PMLA freezing restraint requires statutory compliance; bank accounts were de-frozen, while immovable property freezing was maintained.

Continued restraint over bank accounts under the PMLA was found unjustified where the statutory requirements for recording and serving reasons to believe for continuation of freezing were not met and no specific transaction was shown to support the action; the bank accounts were therefore de-frozen, subject to restriction on dealing with the balance. Freezing of the immovable properties was maintained because the allegations, pending criminal proceedings, and retention proceedings justified continued interim protection at that stage, although the appellant was permitted to use the property and further relief was left open after progress in the criminal case.

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Issues: (i) Whether the freezing of the appellant's bank accounts could continue when the statutory requirements for continuation and adjudication were not satisfied. (ii) Whether the immovable properties should be de-frozen or the freezing should continue pending the criminal proceedings and adjudication.

Issue (i): Whether the freezing of the appellant's bank accounts could continue when the statutory requirements for continuation and adjudication were not satisfied.

Analysis: The challenge to the frozen bank accounts was examined on the footing that no specific transaction in those accounts was shown to justify freezing and that the mandatory requirements for recording and serving reasons to believe for continuation of freezing were not complied with. The record also showed that the accounts were being treated as covered by an apprehension-based order rather than by any demonstrated nexus with money-laundering. In those circumstances, continued restraint on the bank accounts was not justified.

Conclusion: The bank accounts were ordered to be de-frozen, though the appellant was restrained from dealing with the balance amount lying therein.

Issue (ii): Whether the immovable properties should be de-frozen or the freezing should continue pending the criminal proceedings and adjudication.

Analysis: The immovable properties were considered in the context of serious allegations arising from the scheduled offences and the pending retention proceedings. The Tribunal declined to grant de-freezing at that stage, noting that the role of the appellant and the outcome of the criminal case would have to be examined further. It was, however, permitted that the appellant could use the property, and the interim arrangement was directed to continue until the final order of the Special Court after evidence is recorded.

Conclusion: The freezing of the immovable properties was maintained.

Final Conclusion: The impugned order was modified by granting relief in respect of the bank accounts, while sustaining the freezing of the immovable properties and leaving further relief open for reconsideration after the criminal proceedings progress.

Ratio Decidendi: Continuation of restraint over property under the Prevention of Money Laundering Act requires compliance with the statutory preconditions for recording and justifying the action, and freezing may be maintained only to the extent supported by the material and the pending proceedings.

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