Dismissal of Writ Petition to Quash Bank Account Freeze under Money-Laundering Act

The Court dismissed the writ petition seeking to quash the proceedings and de-freeze a bank account under the Prevention of Money-Laundering Act. It held that the petitioners had not exhausted their remedies under the Act and had not objected to the notice, deeming the petition premature. The Court advised the petitioners to pursue further action if they had any remaining cause of action, concluding that it was premature to grant the requested relief at that stage.

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Issues Involved:
1. Quashing of proceedings pursuant to Annexures-2, 3, and 8 (series).
2. De-freezing of the bank account as mentioned in Annexure-8 (series).

Issue-wise Detailed Analysis:

1. Quashing of proceedings pursuant to Annexures-2, 3, and 8 (series):

The petitioner sought a writ of certiorari and/or mandamus to quash the proceedings initiated pursuant to Annexures-2, 3, and 8 (series). The petitioner argued that the Director did not comply with the requirements under Sections 5, 8, and 17 of the Prevention of Money-Laundering Act, 2002, when issuing the impugned order at Annexure-8. The petitioner relied on the Supreme Court judgment in *Opto Circuit India Ltd. Vs. Axis Bank and Ors.*, AIR 2021 SC 753, to support their case.

The Court examined the relevant provisions of the Act, including Sections 5, 8, 17, and 20. Section 5 deals with the attachment of property involved in money laundering, requiring the Director to record reasons in writing based on material in possession. The attachment is provisional for up to 180 days and must be reported to a Magistrate or court. Section 8 outlines the adjudication process, providing the person concerned an opportunity to respond before final attachment. Section 17 covers search and seizure, allowing freezing of property under certain conditions, and Section 20 deals with retention of property.

The Court found that the proceedings were still at the stage under Section 17(A) of the Act, and the petitioner had not filed an objection to the notice under Annexure-8. Therefore, the Court could not consider the validity of the notice at this premature stage. The Court noted that the development through Annexures-2 and 3 did not arise from the subject involving Section 17(1-A) of the Act.

2. De-freezing of the bank account as mentioned in Annexure-8 (series):

The petitioner also sought a direction to the Bank authority to release some amount from the frozen account for minimum sustenance. However, the Court observed that the proceedings were still ongoing under Section 17(A) of the Act, and the time fixed through the provisions of Sections 5 and 8 had not yet passed. Therefore, the Court could not consider the request to de-freeze the account at this stage.

The Court concluded that the petitioners had not exhausted their remedies under the Act and had not filed objections to the notice. Hence, the writ petition was premature. The petitioners were given the liberty to bring any surviving cause of action involving Annexures-2 and 3 in appropriate proceedings.

Conclusion:

The writ petition was disposed of, with the Court finding it premature to quash the proceedings or de-freeze the bank account at this stage. The petitioners were advised to pursue appropriate proceedings if they had any remaining cause of action.

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