Aasma Mohammed Farooq and Ors. v. Union of India and Ors.
Link to Judgement / MANU/DE/4514/2018

In this case a writ petition had been filed before the Delhi High Court (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’). The Petitioners sought quashing of provisional attachment, impugned original complaint and the show cause notice.

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

On behalf of the respondent, the maintainability of the petition was objected on the ground that it would go against the principles of ‘forum conveniens’ and so the Court should not entertain this petition.

As per 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 also been placed on the judgment of Five Judges of this Court in the case of M/s. Sterling Agro Industries Ltd. v. Union of India & Ors. (AIR 2011 Delhi 174)[http://lobis.nic.in/ddir/dhc/DMA/judgement/01-08-2011/DMA01082011CW65702010.pdf] 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.

The Court held that because the notice under Section 8 of the Act has been issued by the Authority in Delhi it can entertain the writ petition because a part of cause of action has arisen under the jurisdiction of this Court but decided against it as it is not the forum conveniens.

Since the petitioner was based in Mumbai and the properties were located in Mumbai. Moreover, the provisional attachment order had been passed in Mumbai. The complaint though, filed before the Adjudicating Authority in Delhi, it encompassed all the facts that had 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 had happened in Delhi. Only notice to show cause had been issued by Adjudicating Authority based in Delhi.

Therefore, the Court decided that in this case the Bombay High Court shall be the forum conveniens and it is where the party aggrieved against the orders passed by the Appellate Authority shall approach, in terms of Section 42 of the Act and thus, this Court shall not entertain the present writ petition.

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

For more information please write to Mr. Vijay Pal Dalmia at [email protected]