Point of Law: It is a well-settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner.

ORDER :

1. The petitioner is before this Court calling in question order dated 02-09-2022 passed by the 5th respondent/Assistant Director, Directorate of Enforcement directing freezing of the account of the petitioner invoking Section 17(1-A) of the Prevention of Money Laundering Act, 2002 (‘the Act’ for short).

2. Brief facts that lead the petitioner to this Court in the subject petition, as borne out from the pleadings, are as follows:-

The petitioner is M/s Inditrade Fincorp Limited which claims to be a Type-II non-deposit taking Non-Banking Financial Company (NBFC) incorporated in 2007 under the provisions of the Companies Act, 1956 and further claims to have secured and unsecured micro lending business and its primary revenue is the interest income on the loans given and other incidental fees. The petitioner claims that it is a Company wholly governed and regulated by the Reserve Bank of India under the Reserve Bank of India Act, 1934 and the relevant Rules therein. Respondents 2 to 5 who are the officers of the Enforcement Directorate, 5th respondent in particular, directs that the account of the petitioner be placed under debit freeze pursuant to a search conducted on M/s Cashfree Payments India Private Limited and M/s Razorpay Solutions India Private Limited which are Payment Gateways utilized by the petitioner for disbursal and collection of digital micro-loans to borrowers/customers. After directing debit freeze, proceedings are initiated in Original Application No.732 of 2022 by the Adjudicating Authority under the Act and issues show cause notice to the petitioner on 14-10-2022 in terms of Section 8 of the Act. Contending that the very search and seizure is contrary to law and the second show cause notice being based on the foundation of such search and seizure would also be contrary to law, the petitioner has knocked the doors of this court in the subject petition.

3. Heard Sri Avi Singh, learned counsel appearing for the petitioner; Sri K.N.Krishna Rao, learned counsel appearing for respondent No.1 and Sri Madhukar Deshpande, learned counsel appearing for respondents 2 to 5.

4. The learned counsel appearing for petitioner would vehemently contend that the orders which direct debit freeze are void ab initio and they are in complete disregard to the procedural safeguards inasmuch as there are no reasons to believe for directing freeze of the account of the petitioner. He would contend that procedural compliance in terms of Section 17 of the Act is mandatory and not ancillary. It is his submission that freezing of bank account of the petitioner is a draconian act which would entail serious civil consequences and if the statute directs performance of act of freezing in a particular manner, the respondents cannot deviate from the said procedure and if there is deviation it would become non est in the eye of law. He would submit that the present proceeding is non est in the eye of law and seeks quashment of the same.

5. On the other hand, the learned counsel representing respondents 2 to 5 would seek to refute the submissions to contend that reasons to believe is found in the file. It is not disclosed to the petitioner at the outset. What is challenged now is only a show cause notice issued to the petitioner. It is always open to the petitioner to urge all these grounds before the Adjudicating Authority who has issued the show cause notice. The petition challenging only a notice is premature. It is his contention that the account of the petitioner is used by several Payment Gateways and other Payment Gateways are thus money actions who have links to Chinese apps and, therefore, there is a serious conspiracy that has to be unearthed only by way of investigation. He would submit that the petition be rejected as none of the grounds urged by the petitioner are tenable.

6. In reply, the learned counsel for the petitioner would take this Court to the documents appended to the petition to demonstrate that there is no searc