High Court denies bank account access due to economic offenses

The Calcutta High Court denied the petitioners' request to operate their bank accounts, citing serious allegations of economic offenses and fraudulent dealings with banks. The court allowed the filing of affidavits but refused to grant permission to the petitioners due to ongoing investigations and concerns raised by the Enforcement Directorate and banks. The judgment emphasized the need to address the allegations before considering the petitioners' request, highlighting the complexity of the case and the importance of following proper legal procedures.

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Issues: Challenge to actions of Enforcement Directorate preventing operation of bank accounts.

The judgment by the Calcutta High Court involves a challenge to the actions taken by the Enforcement Directorate in preventing the operation of bank accounts of the petitioners. The petitioners argue that the Prevention of Money Laundering Act, 2002 does not authorize the Enforcement Directorate to halt their business operations without issuing a notice under Section 5 of the Act. They claim that an Assistant Director of the Enforcement Directorate exceeded jurisdiction by ordering the prohibition of withdrawal/transfer of accounts. On the other hand, the banks assert that the petitioners' accounts were declared as non-performing assets, with one bank revealing discrepancies in the movables pledged by the petitioners. The Enforcement Directorate justifies its actions by stating that the complaint from the Central Bureau of Investigation is under investigation, and their request to banks to stop withdrawals/transfers is a valid measure. They rely on a previous judgment recognizing their authority to issue such prohibitory orders.

The court, after considering the arguments from all parties, decides to allow the filing of affidavits within specified timelines. However, regarding interim orders, the court notes the serious allegations of economic offenses against the petitioners, suggesting fraudulent dealings with banks and financial institutions. Consequently, the court deems it inappropriate to grant the petitioners permission to operate their bank accounts as requested at this stage. The judgment concludes by directing the provision of an urgent certified copy of the order to the parties upon completion of necessary formalities.

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