The Telangana High Court on Tuesday has set aside a single judge order staying the Directorate of Enforcement order attaching properties worth ₹110.70 crore belonging to 29 entities of the Karvy Group under the Prevention of Money Laundering Act.
A bench of Chief Justice Alok Aradhe and Justice Anil Kumar Jukanti pronounced the verdict, allowing a writ appeal filed by the DE challenging the single judge decision in an interim application filed by Karvy Group entities. HDFC bank lodged complaints against various entities of Karvy Group and its directors in 2021 resulting in registration of cases.
Based on these cases, the ED issued Enforcement Case Information Report under PMLA the same year. As part of the investigation, ED passed an order attaching properties worth ₹1,984.84 crore of the group’s entities in 2022. Subsequently, an original complaint (no. 1680 of 2022) was filed before ED’s Adjudicating Authority. The ED passed another order attaching moveable and immovable assets of entities of the group worth ₹110.70 crore connected to loans obtained by them from Laxmi Vilas Bank (now DBS bank).
The Karvy group’s entities challenged the second attachment order and the original complaint before the adjudicating authority stating that the OC was registered though there was no scheduled offence since the Laxmi Vilas Bank did not lodge any specific complaint. The showcause notice issued by the AA too was questioned stating that it was issued without jurisdiction and by a single member of the AA not having experience in the field of law.
The bench led by Chief Justice, citing verdicts of different High Courts and the Supreme Court, held that the AA comprising single member can exercise powers under section six of the PMLA. “The proposition that powers under section eight of PMLA can be exercised by the AA comprising only from the member in the field of law does not deserve acceptance...”.
Published - February 14, 2024 12:34 am IST
