High Court grants stay of freezing order, directs parties to maintain status quo pending further proceedings

The High Court granted a stay of the freezing order, allowing the appellants to present their case properly by filing an affidavit-in-opposition within a specified timeframe. The Court found the appeal maintainable as the Single Judge had not addressed the prayer to quash the specific case mentioned in the writ petition. The order under appeal was deemed interlocutory, focusing solely on the stay of the freezing order. The High Court directed the parties to maintain the status quo regarding the frozen accounts and to rely on cited judgments during further proceedings before the Single Judge, refraining from delving into the case's merits.

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Issues:
1. Stay of freezing order
2. Opportunity to file affidavit-in-opposition
3. Maintainability of appeal
4. Nature of the order

Stay of Freezing Order:
The intra-court appeal challenged the order granting interim relief against the freezing order dated July 13, 2022. The writ petitioner sought to restrain further action related to a specific case. The learned Single Judge stayed the freezing order and directed the respondents not to proceed further based on that order. The appellants argued that the investigation should not be stayed as per the Prevention of Money-Laundering Act, 2002 (PMLA). They contended that reasons to believe were available and could have been presented if given the chance. The appellants highlighted the scheme of the PMLA and the availability of the remedy of appeal under Section 26 of the Act. The respondents opposed the stay only on the freezing order, not on the investigation itself.

Opportunity to File Affidavit-in-Opposition:
The appellants raised concerns that the writ petition was disposed of on the first hearing without allowing them to file an affidavit-in-opposition or present relevant documents. The reasons to believe for retaining the property under the PMLA were shared with the Adjudicating Authority but were not presented in the writ court due to lack of opportunity. The Court noted that the appellants should have been given a chance to respond before the disposal of the petition.

Maintainability of Appeal:
The Court found that the appeal was maintainable as the learned Single Judge had not addressed the prayer to quash the specific case mentioned in the writ petition. Since the Single Judge had only considered the issue of the freezing order, the appeal was deemed valid as the criminal jurisdiction was not exercised.

Nature of the Order:
The Court observed that the order under appeal was interlocutory in nature, focusing solely on the stay of the freezing order. It was noted that the conclusions and findings in the order were tentative, emphasizing the need for the appellants to have an opportunity to present their case properly. The appeal was disposed of by allowing the appellants to file an affidavit-in-opposition within a specified timeframe, and the writ petition was to be decided expeditiously by the learned Single Judge.

In conclusion, the High Court set aside part of the Single Judge's order, granting the appellants the opportunity to present their case properly. The status quo regarding the frozen accounts was to be maintained, and parties were directed to rely on cited judgments during further proceedings before the Single Judge. The High Court refrained from delving into the merits of the case to avoid prejudicing the parties before the Single Judge's final decision.

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