FORUM CONVENIENS & PREVENTION OF MONEY LAUNDERING ACT, 2002

Court :- Delhi High Court , Citation :- MANU/DE/4514/2018

In this case of Aasma Mohammed Farooq and Ors. v. Union of India and Ors., a writ petition had been filed before the Delhi High Court challenging the provisions of Section 5(1), 5(5), 8(3), 8(5) and 8(6) of the Prevention of Money Laundering Act, 2002 ('Act' in short). Apart from that the Petitioners sought quashing of provisional attachment order No. 08/2018 dated June 20, 2018/impugned original complaint No. 998 of 2008  and show cause notice dated July 31, 2018.

The notice to show cause under Section 8 of the Act had been issued by the Adjudicating Authority, based in Delhi.

The learned AS, on behalf of the Respondent, had objected the maintainability of the petition on the ground that it would militate against the principles of ‘forum conveniens’ and so the Delhi High Court should not entertain this petition.

Section 42 of Act, i.e., Appeal to High Court- Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.-For the purposes of this section, "High Court" means-

(i) The High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain;

and

(ii) Where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.

In this case, reference had been paced on the judgment of Five Judges of this Court in the case of M/s. Sterling Agro Industries Ltd. v. Union of India & Ors. to contend that even if the impugned order has been issued by an Authority and the same constitutes a part of cause of action to make the writ petition maintainable in this Court, yet the same may not be a singular factor for this Court to decide the matter on merits and this Court can refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.

Decision:

The Court held that even though the notice under Section 8 of the Act has been issued by the Authority in Delhi, as such Delhi High Court has jurisdiction to entertain the writ petition but merely because a part of cause of action has arisen under the jurisdiction of this Court.

On whether this Court needs to exercise its jurisdiction the Court was of the view "that it should not", because of the following reasons:

Since the petitioner is based in Mumbai and the properties are located and properties are located in Mumbai, Delhi High Court shall not exercise the jurisdiction. .  Moreover, the provisional attachment order had been passed in Mumbai. The complaint though, filed before the adjudicating authority in Delhi, it encompasses all the facts that have arisen in Mumbai. It is only after filing of the original complaint as contemplated under Section 5(5) of the Act before the adjudicating authority, which is located in Delhi that the impugned notice had been issued from Delhi but the fact remains that nothing has happened in Delhi. Only notice to show cause has been issued by Adjudicating Authority based in Delhi.

Therefore, it should be the High Court of Mumbai, which is more convenient and where if a party aggrieved against the orders passed by the Appellate Authority shall approach, in terms of Section 42 of the Act, shall be the "forum conveniens". In this case, it shall be the Bombay High Court and so this should not entertain the present writ petition.

The writ petition is dismissed as infructuous, with liberty to the petitioner to approach the Bombay High Court.

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