The court upheld the validity of the debit freeze on the appellant's accounts, affirming that the funds were reasonably suspected to be proceeds of crime under PMLA.

FINAL ORDER

12.03.2026

This Order disposes of the Appeal No. FPA-PMLA-3057/CHD/2019 filed by M/s Dove Infrastructure Pvt. Ltd. (DIPL), against the Order dated 16.11.2018 (Impugned Order) passed by the Ld. Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA) in the Original Application No. 234/2018 (OA). The retention of the debit freeze of balances lying in the three bank accounts of the Appellant in the form of Bank Guarantee/FDRs under Section 17 (1A) of PMLA was allowed, vide the Impugned Order.

2. Ld. Counsel for the Appellant submitted that the Appellant was neither served nor provided with an opportunity of hearing by the Adjudicating Authority before passing the Attachment Order for "debit" freeze of the accounts of the Appellant. The Appellant being an infrastructure company obtained a license bearing No. 281/2007 from the Directorate of Town and Country Planning, State Government of Haryana ("DTCP") enabling it to develop an IT Park Project. As per the terms of the said license the Appellant provided a bank guarantee to DTCP secured by way of lien marked on the fixed deposit. As such, DTCP through the Bank had a charge/prior claim on the fixed deposit and the bank guarantee could either be renewed or encashed in favour of DTCP. Taking over of the fixed deposits by the Respondent obligated the bank to dishonour the bank guarantee, resulting in irreparable injury. The facts of the present case did not warrant such a harsh action. The Respondent Directorate of Enforcement exceeded its jurisdiction under Section 8 (4) of PMLA by ordering and taking over of physical possession of the fixed deposit accounts of the Appellant while the law only mandates symbolic possession.

3. Ld. Counsel for the Appellant stated that the Appellant had preferred an application before the Special Court under PMLA at Panchkula under Section 8 (8) of PMLA seeking release of the attached fixed deposit. The said application was still pending before the concerned authority and notice in the application was issued to the Respondent on 30.04.2019. It was submitted that the Possession Order is mala fide as it had been passed during the pendency of the Application under (8) of PMLA before the concerned authority only to render the said Application otiose. Against the Fixed Deposit, a Bank Guarantee, bearing No. 2007/40, was issued by then Corporation Bank on 06.12.2007, on behalf of DIPL, in favour of Director, Town and Country Planning, Haryana. The Corporation Bank had standing instructions to either extend the bank guarantee or to encash it in favour of the beneficiary. As such, since there was an encumbrance/prior claim on the Fixed Deposit since last 12 years and hence, the same could not be attached/seized by the Respondent. The Bank Guarantee had been issued in favour of Haryana Government in compliance of statutory requirements. Thus, there was no justification for attachment of the Fixed Deposit and the Bank Guarantee.

4. Ld. Counsel for the Appellant contended that the Attachment Order does not record the Adjudicating Authority's reasons to believe' that the monies in accounts of DIPL were proceeds of crime. The inference that the said monies were proceeds of crime could have been reached only after an enquiry into the sources of income and funds of DIPL. As no such enquiry was ever made, the Attachment Order did not satisfy the requirements of Section 8 (1) and Section 20 (4) of PMLA. The Fixed Deposit had been created from legitimate sources of money received mainly from RIL and BNB Investment & Properties Ltd