Provisional Attachment of Bank Accounts ceased to be effective after 180 days on failure of Authority in passing further order: Calcutta HC [Read Order]

The Calcutta High Court ruled that the provisional attachment of Bank accounts ceased to be effective after 180 days of failure of Authority in passing further orders.

The Petitioner, Gobindo Das has filed this Writ Petition challenging the impugned Provisional Attachment Order passed by the Deputy Director, Enforcement Directorate attaching his bank accounts in question under Section 5 (1) of The Prevention of Money Laundering Act, 2002 on the ground that the validity of the said impugned Provisional Attachment Order has lost its force and ceased to have any validity under Section 5 (3) of the aforesaid Act after expiry of 180 days on 9th June, 2021 and in view of the fact that the adjudicating authority has not passed any formal order on or before 9th June, 2021 under Section 8(3) of the aforesaid Act for confirmation or further extension of the aforesaid impugned Provisional Attachment Order dated 11th December, 2020.

Mr. N.K. Chowdhury, the counsel for the Petitioner contends that after the expiry of 180 days from the date of the aforesaid attachment order, Respondent No. 3 has become functus officio and further there is no provision under the aforesaid Act for automatic or deemed extension of the Provisional Attachment Order under Section 5 (1) of the aforesaid Act. Petitioner is aggrieved by the action of the respondent no. 3 in not allowing him to operate his bank account in question even after expiry of the validity of the aforesaid order of provisional attachment.

Enforcement Authorities opposing the Writ Petition and defending the action of the Respondentauthority in not allowing the Writ Petitioner to operate the bank accounts in question contends that even without passing any formal order of confirmation or further extension under Section 8 (3) of the Act after the expiry of 180 days of validity of the aforesaid impugned Provisional Attachment Order, the aforesaid impugned Provisional Attachment Order automatically should be deemed to have been extended by claiming benefit of the order of the Supreme Court dated 23rd March, 2020 in Suo moto Writ Petition. For Extension Of Limitation which was extended from time to time and lastly on 27th April, 2021 where the Hon’ble Supreme Court in view of the steep rise in Covid-19 Virus cases engulfing the entire nation and the extraordinary situation caused by the outburst of Covid-19 Virus resulting difficulties by the litigants and advocates in filing petitions or applications or suits or appeals and all other proceeding irrespective of period of limitation prescribed in general or special law extended a period of limitation until further orders.

The single judge bench of Justice Md. Nizamuddin while allwing the petition held that the impugned order of provisional attachment of Bank accounts and postal accounts in question passed under Section 5 (1) of The Prevention of Money Laundering Act, 2002 after expiry of 180 days on 9th June, 2021 is ceased to have any effect or force as a consequence of failure on the part of the Respondent Enforcement authority/Adjudicating authority in passing further order under Section 8 (3) of The Prevention of Money Laundering Act, 2002 extending or confirming order dated 11th December, 2020 under Section 5 (1) of the said Act on or before 9th June, 2021 after expiry of its validity under Section 5 (3) of the said Act by taking the stand of automatic deemed extension/confirmation of the said order by claiming itself as a litigant or advocate or quasi- judicial authority when it was not required to approach physically any quasi- judicial or judicial authority to initiate any proceeding or to file any application/suit/appeal for the purpose of extension or confirmation of the order under Section 5 (1) of The Prevention of Money Laundering Act, 2002.

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