Court upholds decision to de-freeze bank accounts, leaves issue of functus officio open

The Court dismissed the writ appeals, upholding the Single Judge's decision to de-freeze the bank accounts. The issue of the adjudicating authority becoming functus officio due to non-confirmation within 180 days was left open for consideration in the separate appeals filed by the ED.

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Issues Involved:
The judgment involves challenges to freezing of bank accounts by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002. The issues include non-inclusion of certain bank accounts in the list seeking confirmation, expiration of freezing order due to statutory period, violation of fundamental rights, and the interpretation of the statutory time limit.

Summary:

Challenge to Freezing of Bank Accounts:
The writ petitions were filed to challenge the freezing of bank accounts belonging to the petitioners by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002. The petitioners contended that their bank accounts were not included in the list seeking confirmation, leading to an infringement of their fundamental and legal rights.

Expiration of Freezing Order:
The petitioners argued that the Confirmation Order by the adjudicating authority was passed beyond the statutory period of 180 days, causing the freezing action to end by virtue of the provision in the Act. The adjudicating authority was claimed to have become functus officio and could not have confirmed the freezing order.

Court's Decision:
The Single Judge allowed the writ petitions, stating that the ED did not validly freeze the bank accounts as they were not included in the Original Application seeking confirmation. The Judge also held that the adjudicating authority had become functus officio due to the expiry of the statutory period. The ED appealed the decision, arguing that the freezing order was valid and the petitioners had a statutory remedy to challenge the order.

Judicial Analysis:
The Court noted that the initial freezing order of the bank accounts was not submitted for confirmation within the required period, leading to the expiration of the freezing action. The Court upheld the Single Judge's decision to de-freeze the bank accounts, citing a violation of the petitioners' fundamental rights. The Court emphasized that the availability of a statutory remedy should not impede the protection of fundamental rights.

Separate Judgment:
The ED also filed separate appeals challenging the view that the adjudicating authority became functus officio due to non-confirmation within 180 days. The Court decided to dismiss the writ appeals while indicating that the issue of the statutory time limit would be considered in the separate appeals.

Conclusion:
The Court dismissed the writ appeals, upholding the Single Judge's decision to de-freeze the bank accounts. The issue of the adjudicating authority becoming functus officio due to non-confirmation within 180 days was left open for consideration in the separate appeals filed by the ED.

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