Point of Law: Adjudicating authority is empowered by virtue of Section 20(1) of Act of 2002 to direct continuation of freezing of Bank Account.

JUDGMENT :

(Sandeep Mehta, J.)

1. The instant two intra-Court writ appeals involve identical questions of facts and law and hence, the same are being decided together by this common order.

2. The respondent Nos.1/writ petitioners, Smt. Zoramthari, proprietor of M/s Thari Enterprise, and Shri Lalrinhlua, Proprietor of M/s LRH Enterprise filed criminal writ petitions in the Aizawl Bench of this Court being WP(Crl.) No. 2/2022 and WP(Crl.) No.3/2022 respectively in order to challenge freezing of 4(four) Bank Accounts belonging to Smt. Zoramthari [writ petitioner in WP(Crl.) No.2/2022] and one Bank Account belonging to Shri Lalrinhlua [writ petitioner WP(Crl.) No.3/2022].

These Bank Accounts were freezed by the Banks concerned under the direction of the appellant i.e. Directorate of Enforcement (ED).

Brief Facts :

3. FIR No.216/2021 dated 14.12.2021 was registered by the Enforcement Directorate (ED) against one M/s Nayla Family Exports Private Limited and others with the allegation of illegal smuggling of human hair. During the course of investigation, the Enforcement Directorate conducted search in offices and residences of various persons in Hyderabad and Mizoram including the respondent/writ petitioners and certain documents including property papers, mobile phones, laptop and Indian currency worth Rs.26 lakhs were seized. The ED issued orders dated 09.02.2022 and 10.02.2022 under Section 17(1) of the Prevention of Money Laundering Act, 2002 (in short, the Act of 2002) for freezing various Bank Accounts of numerous persons including those of the respondents/writ petitioners. On 07.03.2022, the ED proceeded to file Original Application (O.A.) No.644/2022 under Section 17(4) of the Act of 2002 before the adjudicating authority requesting for retention of the property seized and for continuation of the freezing of the Bank Accounts concerned. In the O.A., the ED gave out details of 143 Bank Accounts which had been frozen by it in pursuance to the orders issued on 09.02.2022 and 10.02.2022. The respondents/writ petitioners were arrayed as defendants in the O.A. Few of their Bank Accounts also figured in the list of 143 Bank Accounts annexed with the O.A. However, 4(four) Bank Accounts of the writ petitioner in WP(Crl.) No.2/2022, Smt. Zoramthari [Writ Appeal No.311/ 2023] and one Bank Account of the writ petitioner in WP(Crl) No.3/2022, Lalrinhlua [Writ Appeal No.314/2023] were not included in the list filed along with the O.A. Nonetheless, the Banks concerned were not permitting operation of these Accounts.

4. The respondents/writ petitioners filed their written objection before the adjudicating authority, who proceeded to pass the Confirmation Order dated 22.08.2022 allowing the O.A. filed by the E.D.

5. Upon this, the writ petitions (Criminal) in question came to be instituted before the Aizawl Bench on numerous grounds. The pertinent one that 4(four) Bank Accounts of the writ petitioner Smt. Zoramthari [WP(Crl.) No.2/2023] and one Bank Account of writ petitioner Shri Lalrinhlua [WP(Crl.) No.3/2023 ] were not included in the list of Accounts sought to be confirmed under Section 17(4) of the Act of 2002 nor did the adjudicating authority permit continuation of freezing of these Bank Accounts and hence, the continued moratorium on operation of the Bank Accounts amounted to infringement to the fundamental and legal rights of the respondents/writ petitioners.

6. A plea was also taken by the writ petitioners that the Confirmation Order came to be passed by the adjudicating authority beyond the statutory period of 180 days prescribed under the Act of 2002 and hence, the action of freezing came to an end by efflux of time by virtue of the provision contained in Section 20(1) of the Act of 2002. The adjudicating authority became functus officio on 07.08.2022 and could not have passed the Confirmation Order.

7. Before the learned Single Judge, the ED presented a Freezing Order dated 10.02.2022 passed in relation to these 5(4+1) Bank