference was made to other statutory enactments, such as the Central Excise Act and the Customs Act, to demonstrate that whenever the legislature intended to vest an appellate body with remand powers, it did so expressly.
On the other hand, counsel for the respondent argued that the power to set aside an order inherently carries the power to remand, as it is necessary for justice. Reliance was placed on the Full Bench decision of the Kerala High Court in N.K. Dharmadas v. State Transport Appellate Tribunal of Kerala (1962 SCC Online KER 136), which recognized the incidental power of remand as inherent to appellate jurisdiction.
The Bench recorded that “there can be no manner of doubt that Tribunal is creation of the Statute and it exercises limited power as conferred on it by the Statute. There is no inherent power in a Tribunal, inasmuch as the Tribunal is not a regular Court.”
The Court referred to the Supreme Court’s decision in MIL India Ltd. and extracted relevant passages, observing that “once the power of remand does not vest in a statutory authority, there cannot be any inherent or concomitant power to remand the matter back to the lower authority.”
The Court stated, “Under sub-section (4) of Section 26 of the PML Act, the Tribunal has power as Appellate Authority to pass order of confirming, modifying or setting aside the order appealed against, as it deems fit, however, there is no such power of remand vested in the Appellate Tribunal.”
The Bench stated that “if the Statute does not confer a power of remand, and there is no inherent power vested in the Tribunal, it cannot remand the matter back to the Adjudicating Authority unless it is specifically provided in the Statute itself.” The Court further noted that “the Tribunal is not a regular Court; it functions within the four corners of the statute under which it is constituted.”
The Court noted that fairness could still be ensured within the statutory framework, as the Tribunal was empowered to assess the correctness of the Adjudicating Authority’s decision and make an appropriate order. The Bench remarked that “the Tribunal is the final fact-finding authority under the Act and is fully empowered to decide on the merits without recourse to remand.”
The judgment stated, “If the Tribunal remands the matter to the Adjudicating Authority, the attachment order would go and it would be difficult to trace the money. Once the money attachment order is removed and the money is taken away, the whole purpose of attachment would get frustrated.”
The Court observed that “we are in agreement with Mr. Unnikrishnan, learned counsel for the appellant that in the absence of specific power of remand, the Tribunal could not have remanded the matter back to the Adjudicating Authority.”
The Division Bench ordered that “as we hold that the Tribunal does not have the power to remand the matter back to the Adjudicating Authority, we set aside the impugned order passed by the Tribunal and remand the matter back to the Tribunal to render its decision on merit after hearing the parties.”
“With the aforesaid direction, the appeal is allowed.”
Advocates Representing the Parties:
For the Appellant: Sri Unnikrishnan M., Central Government Counsel for the Directorate of Enforcement.
For the Respondent: Ms. Manasa Sundaraman along with Ms. Sushma Rao for Sri Goutham R.V., Advocates.
Case Title: The Joint Director, Directorate of Enforcement, Bengaluru v. M/s Devas Multimedia Pvt. Ltd.
Neutral Citation: 2025:KHC:39016-DB
Case Number: MSA No. 24 of 2020
Bench: Justice D.K. Singh and Justice Venkatesh Naik T
