Delhi High Court orders ED to look into Vivo's request to operate bank accounts

Delhi High Court orders ED to look into Vivo's request to operate bank accounts.

The Enforcement Directorate was asked by the Delhi High Court to respond to Vivo's petition against debit freezing of its bank accounts and ordered it to decide on the Company's representation seeking permission to operate the accounts. Vivo is a Chinese Manufacturing company.

"In the meanwhile and bearing the financial conditions which are expressed in the writ petition and are also outlined in a representation of July 7, 2022, the court directs the respondents [ED] to attend to that representation in light of the power of according prior permission to deal with the seized property as is envisaged under Section 17 (1A) of the Prevention of Money Laundering Act," said Justice Yashwant Varma in the order.

The ED has stated that 48 locations across the country belonging to Vivo Mobiles India Private Limited amongst which 23 associated companies were searched on Tuesday in connection with a money-laundering probe. The search at Vivo's factory in Greater Noida continued on Thursday till late hours. At least nine bank accounts of Vivo were ordered to be 'debit frozen' by the ED on 5 July.

Aggrieved the order, Vivo Mobile India Private Limited in the petition said the central agency has undertaken a "roving and fishing inquiry" against it and continues to make "various attempts to disrupt" its company and business.

Vivo prayed before the Chief Justice for an urgent hearing of the case because the day-to-day functioning, including payment of salaries and statutory dues, was affected by the said order. This was thereby allowed.

It was noted during the hearing that the search in the case was ongoing and observed that PMLA does not appear to contemplate any lifting of the debit freeze or the seized articles pending confirmation by the adjudicating authority. The court also said the reasoning behind the orders for debit freezing of the accounts was not available at present and listed the case for further hearing.

"There is no question of lack of power," said the court, adding that the power has been exercised by ED under Section 17 (1A) of the PMLA.

It was argued by Vivo that substantive revenue from online sales stands attached fur to freezing order which has led to an inability of the Company to discharge its liabilities.

Terming the petition premature ED, argued that searches were ongoing and that company should have waited for the completion of the statutory process.

"Routinely debit freeze orders are passed. When the search was being conducted, the employees were trying to abscond, trying to hide digital devices, they were not cooperating with search proceedings…," ED told the court.