Court rules against Enforcement Directorate in asset attachment case, orders modification of orders The court found the provisional attachment of the petitioner's assets by the Enforcement Directorate unjustified, as there were insufficient grounds to ...
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Court rules against Enforcement Directorate in asset attachment case, orders modification of orders
The court found the provisional attachment of the petitioner's assets by the Enforcement Directorate unjustified, as there were insufficient grounds to support the allegations of unauthorized payments for coal block allocation. The court modified the provisional attachment orders, allowing the petitioner to retain her immovable property and a fixed deposit while unfreezing her bank accounts. The petitioner was granted liberty to approach the Adjudicating Authority as per the law. The court disposed of the petition and pending applications accordingly.
Issues: Challenge to Provisional Attachment Order (PAO) by Enforcement Directorate (ED) on suspicion of proceeds of crime being used for unauthorized payments for coal block allocation.
Analysis: The petitioner, a 72-year-old widow and former public relations professional, challenged the PAO dated 22nd January, 2021, where her assets were provisionally attached by the ED. The PAO alleged that she was involved in making unauthorized payments for coal block allocation. The petitioner's counsel argued that there was no basis for the PAO as she was not named in the FIR and was not an accused. On the other hand, the ED contended that there was enough material to suspect her involvement in the unauthorized payments.
The court considered the Supreme Court judgment in Opto Circuit India Limited v. Axis Bank & Ors., highlighting the need for proper and cogent reasons for issuing PAOs under the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner's plea was based on humanitarian grounds, stating that her life savings were frozen, making it difficult for her to pay medical bills and daily expenses. The allegations against her dated back to her time as a PR professional between 2007-08 and 2015.
After initial hearings and the issuance of a subsequent PAO on 8th February 2021, the court found the freezing of all the petitioner's liquid savings unjustified, considering the speculative nature of the allegations at that stage. The court directed the petitioner to voluntarily keep a fixed deposit of Rs. 3 crores and retain her immovable property, modifying the PAOs dated 22nd January, 2021, and 8th February, 2021 accordingly. The petitioner was allowed to deal with her other assets, subject to compliance within a week.
The court ordered the de-freezing of bank accounts upon service of the order, with no further communication from the ED required by the banks. The petitioner was given the liberty to approach the Adjudicating Authority as per the law at the appropriate stage. With these observations, the petition and pending applications were disposed of by the court.
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