KRISHNA VENTURES PVT Vs. DIRECTORATE OF ENFORCEMENT

JUDGEMENT

(1.) Heard learned Senior Counsel Sri Dammalapati Srinivas on behalf of learned counsel for the petitioners and Sri B. Narsimha Sharma, learned Standing Counsel for Enforcement Directorate (ED).

(2.) Learned Senior Counsel submits that as an interim measure, a sum of Rs. 2 crores may be released subject to the petitioners furnishing bank guarantee. The learned Standing Counsel for ED submits that impugned proceedings directing freezing of bank accounts of the petitioners are dated 11.10.2021. The 1st respondent filed an Original Application under Section 17(4) of the Prevention of Money Laundering Act, 2002 before the Adjudicating Authority for continuation of freezing orders wherein notices will be issued to the petitioners. The learned Standing Counsel submits that grievance, if any of the petitioners can be addressed in the said proceedings. However, learned Senior Counsel for the petitioners submits that there is urgency in the matter as salaries and statutory benefits of the employees have not been paid and the employees would suffer hardship. He relies on judgment of the Delhi High Court dated 27.10.2021 in W.P(C).No. 5713 of 2020 and CM Appeals No. 20656, 31384 of 2020 and 4153 of 2021. The Delhi High Court in paragraph 110(v) granted the following interim relief: " In the interregnum, the specific amounts as referred to in the order dated 28th December 2020 of the Adjudicating Authority shall remain frozen. However, the petitioners are permitted to furnish either bank guarantees, or securities to the satisfaction of the ED, subject to which the said accounts may be directed to be defrozen by the ED, on a case-to-case basis." It is submitted that the proceedings before the Delhi High Court are issued under the provisions of the PMLA. The learned Senior Counsel further submits that in the proceedings arising out of the Foreign Exchange Management Act, 1999 (FEMA), freezing order was passed by the ED and Karnataka High Court passed interim order dated 05.11.2018 in W.P. No. 47822 of 2018, directing release of amounts towards payment of salary, recurring expenses and other statutory dues, subject to the condition that the petitioners therein should provide bank guarantee for the said amount to the Directorate of Enforcement.

(3.) In the circumstances, this Court is inclined to grant interim order to the extent of payment of salary to the employees of the petitioners. There shall therefore, be a direction to the respondents to permit the petitioners to operate the bank accounts to the extent of Rs.2 crores, subject to their furnishing bank guarantee for the said amount. The petitioners are permitted to operate the bank accounts with respect to the amounts deposited on or after 12.10.2021, forthwith. Both the learned counsel agree that in terms of this interim order, the Writ Petitions may be disposed of giving liberty to the petitioners to approach the Adjudicating Authority, in accordance with law.