Adjudicating Authority Must Issue Notice Before Proceedings | SAFEMA

Case Details: Shrenik Suresh Seth vs. Deputy Director Directorate of Enforcement - [2025] 178 taxmann.com 277 (SAFEMA - New Delhi)

Judiciary and Counsel Details

• V. Anandarajan, Member
• Bhomesh Bellam, Ashish Raghuvanshi & Rudraksh Kaushal, Advs. for the Appellant
• Aditya Singla, Adv. for the Respondent

Facts of the Case

In the instant case, the appellant was a purchaser of a property that was in the possession of the respondent company and was included in the list of properties attached to money laundering proceedings initiated against the said company.

The appellant filed an impleadment application before the Adjudicating Authority (AA) seeking intervention in the said proceedings on the ground that the property belonged to him. The said application was rejected by AA on the ground that it was not allowed to intervene in proceedings.

It was noted that appellant had a ‘legitimate interest’ in property for purposes of issue of notice under section 8(2) of the PMLA, and for the same reason, AA could not shut appellant out of adjudication proceedings without even issuing a notice.

Tribunal Held

The Appellate Tribunal held that wherever a statute provides for due process to be followed, it must be followed by the relevant authority in letter and spirit, regardless of what the end result of following that process might be. Therefore, AA was to be directed to issue a notice to the appellant as provided under section 8(2) of the PMLA and to allow him to participate in the adjudication proceedings.

List Of Cases Reviewed

• Hameedia Hardware Store v. B. Mohan Lal Sowcar (1988) 2 SCC 513 (Para 24)
• Ms. Kiran Mazumdar v. Deputy Director, Directorate of Enforcement [2018] 96 taxmann.com 365/149 SCL 132 ((PMLA-AT) (para 26) distinguished.

List Of Cases Referred To

• Hameedia Hardware Store v. B. Mohan Lal Sowcar (1988) 2 SCC 513 (para 8)
• Directorate of Enforcement v. Axis Bank Limited [2019] 104 taxmann.com 49 (Delhi) (para 9)
• Ms. Kiran Mazumdar v. Deputy Director, Directorate of Enforcement [2018] 96 taxmann.com 365/149 SCL 132 ((PMLA-AT), NEW DELHI) (para 11)
• Prabhagiya Van Adhikari Awadh Van v. Arun Kumar Bhardwaj (2021) 18 SCC 104 (para 18)
• Vimla Gautam v. Mohini Jain ILR (2012) III Delhi 41 RFA (para 19).