Bombay High Court: No Condonation Beyond 120 Days Under PMLA, Appeal Dismissed for Exceeding Strict Limitation and Reaffirming Exclusion of Section 5 of the Limitation Act

Court’s Decision

The Bombay High Court dismissed an appeal filed by the Directorate of Enforcement (Appellant) under Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA), citing its inability to condone delays exceeding 120 days. The Court emphasized:

“To hold that the High Court can entertain an appeal even beyond the extended period would render the words ‘not exceeding sixty days’ wholly otiose. No principle of interpretation would justify such a result.”

The Court ruled that the legislative intent behind Section 42 is to impose a strict limitation period, explicitly excluding the application of Section 5 of the Limitation Act, 1963, which generally permits condonation of delays.

Facts

1. Provisional Attachment: On July 17, 2017, the Directorate of Enforcement issued a Provisional Attachment Order under Section 5(1) of PMLA, alleging the proceeds of crime were involved.
2. Adjudication Authority Confirmation: The Adjudicating Authority confirmed the attachment on December 28, 2017, under Section 8 of the Act.
3. Appellate Tribunal Reversal: The Respondent-Bank challenged this confirmation before the Appellate Tribunal, which set aside the attachment order on July 4, 2018.
4. Initial Appeal to Gujarat High Court: The Appellant initially filed an appeal under Section 42 before the Gujarat High Court but faced a delay of 5 days, which the Gujarat High Court condoned.
5. Jurisdiction Issue: During the proceedings, the Gujarat High Court determined that the appropriate jurisdiction lay with the Bombay High Court. The appeal was withdrawn on September 20, 2023.
6. Further Delay: Despite the withdrawal, the Appellant delayed another 132 days before approaching the Bombay High Court on January 30, 2024.

The cumulative delay in filing the appeal before the Bombay High Court exceeded the 120-day maximum limit set by Section 42 of PMLA.

Issues

1. Jurisdiction of High Court to Condone Delays: Can the High Court condone delays exceeding 120 days as prescribed by Section 42 of PMLA?
2. Applicability of Section 5 of the Limitation Act: Does Section 5 of the Limitation Act, 1963, apply to condone delays under PMLA?

Petitioner’s Arguments

1. Applicability of Limitation Act: The Appellant argued that Section 42 does not explicitly exclude Section 5 of the Limitation Act, allowing for further condonation.
2. Hybrid Nature of PMLA: The Appellant submitted that PMLA has both civil and criminal elements, which warrant a liberal interpretation of procedural timelines.
3. Judicial Precedents: Relied on the Bombay High Court’s ruling in Faizal Hasamali Mirza alias Kasib vs. State of Maharashtra, which interpreted similar provisions in the National Investigation Agency Act (NIA) to permit condonation beyond the stipulated time.

Respondent’s Arguments

1. Strict Limitation Period: The Respondent contended that the proviso to Section 42 expressly limits condonation to a maximum of 60 days beyond the initial 60-day period.
2. Repeated Delays: Argued that the Appellant’s failure to act diligently compounded delays, demonstrating negligence in complying with statutory requirements.
3. Exclusion of Section 5: Highlighted that the language of Section 42 inherently excludes the applicability of Section 5 of the Limitation Act.

Analysis of the Law

1. Statutory Provisions:
   • Section 42 of PMLA prescribes a 60-day period for filing an appeal, with an additional grace period of 60 days if sufficient cause is shown.
   • The Limitation Act’s Section 29(2) allows for the application of Sections 4 to 24, including Section 5, unless expressly excluded by a special or local law.
2. Judicial Interpretation:
   • The Court emphasized that the words “not exceeding sixty days” in the proviso to Section 42 constitute an express exclusion of Section 5 of the Limitation Act.
   • Cited Popular Construction Co. vs. Union of India and Chhattisgarh State Electricity Board vs. CERC, which affirmed that statutory time limits under special laws are absolute and non-extendable.
3. Precedent in Similar Cases:
   • Municipal Corporation of Greater Mumbai vs. Anusaya Sitaram Devrukhkar: The Bombay High Court, interpreting similar language in the Land Acquisition Act, ruled that delays beyond the stipulated period could not be condoned.
   • Distinguished the reliance on Faizal Hasamali Mirza, as that decision involved fundamental rights under Article 21, which justified a broader interpretation of procedural provisions.

Court’s Reasoning

1. Legislative Intent:
   • The proviso to Section 42 was crafted to ensure finality within a specified timeframe.
   • Allowing further condonation would defeat the purpose of the proviso and undermine the efficiency and certainty intended by the statute.
2. Practical Considerations:
   • The Appellant’s delay of 132 days in filing the appeal before the Bombay High Court was deemed excessive and unjustified.
   • The Court criticized the Appellant’s lack of diligence, noting that procedural errors and jurisdictional misunderstandings do not reset the limitation clock.
3. Rejection of Section 5 Application:
   • The Court held that Section 5 of the Limitation Act was expressly excluded by the language of Section 42. To hold otherwise would render the proviso meaningless.

Conclusion

The High Court dismissed the Appellant’s interim application seeking condonation of delay and the related appeal. It reiterated:

“Beyond the total period of 120 days as stipulated in Section 42, this Court has no power to condone the delay. The words ‘not exceeding sixty days’ cannot be disregarded.”

Implications

This judgment underscores the strict timelines imposed under special laws like PMLA and the limited judicial discretion in condoning delays. It serves as a reminder to litigants to adhere diligently to procedural requirements, as statutory time limits are interpreted strictly to maintain finality and efficiency in the legal process.

Also Read – Jammu & Kashmir and Ladakh High Court Acquits Appellants in Abduction and Rape Case: Holds That “Prosecutrix’s Testimony Not of Sterling Quality,” Cites Inconsistencies, Lack of Corroboration, and Procedural Lapses in Investigation