Point of law: powers of judicial review are limited and while exercising such power the Court has to see whether the process adopted or decision made by the authority is malafideor is intended to favour someone or is so arbitrary and irrational that no reasonable authority acting reasonably and in accordance with the relevant law could have reached to such a conclusion and as to whether public interest is affected.

ORDER :

1. The petitioner in W.P.No.2737 of 2021 is a private limited company, the petitioner in W.P.No.2738 of 2021 is a limited company and the petitioner in W.P.No.2794 of 2021 is a partnership firm. All these petitioners are carrying on business of manufacture, sale and export of carpets and floor coverings.

2. All these petitioners are before this Court 3rd challenging the imposition of “debit-freeze”, by the Respondent, of the bank accounts of these petitioners maintained with the 4th respondent bank. As the issues raised in these three writ petitions are similar and the facts are also similar, all the three writ petitions are taken-up together for disposal.

3. A case had been initiated on account of FIR No.187 of 2017 registered on 11.05.207 by the Visakhapatnam Police against one Vaddi Mahesh and others, who are said to have conspired to create false and forged documents for the purpose of cheating the Government of India by transferring of Rs.569 crores in foreign exchange outside India to Singapore, Hongkong and China. A case under the Prevention of Money laundering Act, 2002 (hereinafter referred to as ‘the Act’) was also registered. It is the case of the 3rd respondent that about Rs.47.41 crores was transferred from various entities belonging to the Managing Director of the petitioners, to the bank accounts of firms created by the aforesaid Sri Vaddi Mahesh, which were further transferred to the other bank accounts of shell companies created by Sri Vaddi Mahesh.

4. In October, 2020 summons had been issued to the 3rd petitioners by the respondent herein requiring the attendance of the person in management, along with the documents enclosed with the summons. While the said enquiry was going on, the petitioners in all the cases, received a message 4th from the respondent on 19.11.2020 that the petitioners cannot operate their bank accounts in view of an order from the Revenue Authority. As the freeze would cause dislocation of the operations of the petitioners, a request was made to the 4th respondent to furnish the details of the order. On the very same 4th day, the respondent issued a letter dated 19.11.2020 informing the petitioner that the debit-freeze has been placed on the current accounts of the petitioners in terms of the letter No.ECIR/03/VKSZO/2017/732, dated 06.11.2020, received from the 3rd respondent. All the petitioners submit that the said order/communication regarding imposition of “debit-freeze” of their accounts was never intimated to the petitioners by any official of the Enforcement Directorate. On 20.11.2020, the petitioners again wrote an email/letter to the 3rd respondent requesting for unfreezing of the account, in view of the great difficulty faced by the petitioners in carrying on their operations.

5. On 07.12.2020, a raid was conducted on the premises of all the petitioners by the officials of the Directorate of Revenue Investigation and panchanamas were prepared showing the documents seized during the raid. On 11.12.2020, there was a further search/seizure raid conducted on the office of the petitioners, as well as the residential premises of Sri Yadavendra Kumar Roy, who is the person who has control over the petitioners, and a seizure memo was prepared, which showed that no documents were seized from the premises of the petitioners. However, the only material, which has any proximity to the petitioners, seized on that day, were some financial statements as on 31.03.2011 of M/s. Orient Trade International FZE obtained from the residence of Mr. Yadavendra Kumar Roy.

6. On 22.01.2021, the adjudicating authority under the Act, on an application dated 30.12.2020, made by the 3rd respondent, under sub-section (4) of Section 17 of the Act, issued a Show Cause Notice to Sri Yadavendra Kumar Roy and to the petitioner in W.P.No.2738 of 2021, to show cause why the properties of records seized on 11.12.2020 should not be retained as involved in Money-Laundering and confiscated under the Act. The peti