M/S. C.Gopal Reddy And Co., vs Directorate Of Enforcement
2023 Latest Caselaw 2122 AP

      IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

HON'BLE Mr. JUSTICE PRASHANT KUMAR MISHRA, CHIEF JUSTICE
                            &
          HON'BLE Mr. JUSTICE NINALA JAYASURYA

                     WRIT APPEAL No.315 of 2023

 M/s. C. Gopal Reddy & Co., rep. By its Managing Partner
 Mr. Chavva Gopal Reddy, R/o. Road No.2, Sanjeev Nagar, Tadipatri,
 Ananthapur District, Andhra Pradesh - 515411, and others

                                                               ... Appellants
                                    Versus

 Directorate of Enforcement, Ministry of Finance, Department of
 Revenue, 3rd Floor, Shakar Bhawan, Basheerbagh, Hyderabad -
 500004, and others

                                                              ... Respondents
                            JUDGMENT (ORAL)

Dt. 20.04.2023

(Prashant Kumar Mishra, CJ)

This writ appeal is directed against the order dated 07.03.2023

passed by the learned single Judge allowing W.P.No.36939 of 2022

and issuing directions to freeze the bank accounts of the writ

petitioners/appellants for a period of 15 days and, further, to abide by

the order passed by the authorized officer under Section 17 of the

Prevention of Money Laundering Act, 2002 (for short, "the PMLA,

2002").

2. The writ petitioners have challenged the e-mails dated

18.10.2022 issued by the 2nd respondent-Assistant Director,

Directorate of Enforcement, Hyderabad Zonal Office, Hyderabad, to HCJ & NJS,J

the 3rd respondent and 4th respondents, viz., Axis Bank Ltd., Tadipatri

Branch and Union Bank of India, Saifabad, Hyderabad, respectively,

requesting them to furnish the balance held in the accounts

maintained in those banks by the writ petitioners/fixed deposits with

further request not to entertain debit transactions from the said

accounts until further directions from the office of the Enforcement

Directorate, informing that the Directorate of Enforcement was

investigating a case against the subject entity and others under the

PMLA, 2002.

3. The writ court has found that since no order has been passed

following the due procedure in exercise of powers under Section 17

(1-A) of the PMLA, 2002, directions to the bank authorities to freeze

the bank accounts of the petitioners could not have been issued.

However, having said so, the writ court itself directed that there shall

be no debit transaction from the accounts of the writ petitioners. The

operative portion of the order impugned reads thus:

"36. In the result, the writ petition is partly allowed in the following terms:-

i) The impugned Emails annexed as Exs.P1 and P3 are hereby quashed.

ii) It shall be open to the authorized officer of E.D under Section 17 of the PMLA to take necessary action, by proceeding in accordance with law.

HCJ & NJS,J

iii) For a period of 15 days from today, there shall be no debit transaction from the accounts of the petitioners in question with the respondent Nos.3 to 4 Bank.

iv) The above direction of no debit transaction from the petitioners‟ accounts in question for a period of 15 days, shall abide by the orders passed by the authorized officer under Section 17, if any."

4. In the course of hearing today, it is informed that consequent

to the directions issued by the writ court, the period of 15 days from

the date of order of the writ court, has expired and, thereafter, the

authorized officer has already issued separate order in exercise of

powers under Section 17/17(1-A) of the PMLA, 2002, which is under

challenge in a separate writ petition; therefore, this writ appeal has

been rendered infructuous.

5. At this stage, learned counsel for the appellants/writ petitioners

would submit that the authorized officer has passed an order, as if

the learned single Judge under the impugned order directed to freeze

the bank accounts of the writ petitioners, which is under challenge in

a separate writ petition. It is submitted that when the writ petition

filed by the writ petitioners afresh would be heard, directions issued

in the impugned order in paragraph 36.3 and 36.4, may come in the

way of the writ petitioners in seeking relief from this Court.

6. Considering the fact that the authorized officer has already

exercised powers under Section 17/17(1-A) of the PMLA, 2002, and HCJ & NJS,J

the same is under challenge in a separate writ petition, we observe

that the directions issued by the learned single Judge, to the effect

that there shall be no debit transaction from the accounts of the writ

petitioners with the 3rd and 4th respondents for a period of 15 days

there-from, were as part of interim arrangement till the authorized

officer passed an order under Section 17/17(1-A) of the PMLA, 2002,

in accordance with law and there were no directions to pass such

order freezing the bank accounts of the writ petitioners.

7. Accordingly, it is observed that in all further proceedings

including the writ petition preferred afresh by the writ petitioners

challenging the order passed by the authorized officer under Section

17/17(1-A) of the PMLA, 2002, the impugned order passed by the

learned single Judge shall have no bearing and the competent

authority shall decide the writ petitioners' challenge to the said

proceedings independently, in accordance with law, without being

influenced by the observations in the impugned order passed by the

learned single Judge.

8. Subject to the above, writ appeal is disposed of. No order as to

costs. Pending miscellaneous applications, if any, shall stand closed.

         Sd/-                                      Sd/-
PRASHANT KUMAR MISHRA, CJ                    NINALA JAYASURYA, J

MRR