Court allows transfer to National Housing Bank, pending final decision; funds attached subject to further proceedings.

The court maintained the petitioner's challenge to the Provisional Attachment Order but allowed the transfer of a significant amount to the National Housing Bank (NHB). A portion of the attached funds was directed to be transferred to NHB's account, with the remaining amounts staying attached pending further proceedings before the Adjudicating Authority under the Prevention of Money Laundering Act. The court emphasized that the payment to NHB was temporary, subject to the Authority's final decision, and all parties retained their rights and remedies. The petition was disposed of with these directions.

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Issues:
Challenge to Provisional Attachment Order

Analysis:
The petitioner sought quashing of a Provisional Attachment Order relating to fixed deposits amounting to Rs. 51,85,94,086.78. A significant portion of this amount was to be repaid to the National Housing Bank (NHB). The Directorate of Enforcement (ED) contended that the writ was not maintainable as per previous orders. The petitioner acknowledged the amount's ownership by NHB and requested the transfer of this sum to avoid increased liabilities. NHB confirmed the amount's origin and purpose for further funding in the housing sector.

The court acknowledged ED's objection but clarified that the petition was maintainable. It was inclined to quash the attachment order, with an exception for the amount belonging to NHB. The court directed the transfer of Rs. 42,85,32,698.63 from the attached account to NHB's account maintained by HDFC Bank. The remaining amounts stayed attached, allowing the petitioner to present arguments before the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA).

The court emphasized that the payment to NHB was a temporary measure, subject to the Adjudicating Authority's final decision. If the Authority directed repayment to ED, NHB was to redeposit the amount within six weeks without interest. The principal amount transferred to NHB from HDFC Bank would be returned to ED if required. NHB was to communicate bank details promptly for the transfer.

The petitioner was to be involved in attachment proceedings before the Adjudicating Authority and given a chance to present their case. The court clarified that it did not delve into the attachment order's merits or the underlying disputes, leaving all rights and remedies open for the parties involved. The petition and related applications were disposed of with these directives.

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