Srinagar: In a significant ruling, the High Court of J&K and Ladakh has held that the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) 2002, does have the power to send cases back to the Adjudicating Authority after setting aside a confirmation order.
The Court said this authority is inherent to the Tribunal’s appellate function.
A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar underscored that the power to remand is a basic feature of appellate jurisdiction. Without it, they warned, the Tribunal’s ability to overturn orders on procedural lapses—such as violations of natural justice—would be “illusory.”
The Court was addressing whether Section 26(4) of the PMLA implicitly allows the Tribunal to remand matters after invalidating a confirmation order under Section 8(3).
The Court concluded that it does, pointing to the statute’s broad language allowing the Tribunal to “pass such orders as it thinks fit.”
The Bench said, such phrasing has long been interpreted across Indian law as including the power to remand unless a statute clearly states otherwise.
The judgment stands in contrast to a recent Karnataka High Court decision that denied the Tribunal this authority, effectively setting up a judicial divergence on the matter.
The appeals before the Court stemmed from a 2019 provisional attachment order issued by the Enforcement Directorate (ED) under Section 5 of the PMLA.
The order attached a Gurgaon property worth about ₹1.64 crore, owned by Sarwa Zahoor. Her husband, Zahoor Ahmad Shah, a promoter of M/s Trison Farms and Construction Pvt. Ltd., had been arrested by the National Investigation Agency (NIA) the same year.
He was accused of acting as a conduit for money allegedly sent from Pakistan and the Pakistan High Commission in Delhi to separatist groups in Kashmir.
As per ED it was stated that documents seized during raids including materials recovered from the home of one Ghulam Mohd. Bhat—indicated that 1.64 crore rupees were moved through these channels in 2015–16.
Following the ED’s action, the NIA filed its complaint before the Adjudicating Authority, which issued a show-cause notice and later confirmed the attachment on August 26, 2019.
However, the Authority failed to disclose its “reasons to believe” as required under Section 8(1) of the PMLA—a procedural lapse that the appellants argued violated their right to natural justice.
When the matter reached the Appellate Tribunal, it set aside the confirmation order and sent the case back for fresh adjudication. The Tribunal directed the Authority to issue a new notice and give the appellants a proper opportunity to respond, stressing that procedural fairness had to be restored.
The High Court has now upheld that approach, confirming that the Tribunal was well within its powers to do so.
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