ED’s Adjudicating Authority Can’t Act ‘Mechanically’: HC

The Enforcement Directorate’s adjudicating authority cannot act “mechanically”, the Delhi High Court Said, referring to the ED’s handling of a letter from the Brazilian government that sought to freeze the bank accounts of Indian individuals and entities in connection with a money-laundering probe. The Brazil government had approached the Indian government in connection with a probe into allegations of corruption and money laundering against one of its ex-government.

The court’s observation came during a hearing of pleas filed by a clutch of companies, including JK Tyres and Hamilton Housewares, which had moved the court against the December 28, 2020 order of the ED’s a adjudicating authority which confirmed the freezing of bank accounts of 66 companies.

Setting aside the order, the court has given time to ED to give relevant documents to the companies and for them to respond by February 2022. Until then, the bank accounts shall remain frozen. However, the companies are permitted to furnish either bank guarantees or securities to the satisfaction of the ED, subject to which the said accounts may be directed to be de-frozen on a case-to-case basis.

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