DIRECTORATE OF ENFORCEMENT Vs. UNION OF INDIA

JUDGEMENT

(1.) This intra-court appeal is at the instance of the Enforcement Directorate challenging the order of the learned Single Judge dated 27th of June, 2022 whereby WPA 9699 of 2022 filed by the respondent nos. 3 and 4 herein (writ petitioners) has been allowed and the provisional attachment order dated 30th of September, 2021 has been set aside with all consequential benefits.

(2.) The respondent nos. 3 and 4 had filed the writ petition with the plea that respondent no. 3 is one of the directors of M/s. HAP Garments Private Limited and M/S. K.P. Garments Private Limited and the respondent no. 4 is a silent director of M/s. K.P. Garments Private Limited. The appellant no. 1, Directorate of Enforcement, had registered an Enforcement Case Information Report (ECIR) being ECIR No. ECIR/06/KLZO/2021 dated 17th of February, 2019 against the respondent nos. 3 and 4 and their companies on the basis of the First Information Report (FIR) registered by Central Bureau of Investigation (CBI) against them. The provisional attachment order dated 30th of September, 2021 was passed under the provisions of The Prevention of Money-Laundering Act, 2002 (for short, "PMLA"). The show-cause notice dated 18th of November, 2021 was issued to the respondent nos. 3 and 4, who had submitted their reply on 3rd of January, 2022. The respondent nos. 3 and 4 took the plea in the petition that 180 days mandatory period for confirmation of the provisional attachment order had expired on 31st of March, 2022 and before that, the competent authority had failed to pass any formal order of confirmation or extension of validity of the provisional attachment order dated 30th of September, 2021, therefore, the authority had become functus officio. In the writ petition filed on 26th of May, 2022, a prayer was made to set aside the provisional order of attachment and the original complaint being OC No. 1550 of 2021 and ECIR being ECIR/06/KLZO/2020.

(3.) The respondent nos. 3 and 4 have succeeded before the learned Single Judge.