The Assistant Director, Directorate Of ... vs The Branch Manager, The Goa State ...
2025 Latest Caselaw 1558 Bom

Bombay High Court

The Assistant Director, Directorate Of ... vs The Branch Manager, The Goa State ... on 14 January, 2025

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

2025:BHC-AS:1556-DB


                                                                               IA 1958-24 copy.docx



                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      CIVIL APPELLATE JURISDICTION


                               INTERIM APPLICATION NO. 1958 OF 2024
                                                IN
                                 FIRST APPEAL (ST.) NO. 3056 OF 2024

            The Assistant Director,
            Directorate of Enforcement                                  .. Applicant/Appellant

                     Versus

            The Branch Manager,
            The Goa State Co-op Bank Ltd.                                        .. Respondent

                 Adv. Ashish Chavan a/w Yash Palan for the Applicant/ Appellant.



                                                   CORAM: B. P. COLABAWALLA &
                                                          SOMASEKHAR SUNDARESAN, JJ.

                                   RESERVED ON:                    DECEMBER 09, 2024
                                 PRONOUNCED ON:                    JANUARY 14, 2025



            JUDGMENT:

- [ Per: B. P. COLABAWALLA, J ]

1. The above Appeal is filed under Section 42 of the Prevention of

Money Laundering Act, 2002 [for short the "PMLA, 2002"] by the Assistant

Director, Directorate of Enforcement, challenging the order dated 4th July

2018 passed by the Appellate Tribunal [constituted under the provisions of the

PMLA, 2002], in FPA-PMLA-2178/AHD/2018. By the impugned order, the

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Appellate Tribunal allowed the Appeal filed by the Respondent-Bank against

the order of the Adjudicating Authority confirming the Provisional Order of

the Attachment levied [under Section 5 of the PMLA, 2002] by the Deputy

Director, Directorate of Enforcement, Surat.

2. Since there is a delay in filing the Appeal, the above Interim

Application is also filed seeking a condonation of delay. Though in the Interim

Application, the period of delay is not mentioned, on the basis of the lists of

dates and events tendered to this Court on 9th December 2024, the delay

mentioned is 132 days.

3. As recorded in our order dated 9th December, 2024, we had noted

that the issue involved in the present case is whether the Court has the power

to condone the delay beyond the total period of 120 days [sixty days being the

prescribed period and a further period of sixty days being the grace period] as

stipulated in Section 42 of the PMLA, 2002, read with its proviso. In order to

decide the aforesaid issue, it would be apposite to refer to certain admitted

facts which are relevant for the present purposes.

4. The present Applicant/Appellant is working as the Assistant

Director, Directorate of Enforcement, Surat, Sub-Zonal Office, Surat. The

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Joint Director of the Directorate of Enforcement, Ahmedabad Zonal office,

Ahmedabad, had filed Original Complaint No. 805 of 2017 [under Section 5(5)

of the PMLA, 2002] in respect of Provisional Attachment Order No.4 of 2017

dated 17th July 2017. This provisional attachment was also levied under Section

5(1) of the PMLA, 2002.

5. It is the case of the Appellant that after going through all the

documents and evidence, the Adjudication Authority confirmed the

Provisional Attachment Order [dated 17th July 2017] vide its order dated 28th

December 2017. This confirmation was done under Section 8 of the PMLA,

2002.

6. Being aggrieved by the order of the Adjudicating Authority dated

28th December 2017, the Respondent-Bank, on 15th February 2018, preferred

an Appeal before the Appellate Tribunal under Section 26 of the PMLA, 2002.

This Appeal filed by the Respondent-Bank was heard on 4th April 2018 and the

Judgment was pronounced by the Appellate Tribunal on 4th July 2018. The

Appellate Tribunal allowed the Appeal filed by the Respondent- Bank and

inter-alia set aside the order of the Adjudicating Authority dated 28th

December 2017 and the Provisional Attachment Order dated 17th July 2017.

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7. Being aggrieved by this decision of the Appellate Tribunal, the

Appellant herein initially preferred an Appeal under Section 42 of the PMLA,

2002 before the High Court of Gujarat, Ahmedabad, being First Appeal No.

4151 of 2018. Since there was a delay of approximately five days [beyond the

initial period of sixty days] in preferring the Appeal, the Appellant herein also

filed an application for condonation of delay. The delay was accordingly

condoned by the Gujarat High Court vide its order dated 28th June 2019.

8. Eventually, when the Appeal was being argued before the Gujarat

High Court, it was realized that by virtue of the Explanation (ii) of Section 42,

the Appeal would lie before the High Court of Bombay. In these circumstances,

on 20th September 2023, the Appellant withdrew the Appeal before the Gujarat

High Court with liberty to approach the appropriate High Court. Thereafter,

the above First Appeal was lodged in this Court on 30th January 2024.

