DIRECTORATE OF ENFORCEMENT Vs. KARVY INDIA REALTY LIMITED

JUDGEMENT

(1.) This intra court appeal emanates from an order dtd. 13/3/2023 passed by the learned Single Judge in I.A.No.1 of 2022 in W.P.No.41133 of 2022.

(2.) Facts giving rise to filing of this appeal briefly stated are that the respondent Nos.1 to 29 in the writ appeal are the companies registered under the provisions of the Companies Act, 1956. On the basis of a complaint made by the Housing Development Finance Corporation Bank (hereinafter referred to as 'the HDFC Bank'), First Information Reports (FIRs) bearing FIR No.78 of 2021, dtd. 22/4/2021 and F.I.R.No.86 of 2021, dtd. 1/5/2021 were registered against M/s.Karvy Stock Broking Limited (KSBL) and its directors and M/s.Karvy Comtrade Limited and its Directors respectively for the offence under Sec. 420 IPC. A provisional order of attachment dtd. 18/7/2022 was issued under Sec. 5(1) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'PMLA') by the Deputy Director, Enforcement Directorate. Thereafter, a show cause notice dtd. 19/9/2022 was issued by the Union of India.

(3.) The validity of the aforesaid provisional order of attachment dtd. 18/7/2022 and show cause notice dtd. 19/9/2022 was assailed in a writ petition inter alia on the ground that a single member cannot pass an order of attachment, as Sec. 6 of PMLA contemplates the constitution of adjudicating authority by a chairperson and two members. Another ground attack is that the adjudicating authority was not a judicial member and therefore, act of passing of the provisional order of attachment which is a quasi-judicial function can only be performed by a member who is experienced in the field of law.