SANJEEV SACHDEVA, J.

1. The Petitioner by the present petition seeks quashing of letter dated 23.12.2016 whereby the Respondent No. 2/Directorate of Revenue Intelligence has directed the Respondent No. 3 and 4 (Banks) to cease all banking activities of the bank accounts of the petitioner. The Petitioner also seeks quashing of letter dated 26.12.2016 whereby the petitioner has been informed by the Banks that all accounts of the petitioner have been stopped.

2. It is contended by the Petitioner that the petitioner has an export unit in Noida SEZ for importing gold, manufacturing jewellery and exporting the same.

3. On 22.12.2016, the officers of Respondent No. 2/Directorate of Revenue Intelligence (DRI for short) carried out searches in premises of Petitioner at Noida and Delhi. At Noida, the DRI officers seized 15 kg consignment of jewellery. The custom authorities had earlier seized 3 kgs. In total 18 kgs of gold of the petitioner has been seized.

4. On 23.12.2016, DRI officers seized of Rs. 2,48,45,500/- in demonetized currency notes and Rs. 13,40,000/- in new currency notes and various documents. The details thereof was recorded in the panchnama dated 23.12.2016. It may be noted that the prayers in the petition are restricted to the freezing of the bank accounts and as such in these proceedings, this court is not concerned with the legality or otherwise of the seizure of the gold, currency notes (demonetized and new) and other documents.

5. On 23.12.2016, the DRI issued the impugned letters to the Banks/Respondent 4 and 5 directing them to cease all banking activities of the petitioner’s bank accounts. Consequent to the said letters the Banks have intimated the petitioner by the impugned letters dated 26.12.2016 that the bank accounts have been frozen.

6. It is submitted by learned counsel for the petitioner that neither any show cause notice was issued prior to the issuance of letter dated 23.12.2016 to the bank for ceasing all operations in the accounts nor any formal order was passed. It is further submitted that no intimation with regard thereto was ever sent to the petitioner.

7. It is further submitted that the impugned letters issued by the DRI are silent as to under which provision of law the same have been issued. It is submitted that the only power to seize is under section 110 of the Customs Act, 1962 (hereinafter referred to as the Act), which also does not confer the power on the DRI to freeze bank accounts.

8. It is submitted that the coercive action of freezing of bank accounts could not have been taken prior to adjudication of penalty and prior to any sum having been crystallized or ascertained.

9. It is further submitted that the cessation of operation of the bank accounts has virtually led to the entire business coming to a standstill and the petitioner is not in a position to carry on its day-to-day operation. It is further contended that the accounts that have been seized are cash credit accounts in which there is debit balance.

10. Reliance is placed on the decisions in the cases of

(i) VIKAS GUMBER VERSUS UNION OF INDIA (2009) 234 ELT 439 (Del)

(ii) MZ HANDICRAFTS VERSUS UNION OF INDIA 2015(322) ELT 57 (All.)

(iii) RAJENDRA VITTHAL SHINDE VERSUS UNION OF INDIA 2016 (332) ELT 699 (Bom)

(iv) KHAJA MUSTAFA KAMAL VERSUS UNION OF INDIA 2016 (337) ELT 221 (Bom)

11. The respondent DRI in its counter affidavit has contended that the petitioner used to import duty free imported gold for making jewellery with the condition that it would export the entire jewellery made from the imported duty free gold. It is contended that instead of exporting the gold jewellery, the petitioner used to divert the duty free imported gold in the open market. It is contended that approximately 431 Kg Gold, Silver, foreign Currency and Indian Currency approximately to the tune of Rs 141 to 145 Crore has been diverted.

12. It is contended that as on 22.12.2016 a total quantity of 430 Kg of imported gold was found short. Out of the same, 19