9. It is the case of the Appellant [in the list of dates and events

tendered to the Court on 9th December 2024] that there is a delay of 132 days

in approaching this Court after the Appellant withdrew its Appeal from the

Gujarat High Court. It is in these circumstances that the Appellant has prayed

for condonation of delay. From the list of dates, it is clear that the Gujarat High

Court was approached on 7th September 2018 challenging the order passed by

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the Appellate Tribunal dated 4th July 2018. As per Section 42, the Appeal had

to be filed within a period of sixty days from the date of communication of the

said order. Since the Appeal was filed after 65 days from the date of the

communication of the order passed by the Appellate Tribunal, an application

for condonation of delay was also filed before the Gujarat High Court, and

which was allowed. Thereafter, once the Appeal was withdrawn from the

Gujarat High Court and filed in this Court, there has been further delay of

about 132 days in filing the above Appeal.

10. In these facts, and considering the provisions of Section 42, we

inquired from the learned Counsel appearing for the Appellant as to how we

would have the power to condone the delay beyond the maximum period of

120 days as stipulated in Section 42 of the PMLA, 2002. In answer to this

query, the learned Counsel submitted that the provisions of Section 42 do not

preclude the application of Section 5 of the Limitation Act, 1963. In this regard

the learned Counsel submitted that Section 29(2) of the Limitation Act, 1963

clearly stipulates that where any special or local law prescribes inter-alia for

any appeal, a period of limitation different from the period prescribed by the

Schedule of the said Act, for the purpose of determining any period of

limitation prescribed for such appeal by any special or local law, the provisions

contained in Sections 4 to 24 [inclusive] shall apply only insofar as and to the

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extent to which they are not expressly excluded by such special or local law. He

submitted that if one reads the language of Section 42 of the PMLA, 2002 there

is no express exclusion of Section 5 of the Limitation Act, 1963 and therefore,

we would have the power to condone the delay even beyond the period of 120

days as stipulated in Section 42 of the said Act. The learned Counsel also took

us through certain other provisions of the PMLA, 2002, namely, the definition

of the words "proceeds of crime" under Section 2(1)(u) as well as Section 47.

The learned Counsel submitted that the PMLA, 2002 is a hybrid statute which

has civil as well as criminal consequences and when one reads all these

provisions, it becomes clear that Section 5 of the Limitation Act, 1963 is not

expressly excluded by the language employed by the legislature in Section 42.

To buttress this argument, the learned Counsel appearing for the Appellant

strongly relied upon a decision of the Division Bench of this Court in the case

of Faizal Hasamali Mirza alias Kasib Vs. State of Maharashtra and

another [2023 SCC OnLine Bom 1936]. The learned Counsel submitted

that in this decision, a Division Bench of this Court was considering the

provisions of Section 21 of the National Investigation Agency Act, 2008 [for

short "NIA Act"] and came to the conclusion that even beyond the period

stipulated in Section 21 of the NIA Act, the Court has the power to condone the

delay. He submitted that the provisions of Section 21 of the NIA Act are very

similar to the provisions of Section 42 of the PMLA, 2002, and therefore, even

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we would have the power to condone the delay beyond the total period of 120

days. For all these reasons, the learned Counsel submitted that we ought to

condone the delay and allow the above Interim Application.

11. We have heard the learned Counsel appearing for the Appellant.

Before we deal with this issue, it would only be apposite to set out the

provisions of Section 42 of the PMLA, 2002 as well as Sections 5 and 29 of the

Limitation Act, 1963. Section 42 of the PMLA, 2002 reads as under:

"42. Appeal to High Court.--Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.--For the purposes of this section, "High Court" means--

(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(ii) 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."

(emphasis supplied)

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12. As can be seen from the aforesaid provision, any person aggrieved

by any decision or order of the Appellate Tribunal may file an appeal to the

High Court within sixty days from the date of communication of the decision

or order of the Appellate Tribunal on any question of law or fact arising out of

such order. The proviso to Section 42, and which is important for our purposes,

stipulates that the High Court may, if it is satisfied that the Appellant was

prevented by sufficient cause from filing the appeal within the initial period of

sixty days, may allow it to be filed within a further period not exceeding sixty

days. What can be discerned from these provisions is that an appeal has to be

filed within sixty days [the initial period], and if not done so, then, on sufficient

cause being shown, the High Court can condone the delay up to a further

period of sixty days. The question that arises in the present case, is whether by

virtue of the said proviso, the applicability of Section 5 of the Limitation Act,

1963 is excluded. As mentioned earlier, to understand this issue, one will also

have to note the provisions of Section 5 and Section 29 of the Limitation Act,

1963 as well. Section 5 of the Limitation Act, 1963 reads thus:-

"5. Extension of prescribed period in certain cases.--Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation.--The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section."

