Court Mandates Bank Guarantee to Secure Respondent's Interest Amidst Ongoing Appeal
In a significant ruling, the Delhi High Court has directed the Directorate of Enforcement to release Rs. 1,54,15,300 to Satyam Caterers Pvt. Limited, subject to the company furnishing a bank guarantee of equivalent value. This decision comes in the wake of an appeal filed under Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA) by Satyam Caterers, challenging an earlier order by the Appellate Tribunal under SAFEMA.
The case revolves around the quantification of proceeds of crime initially identified as Rs. 4,62,45,900, which was recovered from Satyam Caterers' bank account. The Adjudicating Authority later reduced this amount to Rs. 3,08,30,600. Satyam Caterers sought the release of the excess Rs. 1,54,15,300, a request initially denied by the Tribunal on the basis that an appeal by the Directorate of Enforcement was pending.
The Delhi High Court, presided by Justices Navin Chawla and Ravinder Dudeja, found the Tribunal's refusal unsustainable. The court highlighted the lack of consideration given to the prima facie merits of the Directorate's appeal, which had not been adjudicated at the time of the Tribunal's decision. Consequently, the court set aside the Tribunal's order, directing the release of the excess funds to Satyam Caterers, contingent upon the provision of a bank guarantee.
The court's directive aims to ensure that the interests of both parties are safeguarded while the Directorate's appeal is pending adjudication. Additionally, the High Court has ordered that the remaining Rs. 3,08,30,600, deemed proceeds of crime, be kept in a fixed deposit until the final resolution of the appeals filed by both parties.
The court clarified that its decision does not reflect any judgment on the merits of the appeals or any interim applications filed therein, and the appeal was disposed of in these terms.
Bottom line:-
Prevention of Money Laundering Act, 2002 - Excess amount recovered as proceeds of crime - Tribunal's refusal to release excess amount to appellant on the ground of pending respondent's appeal not sustainable - Court directs release of excess amount subject to furnishing a bank guarantee.
Statutory provision(s): Prevention of Money Laundering Act, 2002 Section 42
