Court releases Rs. 2 crores subject to bank guarantee, allows payment of salaries, disposes of Writ Petitions

The Court ordered the release of funds amounting to Rs. 2 crores subject to a bank guarantee amidst the freezing of bank accounts. It granted interim relief for payment of salaries to employees, allowing the petitioners to operate their bank accounts up to the specified amount upon furnishing a bank guarantee. The judgment disposed of the Writ Petitions without imposing costs, providing liberty to the parties to raise legal contentions before the Adjudicating Authority and allowing further proceedings in accordance with the law.

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Issues:
1. Release of funds subject to bank guarantee amidst freezing of bank accounts.
2. Urgency in addressing salary and statutory benefits payment to employees.
3. Application of interim relief based on judgments from Delhi High Court and Karnataka High Court.
4. Disposal of Writ Petitions with liberty to approach the Adjudicating Authority.

Analysis:
1. The judgment revolves around the release of funds amounting to Rs. 2 crores subject to a bank guarantee, amidst the freezing of the petitioners' bank accounts as directed by the 1st respondent under the Prevention of Money Laundering Act, 2002. The learned Senior Counsel emphasized the urgency due to non-payment of salaries and statutory benefits to employees, leading to potential hardships.

2. Citing a judgment from the Delhi High Court, the Senior Counsel argued for interim relief allowing the petitioners to furnish bank guarantees or securities to the satisfaction of the Enforcement Directorate (ED) to unfreeze the accounts on a case-to-case basis. Similarly, in a case related to the Foreign Exchange Management Act, 1999, the Karnataka High Court had previously directed the release of amounts for salary payments upon providing a bank guarantee.

3. In light of these precedents, the Court decided to grant an interim order specifically for the payment of salaries to the petitioners' employees. The order permitted the petitioners to operate their bank accounts up to Rs. 2 crores, subject to furnishing a bank guarantee for the same amount. The permission to operate the accounts was limited to funds deposited after 12.10.2021.

4. Consequently, the Court disposed of both Writ Petitions, granting liberty to the petitioners and respondents to raise legal contentions before the Adjudicating Authority. The judgment did not impose any costs and closed any pending miscellaneous applications. The parties were given the freedom to approach the Adjudicating Authority in accordance with the law for further proceedings.

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