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13. Section 29 of the Limitation Act, 1963 reads as under:-

"29. Savings.--(1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872).

(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.

(3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law. (4) Sections 25 and 26 and the definition of "easement" in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882 (5 of 1882), may for the time being extend."

(emphasis supplied)

14. Section 29(2) basically stipulates that where any special or local

law, for any suit, appeal or application, prescribes a period of limitation

different from the period prescribed by the Schedule of the Limitation Act,

1963, then, for the purpose of determining any period of limitation prescribed

[for any suit, appeal or application] by any such special or local law, the

provisions contained in Sections 4 to 24 (inclusive), shall apply only insofar as,

and to the extent to which, they are not expressly excluded by such special law

or local law. After perusing the provisions of Section 42, we are clearly of the

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view that when the said Section is read as a whole, the inescapable conclusion

is that Section 5 of the Limitation Act, 1963 cannot be invoked for condoning

the delay beyond the total period of 120 days as stipulated in Section 42 read

with its proviso. If the legislature had in fact intended that Section 5 of the

Limitation Act, 1963 would apply to an appeal to be filed under Section 42 of

the PMLA, 2002, the legislature would not have inserted the proviso to Section

42 which [after the initial period of sixty days to file an appeal under Section

42 has expired], gives power to the High Court to condone the delay for a

further period not exceeding sixty days. The legislature would have stopped by

simply saying that any person aggrieved by the decision or an order of the

Appellate Tribunal, may file an appeal to the High Court within sixty days from

the date of the decision or order. If that is all that was said by the legislature,

the applicability of Section 5 of the Limitation Act, 1963 could not have been

construed as being expressly excluded because a mere provision of a period of

limitation [in a special or local law], in howsoever peremptory or imperative

language, is not sufficient to displace the applicability of Sections 4 to 24

[which includes Section 5] of the Limitation Act, 1963. However, the proviso

to Section 42 basically stipulates that the High Court shall, after the initial

period of sixty days, have the power to condone the delay for a further period

not exceeding sixty days. This would most definitely amount to an express

exclusion to the applicability of Section 5 of the Limitation Act, 1963, to an

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appeal to be filed under Section 42 of the PMLA, 2002. To hold that the High

Court can entertain an appeal even beyond the extended period [as stipulated

in the proviso to Section 42] would render the words "not exceeding sixty

days" wholly otiose. No principle of interpretation would justify such a result.

We are unable to agree with the learned Counsel that an express exclusion only

means that Section 42 ought to expressly mention the exclusion of Section 5.

An express exclusion would mean that the language of the statute clearly

indicates that the applicability of Section 5 has been excluded. The words used

in the proviso to Section 42 "within a further period not exceeding sixty days"

clearly therefore exclude the applicability of Section 5 of the Limitation Act,

1963. If we were to hold otherwise, as mentioned earlier, would render the said

words otiose and would be against all principles of interpretation.

15. We must note that we have taken this precise view in the case of

Municipal Corporation of Greater Mumbai Vs. Anusaya Sitaram

Devrukhkar and Others [Interim Application No.13254 of 2024 in

First Appeal (ST) No.24058 of 2024 decided on 7th January 2025].

In this decision, what this Court considered were the provisions of Section

74(1) of the Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement Act, 2013 [for Short "the 2013

Act"]. Section 74 of the 2013 Act also stipulated that the Requiring Body, or

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any person aggrieved by the award passed by the Reference Authority under

Section 69 of the 2013 Act, may file an appeal to the High Court within sixty

days from the date of the Award. The proviso to Section 74(1) stipulated that

the High Court may, if it is satisfied that the appellant was prevented by

sufficient cause from filing the appeal within the initial period of sixty days,

allow it to be filed within a further period not exceeding sixty days. For the sake

of convenience, Section 74 (1) the 2013 Act and its proviso are reproduced

hereunder:-

"74. Appeal to High Court.-(1) The Requiring Body or any person aggrieved by the Award passed by an Authority under section 69 may file an appeal to the High Court within sixty days from the date of Award:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

16. As can be seen from this provision, it is almost identical to the

provisions of Section 42 of the PMLA, 2002. This Court, in the case of

Municipal Corporation of Greater Mumbai (supra), after reviewing

the law laid down by the Supreme Court in (i) Union of India Vs. Popular

Construction Company [(2001) 1 SCC 470]; (ii) Chhattisgarh State

Electricity Board Vs. Central Electricity Regulatory Commission

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and others [(2010) 5 SCC 2023]; (iii) Oil and Natural Gas

Corporation Ltd. Vs. Gujrat Energy Transmission Corporation

Ltd. and others [(2017) 5 SCC 42]; and (iv) Bengal Chemist and

Druggists Association Vs. Kalyan Chowdhary [(2018) 3 SCC 41],

came to the conclusion that beyond the stipulated period of 120 days, this

Court would have no power to condone the delay. We are clearly of the view

that the decision rendered by this Court in Municipal Corporation of

Greater Mumbai (supra) would apply with full force to the facts of the

present case. We, therefore, have no hesitation in holding that after the total

period of 120 days as stipulated in Section 42 of the PMLA, 2002, read with its

proviso, the High Court would have no power to condone the delay in

preferring the Appeal.

