The High Court of Karnataka has upheld the actions initiated by the Enforcement Directorate (ED) under the Prevention of Money Laundering (PML) Act in different cases against various companies, financial institutions and individuals, and dismissed the petitions filed by them challenging the legality of ED’s proceedings.
The High Court held that the provisions of the PML Act that allows attachment of properties till the final outcome of the trial are constitutionally valid while also holding that it is not necessary in law that a person will have to be an accused in a scheduled offence for proceedings against him under the PML Act.
Justice Aravind Kumar passed the order while dismissing petitions filed by companies such as JSW Steel Ltd. and Devas Multimedia Pvt. Ltd., certain individuals linked to the former Minister Katta Subramanya Naidu, and others, who were connected to persons against whom offences under Indian Penal Code and Prevention of Corruption Acts were registered.
The provisional attachment of the properties and their confirmation does not deprive right, title, and interest of its owner over the property but only the beneficial enjoyment of the property by the owner or the occupier is taken away till the trial court gives finding on whether properties are proceeds of money laundering and if they have to be confiscated.
The petitioners had questioned the ED’s actions such as provisionally attaching properties, freezing bank accounts, information sought from banks and financial institutions, confirmation of provisionally attached properties, initiation of proceedings under PML Act despite petitioners not being accused in any of scheduled offences under the Act, etc.
With this order, the stay granted against further proceedings against them by the Enforcement Directorate stands vacated.
