The Supreme Court has reserved its judgment on a significant question concerning the functioning of the Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA): whether a single-member bench, particularly one lacking a judicial member, can lawfully confirm attachment orders issued by the Enforcement Directorate (ED).
A three-judge Bench headed by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V. Mohan, heard a batch of petitions challenging the composition and functioning of the Adjudicating Authority. The petitioners argued that the Authority performs quasi-judicial functions and therefore requires meaningful judicial participation.
Senior Advocate Vikram Chaudhri, appearing for the petitioners, submitted that the PMLA envisages an Adjudicating Authority consisting of a Chairperson and two members. He argued that the presence of a judicial member is essential because the Authority determines whether provisional attachment orders affecting property rights should be confirmed.
The petitioners also referred to the Supreme Court's observations in the Vijay Madanlal Choudhary judgment, where the Court had noted that Adjudicating Authorities were structured as three-member bodies headed by judicial officers. According to the petitioners, prolonged functioning of the Authority without adequate judicial representation undermines the safeguards intended under the statute.
Another concern raised before the Court related to the practical consequences of property attachments. Counsel argued that only a small percentage of Enforcement Directorate investigations ultimately reach trial, yet attachment orders continue to affect property owners across a much larger number of cases. This creates long-term civil consequences even where criminal proceedings may not progress swiftly.
During the hearing, Justice Joymalya Bagchi questioned whether genuine application of mind was possible when a limited number of members are required to process thousands of attachment matters within statutory timelines. The Bench expressed concern that the sheer volume of cases could reduce the effectiveness of judicial scrutiny.
The Court also sought data from the Enforcement Directorate regarding the number of cases that have proceeded to trial compared with the total number of investigations initiated under the PMLA. The information is expected to assist the Court in evaluating the broader impact of attachment proceedings.
The outcome of the case could have significant implications for the validity of attachment proceedings, the institutional structure of the Adjudicating Authority, and procedural safeguards available to individuals whose properties are attached during money laundering investigations.