17. Before concluding, it would only be fair to refer to the decision of

another Division Bench of this Court rendered in the case of Faizal

Hasamali Mirza alias Kasib Vs. State of Maharashtra and another

(supra). We have carefully gone through the aforesaid decision. In this

decision, another Division Bench of this Court was considering the provisions

of Section 21 of the NIA Act. Section 21 of the NIA Act reads as under:-

"21. Appeals. - (1) Notwithstanding anything contained in the Code, an appeal shall lie from any judgement, sentence or order, not being an interlocutory order, of a Special Court to the High Court both on facts and on law.

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(2) Every appeal under sub-section (1) shall be heard by a Bench of two Judges of the High Court and shall, as far as possible, be disposed of within a period of three months from the date of admission of the appeal.

(3) Except as aforesaid, no appeal or revision shall lie to any Court from any judgment, sentence or order including an interlocutory order of a Special Court.

(4) Notwithstanding anything contained in sub-section (3) of section 378 of the Code, an appeal shall lie to the High Court against an order of the Special Court granting or refusing bail.

(5) Every appeal under this section shall be preferred within a period of thirty days from the date of the judgment, sentence or order appealed from:

Provided that the High Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of thirty days.

Provided further that no appeal shall be entertained after the expiry of period of ninety days."

(emphasis supplied)

18. Whilst construing this provision, the Division Bench of this Court

held that the word "shall" appearing in the proviso to Section 21(5) should be

read as "may" and hence would be directory in nature. We fail to understand

how this decision can be of any assistance to the Appellant. The decision of the

Division Bench of this Court in the case of Faizal Hasamali Mirza alias

Kasib Vs. State of Maharashtra and another (supra), came to this

finding taking into consideration that an appeal filed by the accused under

Section 21 of the NIA Act would be a part of the right to life and liberty as

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enshrined in Article 21 of the Constitution of India. It is in these facts that the

Division Bench in the case of Faizal Hasamali Mirza alias Kasib Vs.

State of Maharashtra and another (supra) came to the conclusion that

the word "shall" in the proviso to Section 21(5) has to be read as "may" and

hence directory in nature. What is important to note is that in this decision,

the Division Bench has not come to the conclusion that although the provisions

of Section 5 of the Limitation Act, 1963 are excluded by the language of Section

21 of the NIA Act, yet the Court has the power to condone the delay. As can be

seen from the provisions reproduced by us above, the language used in Section

21 of the NIA Act and that in Section 42 of the PMLA 2002 are materially

different. In these circumstances, we have no hesitation in holding that the

reliance placed by the learned Counsel on the decision of the Division Bench

of this Court in the case of Faizal Hasamali Mirza alias Kasib Vs. State

of Maharashtra and another (supra) is wholly misconceived and

misplaced.

19. There is one other facet - and this would need comment only to

underline the extent of the delay. The Appellant was already five days late in

approaching the Gujarat High Court, and this delay had been condoned. After

the Gujarat High Court ruled that the jurisdictional High Court is the Bombay

High Court, the Appellant took another 132 days to approach this Court. In

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short, the Appellant had already been condoned for a delay of five days in

preferring an appeal. That the Appellant was found to have approached the

wrong forum would not reset the clock for computing limitation from scratch.

The Appellant ought to have approached this Court within 55 days of the

outcome at the Gujarat High Court, and evidently, the Appellant was late by a

long distance of time.

20. In view of the foregoing discussion, we have no hesitation in

holding that beyond the total period of 120 days as stipulated in Section 42

[read with its proviso] of the PMLA, 2002, this Court has no power to condone

the delay. Since admittedly, in the facts of the present case, the application

seeking a condonation of delay is beyond the total period of 120 days, the above

Application seeking condonation of delay is hereby dismissed. Consequently,

so is the above First Appeal. However, in the facts and circumstances of the

present case, there shall be no order as to costs.

21. This order will be digitally signed by the Private Secretary/

Personal Assistant of this Court. All concerned will act on production by fax

or email of a digitally signed copy of this order.

[SOMASEKHAR SUNDARESAN, J.] [B. P. COLABAWALLA, J.]

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