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Refuses to TMC Against ED Freeze of ₹440 Crore Accounts
In a significant legal setback for the ruling (TMC) in West Bengal, the on Monday declined to grant interim permission to the party to operate three of its bank accounts frozen by the (ED). The accounts, holding approximately ₹440 crore, were frozen as part of a money laundering investigation under the (PMLA) linked to alleged fund diversions for the purchase of an aircraft and a helicopter. Justice Krishna Rao, presiding over the matter, refused to stay the ED’s freeze order, leaving the funds inaccessible while the court hears the party’s challenging the agency’s action.
The decision comes just a day before the politically charged July 21 Martyrs’ Day rally, a cornerstone of the TMC’s annual political calendar, and is likely to have immediate financial ramifications for the party’s organizational expenses. For legal practitioners, the ruling raises important questions about the interplay between parallel investigations by state police and a central agency under the PMLA, and the standards for granting against a .
A Double Freeze: The Genesis of the Legal Battle
The TMC bank accounts have been at the centre of a twin legal storm. Earlier, the had directed the freezing of these very accounts following a complaint lodged by rebel TMC MLA Biswanath Das, who alleged misuse of party funds. The TMC successfully challenged that police-directed freeze before another Bench of the , which granted relief by permitting the party to operate the accounts under the supervision of a Special Officer. The accounts were thus in the process of being defreezed when the ED stepped in.
Subsequently, the froze the same three accounts under the PMLA, asserting that its investigation was independent and stemmed from a distinct set of facts. The ED’s probe zeroed in on transfers from these accounts to and a related entity between April 2023 and June 2026, suspected to be connected to the acquisition of an Embraer Legacy 600 business jet and an AgustaWestland 109SP helicopter. According to ED officials, around ₹160 crore was transferred from the TMC’s bank accounts to Carewell Aviation, and a substantial portion of these funds was further routed to a newly incorporated entity, with ₹112 crore eventually used for the aircraft purchases.
Arguments Overriding an Earlier High Court Order
The TMC, represented by senior advocate , mounted a forceful argument that the ED’s subsequent freeze effectively nullified the earlier High Court order that had permitted the party to operate the accounts. Singhvi contended that the central agency was fully aware of the pending de-freezing process but chose to impose a fresh freeze under the money laundering law, thereby overreaching the court’s prior directive. He argued that such an action undermined judicial authority and placed the party in an impossible financial position, particularly ahead of a major political event.
In his submissions, Singhvi stressed that the ED’s action was not independent but a strategic maneuver to bypass the court’s relief. “The ED was aware that the accounts were likely to be de-frozen pursuant to the earlier proceedings but imposed a fresh freeze through its money laundering investigation,” he argued, as reported by media sources. The TMC therefore sought an to operate the accounts pending the final disposal of its , asserting that the was overwhelmingly in its favour.
Independent Money Laundering Probe or Collateral Attack?
The , on the other hand, maintained that its investigation was entirely autonomous, based on a First Information Report (FIR) lodged by the police regarding dishonest financial dealings, unlawful collection of money, and routing of suspected funds through party accounts. The ED argued that the PMLA freeze was predicated on the agency’s own findings of money laundering — an offence distinct from the predicate police complaint — and thus stood on a separate legal footing. The central probe had uncovered a pattern of transactions involving huge sums being moved to aviation companies with no apparent legitimate purpose, raising serious concerns about the source and application of political funds.
The ED’s preliminary investigation revealed that about ₹160 crore was transferred from TMC’s accounts to and its related entity in the stipulated period, of which ₹82.96 crore was further routed to another newly incorporated entity. The agency emphasised that the suggested a potential of funds meant for party activities into high-value movable assets, thereby attracting the provisions of PMLA. The ED thus urged the court not to interfere with the ongoing probe by granting any .
The Court’s Decision: No
After hearing both sides, Justice Krishna Rao refused to grant any interim permission to the TMC to operate the frozen accounts. The order, reserved on , was delivered orally on Monday, without a detailed written judgment. However, the Court appeared to accept that the ED’s action, though subsequent, operated in a different statutory domain and was not an abuse of its powers. By declining the stay, the Court effectively maintained the , meaning the accounts will remain immobilised until the merits of the main petition are decided.
Notably, the Bench did not express any opinion on the validity of the ED’s investigation at this , leaving the door open for TMC to argue on the legality of the freeze during the . The refusal of , however, underscores the cautious approach courts typically adopt when allegations of money laundering involve large sums and public institutions.
Legal Implications for Political Parties Under PMLA
This development carries significant ramifications for how political parties and their bank accounts may be treated under India’s anti-money laundering regime. The PMLA provides stringent powers to the to properties — including bank balances — if there is reason to believe that the funds are . Unlike the state police probe that led to the first freeze, the ED’s jurisdiction under PMLA is not restricted to the alleged but extends to any activity connected to the projection of tainted money as untainted.
For legal professionals, the case highlights two key aspects: first, the potential for overlapping investigative actions where a state law enforcement agency and the ED simultaneously exercise coercive powers over the same subject matter, yet on different legal theories; and second, the high threshold for obtaining against a PMLA freeze. Courts are generally reluctant to lift such freezes at an early stage, given the severity of money laundering as an economic offence and the public interest in preventing dissipation of suspected illicit funds.
The TMC’s reliance on the earlier High Court order granting relief may still hold persuasive value, but the Court’s present refusal indicates that the existence of a prior judicial order in a separate proceeding does not automatically inhibit the ED from acting if its investigation meets the statutory requirements. The final outcome will likely turn on whether the ED can demonstrate a between the frozen funds and any .
Impact on TMC’s July 21 Rally and Beyond
The timing of the order could not be more critical. Every year, the TMC holds a massive Martyrs’ Day rally on July 21 in Kolkata, commemorating party workers killed in a police firing in 1993. The event is not only a emotive symbol of the party’s political journey but also a major logistical exercise requiring substantial funding. With ₹440 crore locked in accounts, the party’s immediate operational liquidity has been severely constrained, potentially impacting the scale and execution of the rally and associated political activities.
Beyond the rally, the decision raises broader concerns about the regulation of political financing in India. Political parties are not expressly prohibited from investing surplus funds in instruments such as aircraft, but such transactions must pass muster under tax laws and, crucially, must not be derived from criminal proceeds. The present scrutiny could open the door to larger questions about transparency in political funding and the use of party coffers for high-value asset acquisitions. If the ED’s case proceeds to trial or results in attachment, it may set a precedent for other parties as well.
Conclusion
Justice Krishna Rao’s refusal to grant marks a pivotal moment in the ongoing legal tussle between the TMC and the . While the order is interim and limited to the question of operating the accounts , it significantly strengthens the ED’s hand in its PMLA investigation. The case will now proceed to a full hearing, where the High Court will examine whether the is sustainable on merits. Until then, the ₹440 crore will remain out of the party’s reach, testing not only its legal strategies but also its political resilience. For the legal community, this litigation promises to offer deeper insights into the evolving contours of PMLA jurisprudence, especially as it intersects with the constitutional rights of political parties.
