Calcutta High Court Grants Temporary Relief to Knight Riders by Quashing PMLA proceedings

Calcutta High Court Grants Temporary Relief to Knight Riders by Quashing PMLA proceedings

The Calcutta High Court (HC) in the case titled Knight Riders Sports Private Limited (Petitioner) v. Adjudicating Authority (PMLA) & others (Respondents) granted temporary relief to the Knight Riders by restraining the Adjudicating Authorities under the Prevention of Money Laundering Act, 2002 (PMLA) from issuing any notice of hearing on the basis of the provisional order of attachment.

The single-judge of the HC Justice Sabyasachi Bhattacharyya restrained the Adjudicating Authority from issuing any notice of hearing/taking any other action on the basis of the provisional order of attachment dated 31 January 2020 until further orders.

The petitioners contended that despite a provisional order of attachment passed by the Deputy Director, Enforcement Directorate (ED) (respondent authority) having spent its force after 180 days therefrom in terms of Section 5(3) of the PMLA Act, the ED has been continuing to issue notices for hearing on the basis of the said provisional.

It was further argued that the extension of limitation granted by the Supreme Court (SC) on various occasions, pertained only to limitations regarding proceedings, and the stipulation under Section 5(3) of the PMLA Act is not covered by said limitation.

The respondents raised objections to the contentions of the petitioner and for its prayer for seeking a stay of further proceedings based on the said provisional notice on the ground that the SC orders, extending limitation, clearly applied not only to general laws but also special statutes.

It was further urged that the period envisaged under Section 5(3) of the PMLA Act comes within the purview of the said orders, thereby extending the period of 180 days further.

The petitioner stated that the language of Section 5(3) is very clear as to the period of 180 days operating in respect of orders of attachment and says in positive language that such order of attachment shall cease to have effect after the expiry of such period.

It added that the said restriction/stipulation does not relate to any period of limitation prescribed under the general or special laws pertaining to institution or termination of "proceedings" but directly deals with the tenure of operation of the order of provisional attachment.

The HC while granting temporary relief to the petitioner stated that "Since such a stay would negate the entire effect of the restraint order and revive the proceedings, thereby subjecting the petitioner to the risk of rendering their writ petition infructuous, such prayer for stay of this order is refused."