No Adjudication Without Notice by Authority Under 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 had purchased a property that was in possession of the Respondent company and was also included in the list of properties attached in money laundering proceedings initiated against the company.
The Appellant moved an impleadment application before the Adjudicating Authority (AA), seeking to intervene in the said proceedings on the ground that the property rightfully belonged to him. The AA, however, rejected the application on the ground that such intervention was not permissible.
The Appellate Tribunal, SAFEMA, observed that the Appellant had a “legitimate interest” in the property for the purposes of issuance of notice under Section 8(2). Therefore, the AA could not exclude the Appellant from the adjudication proceedings without even issuing a notice.

Tribunal Held

The Tribunal further held that wherever a statute prescribes due process, the concerned authority is bound to follow it in both letter and spirit, irrespective of the outcome of such process.
Accordingly, the Tribunal directed the AA to issue notice to the Appellant under Section 8(2) and to permit 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).