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2023 (4) TMI 13 - HC - Money LaunderingMoney Laundering - Freezing of Bank Accounts of petitioner - Section 26 of the Prevention of Money Laundering Act, 2002 - HELD THAT - The appeal has been filed before the Appellate Tribunal under the PMLA in February, 2023 and is now pending in the Appellate Tribunal. Insofar as the Petitioner in W.P.(C) 12650/2022 is concerned, ld. Counsel for the Petitioner submits that the appeal is in the process of being filed. Considering the fact that the writ petitions itself were directed against the initial debit freeze orders, which have now merged with the final order passed on 21st December, 2022 and the Petitioner has already availed of the appellate remedy, it is deemed appropriate to relegate both the Petitioners to pursue their appellate remedies before the Appellate Tribunal, under the PMLA, in accordance with law. The Petitioners in both the writ petitions shall, along with their appeals, prefer interim applications before the Appellate Tribunal. The said interim applications, if not already listed, may be taken up by the Appellate Tribunal within 4 weeks and shall be adjudicated expeditiously - Petition disposed off.
Issues:
The judgment involves challenging impugned orders for debit freeze on bank accounts, interpretation of powers under Section 17 of the Prevention of Money-Laundering Act, 2002, furnishing of bank guarantee, maintenance of credit balance, confirmation of debit freeze order by Adjudicating Authority, appeal under Section 26 of PMLA, and directions for pursuing appellate remedies. Debit Freeze Orders: The petitions challenged orders for debit freeze on bank accounts of the Petitioners, M/s Vivo Mobile India Pvt. Ltd. and M/s Grand Prospect International Communication Pvt. Ltd. The Enforcement Directorate called for details to support payments totaling Rs. 2826 crores under various heads. The Petitioners provided data, and arguments were made regarding the powers conferred by Section 17 on the Enforcement Directorate. A bank guarantee of Rs. 950 crores was furnished by the Petitioners to safeguard the interest of the respondent during the pendency of the writ petition. Interpretation of Powers under Section 17: The Enforcement Directorate's exercise of powers under Section 17(1A) was debated, with arguments on the distinction between powers under Section 132 of the Income-tax Act, 1961 and those under the PMLA. The freezing of accounts was based on material found during a search, indicating the presence of proceeds of crime in the bank accounts. The Court ordered the Petitioners to furnish details of remittances every 48 hours and to maintain a credit balance of Rs. 251 crores in the accounts. Furnishing of Bank Guarantee: The Petitioners agreed to furnish a bank guarantee of Rs. 950 crores, in addition to the existing credit balance of Rs. 251 crores in the freezed accounts. This measure was deemed necessary to safeguard the respondent's interest during the pendency of the writ petition. Confirmation of Debit Freeze Order: The Adjudicating Authority confirmed the debit freeze order, citing the interest of the investigation and prima facie allegations of money laundering. The retention of currency, gold bullions, digital devices, and bank accounts was deemed necessary for adjudication under Section 8 of the PMLA. The Authority acknowledged the directions of the High Court and other related orders in similar matters. Appeal under Section 26 of PMLA: The Petitioner appealed the Adjudicating Authority's order under Section 26 of the PMLA before the Appellate Tribunal. The appeal is pending in the Tribunal, and the Petitioner in another matter is in the process of filing an appeal. The judgment relegates both Petitioners to pursue their appellate remedies before the Appellate Tribunal in accordance with the law. Directions for Pursuing Appellate Remedies: The Court issued directions for the Petitioners to prefer interim applications along with their appeals before the Appellate Tribunal. The interim arrangements ordered by the Court were to continue until the Tribunal decides on the applications or the final decision in the appeals. The Petitioner in one of the matters was permitted to file the appeal within a specified timeframe. The Court emphasized expeditious conduct of interim applications and final adjudication before the Appellate Tribunal.
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