Show Cause Notice under Section 8 of PMLA has to be issued by a judicial member of Adjudicating Auth

Observing that impugned show cause notice of the Adjudicating Authority (under the Prevention of Money Laundering Act, 2022), New Delhi, dated 2.09.2023 issued under Section 8 of PMLA Act,2002 has been issued by a Technical Member / Member (Finance) instead of a judicial member, the operation of the impugned show cause notice has been stayed by the Hon. Telangana High Court.
 
The High Court has placed reliance on its earlier decision in W.P.Nos.34238 &.34627 of 2022 and batch, titled as M/s. Hygro Chemicals Pharmtek Pvt. Ltd. vs. Union of India & another, wherein it was held that an Adjudicating Authority consisting of a single member cannot pass quasi-judicial orders unless such a single member has experience in the field of law. Further, in that case, it was observed that any quasi-judicial function performed by a single member having experience in the field of finance, accountancy, or administration is non-est and would be hit by coram non judice.
 
The High Court in the instant case also placed reliance on Apex Court’s judgment passed in Opto Circuits (India) Ltd vs Axis Bank, reported in 2021 (6) SCC 707, wherein it was held that when a power is circumscribed by a procedure laid down under the statute, it has to be exercised in the manner alone failing which it would fall foul of the requirement of complying due process under law.
 
The instant petition was filed after the Enforcement Directorate filed an Original Application before the Adjudicating Authority seeking retention of property and records for a period of 365 days pursuant to which the Adjudicating Authority has issued a Show Cause Notice under Section 8 of PMLA.
 
The matter is now listed on 05.10.2023.
 
(Vani Cherukuri vs Directorate of Enforcement, order dated 13.09.2023 in IA No. 2 OF 2023 in WP NO: 25457 OF 2023)