- (1.) MS. Pareena Swarup, member of the Bar, has filed this writ petition under Art. 32 of the Constitution of India by way of Public Interest Litigation seeking to declare various sections of the Prevention of Money Laundering Act, 2002 such as section 6 which deals with adjudicating authorities, composition, powers etc. , Section 25 which deals with the establishment of Appellate Tribunal, Section 27 which deals with composition etc. of the Appellate Tribunal, Section 28 which deals with qualifications for appointment of chairperson and Members of the Appellate Tribunal, Section 32 which deals with resignation and removal, Section 40 which deals with members etc. as ultra vires of Arts. 14, 19 (1) (g), 21, 50, 323b of the Constitution of India. It is also pleaded that these provisions are in breach of scheme of the constitutional provisions and power of judiciary.
(2.) BRIEF facts in a nutshell are: the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "the Act") was introduced for providing punishment for offence of Money Laundering. The Act also provides measures of prevention of money laundering. The object sought to be achieved is by provisional attachment of the proceeds of crime, which are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds under the Act. The Act also casts obligations on banking companies, financial institutions and intermediaries to maintain record of the transactions and to furnish information of such transactions within the prescribed time. In exercise of powers conferred by clause (s) of sub-section (2)of Section 73 read with Section 30 of the Prevention of Money-Laundering Act, 2002 (15 of 2003), the Central Government framed rules regulating the appointment and conditions of service of persons appointed as Chairperson and Members of the Appellate Tribunal. These rules are the Prevention of money-Laundering (Appointment and Conditions of Service of chairperson and Members of Appellate Tribunal) Rules, 2007. The Central Government has also framed rules called the prevention of Money Laundering (Appointment and Conditions of Service of Chairperson and Members of Adjudicating authorities) Rules, 2007. It is highlighted that the provisions of the Act are so provided that there may not be independent judiciary to decide the cases under the Act but the Members and the chairperson are to be selected by the Selection Committee headed by the Revenue Secretary. It is further pointed out that the Constitutional guarantee of a free and independent judiciary, and the constitutional scheme of separation of powers can be easily and seriously undermined, if the legislatures were to divest the regular Courts of their jurisdiction in all matters, entrust the same to the newly created Tribunals. According to the petitioner, the statutory provisions of the Act and the Rules, more particularly, relating to constitution of Adjudicating Authority and Appellate tribunal are violative of basic constitutional guarantee of free and independent judiciary, therefore, beyond the legislative competence of the Parliament. The freedom from control and potential domination of the executive are necessary pre-conditions for the independence. With these and various other grounds, the petitioner has filed this public interest litigation seeking to issue a writ of certiorari for quashing the abovesaid provisions which are inconsistent with the separation of power and interference with the judicial functioning of the Tribunal as ultra vires of the Constitution of india. The respondent-Union of India has filed counter affidavit repudiating the claim of the petitioner. The Department highlighted that the impugned Act has not ousted the jurisdiction of any courts and sufficient safeguards are provided in the appointment of officers of the Adjudicating authorities, Members and Chairperson of the Appellate tribunal.
(3.) WE have carefully verified the provisions of the Act and the Rules, particularly, relating to constitution and selection of adjudicating Authorities, Members and Chairperson of the appellate Tribunal. Considering the stand taken by the petitioner with reference to those provisions, we requested Mr. K. K. Venugopal, learned senior counsel, to assist the Court. Pursuant to the suggestion made by the Court, Mr. K. K. Venugopal and Mr. Gopal Subramaniam, learned Additional solicitor General, discussed the above issues and by consensus submitted certain proposals. The petitioner has highlighted the following defects in the adjudicating Authority Rules, 2007 and the Appellate Tribunal rules, 2007:- 1]. Rule 3 (3) of Adjudicating Authority Rules, 2007 does not explicitly specify the qualifications of member from the field of finance or accountancy. 2]. Rule 4 of Appellate Tribunal Rules, 2007 which provided for method of Appointment of Chairperson do not give adequate control to Judiciary. 3]. Rule 6 (1) of Appellate Tribunal Rules, 2007 which defines the selection Committee for recommending appointment of members of the Tribunal, would undermine the constitutional scheme of separation of powers between judiciary and executives. 4]. Rule 32 (2) of PMLA which provides for removal of chairperson/members of Tribunal under PMLA does not provide adequate safety to the tenure of the chairperson/members of the Tribunal. 5]. Rule 6 (2) of Appellate Tribunal Rules is vague to the extent that it provides for recommending names after "inviting applications thereof by advertisement or on the recommendations of the appropriate authorities. " 6]. Section 28 (1) of PMLA, which allows a person who "is qualified to be a judge of the High Court" to be the Chairperson of the tribunal, should be either deleted or the Rules may be amended to provide that the Chief Justice of India shall nominate a person for appointment as Chairperson of appellate Tribunal under PMLA "who is or has been a Judge of the Supreme Court or a High Court" failing which a person who "is qualified to be a judge of the High Court. " 7]. The qualifications for Legal Member of the Adjudicating authority should exclude "those who are qualified to be a district Judge" and only serving or retired District Judges should be appointed. The Chairperson of the Adjudicating authority should be the Legal member. ;